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Monthly Archives: December 2013

NAR: Sales down, prices up in November

Seasonal trends usually dictate that the fall and winter are slower seasons for new home sales, while, at least over the past several years, the mortgage markets are dominated by homeowners looking to refinance their existing mortgages. According to the latest data from the National Association of Realtors (NAR), this certainly rang true in November, as the number of closings on new properties sank from the month prior.

However, while total sales may have sunk last month, the prices of properties in almost all major markets soared during the period, indicating high demand in many markets and limited inventory, which is creating fierce competition over the few properties available.

Mortgage demand down over past week

According to the latest data from the Mortgage Bankers Association (MBA), an industry analytics group that monitors more than 75 percent of the home loan activity that takes place in the United States, applications for mortgages dropped last week to multi-year lows.

In the MBA's seasonally adjusted index of mortgage application activity, demand fell 5.5 percent, giving the index a reading of 374.6 over the week ending December 13. The index looks at both refinancing and new home loan applications.

Experts: Growth will continue, but at slower pace, in 2014

This has been a banner year for the housing market, as home prices and sales exceeded analysts' expectations in 2013, ultimately reaching pre-recession levels of health in almost every metro region from coast to coast. According to several reports from experts in the industry, 2014 looks to be another great year for real estate, although the momentum of the market is poised to slow down slightly from the breakneck pace it is currently surging at.

A recent report from Money Magazine indicates that housing prices, which have been increasing month over month throughout 2013, will continue to rise next year, but at only about half the current pace.

Rental affordability hits all-time low - is buying a better option?

As we've recently discussed, the housing market is in a state where soaring demand has resulted in a significant uptick in the cost of new homes, making affordability a major problem for some middle- to lower-income Americans. However, while potential homebuyers currently can enjoy interest rates on new home loans that have been hovering around all-time lows, renters are stuck paying more to keep a roof over their heads than ever before.

According to a recent report from the Harvard Joint Center for Housing Studies, about half of all renters are currently spending more than 30 percent of their income on rent, which is up from only 18 percent just a decade ago. What's more is that 27 percent of renters are actually paying more than half of their income to remain in their home, which makes this the most expensive rental climate in United States history.

Freddie Mac: Interest rates, delinquencies down

While interest rates on fixed-rate conforming home loans are still markedly above the all-time low levels reached last year, they are still well below historical averages and have even dropped over the week ending December 12, according to government-backed mortgage securer Freddie Mac.

The benchmark 30-year offering was down to 4.42 percent, down from last week's 4.46 percent median interest rate. While this is significantly higher than the 30-year rates experienced during the same period last year - 3.32 percent - it is still below 5 percent, which many analysts had anticipated would be the standard as 2013 wrapped up.

NAR: South and West will see highest property value increases in new year

According to research conducted for the National Association of Realtors' (NAR) August-October 2013 Confidence Index Survey, it appears that the continued recovery of the housing market will be focused primarily in the southern and western regions of the United States over the next 12 months.

The median cost of housing is expected to go up roughly 4 percent, based upon data from roughly 3,000 Realtors who participated in the survey. However, the increases will be much more significant in parts of the country that had previously been sluggish in bouncing back after the housing bubble burst in late 2007.

Condo construction outpacing single family buildouts in major metros

The housing market has been somewhat strained of late, as demand has increased throughout 2013 at a pace that far exceeds the current level of housing stock available. As a result, property values have been up significantly year-over-year for almost every consecutive month as stiff competition for the few homes available holds the market back. However, construction starts have been up recently, providing some more options as well as affordability in the kinds of residences prospective buyers can look into.

The traditional kind of property most buyers attempt to pursue is a single family residence that affords occupants an independent structure from their neighbors and a traditional mortgage structure. But in the country's most active real estate markets, there is a large amount of new construction geared not toward the single-family demographic, but instead multiple unit condo developments.

Home prices near peak in almost half of the United States

A report published by real estate analytics group CoreLogic has found that in almost half of the United States, home prices have rebounded to their peak levels, which were experienced in early 2006 before the burst of the housing bubble.

The data shows that in 23 states, property values are at least within 10 percent of their value before the Great Recession. Although some would interpret this as yet another building bubble and the potential onset of another wave of foreclosures, conditions are significantly more positive for potential and existing homeowners, as interest on fixed-rate loans remain low and more residents are experiencing increasing equity in their homes.

October new-home sales rebound for sharpest rise in over 30 years

All summer, continuing increases in home prices and mortgage rates caused sales for new homes to lag behind expectations. But the numbers for October are in, and not only has the market rebounded from this downward slope, it has actually grown at a rate greater than anything seen in over 30 years.

Bloomberg reports that new-home sales conducted in October jumped by a whopping 25.4 percent, hitting a seasonally adjusted annual rate of 444,000. Not only was this well above the median forecast of economists, which had predicted 429,000, but this also marked the strongest surge in home sales since May 1980.

Americans remain optimistic about homeownership despite slow recovery

The housing market has been particularly unpredictable over the past decade, as conditions have bounced back and forth from the all-time lows following the burst of the housing bubble to the record highs experienced over the past few months. However, despite overall market instability, it appears that many Americans continue to view homeownership and all of its benefits as a goal worth attaining.

A recent survey from analytics group NeighborWorks America found that the majority of adults who participated in a recent survey believe that owning a home is an important part of their "American dream."