3 Housing Trends Emerging This Spring

The spring tends to be real estate’s most active season of buying and selling. So what housing trends are emerging right now that you should be aware of? The Street recently took a look at three trends it sees as getting bigger this spring:

1. Inventories are favoring the seller. With a limited number of homes for sale across the country, home sellers have the upper hand as home buyers are forced to compete for limited inventories. Inventories of less expensive “starter homes,” in particular have dropped, which is making it difficult for first-time buyers to break into the market. Home buyers need to be ready to act when they see a home they want.

2. More buyers may consider a new home. Some home buyers may seek greater alternatives to limited inventories and consider building a home and buying new. Ralph McLaughlin, chief economist with Trulia, says there’s a 10-year high for homes being bought off of a plan alone. “Why? The inventory of existing homes continues to fall,” he notes.

3. Buying is cheaper than renting. Seven in 10 respondents of a recent Freddie Mac survey believe it’s cheaper to pay rent than a monthly mortgage on a home. Saving for a down payment may a big hurdle for many. However, studies show that buying trumps renting in 98 of the 100 largest metros in the nation.

Source: “3 Real Estate Trends to Watch This Spring,” The Street (April 20, 2016)

Survey: Real Estate Is the Best Investment

Americans ranked real estate as the best long-term investment, even over stocks and gold, according to a recent Gallup Poll of about 1,000 U.S. adults. Real estate has been the top investment choice for the past two years, and it’s lead is increasing over four other popular investment choices.

Thirty-five percent of Americans selected real estate as their top investment choice compared to 22 percent for stocks and mutual funds; 17 percent for gold; 15 percent for savings accounts/CDs; and 7 percent for bonds. By comparison, 34 percent of Americans said gold was their top long-term investment choice in 2011 while 19 percent said real estate.

“As the average sale price of new homes in the U.S. increased from $259,300 in August 2011 to $348,900 in February of this year, the percentage of Americans picking real estate as the best long-term investment almost doubled,” according to Gallup. “During approximately the same time span—from August 2011 to April of this year—gold prices plunged from $1,910 to $1,254 per ounce, and the percentage thinking gold would be the best investment was cut in half.”

Source: Gallup.com

Get to Know the ‘Transitional Kitchen’

When it comes to kitchen design, it’s time to throw some of the old traditional rules out and embrace the mix-and-match transitional kitchen approach.

What is a transitional kitchen exactly? It’s a style that equal parts functional and expressive. It accommodates the individual needs of the family, showcases the personality of the home owners, but is also universally appealing and homey. And it’s hotter than ever.

In a recent survey by the National Kitchen and Bath Association, home owners listed the transitional kitchen as their top style pick, beating the traditional kitchen for the first time in many years.

Bottom line: A transitional kitchen at its essence should be functional for owners’ specific needs, but the other main rule is that there are no rules. The days where kitchen design had to solely embrace one style may be over, and buyers and owners alike are looking for a space that mixes and matches elements that reflects their individual personality.

Source: “Elements of Transitional Kitchen Style,” Houselogic.

Home Loan Rates Reach a New Low for 2016

The 30-year fixed mortgage rate dipped to its lowest average of the year this week, averaging 3.58 percent, Freddie Mac reports in its latest mortgage market survey.

“Demand for Treasuries remained high this week, driving yields to their lowest point since February,” says Sean Becketti, Freddie Mac’s economist. “In response, the 30-year mortgage rate fell 1 basis point to 3.58 percent. This rate represents yet another low for 2016 and the lowest mark since May 2013.”

Freddie Mac reports the following national averages for the week ending April 14:

  • 30-year fixed-rate mortgages: averaged 3.58 percent, with an average 0.5 point, dropping from last week’s 3.59 percent average. Last year at this time, 30-year rates averaged 3.67 percent.
  • 15-year fixed-rate mortgages: averaged 2.86 percent, with an average 0.5 point, falling from last week’s 2.88 percent average. A year ago, 15-year rates averaged 2.94 percent.

Source: Freddie Mac

Home Owners May Be Too Upbeat About Prices

Home owners may be slightly too optimistic about their home’s value compared to what appraisers say it’s actually worth. Home values are, on average, about 2.17 percent lower than what home owners expect compared to appraisers’ estimates, according to Quicken Loans’ latest Home Price Perception Index (HPPI).

The gap between home owner expectations and appraisal estimates widened in March. In February, appraisals were 1.99 percent lower than what home owners expected.

“The varying HPPI values across the country illustrates the importance of examining the market at the local level,” says Quicken Loans Chief Economist Bob Walters. “If home owners are eyeing that new home being built across town, they could be pleasantly surprised how much their home will sell for – or in some instances their equity may not take them as far as they think – depending on what area of the country they’re in. … It’s not always easy for home owners to keep their finger on the pulse of their equity.”

Source: Quicken Loans

Is Facebook Losing Some of Its Mojo?

Fewer Facebook users are sharing personal updates or original content. In fact, a newly released report shows that Facebook saw a 21 percent decline in “original sharing” or personal updates among its 1.6 billion monthly active users.

“This indicates a key vulnerability for the social behemoth,” a Fortune article notes. What started as a “special and intimate place to share things grows into a big, impersonal, and professional platform.”

Fortune columnist Erin Griffith blames the decline partially on the rise of professional content on Facebook. Facebook has helped to foster the growth of professional content on its site, but Griffith says the problem is that professional content can be found anywhere online and makes Facebook lose its identity. What’s more, the greater the professional content offerings on the social network, the more other users may feel their inside jokes, blurry photos, and opinions feel out-of-place.

“The platform no longer feels like an intimate conversation among friends,” Griffith notes. If the platform is going to keep its future domination, Griffith says it needs to look to retain what made it special in the first place: Intimacy.

Source: “Facebook users Are Sharing Less and It’s a Big Problem,” Fortune (April 7, 2016)

Exterior Projects Top Home Remodeling List

Thirty-six million owners plan to renovate their homes within the next 12 months, and the home’s exterior is likely to get most of their attention, according to a new survey by Bankrate.com of 1,000 home owners.

Home exterior or yard renovations – such as repairing driveways, decks, patios, pools, landscaping, or fencing – are among the most popular projects home owners plan to take on in the next year. The next most popular renovation projects include adding new flooring and new windows, roofing, or siding, the survey shows.

Millennial home owners are the most likely to be planning renovations when compared to other age segments, according to the survey. Also, home owners with lower income are just as likely to be planning renovations within the next 12 months than those with higher incomes, according to the survey.

Source: Bankrate.com

Home Loan Interest Rates Hold Steady This Week

Mortgage rates showed little fluctuation this week as the 30-year fixed-rate mortgage continues to average well-below 4 percent.

“Dovish comments by Federal Reserve Chair Janet Yellen on Tuesday triggered a rally in Treasury markets and drove the 10-year yield down 13 basis points from last week’s high,” says Sean Becketti, Freddie Mac’s chief economist. “Yellen’s comments came too late to affect this week’s mortgage rate survey, and the 30-year mortgage rate remained unchanged at 3.71 percent. However, if the Fed’s cautious tone persists, mortgage rates may register the impact in subsequent weeks.”

Freddie Mac reported the following national averages for the week ending March 31:

  • 30-year fixed-rate mortgages: averaged 3.71 percent, with an average 0.5 point, the same as last week’s average. Last year at this time, 30-year rates averaged 3.70 percent.
  • 15-year fixed-rate mortgages: averaged 2.98 percent, with an average 0.4 point, rising from last week’s 2.96 percent average. A year ago, 15-year rates averaged 2.98 percent.

Source: Freddie Mac

Fireplaces Spark Interest with Home Buyers

Fireplaces are eye-catchers of homes, and buyers will linger over a photo of one in a listing. With HVAC and smart-home technology controlling the environment, fireplaces have become purely a pleasure item, to the point where you can just watch a fireplace YouTube video on your smart TV.

For buyers who want the real thing, one design element they consider is the depth of the fireplace. A deeper firebox, according to Curbed.com, shows that the emphasis is for pleasure over function and allows a safer layout, keeping the burning logs away from the room.

But buyers who plan to use their fireplaces look for the Rumford fireplace design, a shallower design that reflects more heat back into the living area while moving air efficiently to keep smoke out.

Source: “What’s the Deal With Old Fireplaces?” Curbed.com (March 24, 2016)

For the First Time in Weeks, Rates Move Lower

Good news after four straight weeks of increases. “The Federal Reserve’s decision last week to maintain the current level of the Federal funds rate combined with the reduction in their forecast for growth triggered a 3-basis point drop in the 10-year Treasury yield,” says Sean Becketti, Freddie Mac’s chief economist. “As a consequence, the 30-year mortgage rate declined 2 basis points to 3.71 percent. However, comments this week by several members of the Fed, including the presidents of the Richmond, San Francisco, and Atlanta banks, indicated that a June rate hike is still on the table.”

Freddie Mac reports the following national averages for the week ending March 24:

  • 30-year fixed-rate mortgages: averaged 3.71 percent, with an average 0.5 point, dropping from last week’s 3.73 percent average. Last year at this time, 30-year rates averaged 3.69 percent.
  • 15-year fixed-rate mortgages: averaged 2.96 percent, with an average 0.4 point, falling from last week’s 2.99 percent average. A year ago, 15-year rates averaged 2.97 percent.

Source: Freddie Mac