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Monthly Archives: July 2013

Study shows no need to worry about wane in housing recovery

A couple week ago, government-backed mortgage securer Freddie Mac reported that average interest on fixed rate loans had lowered slightly compared to the week prior, although rates continue to be higher than they were during the same period last year.

The 30-year fixed rate option slid considerably from 4.51 percent down to 4.37 percent over the seven-day span, although rates were only 3.53 percent during July of 2012. However, the analysts at the government agency explained in a related report that despite fluctuations in average interest, the real estate market is still poised to continue improving at a similar or accelerated pace.

Nation in the midst of both a buyer's and seller's real estate market

According to recent news regarding the housing market, it's been a roller coaster ride for American real estate over the past several weeks, as conflicted reports have had potential buyers and sellers confused about who the market currently favors.

The big takeaway this week for anyone looking into diving into the housing arena is that the market currently favors both buyers and sellers.

FHFA shows 16th straight month of home value improvements

The Federal Home Finance Agency's (FHFA's) monthly Home Price Index (HPI) for May, which was released this week, shows that housing values rose 0.7 percent over April - the 16th straight month of property cost improvements as recorded by the government agency.

This indicates that the housing market is experiencing serious momentum so far in 2013 and that potential buyers and sellers can expect home prices to continue rising well into 2014 at the very least.

Homes remaining on market for lowest amount of time in nearly four years

With recent news of higher interest rates and increases in housing prices in markets across the country, many analysts have been wary about the sustainability of the current real estate boom that is helping to fuel the national economic recovery. However, a recent study conducted by the National Association of Realtors (NAR) has found that homes are being swallowed up at the fastest rate in years, with existing properties only remaining on the market for a few weeks at a time.

According to the June Housing Index report released by NAR, more than 5 million homes were sold on a seasonally-adjusted, annualized basis last month as competition for homes remains high. Even more interesting, however, is the fact that the median number of days that homes remain on the market is 34.

Average salaries up across the country year-over-year

Good news continues to pour in regarding the national economy, as Americans across the country are taking advantage of their improved financial outlook to purchase new properties, signing on to jumbo loan agreements to finance ever more expensive residences. While the real estate market has been one of the biggest success stories over the past several months, now other sectors of the economy are starting to show significant gains as 2013 rolls forward.

Across the United States, workers saw their wages increase an average of 2.5 percent over the past year. However, some metropolitan areas fared even better than this, and the number of new property sales taking place in these regions reflect this fact.

"Luxury" homes leading the way in sales

Between 2010 and 2012, the national housing market was characterized by sales within the lowest price brackets, as foreclosure reached record levels in many parts of the country and even the most affordable properties sat on the market for exceptionally long periods.

So far in 2013, the tide seems to have changed significantly, as the number of residences that are priced in what is traditionally considered the "luxury" bracket have driven sales significantly, signaling that 2014 may be the best year for home sales in a generation.

In spite of rises, Americans upbeat about home prices

Despite anticipated upward trends in housing costs and interest rates on mortgages, the general public still believes that now is a great time to look into buying a home, according to research conducted by the National Association of Realtors.

Data that was sourced from Fannie Mae's National Housing Survey showed that 57 percent of Americans surveyed believe that prices on new residents are bound to go up in the coming months, possible reaching decade-long highs. The same percentage of individuals anticipate that mortgage rates on conforming loans will continue to widen the gap between the record lows witnessed in the winter months and the current multi-year highs.

While economy continues improving, government still looking to help homeowners

It has been a banner year for the housing market, with the past several months especially showing improvements that have signaled a return to almost-normalcy as housing costs and sales return to pre-recession levels. With an increase in home sales at the highest price points and a jump in the applications for jumbo loans across the nation, it is clear that Americans are getting their financial footing back after a rough decade.

However, it's not just prospective homeowners who are seeing conditions improve but also individuals who already occupy properties that are looking to avoid foreclosure. Thanks to a bevy of government-backed initiatives, homeowners across the country have been able to lower their monthly mortgage payments through refinance initiatives that made interest rates more affordable on existing loans.

Jobs report signals strength in U.S. economy

On the first Friday of every month, the U.S. Bureau of Labor Statistics releases their non-farm payroll statistics report which details how many jobs were added or subtracted from the national economy over the prior period. In the data published on Friday, July 5, Wall Street was surprised to hear that the national workforce increased markedly over the course of June, exceeding most trader's and analyst's expectations.

Roughly 195,000 new positions were created coast to coast throughout June, the report showed, and figures from May and April were revised to show higher numbers than had previously been posted. On top of the jobs created in June, the bureau was able to add an additional 70,000 positions to the report overall.

In some markets, first-time buyers helping drive sales

With interest rates continuing to trend upward, many analysts are anticipating that the number of first-time homeowners entering the market - a demographic that had seen its ranks grow markedly over the past year - is likely to begin shrinking again, as individuals with experience owning a home are poised to lead the way in generating new sales and acquiring jumbo loans.

However, not all markets are experiencing this phenomenon, as some urban zones are actually witnessing a healthy uptick in activity among first time buyers. Specifically in the country's largest metropolitan areas, first time buyers are swallowing up new properties despite a large increase in the average asking price of homes for sale.