Category Archives: Uncategorized

Home Sales Dip as Buyers Get ‘Tripped Up’

Low inventory slowed down home sales last month, as buyers faced fewer options and record-high real estate prices, the National Association of REALTORS® reported.

Total existing-home sales, which include completed transactions for single-family homes, townhomes, condos, and co-ops, fell 1.8 percent in June to a seasonally adjusted annual rate of 5.52 million. Nevertheless, the pace of sales rose a modest 0.7 percent compared to a year ago.

“Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” says NAR chief economist Lawrence Yun. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in affordable price ranges continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

Here’s a closer look at some of the top housing indicators in June from NAR’s latest report:

Home prices: The median existing-home price for all housing types was $263,800, up 6.5 percent from a year ago. It’s now the highest median price on record.

Inventories: The supply of existing homes available for sale dropped 0.5 percent to 1.96 million units. That’s 7.1 percent lower than a year ago; unsold inventory is at a 4.3-month supply at the current sales pace.

Days on the market: Fifty-four percent of sold homes were on the market less than a month. Properties took an average of 28 days to sell, down from a timeline of 34 days a year ago. Short sales spent the longest amount of time on the market at 102 days, foreclosures sold in 57 days, and nondistressed homes took a median of 27 days to sell.

All-cash sales: Cash transactions made up 18 percent of home sales, the lowest figure since 2009. Individual investors accounted for the biggest bulk of cash sales—13 percent—unchanged from a year ago.

Distressed sales: Foreclosures and short sales made up 4 percent of sales, which matches the lowest share recorded last September since NAR began tracking such data in October 2008. Foreclosures comprised 3 percent of sales, while short sales made up 1 percent.

First-time buyers: First-timers accounted for 32 percent of sales, down from 33 percent a year ago. “It’s shaping up to be another year of below-average sales to first-time buyers despite a healthy economy that continues to create jobs,” Yun says. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”

Source: National Association of REALTORS®

Education Linked to Homeownership in More Ways Than One

Countless case studies have established a connection between education and homeownership: generally, college graduates are more likely to own a home than non-graduates. A new study out of Trulia now shows that career stage, level of education and location can have varying degrees of influence on homeownership rates.

Being college-educated typically boosts earning potential, which opens up housing options in terms of affordability and size. The median income for bachelor’s degree-holders is $82,202, according to Census data, while the median income for those without a degree is $48,842. The homeownership rate among the former is 16 percent higher than the homeownership rate for the latter, the study shows, and, homes owned by bachelor’s degree-holders feature more square footage than those without: seven rooms versus six.

Incomes tend to grow as careers do, whether a college graduate or not, but incomes expand more as experience stacks up for college graduates than non-graduates. Homeownership rates, as a result, increase more for college graduates as careers progress, the study shows. The median income for college graduates rises from $74,843 at age 22-35, when the homeownership rate is 42 percent, to $105,387 at age 50-63, when the homeownership rate is 82.2 percent. The median income for non-graduates, to compare, rises from $39,045 at age 22-35, when the homeownership rate is 25 percent, to $53,000 at age 50-63, when the homeownership rate is 63.8 percent.

Education Linked to Homeownership in More Ways Than One

What’s more: If a bachelor’s degree leads to more income and higher homeownership rates, it stands to reason succeeding levels of education (e.g., graduate, doctorate) result in even more income and even higher homeownership rates. In reality, incomes and homeownership rates fluctuate at higher levels of education, the study shows. Doctorate-degree holders, for example, for whom the median income is $117,684, roughly $17,000 less than the median for a professional degree-holder at $134,680, own homes at a rate of 73.7 percent, below that of professional degree-holders at 76 percent.

Several housing markets, still, buck the higher education prerequisite simply because a degree-worthy income isn’t necessary to own a home, the study shows. Homeownership rates among those without a high school diploma are above 50 percent in affordable Deltona-Daytona Beach, Fla., and Gary, Ind., where the median home value trails the national median. In Long Island, N.Y., the homeownership rate among those with a high school diploma but no college degree blips at 74.5 percent.

Notably, the findings of the study hold even considering student debt obligations, which have been partly to blame for homebuyers’ inability to enter the market. Higher education, no matter its cost, the study shows, is undeniably tied to success in homeownership.

By Suzanne De Vita

Pets Drive Millennials’ Decision to Buy

Marriage and having children may be the life events that traditionally have prompted people to transition into homeownership. But for some millennials, the need for more space is particularly tied to their furry friends.

A third of recent home buyers ages 18 to 36 say their decision to purchase was based on the desire for a larger property with a yard for their dog, according to a survey conducted by Harris Poll on behalf of SunTrust Mortgage. While 33 percent of 412 millennials surveyed listed their pet as their top homebuying motivation, 25 percent listed marriage and 19 percent listed the birth of a child. The only factors respondents ranked higher than dogs are the desire for more overall living space (66 percent) and the opportunity to build equity (36 percent).

“Millennials have strong bonds with their dogs, so it makes sense that their furry family members are driving homebuying decisions,” says Dorinda Smith, SunTrust Mortgage president and CEO. “For those with dogs, renting can be more expensive and a hassle; homeownership takes some of the stress off by providing a better living situation.”

Forty-two percent of millennial prospective homeowners say their dog—or their desire to adopt one—is a key factor in their desire to purchase a home in the future, according to the survey.

 

Source: SunTrust Banks Inc.

Study: Buying Is Still Better Than Renting

Study: Buying Is Still Better Than Renting in Most States

Affordability challenges are weighing on the housing market, as many homebuyers and sellers contend with either being unable to compete or to find a new home within reach.

Buying a home, however, is still better than renting one in most states—35, to be exact, according to a recent study by GOBankingRates.

GOBankingRates Renting Vs Owning

Analysts for GOBankingRates factored in recent median monthly home price and rent data by state, as well as mortgage rates—gathered by Zillow—to determine levels of affordability. The study assumed a 20 percent down payment on a 30-year, fixed-rate mortgage, and took into account homeowners insurance costs and property taxes.

Buying is significantly more affordable than renting in Alaska, Illinois, Maryland, New Jersey and New York, the study shows, with New Jersey residents saving $566 a month by owning—the highest yield of all states.

In six states, the gap between buying and renting is so slim that neither is substantially more affordable than the other: Alabama, California, South Carolina, Virginia, Washington and Wyoming.

The 35 states where buying is more affordable than renting are (in alphabetical order): Alaska; Arkansas; Connecticut; Delaware; Florida; Georgia; Illinois; Indiana; Iowa; Kansas; Kentucky; Louisiana; Maine; Maryland; Massachusetts; Michigan; Minnesota; Mississippi; Missouri; Nebraska; New Hampshire; New Jersey; New Mexico; New York; North Dakota; Ohio; Oklahoma; Pennsylvania; Rhode Island; South Dakota; Tennessee; Texas; Vermont; West Virginia; and Wisconsin.

View owning and renting costs by state.

Source: GOBankingRates

Homeowner’s Net Worth Is Still Greater Than a Renter’s

Homeowner’s Net Worth Is Still Greater Than a Renter’s | Keeping Current Matters

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

The latest survey data, covering 2014-2016 will be released later this year. In the meantime, Lawrence Yun, the National Association of Realtors’ Chief Economist estimates that the gap has widened even further, to 45 times greater ($225,000 vs. $5,000)!

Put Your Housing Cost to Work for You

As we’ve said before , simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 84% of consumers believe that purchasing a home is a good financial decision. William E. Brown comments :

“Despite the growing concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own. Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top reasons to own a home.

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, meet with a real estate professional in your area who can guide you through the process.

Millennial Homeownership Rate Increases

Millennial Homeownership Rate Increases | Keeping Current MattersRecent headlines exclaimed the homeownership rate, as reported by the Census Bureau, rose again in the second quarter of 2017. What didn’t get much attention in the reports is that the homeownership rate for American households under the age of 35 increased a full percentage point from last quarter’s 34.3% to 35.3%. Millennials proved to have the highest increase of any age group.

This came as a surprise to some considering Millennials have come to be known as the “renter” generation. However, a new study by First American, 6 Trends Poised to Reshape Homeownership Demand, revealed reasons why homeownership numbers will continue to increase for Millennials.

Millennials are the most educated generation in the U.S.

Why does that matter? First American explains:

“Our model shows that, all other factors being equal, the likelihood of homeownership increases by 3 percent for those that earn a bachelor’s degree over those with a high school degree. The likelihood of homeownership jumps another 3 percent for those that earn a graduate degree.”

The more educated, the better the likelihood for homeownership. And, as we mentioned: Millennials are the most educated generation in the U.S.

Homes & marriage go together

Marriage is a key determinate in homeownership. According to an analysis by First American, the homeownership rate is 30% higher among married couples compared to non-married households.

Millennials have put off marriage in the pursuit of higher education. As this group ages, more and more will marry and purchase a home.

Parents buy houses

According to the study:

“The homeownership rate is 1.7% higher for households with one or two children compared to households with no children, and it is 5.4 percent higher for households with three or more children.”

The report goes on to say that as Millennials grow older there may be an increase in not just marriage but also in married couples with children. That will probably also create a “corresponding” increase in homeownership demand.

Wages and the economy

The study goes on to explain that recent gains in income growth and a strengthening economy will also help all generations (including Millennials) be more willing and able to purchase a new home.

Bottom Line

We guess the time has come to announce – Here come the Millennials!!

Housing Inventory Hits 30-Year Low

Housing Inventory Hits 30-Year Low | Keeping Current Matters

Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

CoreLogic’s President & CEO, Frank Martell added,

“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

Overall inventory across the United States is down for the 25 th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

Real estate is local.

Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

Bottom Line

Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, meet with a local real estate professional who can explain the exact conditions in your area.

Hey, Millennial Homeowners!! It May Be Time to Sell

Hey, Millennial Homeowners!! It May Be Time to Sell | Keeping Current Matters

Contrary to what many believe, Millennials are not the ‘renter’ generation. Millennials purchased a larger percentage (34%) of homes in the U.S. than any other age group in 2017 and the most recent Census Bureau report shows that the homeownership rate among Millennials is finally on the rise .

Many Millennials took advantage of post housing crash prices and the First-Time Homebuyers’ Tax Credit and jumped into homeownership in 2010. If you are one of these buyers, now may be the time to sell for many reasons. Here are a few:

1. Equity Build-Up

Home prices have been on the rise since the beginning of 2012 and your house may have appreciated by more than you think. ATTOM Data Solutions , in their Q2 2017 U.S. Home Sales Report revealed that:

“…homeowners who sold in the second quarter realized an average price gain of $51,000 since purchase — the highest average price gain for home sellers since Q2 2007, when it was $57,000.

The average home seller price gain of $51,000 in Q2 2017 represented an average return of 26 percent on the previous purchase price of the home, the highest average home seller return since Q3 2007, when it was 27 percent.”

2. Projected Home Price Increases

If you just got married or just found out you are about to become a parent, you may have plans to move up a bigger home or perhaps move to a different area. Waiting to buy a more expensive home in this market probably doesn’t make sense. The experts contacted for the Home Price Expectation Survey are projecting home prices to increase by nearly 5% over the next year. Yes, your house’s price will increase but not as much as a home currently valued higher than yours.

3. Projected Interest Rate Increases

The Mortgage Bankers’ Association , Freddie Mac, Fannie Mae and the National Association of Realtors are each projecting mortgage rates to increase over the next year.

Higher PRICES + Higher INTEREST RATES = LARGER MORTGAGE PAYMENTS.

Bottom Line

If you are lucky enough to be one of those Millennials who purchased a house in 2010 (or even later), now might be the perfect time to move up to the home of your dreams!


U.S. Housing Inventory Hits a New Low… List Your House TODAY!

Every summer, families across the country decide if this will be the year they sell their current house and move into their dream home.

Mortgage rates have hovered around 4% for all of 2017, forcing buyers off the fence and into the market, resulting in incredibly strong demand RIGHT NOW!! At the same time, inventory levels of homes for sale have dropped dramatically as compared to this time last year.

Trulia reported that “U.S. home inventory has tumbled 8.9% over the past year and has now fallen for nine consecutive quarters.” There is now 20% less inventory than there was five years ago.

Here is a chart showing the decrease in inventory levels by category:U.S. Housing Inventory Hits a New Low… List Your House TODAY! | Keeping Current Matters

Bottom Line

Demand for your home is very strong right now while your competition (other homes for sale) is at a historically low level. If you are thinking of selling in 2017, now may be the perfect time.

Thinking of Selling? You Should Act NOW!

If you thought about selling your house this year, now more than ever may be the time to do it! The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.

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Lawrence Yun, Chief Economist at the National Association of Realtors, recently commented:

“Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”

Yun goes on to say:

“Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction, including the inspection, appraisal and financing contingencies.

Bottom Line

As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.