Posts Tagged ‘homebuyers’

First-time Homebuyers Want Larger Home

April 7th, 2016 Comments off

home buying   firstbanktrust  creditAccording to the Homebuyer Insights Report from Bank of America, first-time homebuyers are not considering starter homes, reports nationalmortgagenews. The report revealed that 75 percent of new homebuyers prefer to buy a larger home to begin with. Additionally, 35 percent of those surveyed plan to retire wherever they buy.

MHProNews has learned 43 percent of Gen Xers, those born between 1965 and 1980, have chosen to put off purchasing a new home until they have reduced their debt load. D. Steve Boland, consumer lending executive for Bank of America, said, “Today’s aspiring homebuyers want to be selective and believe they should wait until they can afford to buy a home they’ll live in for years to come.”

Thirty-two percent of Millennials also would want to reduce their debt before purchasing a home, although 66 percent say they would need parental assistance to buy a home.

Of veterans in the homebuying experience, 75 percent said they made sacrifices in order to purchase their first home, with nearly half saying they sacrificed travel, 37 percent put off buying a new car, and just under a third chose not to add new features to their home.

For this Bank of America report, Braun research surveyed 1,001 people 18 or older who want to purchase a home in the future. ##

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matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews

One-time Manufacturing Areas Now Lead as Top Housing Markets for Buyers

May 19th, 2015 Comments off

wenatchee world photo    mike irwin creditMHProNews has learned from CNNMoney the top housing markets for buyers are where the inventory is fuller and houses tend to remain on the market for a longer time, giving more opportunity for bargaining strategies. Philadelphia, Cleveland, Chicago, Miami-Fort Lauderdale, Providence, Detroit and Pittsburgh are strong buyer markets, according to Zillow.

The S&P/Case-Shiller U.S. National Home Price Index reports low inventory contributed to home prices in January 2015 increase 4.5 percent over the previous January.

Skylar Olsen, a senior economist at Zillow, noting that things are easing, says, “We are heading toward better balance. Buyers will be able to take a little more time this year compared to last year.” While homes in the top ten buyers’ markets are going for almost four percent below asking price, homes in sellers’ markets get a discount on average of under one percent.

She added that cities in the buyers’ markets continue to lag in recent job market and economic growth. “Top buyers markets were generally in areas that were once founded on manufacturing jobs, which have slowed and not returned in earnest,” she said. ##

(Photo credit:wenatcheeworld/Phil Irwin)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.


Spike in Existing Home Sales Inaccurate

April 24th, 2015 Comments off

question_mark_houses__fotosearchFollowing a story MHProNews posted earlier regarding a significant rise in existing home sales based on numbers of the National Association of Realtors, Dave Kranzler, writing for seekingalpha, says when the numbers are put into a longer range historical context, there is “more sizzle than substance.

Home sales were said to be negatively affected by the weather in Q1 2014, so by comparing 2015 numbers to Q1 numbers in 2013, data indicates home sales were basically flat on a monthly basis, and the ten percent rise for March 2015 over March 2014 is misleading.

Further, historically speaking, first-time homebuyers have made up 40-50 percent of the homebuying market, but that has fallen to 30 percent in March 2015, and has been declining since 2009, just after the recession began to take its toll.

Says Kranzler: “The first time buyer is the most important fundamental buyer cohort because the move-up buyer typically has to sell its home before it can upgrade. The relative lack of buying from first time homebuyers, and therefore depressed buy/sell activity by move-up buyers, is the primary reason the housing market has not staged a bigger recovery since the housing bubble popped.”

He says most of the increase in sales, since the Federal Reserve began Quantitative Easing and dropped the interest rate to near zero, have been to investors and individuals who are interested in flipping the homes. He says investor interest has been declining since early 2014, and will drop further.

Statistics demonstrate that homes in the lower price range are not selling all that well because it is the upper income demographic that has benefited from the stock market’s rise. Kranzler says it is vacation home sales that have buoyed the market, and they are not the underlying basis of a healthy housing market. As they fade, home sales will fall significantly. ##

(Image credit: fotosearch–question mark houses)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. silver to Daily business News-MHProNews.

Home Cash Buyers Big in Q1; Housing Market a “Crapshoot”

July 7th, 2014 Comments off

Christine Romans of CNNMoney reports almost half of residential real estate deals in the first quarter of 2014 were “swaggering cash buyers, investors from overseas, private equity funds, wealthy individuals,” who comprised a record high 42.7 percent of the purchases. First-time homebuyers were not a significant part of the housing recovery, but with mortgage rates falling again—4.14 percent for the 30-year fixed rate, the lowest rate since October of last year, and 3.25 percent for the 15-year fixed rate–now is a good time to buy, but only if you can afford it. She says the White House is encouraging governmental agencies to make it easier for qualified buyers to obtain loans to buy homes.

Meanwhile, Karl “Chip” Case, co-creator of the S&P/Case-Shiller home price index, calls the housing market a “crapshoot.” He says, “You’ve got much more negative vibrations in the housing surveys about homeownership than we ever had before.” He says the key indicator to watch is housing starts, as MHProNews has learned, and each time in the past it has fallen below a million a month (annualized) it has come right back—except for the recent Great Recession. It fell below 500,000 in 2009, a rate that many thought could never happen, and the return has been very slow. He says the housing market is more segmented, that some areas will see better results than others. “The Chinese are coming over here with millions and billions of dollars, and they want to spend it on assets that tend to hold their value. And at least the theory is that housing does. But it is far from what it was in 2004,” Case adds. ##

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Millennials: Content to Rent?

June 3rd, 2014 Comments off

U. S. Census Bureau statistics report only 36% of Americans under the age of 35 own a home, a drop from 42 percent in 2007, and the lowest level since 1982 when the Bureau began documenting the age of homebuyers, as has learned. While 90 percent of Millennials would prefer owning a home to renting one, student debt, access to financing and stiff competition due to low inventory make it difficult, according to CNNMoney. Even though home prices have fallen about 20 percent due to the downturn, the number of homes on the market has also dropped, and younger buyers, who have not reached their higher earning years, can not always compete with older buyers who have cash. However, Steve Deggendorf, a senior director for Fannie Mae, says, “Mortgage lending is getting a little less tight, with lenders approving buyers with a little lower credit score and who have less of a down payment.” ##

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Americans’ Optimism Grows about Housing Market

January 8th, 2014 Comments off

A monthly housing survey indicates half of the respondents are optimistic about obtaining credit for a mortgage, an increase over the 45 percent who felt that way one year ago, despite the recent rise in mortgage rates. This survey from December marks the highest sentiment of respondents since Fannie Mae began tracking consumers’ attitudes three years ago. Respondents who think it is a better time to sell their house and to buy a house both rose in the survey, MHProNews has learned from Says Doug Duncan, chief economist at Fannie Mae, “The marked improvement in housing market sentiment over the course of 2013 bore out our view going into the year that the housing recovery was on a firm footing. These consumer attitudes should support a continued but measured housing recovery as we move through 2014.”

(Photo credit:  Greg Vote/Getty Images–two-story  manufactured home for sale)

Job Growth Spurs Mortgage Rates

December 5th, 2013 Comments off

On the heels of ADP’s report that private companies added 215,000 jobs in November, the 30-year, fixed-rate loan, the most popular product for homebuyers, rose to 4.46% from 4.29% last week, according to CNNMoney. The average for a 15-year fixed-rate mortgage (FRM), often used for refinancing higher interest mortgages, rose from 3.30 percent to 3.47 percent. Rates for the 30-year loan have ranged this year from 3.34 percent to 3.58 percent. In addition, MHProNews has learned auto sales have reached their highest mark since 2007, which likely also contributed to the mortgage rate increase. Says Keith Gumbinger of mortgage information site, “If the economy is gaining steam, even just a little, mortgage and other interest rates will firm right along with it.”

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Employment for Young Renters and Homebuyers Remains Sluggish

October 23rd, 2013 Comments off

While unemployment fell to a five-year low in September, hitting 7.2 percent, down .01 percent from August, non-farm payrolls rose by only 148,000 jobs. Says Paul Ashworth of Capital Economics, “The unemployment rate keeps edging lower, but the Fed seems to be more focused on the drop-off in the pace of monthly payroll gains. Given the government shutdown, October’s payrolls are likely to be weak too. That means unless November’s gain turns out to be over 250,000 jobs, it now looks like the Fed could delay tapering until early next year.” As HousingWire informs MHProNews, while residential construction employment is up five percent year over year, only 75 percent of the millennial generation is employed. Jed Kolko, chief economist with Trulia, says, “Without a job, young people are much more likely to live with their parents instead of becoming renters or homebuyers.” Job growth in the hardest-hit metropolitan areas fell 1.6 percent Aug. 2012 to Aug. 2013, compared to national job growth of 1.7 percent for the same 12 months.

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Housing Recovery Still Tenuous

June 5th, 2013 Comments off

As HousingWire informs MHProNews, although the media is overflowing with glowing reports about the housing market recovery, it is not time to celebrate yet. CoreLogic reports April home prices were up 12 percent over April 2012, and 3.2 percent higher than March, but the market continues to need more move-up buyers and new homebuyers to even approach pre-crisis levels. Seven years ago everyone thought real estate prices would continue to rise, but the bursting of the housing bubble brought that to a sudden end. While the market is improving, economist Ed Stansfield with Capital Economics says the 12 percent increase is a short-term gain due to shrinking inventory, and if supply rises, prices could moderate. He says, “All in all, it is important not to lose sight of the fact that despite the rapid gains of the past year, home prices in the U.S. are still over 20% below their previous peak. That suggests that there is some way to go before the risks of further house price gains outweigh the support that housing is lending to the wider recovery.”

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Policymakers should Deal Gingerly with FHA

May 13th, 2013 Comments off

While many call for the Federal Housing Authority (FHA) to reduce its presence in the mortgage market, it would not be a wise move with purchase loans as low as they are. MHProNews has learned from nationalmortgagenews, even though much of the housing market news is encouraging, only 2.3 million purchase loans were originated in 2011, according to data from the Home Mortgage Disclosure Act, and figures from 2012 show little improvement. Federal Reserve Governor Elizabeth Duke says, “The purchase market is at the lowest levels since the 1990s.” Activity in the purchase mortgage market is nearly 50 percent below that of 2000, and 23 percent below 2008 levels. Currently the government backs around 90 percent of the mortgage market. In particular, lower income and younger homebuyers are the hardest hit. Gov. Duke says, “From late 2009 to 2011, the fraction of individuals under 40 years of age getting a mortgage for the first time was half of what it was in the early 2000s.” Now 13% lower than even the pre-bubble level of 2000, FHA purchase activity has declined 34% since fiscal 2010. Returning the FHA share of the market to 10-15 percent would cut FHA purchase activity to less than 50 percent of the current volume, and restrict home-buying to the wealthier who can qualify for a mortgage. Such a move would increasingly shut the door on creditworthy families’ ability to buy a home, and likely turn the economy back on its head.

(Image credit: bankrate)