Retirees Look to Build Smaller, Custom Homes

Many people seek to downsize their home in retirement—but not their home buying wish list. Retirees reportedly are flocking to smaller newly built homes customized to their personal needs and tastes.

One advantage older home buyers find with these custom homes is that they can be built to accommodate medical conditions or physical restrictions, such as wider hallways to accommodate mobility devices. The home also can be outfitted with age-in-place features such as outdoor ramps and lower kitchen cabinets.

Retirees are looking to cut back on home maintenance and repairs, which is why their preferences are straying away from larger, older homes. However, building a custom home can be stressful because of the wide availability of options. Real estate experts recommend researching building plans and contractors carefully to make sure buyers get the type of craftsmanship they seek.

Source: “Retirees Turning to Custom Homes to Get the Right Space,” RISMedia (June 22, 2017)

Home Loan Interest Rates Hold at Low Levels

Home shoppers are getting another week to lock in some of the lowest mortgage rates of the year.  “The 30-year mortgage rate remained relatively flat, falling 1 basis point to 3.90 percent. Mortgage rates are continuing to hold at year-to-date lows amidst ongoing economic uncertainty,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending June 22:

  • 30-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.5 point, dropping from last week’s 3.91 percent average. Last year at this time, 30-year rates averaged 3.56 percent.
  • 15-year fixed-rate mortgages: averaged 3.17 percent, with an average 0.5 point, dropping slightly from last week’s 3.18 percent average. A year ago, 15-year rates averaged 2.83 percent.

Source: Freddie Mac

After Steady Decline, ‘Mortgage Rates Rise’

Mortgage rates increased this week for the first time in more than a month, but they still remain near their yearly lows.

Freddie Mac reports the following national averages for the week ending June 15:

  • 30-year fixed-rate mortgages: averaged 3.91 percent, with an average 0.5 point, rising from last week’s 3.89 percent average. Last year at this time, 30-year rates averaged 3.54 percent.
  • 15-year fixed-rate mortgages: averaged 3.18 percent, with an average 0.5 point, increasing from last week’s 3.16 percent average. A year ago, 15-year rates averaged 2.81 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.15 percent, with an average 0.5 point, rising from last week’s 3.11 percent average. A year ago, 5-year ARMs averaged 2.74 percent.

Source: Freddie Mac

Investors Back Away From Home Flipping

Investors are retreating from flipping houses, showing skepticism that the practice will continue to pay off. About 43,615 single-family homes and condos were flipped in the first quarter of 2017, down 8 percent from the previous quarter and 6 percent from a year ago, according to ATTOM Data Solutions’ Q1 2017 U.S. Home Flipping Report. It represents the lowest number of flips in two years. ATTOM Data Solutions defines a flip as a home that has been sold twice within a 12-month period.

Home flips accounted for 6.7 percent of all single-family and condo sales for the quarter, one-third of which were purchased with financing. That’s up from 31.9 percent that were financed in the fourth quarter of 2016, setting the highest level since the third quarter of 2008.

More interesting ‘Home Flipping’ information at: ATTOM Data Solutions/RealtyTrac

There is ‘High Priority on Home Ownership’

More than two-thirds of Americans believe that owning a home is an essential part of the American dream, according to a new survey released by the National Association of Home Builders of more than 11,300 registered voters.

Other recent surveys also have shown a high desire for home ownership, despite the home ownership rate remaining stalled near a historical low of 64 percent. About 80 percent of millennials recently surveyed by rental website Apartment List say they hope to one day buy a home.

However, being able to afford one is the main obstacle, millennials say, that is holding them back. Thirty-six percent of the 24,000 millennial renters born between 1982 and 2004 surveyed said they’ll likely need to wait more than five years.

Source: National Association of Home Builders and “Wannabe Buyers Aren’t Saving Enough,” REALTOR® Magazine (5/30/2017)

Home Loan Interest Rates Are Still Dropping!

Good news, home buyers may want to rush to lock in: The 30-year mortgage rate hit its lowest level in nearly seven months this week, Freddie Mac reports.

Freddie Mac reports the following national averages for the week ending June 8:

  • 30-year fixed-rate mortgages averaged 3.89 percent, with an average 0.5 point, down from last week’s 3.94 percent average. Last year at this time, 30-year rates averaged 3.60 percent.
  • 15-year fixed-rate mortgages averaged 3.16 percent, with an average 0.5 point, dropping from last week’s 3.19 percent average. A year ago, 15-year rates averaged 2.87 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.11 percent, with an average 0.5 point, holding the same average as last week. A year ago, 5-year ARMs averaged 2.82 percent.

Source: Freddie Mac

Homeowners Cash in on Equity in Droves

Homeowners may be reluctant to sell, but they still want to see a piece of that equity in their homes now. They’re cashing out in levels that have not been seen since the financial crisis. Nearly half of borrowers who refinanced their homes during the first quarter did a cash-out option, the highest level since the fourth quarter of 2008, according to Freddie Mac.

While the number of cash-out refis grows, Len Kiefer, Freddie Mac’s deputy chief economist, does not see this as playing out similarly to the run-up to the financial crisis when borrowers were using their homes like ATMs. Borrowers must follower stricter underwriting standards now when they refinance a mortgage or get a loan. Also, there is less money at stake than a decade ago, Kiefer notes.

Source: “Homeowners Are Again Pocketing Cash as They Refinance Properties,” The Wall Street Journal (May 27, 2017)

Mortgage Rates Stuck in Holding Pattern

The 30-year fixed-rate mortgage continues to hover around 4 percent for the fourth week.

Freddie Mac reports the following national averages for the week ending May 11:

  • 30-year fixed-rate mortgages: averaged 4.05 percent, with an average 0.5 point, rising from last week’s 4.02 percent average. Last year at this time, 30-year rates averaged 3.57 percent.
  • 15-year fixed-rate mortgages: averaged 3.29 percent, with an average 0.5 point, rising from last week’s 3.27 percent. A year ago, 15-year rates averaged 2.81 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.14 percent, with an average 0.5 point, rising from last week’s 3.13 percent average. Last year at this time, 5-year ARMs averaged 2.78 percent.

Source: Freddie Mac

The Housing Market Is Outperforming Forecast

The housing market has been off to a roar this spring. In fact, the market is performing so strongly that the National Association of REALTORS® has upgraded its forecast for the year.

At the start of the year, home sales were expected to match last year’s pace due to higher mortgage rates and diminishing affordability. But the market is hardly slowing down, notes Lawrence Yun, NAR’s chief economist. He now predicts existing-home sales to rise by 3.5 percent, and home prices likely will increase 5 percent this year.

“With no imminent threat of a recession, the housing market’s strong first quarter sets the foundation for continued gains the rest of the year,” Yun writes.

Source: “First Quarter GDP May Be Cool, But Housing Market Downright Balmy,” The Hill (May 1, 2017)

Poll: More Expect Home Prices to Keep Rising

Sixty-one percent of U.S. adults believe home prices in their local area will rise over the next 12 months, the highest percentage since Gallup began collecting such data in 2005. Marking a difference between 2008 and 2012, when one-third of Americans believed home prices would increase.

Residents in the western region of the U.S. are the most optimistic, with nearly three-quarters of residents saying they expect price increases compared to slightly more than half of Midwestern and Eastern residents, according to the Gallup poll. With mortgage rates sitting below 4 percent, consumers may have more incentive to act now before home prices rise even more.

Sixty-seven percent of U.S. adults say now is a good time to purchase a home, which is down slightly from the 2012-to-2014 period when at least 70 percent said so. Unsurprisingly, homeowners (74 percent) are more likely than renters (56 percent) to say it’s a good time to purchase a home, according to the poll. Higher home prices and declining views of homeownership may be behind the dip in those who say it’s a good time to buy, Gallup researchers note.

Source: “More in U.S. Expect Local Home Values to Rise,” Gallup.com (April 24, 2017)