Tuesday, August 20, 2013

Consumers Say Home Ownership is Top Priority!

With the real estate market rising, the once forgotten, American dream is making a quick comeback. More and more consumers are showing that owning a home has become their top priority for the future! 

Concerns of the depleting and then crashing economy in 2010-2011 (some areas saw this years prior) caused many consumers to shy away from getting a piece of the American dream. As banks foreclosed on homes, more and more people became renters as a temporary alternative to owning a home. 

Recently, the market has been on the rise, and housing specifically seems to be picking up. A recent survey was conducted by the National Association of REALTORS that showed a concise agreement that consumers view homeownership a top priority as compared to previous years. 

Americans overwhelmingly believe owning a home is a good financial decision and a majority of renters say homeownership is one of their highest priorities for the future. The 2013 National Housing Pulse Survey also found that renters are thinking more about purchasing a home now than in past years, while the number of people who say they prefer to rent has declined. 


Some key findings from the year’s survey include:
  • Eight-in-ten Americans believe buying a home is a good financial decision, up 8 points since 2011.
  • Half of renters now say that eventually owning a home is one of their highest personal priorities, up 9 points from 2011.
  • Respondents expect to see continued improvement, as 37 percent expect real estate sales to increase in the year ahead.

Source: http://www.realtor.org/reports/housing-pulse-surveys

Thursday, August 8, 2013

4 Threats That Remain in Housing Recovery

The housing recovery appears to be on track and growing stronger. Home sales and prices are up after reaching bottom in 2010, foreclosures and mortgage delinquencies are dropping, yet housing affordability still remains high. 
So why are some analysts and economists concerned? 
At a recent Milken Institute Global Conference in Beverly Hills, Calif., panelists said that threats to the housing recovery still remain. The biggest threats they pointed to included:
  1. Land scarcity: Real estate developers are struggling to find desirable land to start new projects, which is limiting the supply of new homes. A few years ago, banks took ownership of land after developers had foreclosed on some projects. The land is worth less than its original price so banks are reluctant to write off additional losses by selling it too cheaply. Plus, lenders remain cautious about issuing loans for new land purchases. 
  2. House flippers should be cautious: Housing affordability is high mostly due to super low mortgage rates, and investors are taking advantage with intentions of flipping homes for profit. "No doubt you can buy a house today and get a really good price and a low-interest loan,” says Jeff Greene, president of Florida Sunshine Investments. “But if you want to sell that house to somebody two or three years later and rates go up to 5 or 6 percent, how much is he going to pay for that house?"
  3. Foreign buyers potentially inflating prices: In some markets, strong demand by foreign buyers has helped home prices recover, which has made homes more expensive for Americans in some areas. Some analysts fear that it could even lead to another housing bubble if interest rates started rising quickly as well. Markets like Miami, Los Angeles, and New York are seeing strong demand among foreign buyers. Some say this is a good thing, because it reflects a strong faith in the U.S. market. 
  4. A ‘patchy’ recovery: Some markets are seeing rapid increases with bidding wars, rising prices, and low inventories, while other markets are still at a standstill. For example, Miami’s housing market is “on fire” while 80 miles north in Palm Beach County there’s a “huge glut of housing,” says Greene. 
Source: “5 Reasons the Housing Recovery Remains Wobbly,” U.S. News & World Report (May 3, 2013)

Monday, August 5, 2013

June Existing-Home Sales Slip but Prices Continue to Roll at Double-Digit Rates

Existing-home sales declined in June but have stayed well above year-ago levels for the past two years, while the median price shows seven straight months of double-digit year-over-year increases, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 1.2 percent to a seasonally adjusted annual rate of 5.08 million in June from a downwardly revised 5.14 million in May, but are 15.2 percent higher than the 4.41 million-unit level in June 2012.
Lawrence Yun, NAR chief economist, said there is enough momentum in the market, even with higher interest rates.  “Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” he said.  “However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.07 percent in June from 3.54 percent in May, and is the highest since October 2011 when it was also 4.07 percent; the rate was 3.68 percent in June 2012.
Total housing inventory at the end of June rose 1.9 percent to 2.19 million existing homes available for sale, which represents a 5.2-month supply2 at the current sales pace, up from 5.0 months in May.  Listed inventory remains 7.6 percent below a year ago, when there was a 6.4-month supply.  “Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth,” Yun remarked.
The national median existing-home price3 for all housing types was $214,200 in June, up 13.5 percent from June 2012.  This marks 16 consecutive months of year-over-year price increases, which last occurred from February 2005 to May 2006.