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)

Study: January, February ‘Great for Buying’

For home buyers hoping to snag a deal, they may want to make a move now. Home prices in January usually decrease compared to the spring and summer buying season.

There’s plenty of research to back that up too. NerdWallet recently crunched two years of realtor.com® data that reflected the 50 largest U.S. metros. Researchers found that January and February were the top months for those looking to get a bargain. In those months, home sales prices were 8.45 percent lower on average than in June through August.

“You basically face almost half of the competition with almost the same amount of inventory in the market,” says Jonathan Smoke, realtor.com®’s chief economist. Plus, buyers likely will face fewer homes with multiple bidders.

“As we look toward spring and later in 2017, [mortgage rates are] another reason to buy in January and February,” Smoke says. “Because rates are expected to be about 50 basis points, or half a percent, more as the year goes on.”

Source: “Why January Is the Best Time to Buy a Home” NerdWallet (Jan. 13, 2017)

Who Pays What in Closing Costs: By State

The latest findings come from Bankrate.com’s survey of average closing costs by state. (Note: The survey excludes discount points, taxes, title fees, property insurance, association fees, interest, and other prepaid items in its calculations.)

“Thanks to the new and improved mortgage disclosures that the Consumer Financial Protection Bureau introduced last October, closing cost estimates have become more accurate because they mandate that lenders include all costs ahead of time,” says Holden Lewis, Bankrate.com’s senior mortgage analyst. “This is great for consumers who can now comparison shop with more confidence.”

View a full breakdown of all states and Washington, D.C., to find the average home buyers pay in closing costs.

Source: http://www.bankrate.com/finance/mortgages/closing-costs/closing-costs-by-state.aspx

Most Popular Exteriors on New Homes

Vinyl is the most widely used exterior on new single-family homes, according to the latest Census Bureau data. Vinyl (which includes vinyl-covered aluminum) was used for siding material on 27 percent of new homes nationwide in 2015, followed by stucco at 25 percent, brick or brick veneer at 22 percent, and fiber cement siding at 19 percent. Wood or wood products accounted for 5 percent.

The materials used can vary drastically from region to region. For example, stucco was the most popular siding material in the Pacific and Mountain regions, at 57 percent and 55 percent, respectively. In the East and West South Central regions, at least 55 percent of new single-family homes last year used brick or brick veneer.

View map from the National Association of Home Builders to see the most popular siding materials by region at: “Vinyl Is the Most Widely Used Exterior on New Homes,” National Association of Home Builders’ Eye on Housing blog (7/7/16)

Home Owners May Be Too Upbeat About Prices

Home owners may be slightly too optimistic about their home’s value compared to what appraisers say it’s actually worth. Home values are, on average, about 2.17 percent lower than what home owners expect compared to appraisers’ estimates, according to Quicken Loans’ latest Home Price Perception Index (HPPI).

The gap between home owner expectations and appraisal estimates widened in March. In February, appraisals were 1.99 percent lower than what home owners expected.

“The varying HPPI values across the country illustrates the importance of examining the market at the local level,” says Quicken Loans Chief Economist Bob Walters. “If home owners are eyeing that new home being built across town, they could be pleasantly surprised how much their home will sell for – or in some instances their equity may not take them as far as they think – depending on what area of the country they’re in. … It’s not always easy for home owners to keep their finger on the pulse of their equity.”

Source: Quicken Loans

Could Renters Get a Tax Deduction Soon?

A new bill hopes to provide some relief to renters who are faced with skyrocketing rental costs – by giving them a tax break.

If approved, the bill would allow renters to deduct what they pay for rent from their federal taxes.

Rep. Alan Grayson, a Democrat from Florida — who introduced the bill — cites the following example: Average taxpayers paying about $1,500 a month – or $18,000 a year – could possibly save $4,500 annually through the deduction if they fall in the 25 percent tax bracket.

“It could help renters who are looking to become home owners, because it will lower their housing costs,” says Linda Couch, senior vice president for policy at the National Low Income Housing Coalition. “That savings could be put toward a down payment.”

Source: “Move Over, Home Owners – Renters Could Get Tax Breaks Too,” realtor.com® (March 2, 2016)

This is the Hottest Color in Home Decor

White still remains the top seller when it comes to color for most home furnishings but gray may soon edge it out. Home owners are reaching for shades of gray to decorate their spaces, with grays serving as a new neutral in all tones, from soft silvers to dark charcoals.

“Gray plays well with other colors,” says Dee Schlotter, a color brand manager for Glidden Paints.

Gray is edging out the beige era. As Jackie Jordan, director of color marketing at Sherwin-Williams, notes “we were beiged out.”

Home furnishing stores – like Ethan Allen, West Elm, and Restoration Hardware – are showing gray throughout their furnishings. Also, gray kitchen cabinets are becoming more common as well as gray flooring.

Jackie Dettmar of the carpeting manufacturer Mohawk Group, says shades of gray have become some of their top sellers for the last five years. Also, Kohler now offers five shades of gray in its plumbing fixtures for bathrooms and kitchens.

Source: “The Gloomiest Color on the Spectrum Is Now the Hottest for Your Home,” The Washington Post (Feb. 25, 2016)

5 Paint Mistakes Home Sellers Should Avoid

The wrong paint color can be a big turn-off to potential home buyers. House Beautiful recently highlighted some of the worst mistakes home owners can make when it comes to painting their house, including:

1. Painting a ceiling a flat white color. “I never paint a ceiling dead white because all white paint has a bit of gray in it, and it takes the room down,” designer Athalie Derse told House Beautiful. Instead, she suggests choosing a cream shade.

2. Too many colors from room to room. “Even when I don’t use the same colors everywhere, I still like the rooms to feel connected,” designer Mona Ross Berman says. “The bedroom should never feel like it’s in a completely different house than the living room. The whole house has to make sense as one.”

3. Using the same color palette for the entire house. On the flip side, home owners who only stick to one color palette may be making the home too bland. “A two-color scheme can be great, but there has to be some relief, or it comes across as too pat and makes everything seem stiff,” says designer Tom Scheerer.

4. Matching. “You never want to match your walls to a color in one of your fabrics,” Sallie Giordano says. “It will be too strong. Find a grayed-out version of the color.”

5. Use neutrals to balance out color. Some home owners may be tempted to go overboard with one color. “The biggest mistake people make when they’re trying to be colorful and exciting is to forget that you need to balance it with neutrals,” says designer Todd Klein. He adds that architectural elements in white or even a few gray throws can give visitors’ eyes a place to rest.

Source: “The 9 Paint Color Mistakes You Should Never Make,” House Beautiful (August 2015)

Advantage: Home Buyers?

The residential real estate market has “clearly shifted in favor of buyers,” says Jonathan Smoke, realtor.com®’s chief economist, in his latest analysis of housing data from the first three weeks of September.

“Would-be buyers have struggled to find a home all year, but now inventory is nearly as high as it has been all throughout 2015, and it isn’t moving as quickly,” Smoke says. “Likewise, price appreciation remains above normal levels but has declined from the higher pace of the spring and summer.”

Homes have been selling more slowly in September, which might make sellers more willing to negotiate on the price or other concessions, realtor.com®’s report notes.

“Sellers should have reasonable expectations for prices and be more patient during the fall,” Smoke says in his latest report. “But both buyers and sellers should be encouraged by a market that continues to see healthy gains in transactions over last year.”

Source: “The 20 Hottest Markets in September 2015,” realtor.com® (Sept. 29, 2015)

Mortgage Rates ‘Hold Steady This Week’

Fixed-rate mortgages barely budged this week as the 30-year fixed-rate mortgage continued to hover below 4 percent.

Freddie Mac reports the following national averages for the week ending Sept. 10:

  • 30-year fixed-rate mortgages: averaged 3.90 percent with an average 0.6 point, rising from last week’s 3.89 percent average. A year ago, 30-year rates averaged 4.12 percent.
  • 15-year fixed-rate mortgages: averaged 3.10 percent with an average 0.7 point, climbing slightly from last week’s 3.09 percent average. Last year at this time, 15-year rates averaged 3.26 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.91 percent with an average 0.5 point, dropping from last week’s 2.93 percent average. A year ago, 5-year ARMs averaged 2.99 percent.2.45 percent.

Source: Freddie Mac