Author Archive

Fewer Home Buyers Are Bringing All-Cash to Buy!

February 6 2016

One in three buyers paid all-cash to close on their real estate transactions near the end of 2015, according to new data from CoreLogic. The share of all-cash transactions dropped to 33.9 percent in October year-over-year, down from 46.6 percent in January 2011.

The number of all-cash transactions dropped to 33.9 percent year-over-year in October. Still, historically on a pre-crisis average, cash sales tend to make up about 25 percent of the market. CoreLogic estimates that cash sales will return to that level by mid-2018.

Sharp declines in REO sales is the main reason cash sales are steadily dropping, CoreLogic notes. REO sales comprised 7.3 percent of all residential home sales in October 2015, a third of the peak in January 2011 at 23.9 percent.

Source: “What’s Driving Down the Cash Sales Share?” DSNews (Feb. 4, 2016)

Groundhogs Know Best: Spring Buying Is On Now!

February 3 2016

The infamous groundhog – Pennsylvania’s Punxsutawney Phil – may not only have the power to predict how many more weeks are left to winter but also the ability to predict the start to housing’s busiest time of year.

Phil didn’t see his shadow on Tuesday’s Groundhog Day, which, if superstition holds true, means that winter will be shorter this year, with a warmer February across the country.

If the groundhog is correct, Jonathan Smoke,®’s chief economist, says, that could spark an early start to the spring homebuying season.

“When the housing market is strong like it is now, and Phil doesn’t see his shadow, February sees an average 11 percent year-over-year increase in existing-home sales,” Smoke continues. “Thanks to Punxsutawney Phil, we know that the spring housing market starts early this year — and buyers and sellers had better be ready.”

Source: “Guess What? Spring Home Buying Starts Now (Thanks, Punxsutawney Phil!)”® (Feb. 2, 2016)

Home Loan Inrerest Rates Retreat for 4th Week

January 29 2016

“The yield on the 10-year Treasury stabilized around 2 percent this week, and the 30-year mortgage rate dipped 2 basis points to 3.79 percent,” says Sean Becketti, Freddie Mac’s chief economist. “The recent market turmoil has given the Fed pause. As was universally expected, the Fed stood pat this week but kept its options open for a rate increase in March. … A hesitant Fed, sub-4-percent mortgage rates, at least for a little while longer, and strong housing fundamentals should generate a three percent increase in home sales this year.”

Freddie Mac reports the following mortgage rates for the week ending Jan. 28:

Source: Freddie Mac

Home Remodeling Activity Looking to Gain Steam

January 24 2016

Expenditures for home improvements should see healthy gains in 2016, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects annual spending growth for home improvements will accelerate from 4.3% in the first quarter of 2016 to 7.6% in the third quarter. By then, the level of annual spending in nominal terms is anticipated to surpass the previous peak set in 2006.

2016 is looking to be a stronger year for home renovation activity compared to 2015 thanks to the continued recovery in the owner-occupied housing market. In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.

For more information about the LIRA, including how it is calculated, please visit the Joint Center for Housing Studies website.

What’s Topping Home Buyers’ Shopping Lists?

January 21 2016

Home buyers are looking for storage, energy efficiency and outdoor space, according to the latest preference survey released by the National Association of Home Builders and Better Homes and Gardens during the NAHB International Builders’ Show this week.

Some of the top new-home desires cited by home buyers of all ages include separate laundry rooms, energy-star appliances and windows, exterior lighting, and a patio.

On the other hand, buyers are showing less interest in cork flooring, elevators, pet washing stations, expensive outdoor kitchens and fireplaces, and two-story entryways and family rooms, the survey reveals.

Source: National Association of Home Builders

What Americans Say Would Make Them Move

January 17 2016

According to a new survey by Harris Poll of more than 2,200 U.S. adults, these are the top moving motivations for survey respondents:

  • 52% said they’d consider moving to another state to live in for a better climate or better weather.
  • 41% said they’d consider moving for a job opportunity.
  • 35% said they’d factor in proximity to family.
  • 25% said they’d consider a move for health reasons
  • 18% said they’d move to be closer to friends.
  • 16% said they’d relocate to be closer to a significant other.
  • 14% said they’d move for greater educational opportunities.
  • 13% wanted to live in an area with a more accepting lifestyle.
  • 11% said they wanted to move to a place with political views that are more accepting.

Source: “Moving Motivations: What Would Make Americans Consider Uprooting?” RISMedia (Jan. 7, 2016)

Owners Still Overvaluing Homes vs. Appraisals

January 14 2016

Home owners are still slightly overvaluing their homes compared to appraisers’ estimates, according to the latest Quicken Loans Home Price Perception Index. In December, average appraised values were 1.8 percent lower than home owners’ opinions of their homes’ values. That marks the 11th consecutive month where appraised values were lower than home owners’ expectations — but the gap is narrowing.

“The narrowing of the perceived-versus-appraisal value gap is an excellent way to end the year,” says Quicken Loans Chief Economist Bob Walters. “The more home owners are in line with appraisers and understand the equity in their home, the easier it will be to refinance their mortgage. In the same vein, if home buyers understand how the local market is performing, they will be better equipped to come in with a strong offer on the home of their dreams.”

Source: Quicken Loans

Expect a More Modest Housing Market in 2016

January 13 2016

In 2015, the housing market reached its best year in nearly a decade, but 2016 will likely see a slowdown in many housing markets across the country. Home sales are forecasted to increase this year, but at a more moderate pace, “as pent-up demand combats affordability pressures and meager economic growth,” says Lawrence Yun, chief economist for the National Association of REALTORS®.

Yun says pent-up demand, sustained job growth, and improving inventory conditions will be the main triggers pushing the expected gains in new and existing-home sales in 2016.

However, Yun cites rising mortgage rates, home prices that still outpace wage growth, and a fragile global economy as the main challenges that could hold back a stronger pace of sales this year.

Watch the video below for more from Yun’s forecast.

Source: National Association of REALTORS®

Mortgage Rates Start 2016 by Dipping Below 4%

January 8 2016

Mortgage rates aren’t edging up yet. The 30-year fixed-rate mortgage dropped back below 4 percent to start the new year, Freddie Mac reports.

“Concerns about overseas economic developments have dominated financial markets to start the year,” says Sean Becketti, Freddie Mac’s chief economist. “U.S. Treasury bond yields fell amidst a global equity selloff and flight to safety. In response, the 30-year mortgage rate dipped 4 basis points to 3.97 percent.”

Freddie Mac reports the following mortgage rates for the week ending Jan. 7:

  • 30-year fixed-rate mortgages: averaged 3.97 percent, with an average 0.6 point, falling from last week’s 4.01 percent average. A year ago at this time, 30-year rates averaged 3.73 percent.
  • 15-year fixed-rate mortgages: averaged 3.26 percent, with an average 0.5 point, rising from 3.24 percent last week. Last year at this time, 15-year rates averaged 3.05 percent.

Source: Freddie Mac

Is it an End to Mortgage Rates Under 4%?

January 4 2016

The 30-year fixed-rate mortgage finished out 2015 breaking above the 4 percent mark. It was the first time in five months the rate edged above 4 percent.

“In the final week of 2015, Treasury yields jumped reacting in part to strong consumer confidence in December,” says Sean Becketti, Freddie Mac’s chief economist. “In response, the 30-year mortgage rate rose 5 basis points to 4.01 percent, ending a five-month span below 4 percent. After averaging 3.9 percent in the fourth quarter of 2015, we expect the 30-year mortgage rate to average 4.7 percent for the fourth quarter of 2016.”

Freddie Mac reported the following mortgage rates for the week ending Dec. 31, 2015:

  • 30-year fixed-rate mortgages: averaged 4.01 percent, with an average 0.6 point, rising from the previous week’s 3.96 percent average. A year ago, 30-year rates averaged 3.87 percent.
  • 15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.6 point, increasing from 3.22 percent the previous week. A year ago at this time, 15-year rates averaged 3.15 percent.

Source: Freddie Mac