Housing Outlook Says Take The Long View

If you spend any time following the real estate market or economy, you know there’s no shortage of data. Nearly every day there’s a new report detailing some corner of our economic lives, whether it’s consumer spending, mortgage rates, jobs, or home sales. But reading the day-to-day news reports can sometimes give you a distorted view of what’s really happening. That’s because monthly updates on the housing market’s ups-and-downs can be more volatile than a look at annual results. And so it’s important to take a big-picture view of the market from time to time. For example, Fannie Mae’s most recent Economic and Housing Outlook says, despite a slower-than-expected first quarter, the economy will continue to grow. And, according to Doug Duncan, Fannie Mae’s chief economist, home sales will also continue to improve, despite a more challenging environment for buyers. “Soft residential investment last quarter should prove temporary, as home sales resume their slow upward grind, with inventory shortages playing friend to prices but foe to affordability and sales.” More here.

Prices Below Peak In Nearly Half Of All Markets

If you’ve been at all interested in shopping for a home, you’ve likely heard news about rising home prices. Since the housing crash, home values have rebounded and, in some areas, the climb has been quick. However, news about increasing prices should be measured against how far they fell. In other words, though prices have rebounded, they are still below their previous peaks in many markets. In fact, according to recent numbers from ATTOM Data Solutions, median home prices are still below their pre-recession peaks in 46 percent of the 105 metro areas analyzed – including cities like Chicago, Baltimore, Tucson, Las Vegas, and New York-Newark-Jersey City. That’s why it’s always a good idea to look into where prices are in the specific neighborhoods where you’d most be interested in buying. Price increases will vary from one city to the next. So there may still be opportunities for buyers in the areas you’d like to live, despite home prices’ overall upward trend. More here.

Green Homes Aren’t Necessarily More Expensive

Conventional wisdom has it that if you find a home equipped with the latest eco-friendly features it’s going to cost you significantly more than one without. After all, energy-efficiency and green-home technologies have become more popular with prospective home buyers in recent years. But though that’s commonly thought, new research says it’s not necessarily true. In fact, in some markets, homes with eco-friendly features such as solar panels, smart thermostats or bamboo floors don’t sell for much more than the median home price. According to the National Association of Realtors’ consumer website, for example, green homes in the Dallas metro area sell for about four percent more than the median. But in Fort Collins, Colo., there is virtually no difference in home price. Among the reasons for this is the fact that green-home features are becoming more common in markets across the country. While they’re still more prevalent in the South and West, they are becoming increasingly incorporated into homes as buyers recognize the benefits of energy-efficient systems and smart-home technology. More here.

Most Counties More Affordable Than Historic Average

Pretty much anywhere you go there are parts of town that are more affordable than others. There are areas known for starter homes that attract young families and other parts where the homes come with higher price tags and significantly more square footage. Which part of town you end up buying a house in will be determined, in part, by what works for your lifestyle. But your budget and bottom line will ultimately have final say. Currently, with home prices and mortgage rates both trending upward, it may seem like there are fewer and fewer areas with affordable homes to choose from. This, however, is not entirely true. In fact, according to new numbers from ATTOM Data Solutions’ Q1 2018 U.S. Home Affordability Report, 59 percent of the 446 counties they analyzed were more affordable than their historic average. Furthermore, 27 percent of those counties actually posted a year-over-year increase in affordability – meaning prices were more affordable this year than last. Counties where this was true included Cook County (Chicago), Illinois; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; Orange County, California; and Kings County (Brooklyn), New York. In short, though affordability conditions may have worsened generally, it’s always smart to look into what prices are doing in the neighborhoods that most appeal to you. More here.

What Buyers Should Know About Home Inspections

After finding a house to buy and making an offer, one of the next steps in the process is to get the home professionally inspected. This is done for a couple of reasons. One, it provides the home’s buyer with necessary information about the health and upkeep of the home’s various systems. But, additionally, it can be used to negotiate a fair price for the home. For example, if you made an offer on a house, then discovered during the inspection there were issues that might mean costly repairs, your offer could then be renegotiated to account for the previously unknown problem. In short, getting the house inspected is an important protection for buyers, who likely don’t have the expertise to thoroughly evaluate things like the home’s plumbing and electrical systems. But more than just a checklist, the inspection is also a good opportunity for buyers to get to know the house they’re buying and learn more about the condition of the home and the steps they’ll need to take to maintain it. For that reason, it’s a good idea, if possible, for buyers to be present during the inspection, so they can ask questions and get tips on properly caring for their new home. More here.

How Mortgage Rate Increases Affect Home Buyers

Mortgage rates have been increasing lately and there is an expectation that they will move higher this year. But while home prices get a lot of attention, rising mortgage rates are a little more difficult for buyers to calculate in terms of what it will cost them. Here’s some help. According to one recent model, a less than one percent increase in mortgage rates over the next year would result in a $100 increase to the typical monthly mortgage payment. But since the costs of homeownership are influenced by many different factors, this projection has to make certain assumptions about things like the rate at which home prices will increase, for example. In other words, any increase to mortgage rates will cost home buyers but just how much is difficult to calculate precisely. So what should home buyers expect? Well, since a stronger economy and improved job market make it more likely that the Fed will raise interest rates further this year, buyers should expect that mortgage rates will remain low by historical standards but continue to edge higher, taking monthly mortgage payments higher along with them. More here.

Analysis Finds Property Tax On The Rise

When considering the costs of homeownership, it’s sometimes easy to forget about property tax. Home buyers focus a lot of attention on their prospective mortgage payment and the potential cost of any remodels and renovations but often forget to think about how much taxes will run them each year. This is a mistake. Take, for example, new research from ATTOM Data Solutions. Their recent tax analysis found that the average property tax on a single family home last year was $3,399, a 3 percent increase from 2016. That’s nearly $300 a month. But property taxes can differ from one place to the next. As evidence, states like Hawaii, Alabama, Colorado, Tennessee, and West Virginia were found to have lower than average effective property tax rates. They can also vary from city to city. That’s why it’s a good idea to look into how much homeowners pay in property taxes in the areas where you’d most like to buy a home. It may not sway your decision on where you buy, but it will give you a more accurate assessment of how much it’ll cost to buy a house in a particular city. More here.

How Photography Can Help Sell Your House

Increasingly, people rely on technology to simplify tasks that were once difficult or time consuming. These days, everything from grocery shopping to running a business can be done with an assist from a smartphone app. So it’s no surprise that home shoppers would also go to the internet to gather information on how, what, and where to buy a house. And it’s for that reason that photography has become an important tool for homeowners who are looking to sell a house. For example, a recent National Association of Realtors’ study found 89 percent of buyers who searched listings on the internet said photos were the most useful feature. That makes sense. After all, the photos that accompany online listings can offer home shoppers an idea of what the home looks like inside and out. And while it’s always best to see the house in person – as photography can sometimes give an inaccurate impression of what shape a house is in – good photos are clearly a must if you’re selling a home today. More here.

What Style Of House Do You Prefer?

Most regions offer house hunters a variety of architectural styles to choose from. Whether you prefer bungalows to ranches or modern over contemporary, you can likely find something that fits your preference. But, according to one recent survey, what you’re looking for might depend on your age. That’s because the results show millennial home buyers are looking for a different kind of home than older buyers. For example, younger buyers expressed a preference for colonial and contemporary homes, when they had a preference at all. On the other hand, buyers over the age of 55 were much more interested in finding a ranch – which is an architectural style favored by only 6 percent of millennials. Of course, some of this has to do with practicalities – such as retirees in search of a one-story home because it eliminates any concern about future mobility and navigating stairs – but it’s also a question of personal taste and aesthetics. Ultimately, though, whatever type of house Americans say they prefer, they generally all say they want that house to have ample storage, a garage, and multiple bedrooms. More here.

More Home Buyers Sign Contracts In February

If you want to get a feel for how many home buyers there are currently active in the housing market, the National Association of Realtors’ Pending Home Sales Index is a good place to start. It tracks the number of contracts to buy homes signed during the month and, because it measures contract signings and not closings, it’s a good future indicator of where home sales will be a month or so down the road. In short, if there are a lot of pending sales, there will likely be a lot of final sales. Which is why, February’s results are a pretty good indication that the spring season is ramping up. Contract signings were up 3.1 percent in February and rebounded in all four regions of the country. The largest increase was in the Northeast, though pending sales also saw significant improvement in the South. Still, despite the gains, NAR chief economist Lawrence Yun says the pace falls short of last year’s level. “Contract signings rebounded in most areas in February but the gains were not enough to keep up with last February’s level, which was the second highest in over a decade,” Yun said. More here.