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 Biggest Obstacles Facing Housing in 2015

Industry analysts and economists largely believe the real estate market will gain traction this year, but they acknowledge several challenges that pose a potential derailment to the ongoing recovery. CNNMoney recently highlighted several of those challenges:

Investors exit the market: Institutional investors accounted for 15 percent of all sales in October, a drop from 20 percent in January, according to National Association of REALTORS® housing data.

Lending criteria still tight. REALTORS® still say tight credit is holding many of their would-be buyers back and derailing transactions as buyers continue to struggle to qualify for a mortgage (although REALTORS® surveyed say they have seen a slight improvement in lending recently), according to the latest REALTOR® Confidence Index.

Rising mortgage rates: Mortgage rates are sitting near historical lows at the moment, under 4 percent for the 30-year fixed-rate mortgage, but don’t expect that to last. Many economists are predicting rates will push up to 5 percent by the end of this year.

Foreign buyers buying less in U.S.: Foreign buyers helped fuel the housing market recovery, but there are signs they’re presence is receding.For example, in California alone, sales to international clients has plunged about 25 percent in the past year, according to the California Association of REALTORS® (more: NAR’s 2014 Profile of International Home Buying Activity).

Source: “5 Biggest Threats to the Housing Market,” CNNMoney (Jan. 2, 2015)

Mortgage Applications Take Surprising Turn

Loan demand was on the rise last week, posting a strong rebound that was driven mostly by applications to purchase a home, the Mortgage Bankers Association reports in its seasonally adjusted weekly mortgage market survey, reflecting the week ending Nov. 14. The increase in demand came despite interest rates mostly staying flat for the week.

Total application volume, reflecting applications for home purchases and refinances, climbed nearly 5 percent. Refinance applications rose 1 percent week-to-week, while applications for home purchases, viewed as a gauge of future buying activity, surged 12 percent. It was the highest level for purchase applications since July, the MBA reports.

“The MBA and other data are showing strength in the market for new homes, likely reflecting the boost from continued job growth in recent months,” says Michael Fratantoni, the MBA’s chief economist.

Meanwhile, the 30-year fixed-rate mortgage declined slightly last week to 4.18 percent from 4.19 percent the week prior, the MBA reports.

Source: “Weekly Mortgage Applications Jump Unexpectedly,” CNBC (Nov. 19, 2014)

Ready to Buy or Sell: ‘Move-Up Buyers Return’

As home equity levels improve, the move-up buyer is back on the market. More move-up buyers are selling their current properties to replace them with pricier homes, according to the latest report from FNC, a real estate data firm.

The move-up buyers are coming with larger down payments on new homes as recent improvements in home equity levels have allowed them to move.

“An important sign of a healthy and sustainable recovery is increased housing turnover driven by trade-up buying, which is more or less discretionary spending,” says Yanling Mayer, FNC’s director of research. “These buyers are typically more responsive to market conditions and financial incentives.”

Rising mortgage rates are driving the higher demand because move-up buyers are wanting to take advantage before mortgage rates rise any more, brokers say.

Plus, more move-up buyers are in a better position to move. Forty percent of all home owners now have at least 20 percent or more of equity in their homes now, according to RealtyTrac data.

Also, 8.3 million additional home owners are expected to have at least 20 percent equity within the next 15 months if home prices continue to appreciate at the same pace, says Daren Blomquist, vice president of RealtyTrac. Blomquist adds that if 5 percent of these home owners decide to sell their homes, that would amount to an additional 415,000 homes for sale in the coming months.

Source: “Move-up buying activity rises with home equity gains,” HousingWire (Sept. 12, 2013)