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March existing-home sales almost 6% above a year ago

April 21, 2017 by Roberto

Severe housing shortages are prompting existing homes to sell significantly faster this year, propelling home sales to the highest pace in more than a decade, the National Association of REALTORS® reported Friday.

Total existing-home sales, which include completed transactions for single-family homes, townhomes, condos, and co-ops—reached a seasonally adjusted annual rate of 5.71 million in March. The sales pace is 5.9 percent above a year ago. Further, existing-home sales are now the strongest of sales since February 2007 (5.79 million).

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Mortgage rates at a new 2017 low this week

April 14, 2017 by Roberto

The 30-year fixed-rate mortgage continues to drop this week, setting a new low for 2017, Freddie Mac reports in its weekly mortgage market survey. This marks the fourth consecutive week that 30-year rates have fallen.

Freddie Mac reports the following national averages with mortgage rates for the week ending April 13, 2017: 30-year fixed-rate mortgages averaged 4.08 percent, with an average 0.5 point, and 15-year fixed-rate mortgages averaged 3.34 percent, with an average 0.5 point.

Housing inventory is the worst ever

March 28, 2017 by Roberto

The number of homes for sale is at the lowest level on record, according to the National Association of REALTORS®, who began tracking inventory 18 years ago. That means many home buyers likely will find fewer options this spring, and the homes that are being listed tend to sell fast and at a premium.

The lack of new-home supply is one culprit. Housing starts are only at about 75 percent of their historical average. Builders are focusing on pricier segments of move-up buyers, leaving a big void in the demand for lower cost homes that appeal to first-time home buyers. Builders blame the higher costs for land, labor, and materials as forcing them to concentrate on the higher end of the market.

Renters now dominate in half of U.S. cities

March 24, 2017 by Roberto

Fifty-two of the 100 largest U.S. cities were majority renter in 2015, according to U.S. Census Bureau data. Since 2009, 21 cities had shifted to renter-rule. Renters now dominate in both hot housing markets such as Denver and San Diego and more tame markets like Detroit and Baltimore. The homeownership rate has fallen steadily for a decade as millions of foreclosures prompted more owners to rent. Renting likely will continue to rise through 2030, due to demographic trends like aging baby boomers who are opting to downsize to rentals, noted a 2015 report from the Urban Institute.

Home sales drop amid inventory and affordability issues

March 24, 2017 by Roberto

Existing-home sales dropped in February as tight inventory and weakening affordability conditions kept many buyers out of the market in most parts of the country, the National Association of REALTORS® reports. Total sales for existing single-family homes, townhomes, condos, and co-ops fell 3.7 percent to a seasonally adjusted annual rate of 5.48 million, compared to 5.69 million in January, according to the report. However, the pace of sales in February remained 5.4 percent above a year ago.

Rates on the rise

March 19, 2017 by Roberto

Actions are starting to match words. For the second time in three months, the Federal Reserve raised the federal funds rate — the benchmark rate for other interest rates — this past Wednesday. Specifically, the Fed raised the range on the fed funds rate 25 basis points (a quarter of a percentage point) to 0.75% to 1%. The previous range was 0.50% to 0.75%. Now, all attention turns to anticipating future interest-rate increases. As for the future, low odds are being given for another fed funds rate increase the next time Fed officials meet in early May. But for the meeting after that, in June, the odds jump to 50/50. Traders in fed funds rate futures contracts are betting another 25-basis-point increase in June, or soon after. They’re also betting that another 25-basis-point increase will occur before the year ends. In other words, they’re betting that we’ll end 2017 with three rate increases, which would put the range on the fed funds rate at 1.25% to 1.5% heading into 2018. So, what does this mean to us?