Study: Real Estate Cheapest in Fall, Winter

The market tends to slow in the fall and sales prices start to dip. Sales prices drop nearly 3 percent, on average from summer (June through August) to fall (September through November).

Home sale prices tend to be cheapest in the winter. In January or February, for example, homes could potentially cost 8.45 percent less on average than in June through August.

Be able to choose the best time to look for the best buy and now is a great time to start the process.

Source: “House Shopping After Summer Ends? Buying Later in the Year Could Save You Thousands,” NerdWallet (Sept. 20, 2016)

Federal Reserve on Interest Rate Hike: Not Yet

The Federal Reserve voted Wednesday to continue to leave short-term rates alone, but hinted that a raise is still likely before the end of the year.

Fed Chair Janet Yellen offered an upbeat report about a strengthening economy, while still acknowledging the sluggish first half of the year. Employment is increasing and household incomes are too, she said. While the case for raising rates has strengthened, Yellen said there was no need to raise rates quite yet because inflation remains below the Fed’s 2 percent target.

“We judged that the case for an increase had strengthened but decided for the time being to wait for continued progress toward our objectives,” Yellen said at a press conference following the Fed’s policy meeting.

Source: “Fed Stands Pat, But Says Case for Rate Increase Has Strengthened,” The Wall Street Journal (Sept. 22, 2016) and “Why Housing Doesn’t Care About the Fed,” CNBC (Sept. 21, 2016)

Home Flipping is Hot Again!

Homes flipped in the second quarter accounted for 5.5 percent of all single-family and condo sales. A total of 39,775 investors (both individuals or institutions) completed at least one home flip during the quarter, the highest number of home flippers since the second quarter of 2007, according to the Q2 2016 U.S. Home Flipping Report, released by ATTOM Data Solutions.

“We’re starting to see home flipping hit some milestones not seen since prior to the financial crisis, which is somewhat concerning, but there are a couple of important differences in the home flipping of 2016 compared to 2006 when home flipping peaked during the last housing boom,” Blomquist says. “First, home flippers are realizing a much bigger gross ROI in 2016, averaging 49 percent in the first two quarters compared to an average gross ROI of just 27 percent in 2006. Second, while an increasing number of flippers are financing their purchases, more than two-thirds are still using cash to purchase compared to about one-third using cash to purchase back in 2006.”

Data on 10 markets that had the highest flipping rates in the nation at report source: RealtyTrac

Home Colors That Turn Off Buyers

Could the wrong shade of paint dampen interest in a home? As a real estate pro, we can point sellers in the right direction when they’re considering color updates.

First, take note of palettes consumers tell researchers they like: The favorite color combos for exteriors are white and gray, beige and taupe, and slate and black, according to the 2013 National Home Color Survey. On the inside, neutral wins too. The most popular 2016 colors include grays and shades of white, as well as natural-looking greens.

So, what are the paint chips your clients should avoid? Credit.com highlights their findings based on studies of colors at: 4 Colors You Should Never Paint Your Home,” Credit.com (Aug. 22, 2016)

America’s 10 Hottest Markets for Real Estate

Much like that last glorious weekend at the beach before the humdrum schedule of school and work kicks in, August typically sees one last burst of home-buying activity before the busy summer real estate season comes to a close.

So it’s no surprise that with September around the corner, a preliminary analysis of our data here at realtor.com® shows that we’re having the hottest August in a decade—in real estate terms, that is. (It was pretty darn hot weather, too.) Homes for sale are moving off the market 2% more quickly than this time last year, and prices are hitting new record highs.

Details at: http://www.realtor.com/news/trends/americas-20-hottest-markets-real-estate-august-2016/

The Best Time to Invest Is Now?

“Whether it’s stricter lending standards, a shift in attitudes among borrowers or simply the nation getting wiser about the risks of real estate, we’re hardly seeing irresponsible buying in 2016,” writes Reeves, who is also the editor of InvestorPlace.com. “What we are seeing is a healthy housing market that continues to steadily and organically appreciate.”

“Nobody should put all their savings into one or two properties, but in a diversified portfolio, there is a very good argument for real estate investments in 2016,” writes Reeves.

Companies are stepping in to help more people become investors too. For example, Investability, an online real estate marketplace, says it offers tools like cash flow calculators that allow those interested in investing to input estimated vacancy rates and rental incomes from potential properties.

Source: “This Is the Best Time in History to Invest in Real Estate,” MarketWatch (Aug. 23, 2016)

 

 

Buyers Prove Sensitive to Mortgage Rates

Even the slightest fluctuations in mortgage rates are having a big impact on application volume. Total mortgage applications, including for refinancings and home purchases, dropped 2.1 percent on a seasonally adjusted basis last week as rates rose slightly, the Mortgage Bankers Association report.

The average 30-year fixed-rate mortgage bumped up to 3.67 percent last week from a 3.64 percent average the previous week, MBA reports. Applications for refinancings dropped 3 percent last week. Still, refinancings are nearly 45 percent higher than the same week a year ago.

Applications for home purchases dropped slightly by 0.3 percent last week and are 7.7 percent higher than a year ago, MBA reports. However, applications for purchases are now at a six-month low.

Source: “Weekly Mortgage Applications Drop 2.1% as Rates Edge Higher,” CNBC (Aug. 24, 2016)

Tiny Homes Are Making a Bigger Mark

Tiny houses are trending bigger nationwide. Interest in small-home living among the public has gained momentum since the recession, and made some Americans crave a simpler, less expensive way to live, according to U.S. News & World Report.

These small homes, often built on a trailer and portable, tend to be under 700 square feet. They tend to cost a fraction of a typical home, as low as $10,000 or up to $100,000, depending on the size.

TV shows are giving viewers a peek at this new type of living, especially on networks that HGTV that have shows featuring small-home living such as “Tiny House Hunters,” “Tiny House Nation,” and “Tiny House, Big Living.”

Source: “The Big Impact of Tiny Homes: How Little Houses Are Changing Real Estate,” U.S. News & World Report (Aug. 5, 2016)

Home Loan Rates Move Even Lower This Week

Fixed-rate mortgages dropped slightly this week compared to the previous week, and continue to hover near all-time lows.

Freddie Mac reports the following national averages for the week ending Aug. 18:

  • 30-year fixed-rate mortgages: averaged 3.43 percent, with an average 0.5 point, dropping from last week’s 3.45 percent average. Last year at this time, 30-year rates averaged 3.93 percent.
  • 15-year fixed-rate mortgages: averaged 2.74 percent, with an average 0.5 point, dropping from last week’s 2.76 percent average. A year ago, 15-year rates averaged 3.15 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.76 percent, with an average 0.4 point, rising from last week’s 2.74 percent average. A year ago, 5-year ARMs averaged 2.94 percent.

Source: Freddie Mac

Loan Demand Drops Despite Low Rates

Total mortgage activity – including refinances and home purchases – dropped 4 percent last week on a seasonally adjusted basis even though mortgage rates are near all-time lows, the Mortgage Bankers Association reported Wednesday.

“A strong job market and low rates continue to support home sales,” says Michael Fratantoni, MBA’s chief economist. MBA reports the average on the 30-year-fixed rate mortgage remains near all-time lows, decreasing last week to 3.64 percent (from 3.65 percent the previous week).

Source: “Mortgage Applications Fell 4% Even as Rates Sit Near Record Lows,” CNBC (Aug. 17, 2016)