Trend Shows Why ‘Mobile Marketing Is Key’

The total amount of time consumers spend on smartphones has surpassed PCs, with more than 50 percent of all digital time now spent on mobile devices, according to data from “Mobile Internet usage is growing faster than Internet usage in general, up 23 percent compared with just 8 percent and, as a whole grew 34 percent year over year, while desktop digital advertising grew 11 percent.”

The findings should inform the way real estate professional present their advertising and listings. After all, 50 percent of home buyers used a mobile website or application in the home buying process last year, according to the National Association of REALTORS®.

While mobile advertising continues to grow, consumers are reporting that advertisements are disrupting their mobile experience. Contextual relevancy is key, according to a Forrester/Tapad report. Twenty-three percent of consumers surveyed say they want ads to be tailored to the content they’re viewing, and 21 percent expect ads to be tailored to their location, according to the report.

Source: “Buyer Behavior Trends Driving the Digital Shift Toward Mobile,” (June 18, 2015) and “Over 50 Percent of all Digital Time Now Spent on Mobile,” RISMedia (July 21, 2015)

To Buyers, Mortgage Rates May Be Overrated?

Changes in down payment requirements have more influence over home buyers’ willingness to buy than changes in mortgage rates, according to a new study published by economists at the New York Federal Reserve.

The Fed’s survey of buyers and renters found that the impact of interest rates may be overrated compared to the even the smallest changes in down payment requirements. The study found that dropping the required down payment from 20 percent to 5 percent increases the willingness to purchase, on average, by 15 percent among buyers and 40 percent among renters.

On the other hand, decreasing the interest rate on a 30-year fixed-rate mortgage raised the willingness to purchase a home by only 5 percent, on average. Buyers showed more influence by down payment changes even though the mortgage rate change could save them more money than the lower down payment.

Source: “Down Payments Motivate Buyers More Than Interest Rates,” Real Estate Economy Watch (July 20, 2015)

Judge a Property by Its Sound?

House hunters are now getting the ability to judge a home in a new way – by its sound level – in a new feature rolling out to House hunters.

A new company called HowLoud is dubbing itself as the WalkScore but for noise. So far, the new tool is only available in Los Angeles and Orange counties, but company officials are raising funds to roll it out nationwide.

HowLoud assigns a value to the noise level of a property based on a numerical scale, factoring in noise-makers like vehicle and airplane traffic. The company recently launched a crowdfunding campaign to roll out its prototype to the rest of the country. So far, the company has raised 40 percent of its $38,000 goal.

Source: “WalkScore, Except for Sound,” Architect (July 10, 2015)

Owners will be Focusing on Home Improvements

Home owners are expected to increase their home improvement spending expenditures in the next year, says a new study, and recent increases in home equity are partially behind that anticipated surge. Also, a rise in recent home sales activity is a good indicator for the home improvement market, since recent home buyers usually spend about a third more on home improvements than non-movers, even when controlling for age or income differences, according to Harvard University’s Joint Center for Housing Studies’ Leading Indicator of Remodeling Activity.

JCHS has predicted a surge in remodeling on the horizon in the coming years, driven by a rising number of older adults who will want to outfit their homes with more age-in-place home features as well as projects spurred by an aging housing stock.

Source: “Pick-Up Projected in Home Improvement Activity Moving into 2016,” Joint Center for Housing Studies of Harvard University (July 16, 2015)

Mortgage Rates Set New High for the Year

Fixed-rate mortgages reversed course this week and rose toward the highest level this year, amid ongoing volatility in the bond markets, Freddie Mac reports survey.

The average rate on the 30-year fixed-rate mortgage increased five basis points this week, averaging 4.09 percent, the highest level since October of last year.

Freddie Mac reports the following national averages for the week ending July 16:

  • 30-year fixed-rate mortgages: averaged 4.09 percent, with an average 0.6 point, rising form last week’s 4.04 percent average. Last year at this time, 30-year rates averaged 4.13 percent.
  • 15-year fixed-rate mortgages: averaged 3.25 percent, with an average 0.6 point, increasing from last week’s 3.20 percent average. A year ago, 15-year rates averaged 3.23 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.96 percent, with an average 0.5 point, increasing from last week’s 2.93 percent average. Last year at this time, 5-year ARMs averaged 2.97 percent.

Source: Freddie Mac

What First-Time Home Buyers Are Willing to Sacrifice

A new survey shows that consumers saving for a home are willing to forego modern conveniences in order to secure a down payment. That may even mean giving up phones, Internet, cable TV, or Starbucks, according to a newly released survey by the business advisory firm the Collingwood Group.

Potential first-time home buyers are making such sacrifices because they want to be able to make a sizable down payment on their home purchase. Nearly two-thirds recently surveyed by TD Bank say they’d like to put 20 percent down or more on their home purchase. The bank polled more than 1,000 consumers who were not home owners but intended to purchase a home within the next five years.

First-time home buyers are increasing their ranks lately, with their share in the housing market rising to 32 percent in May. That matches their highest share since September 2012, according to the National Association of REALTORS®. A year ago, first-time buyers represented 27 percent of all buyers.

Source: TD Bank First-Time Home Buyer Pulse and “Report Says More Millennials Value Home Ownership Over Conveniences,” MReport (July 14, 2015)

Home Remodeling Surge Coming: Here’s Why

As the baby boomer generation ages, many home owners likely will choose to “age in place” and will require remodeling to better suit their changing needs.

“Since much of the housing stock is currently ill-equipped with even basic accessibility features, older home owners aging in place will need to invest in retrofitting their homes in order to age comfortably and safely,” writes Abbe Will, researcher analyst for JCHS.

“Yet the current housing stock is not especially equipped to meet the accessibility needs of an aging nation, as not even a third of homes have what could be considered basic accessibility features, such as a no-step entry and bedroom and full bathroom on the entry level,” JCHS’s analysis notes.

This suggests “the need for significant retrofit spending on existing homes to narrow this supply-demand gap,” the JCHS analysis notes. Meanwhile, “older households in the South and West regions of the country are already better accommodated for aging in place, with relatively more homes in these regions having basic accessibility features, and this trend is not expected to change over the coming decade.”

Source: “Aging Society and Inaccessible Housing Stock Suggest Growing Need for Remodeling,” Harvard University’s Joint Center for Housing Studies’ Housing Perspectives Blog (July 8, 2015)

Relief in Mortgage Interest Rates Likely to Stick Around

Average fixed-rate mortgages moved lower this week, helping to keep buyer activity strong toward the close of the spring homebuying season, Freddie Mac reports in its weekly mortgage market survey.

“Yields on Treasury securities declined this week in response to investor concerns about events in Greece and China,” says Sean Becketti, Freddie Mac’s chief economist. “Mortgage rates fell as well, although not by as much as government bond yields. The rate on 30-year fixed-rate mortgages fell 4 basis points to 4.04 percent. Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases.”

Freddie Mac reports the following national averages for the week ending July 9:

  • 30-year fixed-rate mortgages: averaged 4.04 percent, with an average 0.6 point, dropping from last week’s 4.08 percent average. A year ago, 30-year rates averaged 4.15 percent.
  • 15-year fixed-rate mortgages: averaged 3.20 percent, with an average 0.5 point, dropping from last week’s 3.24 percent average. Last year at this time, 15-year rates averaged 3.24 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.93 percent, with an average 0.4 point, dropping from last week’s 2.99 percent average. A year ago, 5-year ARMs averaged 2.99 percent.1-year ARMs: averaged 2.50 percent, with an average 0.3 point, dropping from last week’s 2.52 percent average. A year ago, 1-year ARMs averaged 2.40 percent.

Source: Freddie Mac

Survey Shows Value of Like-Kind Real Estate Exchanges

The 2015 Like-Kind Exchanges: Real Estate Market Perspectives Report of NAR’s commercial and residential members believe these tax provisions are necessary for gaining and disposing properties, and help fuel the country’s economic and job growth.

Like-kind exchanges, also known as Internal Revenue Code Section 1031, give individuals and businesses a tax deferment on gains after they get rid of of one property as long as the proceeds are reinvested real estate. These types of exchanges are available to individuals, partnerships, corporations, limited liability companies, or trusts.

REALTORS® participate in like-kind exchanges for many reasons besides deferring capital gains taxes; they use them as equity to buy more properties, as well as in estate planning, diversifying their portfolio, and completing development projects.

Of those surveyed, 86 percent said these tax provisions allowed them or their clients to invest and make improvements in other properties, helping to create more construction and other jobs. Overall, 63 percent of respondents said they participated in a like-kind exchange transaction during 2011-15, which created between 10 and 35 new jobs.

Source: NAR

More Home Owners Warm Up to Idea of Selling Now!

Home owners are becoming more upbeat about potentially selling their home, which should bode well for purchase activity this year, according to Fannie Mae’s June 2015 National Housing Survey, a survey of 1,000 Americans about their attitudes toward housing. Thanks to increased job and income growth, more consumers are viewing the current selling climate more optimistically, which could help reverse the low inventory.

The share of Americans surveyed who say now is a good time to sell reached a new survey high in June, increasing three percentage points to 52 percent. It’s the first time the metric had crossed the 50 percent threshold in the survey’s history.

“With an increase in housing supply from those ready to sell, combined with higher rental cost expectations, more potential home buyers may be encouraged to leave the sidelines,” according to Fannie Mae’s survey.

“Together, these results point to a healthier home purchase market, with more renters likely to find owning to be more cost-effective than renting and more sellers likely to put their homes on the market,” says Doug Duncan, chief economist at Fannie Mae.

Source: Fannie Mae