Smartphones Are Guiding Buyers

Mobile devices are what buyers turn to for finding properties and real estate agents. This has put increasing importance on real estate pros to make sure their websites are mobile friendly and they’re connecting in a way that clients most desire.

The typical home buyer used a mobile device to search for properties online, looking at websites with photos, home listings, and information about the homebuying process, according to the newly released “Real Estate in a Digital Age 2019 Report” published by the National Association of REALTORS® that looks at technology use within transactions.

Overall, 76% of all buyers say they found their home on a mobile device. Seventeen percent of buyers surveyed said they also found their agent on a mobile device, too.

Source: “Real Estate in a Digital Age,” National Association of REALTORS® (8/2019)

Refinance & Lower Loan Payments

Mortgage rates are hovering near three-year lows, and more homeowners may want to start taking advantage. Up to 20 million homeowners could “theoretically” see a 75-point drop in mortgage rates by refinancing, according to a recent analysis from Black Knight.

For homeowners with a credit score of at least 720 and with 20% of equity in their property, they could see savings of nearly $270 per month from lower rates.

Homeowners are starting to respond to lower rates. Refinances are at the highest point since mid-2016 and have doubled since late July. Refinances are up 37% over the past week alone, according to the Mortgage Bankers Association.

Latest Data Shows Housing Clash

Lower mortgage rates are prompting higher demand from home buyers to buy, but they aren’t finding enough homes for sale. Mortgage rates last week reached the lowest average since November 2016.

“July’s data highlight tension in the housing markets between buyers eager to take advantage of lower mortgage rates and potential sellers concerned about slowing price growth,” says George Ratiu, realtor.com®’s senior economist. “The decline in newly listed properties suggests that some would-be sellers are stepping back from the market, during the peak buying season, when most people are searching for their next home.”

July saw flat inventory growth, which realtor.com® researchers say could lead to inventory declines much sooner than originally anticipated. Newly listed properties were down 7% in July compared to a year ago, realtor.com® reports.

Source: realtor.com®

Faith in Real Estate, Not Stocks

Real estate has surpassed stocks as Americans’ favorite long-term investment, according to a nationwide Bankrate survey of about 1,000 respondents. Thirty-one percent of survey respondents named real estate as their favorite investment for building wealth that they don’t need access to for a decade or more. That is the best that real estate has performed on Bankrate’s annual survey in the last seven years. In 2018, stocks were the most popular .

Millennials, at 36%, were the most likely age group to call real estate their top long-term investment choice, according to the survey. Other generations also favored real estate, including generation X (31%), baby boomers (30%), and the silent generation (23%). “Millennials are higher on real estate than any other age group, have cooled a bit on cash, and still aren’t keen on the stock market when investing for more than ten years,” says Greg McBride, Bankrate’s chief financial analyst.

Source: “Real Estate Is Back as Americans’ Favorite Long-Term Investment,” Bankrate.com (July 17, 2019)

If You Don’t Like Home Prices, Blame the Labor Shortage

A shortage of subcontractors continues to hit the new-home market, placing upward pressure on home prices, according to the latest reading from the National Association of Home Builders and Wells Fargo Housing Market Index. The index asked builders about specific shortages they’re facing among 15 different occupations.

The labor shortage over the past year has meant builders have had to pay higher wages to attract subcontractors and have faced greater difficulty in completing projects on time. Seventy-five percent of builders surveyed say the shortages have also translated into higher home prices.

Subcontractors index at article source: “Labor Shortages Still Hurting Affordability,” National Association of Home Builders’ Eye on Housing blog (Aug. 5, 2019)

Shop Around for a Mortgage

More than a third of home buyers say they did not shop around before selecting their mortgage lender, according to new findings from Fannie Mae’s National Housing Survey. That may mean they’re missing out in thousands of dollars in savings.

Real estate professionals, with family and friends, may be among the most influential sources of advice regarding lender selection, notes Doug Duncan, Fannie Mae’s chief economist, in a new column at Fannie Mae.

We recommend a local lender knowledgeable about the area and offers a variety of loans should be one source. The agent needs to help buyers get a lender with the right type of loan that best fits them and the subject home.

Source: Fannie Mae

Reversal in Home Sales Slump

Home sales appear poised to reverse their downward trend, as contract signings in each of the four major U.S. regions rose in June, according to the National Association of REALTORS®’ latest Pending Home Sales Index. The West saw the highest increase in contract signings last month, according to NAR’s report.

Contract signings are now up 1.6% year over year, ending a 17-month streak of annual decreases. NAR Chief Economist Lawrence Yun sees the increase as the likely start of a lasting trend for home sales in the coming months. “Job growth is doing well, the stock market is near an all-time high, and home values are consistently increasing,” Yun says. “When you combine that with the incredibly low mortgage rates, it is not surprising to now see two straight months of increases.”

Hispanics Home Buyers Gaining

Hispanics are posting the largest homeownership gains of any ethnic group, new Census Bureau data shows. The wave of growth is a far cry from four years ago when the Hispanic homeownership rate reached a 50-year low. Since then, ownership among this segment has risen 3.3 percentage points.

Hispanics comprise 18% of the U.S. population, yet they accounted for nearly 63% of new U.S. homeowner gains over the past decade, according to the National Association of Hispanic Real Estate Professionals.

While the Hispanic ownership rate grows, ownership rates among blacks plunged to the lowest levels on record in the first quarter of this year, Census data shows. Economists note this is the first time in 20 years where Hispanics and blacks—the two largest racial minorities in the U.S.—are no longer following the same path when it comes to homeownership rates.

Source: “Wave of Hispanic Buyers Shores Up U.S. Housing Market,” The Wall Street Journal (July 15, 2019) [Log-in required.]

Build More Homes or Get Fined?

In a move to address the housing shortage, some California cities may start to face some stiff penalties if they don’t start building more homes. Under a new bill, cities could face fines up to $600,000 per month if they don’t build more homes for their residents.

A court can find a city or county in violation of state laws that set targets for how much housing a community needs to build for its population needs.

If found in violation, local governments would have a year to comply before the fine kicks in. Following six months of fines, the court could even take over a local government’s authority over its housing plans, according to the bill.

Survey: ‘Senior Housing Demand’

Investors are eyeing senior housing and plan to increase their buying within the sector over the next 12 months, according to the CBRE U.S. Seniors Housing & Care Investor Survey. Sixty-two percent of investors surveyed say they intend to increase the size of their portfolios with elderly living segments over the next year.

“Senior housing demand should remain at relatively healthy levels through 2019, given expected steady economic growth and lower mortgage rates,” says Jeannette Rice, Americas head of multifamily research at CBRE. “Demographic trends are positive for the asset class, with the baby boomers nearing the traditional age for senior housing and nearly 9,000 turning 70 every day this year.”

Source: “Report: Investors Plan to Increase Spending on Senior Housing,” Real Estate Weekly (July 10, 2019)