Over the past 40 years, the typical new home has grown about 1,000 square feet. It seems, for American homeowners, their current home is always smaller than the home they hope to one day buy. But is that always the case? Well, not according to a recent survey from Trulia. Sure, the results show just 32 percent of homeowners say they’d move into a house the same size as the one they currently own. But whether that’s because they feel their house is too big or too small depends on some other factors. Generally, older homeowners and people currently living in homes larger than 2,000 square feet say they’d prefer to downsize, while younger buyers and those living in smaller homes dream of a bigger house. Most of that makes perfect sense. For example, older homeowners may prefer a smaller house due to the maintenance and upkeep issues that a bigger home presents. But when the number of people who say they’d prefer a smaller house rises along with the square footage of their current home, it suggest that there may be, in fact, a point when a house has more space than necessary, regardless of your age. In short, though new homes may keep getting bigger, whether or not you want one probably has more to do with the size of your family, your financial situation, and future life goals. More here.
Archive for Real Estate
Recent real estate data shows home buyer demand is high. There are a lot of buyers looking to take advantage of current conditions out of concern that mortgage rates may go up this year or prices will rise further. That, along with pent-up demand from younger buyers and previously underwater homeowners looking to finally move, means it should be a great time to sell a house. So, if buyer demand is up and conditions are right, why aren’t more homeowners putting their homes up for sale? Well one reason, according to a recent survey, is that they’re afraid they won’t be able to find a suitable replacement for their current home. With inventory tight in many markets, some homeowners – who may otherwise be ready to sell – say they’re hesitant. However, as more homeowners get in the market and off the sidelines, that will begin to change. In the meantime, buyers looking to purchase a home this spring should expect to see available homes for sale selling more quickly than they did last year. In other words, there will likely be some competition for hot properties. That means, interested buyers will have to move fast. One way to beat the competition is to be prepared. If you’re a buyer, have your financing lined up in advance. That way, when you find a home you’re interested in, you’ll have a better shot at getting in the first offer. More here.
Generally, Generation X is used to refer to people born in the 1960s and ’70s. Because they reached peak home buying age right around the time home prices began to drop, many found themselves underwater on their mortgage and unable to sell their house and upgrade to a larger home. Now, according to the National Association of Realtors 2017 Home Buyer and Seller Generational Trends study, there is evidence that there are an increasing number of Gen X home buyers active in the market. In fact, the most recent increase in buyers from this category was the largest since 2014. Lawrence Yun, NAR’s chief economist, says Gen X homeowners have been in their homes a median of 10 years but may now finally be in a position to put their homes on the market. “Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home.” And, because the number of homes available for sale is low in many markets, a growing number of Generation X homeowners ready to sell could provide the needed inventory boost that helps balance the market and moderate future home price increases. More here.
Demand for mortgage applications typically increases as the spring season approaches. Buyers hoping to find a home to buy look to get a jump on their competition by applying for a loan before the rush. This year is no exception. In fact, mortgage application demand was up 3.3 percent last week, according to the Mortgage Bankers Association. The increase puts demand for loans to buy homes 4 percent higher than it was at the same time last year. Some of that interest is seasonal, of course, but it also might have to do with buyers who are concerned about future mortgage rate increases. Last week, for example, average mortgage rates rose across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, FHA loans, and 15-year fixed-rate mortgages. Joel Kan, an MBA economist, said the increase had to do with a couple of factors. “Mortgage rates increased last week as remarks by several key Federal Reserve officials strongly signaled a March rate increase,” Kan told CNBC. “This was further supported by a few solid economic releases, including GDP, inflation and manufacturing gauges.” Whether to lock in low rates or because of the approaching sales season, buyers seem eager to take advantage of current conditions. More here.
Each month, Fannie Mae uses the results of their National Housing Survey to determine Americans’ views about housing market conditions and their personal economic outlook. The resulting Home Purchase Sentiment Index breaks down consumers’ responses about the state of their financial prospects, whether or not they feel it is a good time to buy or sell a house, and whether they think home prices and mortgage rates will rise or fall. In February, the index hit a new high and saw five of its six components increase. In fact, the number of respondents who said now was a good time to buy a house was up 11 percent, while 7 percent more participants said it was a good time to sell than did the month before. Increasing optimism was especially noticeable among younger buyers, according to Fannie Mae’s senior vice president and chief economist, Doug Duncan. “Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time home buyers,” Duncan said in a press release. “Preliminary research results from our team find that millennials are accelerating the rate at which they move out of their parents’ homes and form new households.” More here.
Buying a house is no small purchase. So you definitely don’t want to find yourself regretting your choice after you’ve signed the papers and settled in. But though we all know it’s an important decision and one to be taken seriously, a lot of new homeowners say they’d do things differently if they had the chance to go through the buying process all over again. This is especially true for younger buyers, according to a new survey from NerdWallet. In fact, outside of baby boomers, a majority of recent buyers said they had regrets. So what are the main things that recent buyers said they’d change if they could? Well, nearly 30 percent of participants said they’d save more money before beginning the buying process. This is likely true for a number of reasons. Among them, the most obvious is the down payment. Though you don’t need to have a 20 percent down payment, the less you invest upfront the more you’ll pay on a monthly basis. In other words, the more you save, the better. Respondents also said they’d have done more research before buying a house. Buyers said they wished they had learned more in advance about both getting a mortgage and the home buying process. More here.
Though it’s commonly said that spring is the most popular time for home buyers to begin looking at houses, a new analysis has narrowed it down even further. In fact, the Zillow Group Report on Consumer Housing Trends pinpointed the best two weeks of the year to list a house. The study found that homes listed between May 1st and 15th sold nine days faster than the average listing. Additionally, homes that were listed during that time frame sold for 1 percent above average. However, you may not be able to expect the same success if you’re selling a house in an area with a warmer climate. That’s because, regions where the weather doesn’t change as drastically from season to season will see less variation in sale price. According to Zillow’s chief economist, Dr. Svenja Gudell, there’s one possible reason homes listed near the end of April or beginning of May do so well. “Many home buyers who started looking for homes in the early spring will still be searching for their dream home months later,” Gudell said. “By May, some buyers may be anxious to get settled into a new home – and will be more willing to pay a premium to close a deal.” The report also found that homes listed on a Saturday got 20 percent more views in their first week than those listed earlier in the week. More here.
The dictionary definition of inflation is a “substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency.” In other words, inflation means you get less bang for your buck. And, according to a new outlook from Freddie Mac, it has shown signs it may be about to increase, which could have an impact on the housing market. “Which course inflation takes over the next year will have important implications for housing and mortgage markets,” says Sean Becketti, Freddie Mac’s chief economist. If inflation heads higher – the outlook imagines – interest rates could also rise and lead to falling home sales and mortgage originations. The good news, however, is that Freddie Mac believes inflation will rise only modestly over the next two years. That’s encouraging for potential home buyers worried about deteriorating affordability conditions. “With the housing market on the verge of the spring home buying season, this is good news in an environment where historically low mortgage rates will help offset the pace of house price growth and lack of for-sale inventory in many markets,” Becketti says. In short, there is a chance inflation could rise depending on upcoming trends and economic policy but, more than likely, the increase will be gradual and shouldn’t affect housing market activity in the near term. More here.
The Mortgage Bankers Association’s Weekly Applications Survey is a measure of both mortgage rates and demand for loan applications. Conducted weekly since 1990, the survey is a good source for tracking market trends. According to the most recent survey, average mortgage rates fell last week across all loan categories. Rates declined for 30-year fixed-rate mortgages with both conforming and jumbo balances, 15-year fixed-rate loans, and mortgages backed by the Federal Housing Administration. MBA economist, Joel Kan, said the rate drop was largely due to events overseas. “Rates declined last week as investors favored U.S. Treasury bonds due mainly to political concerns from abroad,” Kan told CNBC. Regardless of the reason rates moved lower, prospective buyers took advantage. In fact, demand for loans to buy homes rose 7 percent from the week before. But because spring is typically the busiest time of year for home buyers, some of that spike might have to do with the approaching sales season more than the rate drop. Also in the report, refinance activity climbed 5 percent over the previous week. It is now at its highest level so far this year. The week’s results contain an adjustment for the Presidents’ Day holiday. More here.
Though this year’s real estate market may not look as buyer friendly as it has in recent years, demand is at its highest level since the Great Recession, according to the National Association of Realtors’ chief economist, Lawrence Yun. Yun says Americans are feeling more confident about their financial status due to better job prospects and recent stock market gains. That, of course, is positive news. But the flip side of increasing buyer demand is more competition for available homes at a time when for-sale inventory is lower than normal in many markets. “Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago,” Yun says. “Most notably in the West, it’s not uncommon to see a home come off the market within a month.” So what does this mean for the spring season? Well, if you’re a prospective buyer, it means you should be ready to move quickly when you find a house you’re interested in. It also means you should be on the lookout for rising prices. Where there are more home buyers than available houses, price increases will accelerate. Yun warns that, especially in expensive markets, “prospective buyers will feel this squeeze in their budget and will likely have to come up with additional savings or compromise on home size or location.” More here.