Category: Real Estate

Demand for Single-Family Rentals Is Surging | Realtor Magazine

The single-family rental market posted strong growth during the initial months of the pandemic, from April through June, according to the National Rental Home Council and John Burns Real Estate Consulting’s latest reading from the Single-Family Rental Market Index during the second quarter.

“As the COVID crisis reverberated throughout the economy in the second quarter this year, demand for single-family rental homes surged,” says David Howard, executive director of the National Rental Home Council. “Most Americans will be working and studying from home for the foreseeable future. So they’re looking for affordable homes in quality neighborhoods with all the amenities and conveniences offered by the single-family home lifestyle.”

Researchers note a rise in consumer demand for extra space away from dense urban centers. The top-performing markets in the second quarter were in the Southeast and Southwest.

Occupancy rates have climbed 15 percentage points between the first quarter and second quarter. Further, nearly 60% of property managers say homes are spending less time on the market, which is up from 35% in the previous quarter.

The single-family rental market is expected to continue to expand over the next six months.

“For many Americans, the pandemic has brought a new urgency to the search for housing, and many are discovering the benefits associated with renting a single-family home,” says Howard. “Suddenly living in a small apartment in an urban high rise isn’t as appealing for families navigating the realities of working and schooling from home. Single-family rental homes offer a lifestyle with a full range of conveniences and community amenities without the cost and commitment of homeownership.”

Overall, the Single-Family Rental Market Index had a reading of 76 in the second quarter, which is up from 63 in the first quarter. Scores below 50 signal that the market is contracting while readings above 50 indicate expansion.

The national median rent in the second quarter was $1,602.

‘The Housing Market Is on a Sugar High’ | Realtor Magazine

Buyers continue to face fierce competition from a limited number of homes for sale, which continues to fuel bidding wars across the country. Daren Blomquist, vice president of market economics at Auction.com, told MarketWatch that “the housing market is on a sugar high brought on by government stimulus and a pandemic-fueled rush” toward housing.

As bidding wars send homes above asking prices, Blomquist says, “prospective buyers will be better positioned for success as homeowners if they understand that this sugar high will not last and make sure their decision to buy is grounded in longer-term factors that will affect their ability and willingness to commit to paying down a sizable amount of debt over the next 30 years.”

Over two-thirds of homes sold in July were on the market for less than a month, according to the National Association of REALTORS®.

“That quick-decision environment may challenge some buyers, especially first-timers who are new to the process,” says Danielle Hale, realtor.com®’s chief economist, told MarketWatch.

The real estate brokerage Redfin reported that nearly 55% of offers submitted by its agents faced a bidding war in August, marking the fourth consecutive month that more than half of offers encountered bidding wars. Some markets in coastal California and more affordable places like Sacramento, Calif., and Phoenix are seeing even higher percentages of bidding wars.

“The pandemic-driven trend of people moving away from densely packed cities toward more affordable and spacious regions means homes in places like Sacramento and Phoenix are becoming nearly as competitive as the Bay Area,” says Daryl Fairweather, Redfin’s chief economist. “Low mortgage rates are motivating home buyers who are thinking of moving to go through with it. I expect competition to continue picking up in more affordable parts of the country.”

Indeed, “the market is on fire,” says Lisa Padilla, a San Diego–based real estate professional with Redfin. “There just isn’t enough on the market to supply the huge demand for homes. … Anything on sale for less than $600,000 has multiple offers, and sometimes they’re getting more than 20 offers.”

Nationwide, 58% of homes priced between $600,000 and $800,000 faced a bidding war in August, the most competitive price segment, according to Redfin’s analysis.

“When the market started getting really hot a few months ago, at first we just saw the lower-priced homes selling fast with multiple offers,” says Marisa Frias, a real estate professional with Redfin in El Paso, Texas. “Now it’s nearly every home at every price level. I’ve had an uptick in young buyers ready to purchase their first home, and the market is tough for them. I always need to make sure they’re emotionally and financially prepared to face a bidding war every time they find a home that is ‘the one.’”

Bidding wars were highest in the following markets, according to Redfin’s analysis:

1. San Francisco/San Jose: 65.2%
2. Salt Lake City: 65.2%
3. San Diego: 64.5%
4. Washington, D.C.: 63.5%
5. Seattle: 62.2%
6. Minneapolis: 61.5%
7. Boston: 60.8%
8. Philadelphia: 59.1%
9. Austin, Texas: 58.2%
10. Sacramento, Calif.: 57.8%
11. Phoenix: 56.5%
12. Portland, Ore.: 56.3%
13. Los Angeles,: 53.4%
14. Tampa, Fla.: 50%
15. Detroit: 50%

Poll: Americans Say It’s a Good Time to Buy and Sell | Realtor Magazine

In a seller’s market, it’s not too surprising Americans have expressed optimism toward home selling. But Americans also say it’s a good time to be a buyer—in fact, more Americans are bullish over buying than selling.

Fannie Mae’s Home Purchase Sentiment Index, which reflects the attitudes of more than 1,000 respondents toward housing, shows consumer sentiment over five of six housing indicators increased in August. Consumers are expressing more optimistic views than previously over buying and selling, and fewer concerns over job losses.

The buyer optimism stems from near-record low mortgage rates, which are helping to “restore much of consumers’ positivity on whether it is a good time to buy a home, while also improving the good-time-to-sell sentiment,” says Doug Duncan, senior vice president and chief economist. “The August survey was conducted as consumers continue to face uncertainty regarding schools’ and business’ reopening plans and as the CARES Act $600-per-week income supplement expired.”

While Fannie Mae’s Home Purchase Sentiment Index rose by 3.3 points in August to a reading of 77.5, the index is still down 16.3 points compared to a year ago.

Here’s a closer look at findings on consumer sentiment from the latest survey:

• Homebuying expectations: The percentage of respondents who said it’s a good time to buy a home increased from 53% to 59% in August.
• Homeselling expectations: The percentage of respondents who said it’s a good time to sell a home rose from 45% to 48%.
• Home prices: Fewer respondents believe home prices will rise over the next 12 months, the percentage decreasing in August from 35% to 33%. The percentage of respondents who said home prices will likely fall decreased to 26% while the share who think home prices will stay the same was unchanged at 34%.
• Mortgage rates: More Americans believe mortgage rates will remain near record lows. The percentage of respondents who said mortgage rates will go down even more over the next year increased to 33%. Forty-five percent of respondents believe mortgage rates will stay the same.
• Job concerns: Consumers are less concerned about losing their jobs over the next year. Seventy-eight percent of respondents said they are not concerned about losing their job in the next 12 months, up slightly from 76% the previous month.
• Household income: Some Americans are feeling richer. The percentage of respondents who said their house income is significantly higher than it was a year ago rose to 25% in August. The percentage of respondents who say their household income is significantly lower stayed unchanged at 16%. Fifty-nine percent said their household income has stayed the same.

Condo Inventory Grows, Sales Stay Strong | Realtor Magazine

As COVID-19 outbreak took hold earlier this year the U.S., sales of condominiums took one of the biggest hits. Condos reached a low year-over-year point in May. That was after in late 2019—pre-pandemic for the U.S.—where condo sales were accelerating at a faster rate than single-family detached homes, reports CoreLogic, a real estate research firm.

“While the pandemic has impacted our views on the desirability of density, it is clear that home buyers have not given up on condominiums,” CoreLogic reports.

Condos are making a strong recovery since May. “Interestingly, while condominium sales took a larger dip during the peak of shelter-in-place orders, pending contracts have healthily rebounded to the same rate of annual growth for single-family homes, with both averaging about 17% year-over-year increases in the first two weeks of July,” according to the most recent data from CoreLogic.

New inventory of condominiums outpaced single-family growth in June. Inventories are constrained for both condos and single-family homes, but active condo inventories has leveled off at about a 13% decrease year over year since May compared to about 30% decrease in the inventory of single-family homes.

“The stabilization in condominium inventory reflects an increase in newly available inventory,” CoreLogic reports. “After dipping to a 50% year-over-year fall during the height of the shutdown, we have seen a rapid growth in new inventory and recorded an 8% increase by mid-July.”

The largest increase in new inventory in June was among condos priced at 200% or more of the median price, which is up 16% compared to a year prior. Newly listed inventory of condos priced below 100% of the median price was up 5% and new inventory priced between 100% and 200% of the median price was up 2% annually in June, CoreLogic reports.

Condos may be offering buyers better deals than single-family homes. The share of condos that sold below the asking price is higher than the rate of single-family detached homes, CoreLogic reports. Nevertheless, the discount on condos is at the lowest rate it has been in at least the last 2.5 years, showing that condos remain desirable even in the pandemic, CoreLogic reports.

Mortgage Applications Are 40% Higher Than a Year Ago | Realtor Magazine

The home shopping spree continues. Typically, the end of August sees a slowdown in the housing market, but this year, real estate has shown no signs of letting up.

Mortgage applications to purchase a home increased 3% last week compared to the previous week. But it’s the year-over-year jump of 40% that has surprised economists. Year-over-year comparisons are usually in the single digits.

“There continues to be resiliency in the purchase market,” says Joel Kan, economist for the Mortgage Bankers Association. “The average loan size continued to increase, hitting a survey high at $368,600. Highlighting the strong overall demand for buying a home, conventional, VA, and FHA purchase applications all increased last week.”

Record low mortgage rates continue to incentivize buyers. The average contract interest rate for the 30-year fixed-rate mortgage dropped to 3.07% last week, the Mortgage Bankers Association reports. The 15-year fixed-rate mortgage was at an all-time low of 2.62%.

Homeowners are rushing to refinance at the lower rates. Applications to refinance increased 3% last week and are a whopping 60% higher than a year ago, the MBA reports.

5 Timeless Kitchen Trends | Realtor Magazine

Kitchens can be expensive to renovate, so help homeowners choose upgrades that will stand the test of time—and outlast trends that come and go.

Life Rejoice, a home improvement blog, has offered up 40 timeless kitchen trends. Here’s a peek at five.

1. Quartz

Engineered quartz will continue to be a popular countertop option for a long time. It’s less prone to damage than other countertop materials and doesn’t stain from acidic substances, making it an increasingly long-lasting choice.

2. Bright, cool spaces

“The all-white kitchen will likely stay evergreen for years to come,” Life Rejoice notes. Still, some of us will appreciate a dash of color, if only to accentuate the squeaky clean impression all those white walls and cabinets give. For example, blue on larger surfaces against mostly white backdrops can add elegance, the blog notes. “Keep the pallet sparse, with only one or two other colors used for touches on fixtures and hardware,” the blog notes.

3. Go green

Life Rejoice recommends mixing in sustainable materials, such as reclaimed wood and fast-growing bamboo. Also, “the color green itself seems to gain in popularity, especially the dark arsenic hue which was all the rage back in Victorian times,” the blog notes. “Consider it for cabinetry, larders, pantry doors, and other furniture of the like.”

4. Dark floors

Bright kitchens offer cleanliness and warmth. But to balance out predominantly light colors on walls and cabinetry, use darker floors. A dark stain for hardwood, dark tile, or even linoleum can make a room feel more cozy.

5. Add in texture

Texture can help break up the monotony of an all-white space. For example, consider beadboard, shiplap, brass, strap hinges, latches, marble, various wood essences, and combined with gray paint to “give your kitchen a lively, but at the same time restrained look,” Life Rejoice notes. “Expressing through texture is considered to be an all-around safer bet than doing so with pure colors if a timeless look is what you’re after.”

Analyst: Housing Market Can’t Sustain ‘Frenzied Demand’ | Realtor Magazine

The housing market showed no signs of slowing in August, with homes getting more expensive and selling faster. The national median listing price increased 10% to a new record high of $350,000 last month, and homes are selling at their fastest pace in 15 months, according to a new report from realtor.com®. Meanwhile, the number of homes on the market sank to a record low as housing shortages persist.

“It’s difficult to imagine that the housing market will be able to sustain the frenzied demand we are currently experiencing, but we have yet to see any signs of slowing,” says Danielle Hale, realtor.com®’s chief economist. “Buyer traffic on realtor.com® is outpacing the record levels we saw earlier this year, suggesting that demand will continue to exceed the number of available homes for sale.”

Housing demand is more intense than it normally is this late into a buying season, Hale says. “Given the strong demand, sellers will return in the driver’s seat for the foreseeable future.”

Inventory dropped 36% in August compared to the year prior. The largest drop in housing inventories in August occurred in Indianapolis-Carmel-Anderson, Ind. (down 55.9%); Riverside-San Bernardino-Ontario, Calif. (down 55.5%); and Providence-Warwick, R.I.-Mass. (down 51.7%).

The lack of homes for sale continues to press on home prices. The Northeast led in listing price gains annually, up nearly 19% in Philadelphia, 14.7% in Boston, and 12.2% in Providence-Warwick, R.I. On average, homes nationwide are selling in 56 days—five days faster than a year ago, according to realtor.com®.

 

 

 

 

Millennials Are Fueling Housing’s Rebound | Realtor Magazine

Young prospective home buyers in their 20s and 30s who were once reluctant to purchase are now driving the housing market recovery during the pandemic, The Wall Street Journal reports.

Even prior to the pandemic, millennial buyers were starting to increase in number, accounting for more than half of all new-home loans early last year. They have consistently stayed above that level in the first months of this year, too, realtor.com® data shows.

The large size of this generation has prompted predictions that they will make a lasting impact on the housing market. Millennials have now surpassed baby boomers as the largest living adult generation in the U.S., Pew Research Center data shows. The largest segment of millennial births occurred in 1990, so that cohort is turning 30 this year. “We anticipate as they turn 31 and 32, we’ll just see homebuying demand grow,” Odeta Kushi, deputy chief economist at First American Financial Corp., told the Journal.

First American predicts millennials could purchase at least 15 million homes over the next decade.

Existing-home sales surged nearly 25% in July, reaching their highest seasonally adjusted annual rate since December 2006, according to the National Association of REALTORS®. First-time buyers comprised 34% of sales in July, up from 32% a year earlier.

The pandemic and low interest rates—which are under 3%—may be offering incentive for more young adults to finally buy. “Millennials, they’re roaring into home buying age,” Rick Arvielo, chief executive of mortgage lender New American Funding, told the Journal. “What the industry’s been talking about for a decade is whether they’re going to follow their predecessor generations in terms of their desire to own homes. … They have the same desires.”

Markets With the Most Competitive Home Buyers | Realtor Magazine

Home shoppers in San Jose, Calif., Raleigh, N.C., and Pittsburgh may find themselves up against the most competitive buyers in the nation, according to a new study from LendingTree.

LendingTree’s researchers ranked the 50 largest metro areas based on three categories: average down payment percentage; the share of buyers who have credit scores above 720; and the share of buyers who shop around for a mortgage before looking for a house. Buyers who are the most strong in these categories will likely have a competitive advantage over other home shoppers.

For example, the average down payment in the top 11 metros with the most competitive buyers is 21.4%. Buyers who offer larger down payment tend to have more enticing offers. Further, nearly 71% of buyers in the top 11 metro areas also have credit scores of at least 720 or higher.

Meanwhile, buyers in Memphis, Tenn., Virginia Beach, Va., and Oklahoma City tend to have the least competitive buyers in the country, the LendingTree study finds. Home shoppers in these areas tend to have lower credit scores and smaller down payments, and are less likely to shop around for a mortgage before choosing a home.

Freddie: Mortgage Rates Won’t Move Much Lower | Realtor Magazine

 

 

Mortgage rates were mostly flat this week, remaining below 3%. “However, there are some interesting compositional shifts, as the 10-year Treasury rate has increased modestly over the past month while mortgage spreads have declined,” notes Sam Khater, Freddie Mac’s chief economist. “Spreads may decline even further, but the rise in Treasury rates will make it difficult for mortgage rates to fall much more over the next few weeks.”

Ultra-low mortgage rates are prompting existing- and new-home sales to increase to pre-pandemic levels, the National Association of REALTORS® reports. Mortgage rates have plunged nearly 80 basis points since the beginning of the year, which translates to a decrease in monthly mortgage payments of $120 for the typical American, NAR reports.

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 3:

30-year fixed-rate mortgages: averaged 2.93%, with an average 0.8 point, up slightly from a 2.91% average last week. The all-time record low for 30-year rates was 2.88%, set at the beginning of August. A year ago, 30-year rates averaged 3.49%.

15-year fixed-rate mortgages: averaged 2.42%, with an average 0.8 point, falling from last week’s 2.46% average. A year ago, 15-year rates averaged 3%.

5-year Treasury hybrid adjustable-rate mortgages: averaged 2.93%, with an average 0.2 point, rising from last week’s 2.91% average. A year ago, 5-year ARMs averaged 3.30%.