Builders Raising Prices, Limiting Supply

Builders Raising Prices, Limiting Supply
Those looking to buy new homes will likely start to see price hikes, and possibly a smaller selection. Many of the nation’s builders say they’ve had to increase prices due to the rising costs of land, labor, and materials. 
For example, Pulte’s sale price, on average, has increased 10 percent to $287,000 in the first quarter of this year. Meanwhile, the average existing home price was $233,200 in March, according to the National Association of REALTORS®. 
“Builders are feeling pinched by rising costs of key building components which is causing home construction costs to rise at a faster pace than appraised values,” says David Crowe, chief economist of the National Association Home Builders. Read more ....

Home Prices to Increase

Home Prices to Increase
Moody's: Loss Severities to Remain High: Home prices will increase over the next three years as the economy expands and servicers work through their distressed inventories, according to a report from Moody’s Analytics. However, the firm predicts rising prices will not be enough to offset anticipated rising loss severities.

Home prices will rise about 4.2 percent between the fourth quarter of last year and the fourth quarter of 2015, according to Moody’s. “Not only will several years of solid job and household growth help home values by the end of this period, housing markets throughout the nation will have worked off most of the remaining distressed inventory,” Moody’s said in its report.
Recent price gains have resulted from high affordability, soaring investor interest, and low inventories with declining foreclosure inventories playing a major role. Read more ...

Best Time to Sell?

Best Time to Sell?
More Americans Say 'Yes' Seller confidence is surging: The number of home sellers who say now is a good time to sell doubled in the second quarter, according to a new survey of nearly 2,000 owners conducted by real estate brokerage Redfin. In the first quarter of 2013, 22 percent surveyed said it was a good time to sell compared to 45 percent in the second quarter.
 

'More folks who bought before the bubble burst are now above water and listing their homes,' says Chad Dierickx, a real estate practitioner with Redfin. 'When sellers see their neighbors' homes selling quickly and for prices they never would have imagined a couple of years ago, they can't help but be optimistic about the market.'

Nearly 32 percent of home owners surveyed said they have no concerns about selling right now. Eighty-five percent of sellers say they believe home prices will rise in their area for the next year — up from 81 percent in the first quarter, according to the survey. 
This marked the fourth-consecutive week mortgage rates inched lower. 
'The housing market is getting a boost with mortgage rates hovering at or near record lows,” says Frank Nothaft, Freddie Mac’s chief economist. Freddie Mac reports the following national averages for mortgage rates for the week ending April 25: See Mortgage Rates ... 

Home Prices to Rise 10% This Year

Home Prices to Rise 10% This Year
Barclays: Home prices will likely climb 10 percent in 2013 and 8 percent in 2014, according to Barclays analyst Stephen Kim, who recently upgraded his view of the housing market from neutral to positive. 
Kim told The Wall Street Journal recently that low mortgage rates are helping to make buying more affordable than renting in many markets. 
About “18 months ago, the industry was nothing much to look at: dilapidated foreclosures were flooding the market, home equity had suffered the worst retrenchment in a generation, and housing starts and sentiment were far below historic troughs levels,” Kim notes.
“But after stabilizing in 2012, both new and existing home prices are now accelerating much more rapidly than in the 1990s cycle.”  Read more ..

Data Shows Mortgage Credit Easing,

Data Shows Mortgage Credit Easing,

Others Not so Sure: Lenders are showing signs of easing up on underwriting for mortgages, according to the latest report from Ellie Mae Inc., a mortgage origination software company. But some critics say they aren’t seeing it in their markets yet, as their customers continue to struggle to qualify for a mortgage, posing one of the biggest obstacles to the housing recovery. 

Ellie Mae’s latest findings may provide some encouraging signs for those buyers who have been shut out: Credit scores and down payments for approved mortgages are moving lower.

FICO scores for approved mortgages averaged 743, dropping to the lowest point since Ellie Mae began its tracking in August 2011. For the first quarter, the average credit score overall among approved borrowers was 746, which compares to 748 for all of 2012, according to Ellie’s report, which reflects March data of approved mortgages. 

Borrowers approved for a loan made, on average, a 19 percent down payment, the lowest since May 2012, according to Ellie Mae. The front-end debt-to-income ratios were 23 percent.  See Rates: 

Prices Up, Existing-Home Sales Down in March

Prices Up, Existing-Home Sales Down in March

NAR: With a sharp jump in prices, existing-home sales fell 0.6 percent in March—the steepest drop since December—to 4.92 million units, the National Association of Realtors(NAR) reported Monday. Economists had expected a 1.0 percent increase to 5.03 million from February’s original report of 4.98 million sales.

February sales were revised downward to 4.95 million.
The median price of an existing single-family home jumped $11,100—the strongest monthly gain in almost eight years—to $184,300, the highest level in seven months. 
Watch our Video to learn more....

Recent Price Gains May Not Be Here to Stay

Recent Price Gains May Not Be Here to Stay Fitch: While some might be rejoicing at the recent rising home prices and rising home sales seen across the nation, Fitch Ratings “still views these gains cautiously.” In fact, the agency predicts price gains will slow and perhaps even reverse over the next year.

Fitch expects a price “trough in the middle of 2014” but suggests inflation will keep prices from falling more than 3.5 percent.
“While rising prices and sales volumes suggest a recovery, they are not moving in sync with key economic indicators that would otherwise support a sustainable price level,” Fitch stated in its most recent quarterly report.Fitch chalks it up to pent-up demand. Persistent low interest rates, For Third Week, Mortgage Rates Sink Lower: Read more .....

Top Regrets Among Buyers, Renters Survey Reveals

Top Regrets Among Buyers, Renters Survey Reveals
Slightly more than half of Americans harbor at least one regret about their current home, according to Trulia’s Real Estate Regrets survey. In today’s seller’s market,Trulia says buyers are especially vulnerable to making decisions they may regret in the future.

“Faced with limited inventory, many buyers will feel pressure to act fast—but snap decisions often end in regrets,” said Jed Kolko, chief economist at Trulia.
One of the common missteps of new homeowners, according to Kolko, is buying before reaching financial stability. “Many buyers would have fewer regrets if they waited until they were in strong enough financial shape to afford a house that really meets their needs,” he said. The top regret listed among homeowners is not choosing a larger home. Thirty-four percent of homeowners cited this regret in Trulia’s survey. Read more ...

Fannie: Housing Recovery 'More Robust'

Fannie: Housing Recovery 'More Robust'

Fannie Mae economists say that “the broadening housing recovery could very well be more robust” than they anticipated, according to the mortgage giant’s lately monthly economic outlook report.

Low inventories of homes for sale are contributing to rapid price increases all across the country, which are expected to continue throughout this year.

Fannie Mae economists predict that existing-home prices will rise 5.1 percent in 2013, reaching a median $186,000. They also predict home prices will increase another 3.8 percent in 2014, reaching $193,000.

New-home prices are expected to rise 4.1 percent in 2013 to a median of $254,000, followed by a 3.5 percent rise in 2014 to $263,000, according to Fannie Mae’s report. Read more ...

Builders Step Up Construction

Builders Step Up Construction

Due to Rising Demand: Homebuilders broke ground on homes in March at the fastest pace since June 2008, mostly fueled by a surge in apartment construction, the Commerce Department reports. 
Housing starts rose 7 percent in March from February, reaching the seasonally adjusted rate of 1.04 million. Homebuilders have ramped up production as buyers rush to take advantage of continued housing affordability due to low mortgage rates. 

Visit our website to see: Home Ownership Matters Bus Tour                                                    

Downsizing Baby Boomers Head to Urban Areas

Downsizing Baby Boomers Head to Urban Areas

Home prices in urban areas have not fallen by as much the last few years as they have in the suburbs. And prices in urban areas are recovering much faster too, according to John McLain of the Urban Land Institute.

Why? Some say it’s because of new moving patterns among the baby-boomer generation. 

An increasing number of baby boomers are reportedly leaving their big homes in the suburbs and heading to urban areas for retirement, drawn by walkability, proximity to public transportation, diversity, and being closer to their children. 
Read more ..

Home Sales See Seasonal Surge

Home Sales See Seasonal Surge  Listings Fall

The seasonal surge in home sales combined with another drop in listings to further drive up prices in March, Redfin observed in its latest Real-Time Price Tracker.

According to the brokerage, home sales rose 25 percent month-over-month in March, reflecting the normal spring spike that occurs every year. On a year-over-year basis, however, sales were up just 0.9 percent—the smallest gain in 14 months.
Ten of the 19 markets tracked by Redfin saw sales increase year-over-year, one fewer than February. All 19 markets posted month-over-month improvements.
Home prices also saw a nice boost, growing 6.2 percent from February and 15 percent from March 2012. Eighteen of the 19 markets measured reported monthly and yearly increases, with Long Island being the only exception. Read more ....

Land Prices Rise as Builders Scramble for Lots

Land Prices Rise as Builders Scramble for Lots

An improving housing market is creating a sharp increase in land prices and “creating big profits for land investors but putting pressure on builders to further increase the price of new homes,” The Wall Street Journal reports. 

Land values across the country increased 13 percent last year — the first gain since 2005, according to a report by Zelman & Associates. The increase has been mostly sparked by growing demand among builders for finished lots. 

'There's no question the land market has gotten heated of late,' says Richard Dugas, chief executive of PulteGroup Inc. 'In some markets, it's a real challenge to get l and deals to pencil.'

The land shortage could equate to higher new-home prices for consumers. The cost of land is about 21.7 percent of the final sales price of a new home and usually the land cost gets 100 percent passed down to the buyer, according to the National Association of Home Builders. Some analysts predict new-home prices will rise 10 percent to 15 percent this year, mostly due to the rising cost of land.  Watch the Video ...

Fixed Rates Tumble on Weak

Fixed Rates Tumble on Weak

Jobs Report: Fixed mortgage rates plummeted this week following the release of disappointing employment data for March.

“Mortgage rates have now fallen four consecutive weeks,” Bankrate noted in a release. “The pullback started with the banking crisis in Cyprus, continued with a run of uninspiring U.S. economic data, and picked up speed with the weak jobs report. But as the sting of the lousy jobs report slowly wears off, we’ll likely see mortgage rates crawling back over the coming week.” See Rates ...

Home Owners Showing More Willingness to Sell?

Home Owners Showing More Willingness to Sell?

The number of listings on the market increased 2.36 percent in March from the previous month — possibly an indication that sellers are becoming more willing to put their homes on the market as asking prices increase, according to housing data.

While the data shows a month-to-month inventory increase, inventories are still down 15.22 percent compared to last year. Salt Lake City-Ogden, UT February 2013 Real Estate Trends

The median age of the inventory continues to drop year-over-year by 12.35 percent, the amount of time homes are sitting on the market has fallen by 20 days since February, according to realtor.com. The median age of inventory of for-sale listings was 78 days in March. 

Lowball offers are a waste of time: “The days when you could scoop up a house for 20 percent less than the list price are long gone,” Read more ...

High Levels of Home Affordability Won't Last

High Levels of Home Affordability Won't Last

Zillow: Even as prices continued to rise in last year’s fourth quarter, American homeowners found themselves paying less in monthly mortgage payments compared to pre-bubble norms, according to Zillow.

“The days of historically high levels of housing affordability are numbered,” said Stan Humphries, chief economist at Zillow. “Current affordability is almost entirely dependent on low interest rates, and there’s no doubt that rates will begin to rise in the next few years.

Zillow analyzed current and historic median home values as determined by the Zillow Home Value Index, comparing it to median income data from the Census Bureau and the Bureau of Labor Statistics. Researchers used the data to calculate an affordability index (measuring the portion of monthly income homeowners spend on mortgage payments) and a price-to-income ratio. Read more ....

Housing Shortage Will Dampen Spring Market

Housing Shortage Will Dampen Spring Market
The housing recovery is progressing, but a shortage of homes on the market will limit the number of home sales this spring selling season, industry insiders say. 

'If we don't see more people listing their properties, I don't think we will see the home sales volume increase that we are accustomed to seeing,' Glenn Kelman, chief executive officer of Redfin told Reuters. 'There are far more buyers than there are sellers on the market. We would have a huge boom spurred by low interest rates if there were more inventory on the market.' Read more ....

Buyers of Foreclosures Need to Act Fast

Buyers of Foreclosures Need to Act Fast
Foreclosures are being listed at far less than what they likely eventually will sell for -- a marketing strategy that generates high interest and multiple bids, some say. As such, buyers of foreclosures need to be prepared to move quickly and come up with a lot more money.

It's still possible to buy a foreclosure and make it the home of your dreams. It's just harder these days.

Investors, both individuals and national corporations, are rushing into the market with the intent of turning foreclosed properties into cash-generating rental units.

Lenders are only slowly listing homes for sale at a time when the general appetite for home purchases is increasing. Demand for properties is leading to bidding wars and higher prices that aren't necessarily justified by appraisals, putting deals at risk. Read more...

Asking Home Prices Move Higher

Asking Home Prices Move Higher

Single-Family Rents at Stand-Still

Asking prices on single-family homes rose in March, while high inventory flattened out rent prices, according to Trulia’s Price and Rent Monitors.

Based on data on for-sale homes and rentals listed on Trulia, the monitors take into account changes in the mix of listed homes and reflect trends in prices and rents for similar homes and similar neighborhoods through the end of March.

With the spring house hunting season upon us, Trulia reported a 7.2 percent year-over-year increase in asking prices on the national level (8.0 percent excluding foreclosures). On a seasonally adjusted basis, prices rose 1.1 percent month-over-month (1.4 percent excluding foreclosures) and 3.5 percent quarter-over-quarter (4.0 percent excluding foreclosures. Read more ..

Get Ready for Big Bidding Wars This Spring

Get Ready for Big Bidding Wars This Spring
With tighter inventories of homes for sale, buyers are finding increased competition through bidding wars. 
But the bidding may not be between only one or two other buyers -- more bidding wars are popping up where dozens or even hundreds of other buyers are all competing for the same property. 

'The only question is not whether a new listing will get multiple bids but how many it will get,

Meanwhile, inventories of for-sale homes continues to be low. The National Association of REALTORS® reported a 19.2 percent drop in inventories year-over-year in February.  See more ...

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Top Markets for Single-Family Rentals

Top Markets for Single-Family Rentals

RealtyTrac: With institutional investors playing a major role in the home-buying market as they snagged tens of thousands of homes in 2012, RealtyTrac set to work to determine which markets still offer the best opportunities for investors intending to purchase single-family homes to rent.

Topping the list of top 20 markets were Memphis, Tennessee; Saginaw, Michigan; Toledo, Ohio; Ocala, Florida; and Las Vegas, Nevada.
These markets ranked the highest for cash purchase capitalization rate—the percentage of the purchase price accrued in net annual income. RealtyTrac observed these rates for three-bedroom homes in markets with at least 200,000 residents.
“Buying single family homes as rentals that actually generate good monthly cash flow has become more difficult over the past year as institutional investors crowded into the market,” said RealtyTrac VP, Daren Blomquist. See the top 20 markets ....

Double-Digit Price Growth in February

Double-Digit Price Growth in February

CoreLogic Reports: Home Price Index (HPI) posted its largest annual increase in nearly seven years in February.

When including distressed sales (short sales and REOtransactions), home prices in February increased by 10.2 percent from February 2012, the data provider reported Wednesday. The annual gain marks the largest increase since March 2006. From January to February, prices still moved in a positive direction, but rose by just 0.5 percent.
“Nationally, home prices improved at the best rate since mid-2006, marking a full year of annual increases and underscoring the ongoing strengthening of market fundamentals,” said Anand Nallathambi, president andCEO of CoreLogic.“Continued home price appreciation will provide fuel needed to drive further recovery in the home purchase market.” Read more ....

NAR: Median Price Rises 15%

NAR: Median Price Rises 15%
Investment-Home Sales Decline in 2012: Investment-home sales in 2012 were down slightly from the year before but remain elevated, while the median price increased, according to a survey from National Association of Realtors (NAR).

Sales for investment homes fell 2.1 percent to 1.21 million, down from 1.23 million in 2011. Overall, investment sales accounted for 24 percent of sales in 2012, the second highest share since 2005, NAR data revealed.
“Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals,” said Lawrence Yun, NAR’s chief economist.  Learn more ....

Interest in Buying Increases Among Young Renters

Interest in Buying Increases Among Young Renters

Survey: Nearly two-thirds of millennials expressed an increased interest in buying, and it’s not because they are tired of apartment living, according to a survey from Pulte Group, Inc., a national homebuilder.

The PulteGroup Home Index Survey (PGHI) showed 65 percent of renters between ages 18 to 34 with an annual income of at least $50,000 said their intention to buy has increased significantly or somewhat over the past year.

The majority of millennials, or 52 percent, are interested in buying because they view a home as an investment and have a desire to own and build equity. Only 12 percent stated they are tired of apartment living. Read more ....

Shrinking Rental Yields to Drive Out Investors

Shrinking Rental Yields to Drive Out Investors

But Not This Year: Lower rental yields might cause investors to lose interest in the housing market, but according to Capital Economics, that scenario is unlikely to play out this year.

Currently, the increase in home prices is outpacing the rise in rents, which “is weighing on rental yields,” the firm noted in a report authored by the property economist Paul Diggle.
For example, national home prices in January rose 9.7 percent year-over-year, according to data from CoreLogic, yet the Consumer Price Index shows rents rose by just 2.7 percent during the same time period, the report noted. Read More ...