Blog

GREAT Conditions for Buying a Home

(Published on - 7/14/2017 2:17:16 AM)

 

 

Why is Home Buying Demand So High? 

Partly Because Buying Conditions (in Theory) Are So Good,

 

  the article from www.zillow.com, reports that an incredibly strong jobs market, coupled with historically high levels of home affordability, is helping create a perfect storm of home buying demand that is proving incredibly difficult for home builders and home sellers to satisfy. For most of us, the decision on the right time to buy a home generally revolves around two key factors: Landing a steady job, and affording the monthly mortgage payments on a home. The low (and falling) unemployment rate certainly suggests the former is very achievable; incredibly low mortgage interest rates mean the latter is theoretically more possible than ever(at least in most markets), despite rising home prices. It’s no wonder, then, that home buying demand is so high right now – in addition to expected demographic tailwinds, as the enormous millennial generation ages into its prime home buying years, buying conditions themselves are very favorable, but for one small hurdle: The number of homes available for sale isn’t nearly enough to satisfy this huge home buying demand. And inventory isn’t just failing to keep pace with demand, it’s actually falling precipitously. In other words, don’t expect this demand to cool anytime soon.

 


The New MultiGenerational Home

(Published on - 7/8/2017 5:07:07 AM)

 

                         Does the Multi-Gen Trend Have Legs?,

from www.builderonline.com, reports that in a post-Great Recession landscape, particularly as the future of work and the soaring cost of healthcare invite such profound questions as they do, households are behaving in a way that shows how important family ties are to economic viability, mobility, options. Jobs and employment wages are still no doubt the most important source of income for our society's households. But paychecks are not the only financial knobs and levers families press and pull to navigate amid today's challenges.

With past as prologue, households composed of more than one generation of adults may direct us back to the future. This is why we believe multigenerational living--in its newly-evolved forms and formats--is more than a passing fad, but rather a sneak peek at new strains and streams of household normalcy. The most important reason primary homeowners say they seek multigenerational features and functionality in their homes is for financial assistance, meaning having more than one generation living under one roof makes a difference in the attainability of the home. A fairly close second ranked reason (42%) is physical health, which ties to the first insight, given that aging parents frequently have current or future health issues to deal withWe're guessing that the underlying financial factors that motivate families to want to stay in near proximity to one another are only strengthening as challenges surface around automation, robotics, data, and the future of work. The multigenerational living trend is only now getting a start. Stay tuned. 


Millennials Are Powering the Housing Market

(Published on - 6/28/2017 6:16:02 AM)

The article, Who’s Powering the Housing Market? Surprise! It’s Millennials,  from www.nbcnews.com, reports that Millennials were the largest group of home buyers (34%) for the fourth consecutive year, according to NAR's 2017 Home Buyer and Seller Generational Trends study. By comparison, baby boomers were 30%of buyers.  "That myth that millennials don't want to own things is not true," said Jeremy Wacksman, chief marketing officer at the Zillow Group. "Millennials are not just starting to buy homes; they're powering the housing market."

 

"Millennials have been fairly slow to get into the market, but we are seeing an uptick in millennial buyers this year — which is a good sign, because as home values rise, we want a wider number of people to participate in this housing recovery," said Lawrence Yun, chief economist at the National Association of Realtors (NAR). "There's a pent-up demand and as the economy continues to improve, we expect to see more people in their early thirties, adults who are still living with their parents — clearly not their idea of the American dream — begin to look for their own housing units."

 

Research done by the National Association of Homebuilders found that more than 90% of millennials say they eventually want to buy a house. Millennials are late bloomers. They've delayed marriage and children and buying a house. So when they do buy, they want a bigger home. Sometimes, they skip that starter home and look for a house that they plan to live in forever.  When they're ready to buy, millennials are very much like the generations that preceded them — most want to buy a house in the suburbs. Millennials want big homes: 2,375 sq. ft. on average, according to the latest NAHB tracking survey, released in March 2016. By comparison, the average desired home size for all buyers is 2,202 sq. ft. For baby boomers it's 1,879 sq. ft.  Nearly half (48%) of the millennials surveyed said they wanted four bedrooms or more. Only 20% of boomers and seniors want that many bedrooms. Millennials also want outdoor spaces — a deck, a patio and a front porch — exterior lighting, a shower and tub in the master bath and hardwood floors on the main floor.

 

Here is the link to the entire article: http://www.nbcnews.com/business/real-estate/who-s-powering-housing-market-surprise-it-s-millennials-n768196


Housing Market Will Only Get Hotter in 2017

(Published on - 6/23/2017 7:42:52 AM)

The article, Opinion: 9 signs the housing market will only get hotter in 2017, from Jeff Reeves at www.marketwatch.com, reports that since 2013, Jeff has been writing regular columns about how the housing market’s recovery isn’t just sustainable, but on a path to continued growth. And after looking at the past few months of data, he remains convinced the housing market has nowhere to go but up.


Here are nine of the latest reasons why:


Single-family home activity is climbing: When the Commerce Department recently reported home starts for April, a bright spot was the brisk activity for single-family home construction. The pace of 835,000 starts is a bullish sign for the housing market because builders are favoring homeownership via stand-alone units instead of multifamily homes for renters.


Housing starts are trending higher: While the overall April numbers may be soft on the surface, MarketWatch reporter Andrea Riquier recently pointed out that “starts have been 6% higher in the first four months of this year than in the same period last year, and the pace of permit authorizations is over 10% higher, pointing to stronger growth in the future.”


Existing-home sales are only capped by inventory: The National Association of Realtors reported a decline in existing-home sales from March to April, but the figure still was a 1.6% increase year over year. Besides, March existing home sales were at a 10-year high. The details show an absence of inventory is really the prime factor holding back sales from pushing to even higher levels, which means that it still is quite a seller’s market and home values have a firm floor under them.


Mortgage activity is strong: According to recent data from the Mortgage Bankers Association, purchase activity is up 3% year over year despite an increase in interest rates. While the longer-term trend for rates is higher, we are seeing a bit of relief right now as well-qualified borrowers start seeing rates of 4% or less —the lowest levels of 2017. That will only spark more activity in the coming months, fueling already high demand.


Unemployment is ultralow: Say what you want about meager U.S. economic growth, but the fact remains that the labor market is very tight and Americans are finding plenty of work. The headline unemployment rate fell to 4.4% in April as payrolls surged after a March lull. The details also were encouraging, with hourly pay up 2.5% year over year and hours worked slightly higher. A strong job market means more Americans with stable family budgets, and that ultimately results in a robust housing market.


Housing prices are climbing ever higher: At the end of April, the Case-Shiller home price index hit its fourth consecutive all-time high. On top of that, the 20-city index notched its fastest pace of growth since 2014. Thus far, the bears who have said home prices cannot continue higher from current records have been continually proven wrong — much like the bears who thought the stock market couldn’t continue moving higher in 2017.


Foreclosures are rare: Foreclosures are near a 10-year low as stricter lending standards and regulations have prevented banks from extending risky mortgages, and kept unqualified borrowers out of the market — as they should be. The lack of foreclosures is an undeniable sign of health for the housing market, and that these gains are sustainable going forward.


Builders are confident: After hitting its highest level in 12 years a few months back, builder confidence has held firm and shows no sign of retreat. Specifically, the National Association of Home Builders noted in its May reading — the second-highest on record — that even higher material costs can’t hold back the index, and readings for both future sales expectations and current conditions are particularly strong.


Most home prices aren’t at prior peaks: Of course, all these positive indicators may have some thinking about the irrational exuberance of 10 years ago and consider all the lofty data a sign that these gains cannot be sustained. However, a recent study from real-estate research firm Trulia reinforces the notion that while some markets may be a bit overinflated, others have much more room to run. Specifically, just 34.2% of homes nationwide have seen their value eclipse pre-crisis highs — meaning a small number of highfliers shouldn’t paint a picture of meteoric rises everywhere. Not only is the nationwide recovery still slowly taking shape, it is more sustainable now that consumers, builders and banks alike have learned their lesson.

 

Here is the link to the entire article: http://www.marketwatch.com/story/9-signs-the-housing-market-will-only-get-hotter-in-2017-2017-05-25
 


Buying A Home Is Cheaper Than Renting

(Published on - 6/21/2017 8:15:19 AM)