Yajnesh Rai

Rent vs. Own? The Best Option in Each State | Realtor Magazine

Home prices may be on the rise across the country, but you’re still better off buying a home in most states in the U.S. than renting one. Consumers in only 11 states will find renting more affordable than buying a home, according to a new study by GOBankingRates, a personal finance website. 

GOBankingRates analyzed the cost of renting versus owning a home in all 50 states and the District of Columbia. Researchers looked at estimated rent prices for all homes listed on a real estate website. It then calculated the estimated monthly mortgage to own a home in each state, based on the median list price of homes, a 20 percent down payment, and a 30-year fixed-rate loan.

Home prices may be on the rise across the country, but you’re still better off buying a home in most states in the U.S. than renting one. Consumers in only 11 states will find renting more affordable than buying a home, according to a new study by GOBankingRates, a personal finance website. 

GOBankingRates analyzed the cost of renting versus owning a home in all 50 states and the District of Columbia. Researchers looked at estimated rent prices for all homes listed on a real estate website. It then calculated the estimated monthly mortgage to own a home in each state, based on the median list price of homes, a 20 percent down payment, and a 30-year fixed-rate loan.

Bay Area real estate: Pending home sales fall across region

Amid the continuing housing crunch, pending home sales dropped across the Bay Area last month.

A California Association of Realtors report shows pending sales fell 0.6 percent throughout the region in June, compared with the same month a year earlier. Pending sales fell 10.4 percent in San Mateo County and 0.4 percent in Santa Clara County.

 

“Last week in Santa Clara County, we stood at roughly 35 percent fewer listings than we did last year at the same time,” said Chris Trapani, founder and CEO of the Sereno Group. “You look at that and say, `What is there even to sell?’ The fact that Santa Clara is off only one percent or less in units sold — that’s actually kind of remarkable, I think.”

Craig Gorman, past president of the Santa Clara County Association of Realtors, agreed: “The biggest reason why sales are down is because there’s just not enough inventory.”

For the week of July 10, he said, only 1,091 homes were on the market in the county.

“They’re still popping off the shelves if they’re priced right,” Gorman said.

San Francisco County bounced back from a double-digit decline in pending sales in May, and rose 22.2 percent in June.

To the north of the Bay Area, pending sales were down 6.5 percent in Sacramento.

To the south, they fell 15.7 percent in Santa Cruz.

Statewide, pending home sales slipped for the sixth month in a row, down 0.9 percent.

Region by region, however, the picture was more varied. Southern California sales were up 2.5 percent, and Central Valley sales rose 5.2 percent.

Buyers Accept ‘Extreme Commutes’ for Affordability | Realtor Magazine

Some buyers are willing to accept an “extreme commute”—a minimum of two hours each way between work and home—in return for the tranquility of the outer ’burbs, a larger property, and more land at a lower price than the city. As The New York Times puts it, these buyers are following an old real estate adage: “Drive until you qualify.”

“Technological changes have made it more possible to redefine the workplace,” says Mitchell L. Moss, director of the Rudin Center for Transportation at New York University. “Even in New York City, which has been famous for not allowing people to work at home, there is now more tolerance of flexible time.”

Data is sparse on how many people embark on an extreme commute. The U.S. Census Bureau, which defines a “long commute” as 60 miles each way, reported in 2013 that 21 percent of commuters spent 60 minutes or longer traveling to work. New York State, at about 16 percent, had the highest rate of long commuters, followed by Maryland and New Jersey, both at about 15 percent.

Meig Walz with Coldwell Banker in Madison, Conn., told the Times that she is seeing more extreme commuters from New York. Madison is about 15 minutes east of New Haven, Conn., and halfway between New York and Boston. It can take more than two hours each way.

“We are now getting more middle- and upper-level executives with young families looking for prime waterfront property,” Walz said. Buyers are purchasing four- and five-bedroom waterfront homes in Madison for about $2 million, which is half of what they would pay in Fairfield County. They also get lower taxes in Madison.

Are Builders Warming Up to Smaller Homes? | Realtor Magazine

Competition is heating up among millennials and baby boomers for smaller, more affordable homes. But builders have been slow to meet demand. That may be showing signs of changing.

Home sizes are beginning to shrink, which may also help prices edge down, too.

“We are starting to see [smaller] starter homes come back,” says Rick Palacios Jr., director of research at John Burns Real Estate Consulting.

The uptick started slightly in mid-2016 as employment and wages rose.

More buyers are “now in that life stage of their early 30s [where] they’ve got a good job now, they’re getting married, they’re having kids,” Palacios says.

Some builders are heading farther from cities, where land is cheaper. Or they may construct more homes on smaller lots or build a line of attached townhouses.

“A builder can’t pay through the nose for land and then build a starter home on that land,” Palacios says. “It just doesn’t pencil out for them. [We’ve] started to see more builders gaining confidence in building lower-priced, smaller homes.”

Nearly 29 percent of the homes built between 2010 and 2015 were 3,000 square feet or more—hardly small by any standards. More builders focused on the high end of the market following the recession and built fewer smaller homes. Census data shows that 14.72 percent of new homes in the 1990s were between 1,000 and 1,499 square feet. Between 2010 to 2015, that percentage shrunk to 9.75 percent.

Robert Dietz, chief economist at the National Association of Home Builders, projects about 850,000 new homes will be constructed this year, even though the market could really support about 1.2 million new homes.

An uptick in smaller homes is “not something that can be fixed overnight,” he notes. “It’s going to take a while.”

After Brief Hike, Mortgage Rates Fall Below 4% | Realtor Magazine

Following two weeks of rate increases, the 30-year fixed-rate mortgage settled back below a 4 percent average this week. 

“Continued economic uncertainty and weak inflation data pushed rates lower this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 10-year Treasury yield fell 5 basis points this week. The 30-year mortgage rate moved with Treasury yields, dropping 7 basis points to 3.96 percent.”

Freddie Mac reported the following national averages with mortgage rates for the week ending July 20: 

• 30-year fixed-rate mortgages: averaged 3.96 percent, with an average 0.6 point, dropping from last week’s 4.03 percent average. Last year at this time, 30-year rates averaged 3.45 percent. 
• 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.5 point, falling from last week’s 3.29 percent average. A year ago, 15-year mortgage rates averaged 2.75 percent. 
• 5-year hybrid adjustable-rate mortgages: averaged 3.21 percent, with an average 0.5 point, dropping from last week’s 3.28 percent average. A year ago, 5-year ARMs averaged 2.78 percent. 

Source: Freddie Mac

Following two weeks of rate increases, the 30-year fixed-rate mortgage settled back below a 4 percent average this week. 

“Continued economic uncertainty and weak inflation data pushed rates lower this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 10-year Treasury yield fell 5 basis points this week. The 30-year mortgage rate moved with Treasury yields, dropping 7 basis points to 3.96 percent.”

Freddie Mac reported the following national averages with mortgage rates for the week ending July 20: 

• 30-year fixed-rate mortgages: averaged 3.96 percent, with an average 0.6 point, dropping from last week’s 4.03 percent average. Last year at this time, 30-year rates averaged 3.45 percent. 
• 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.5 point, falling from last week’s 3.29 percent average. A year ago, 15-year mortgage rates averaged 2.75 percent. 
• 5-year hybrid adjustable-rate mortgages: averaged 3.21 percent, with an average 0.5 point, dropping from last week’s 3.28 percent average. A year ago, 5-year ARMs averaged 2.78 percent. 

Source: Freddie Mac

Freddie Mac: Housing Is Still Affordable | Realtor Magazine

Housing affordability is the talk of the town in the current real estate climate. Home prices surpassed their peak at the end of the last housing boom. Since 2012, prices have increased, on average, 6 percent per year. However, per capita incomes have risen only 2.4 percent, on average, per year, according to Freddie Mac’s latest Insight report for July.

In areas like Marin, San Francisco, and San Mateo counties, the median-income household is unable to qualify for a mortgage to purchase a median-priced home in any ZIP code within those three counties.

The limited number of homes for sale has increased the perception that homes are unaffordable, according to Freddie Mac’s report. But consumers may be surprised to find that homes are still more affordable than they may seem. 

“Thanks to very low mortgage rates, monthly mortgage payments are affordable for the average household despite currently high house prices,” says Sean Becketti, Freddie Mac’s chief economist. “Nevertheless, hurdles to homeownership arise from the difficulty of finding a house. The supply of homes for sale is very tight, especially starter homes.” 

Underwriting requirements are also more rigorous than they have been in the past, Becketti says.

“Many potential first-time borrowers are stymied by variable employment and income histories and the challenge of accumulating a down payment while simultaneously paying down their student loans,” Becketti says. “In fact, a high level of household debt, particularly student debt, poses perhaps the largest obstacle to first-time homebuyers.”

Borrowers Are in a Rush as Mortgage Apps Soar | Realtor Magazine

Threats of rising mortgage rates may have spooked borrowers last week and prompted them to quickly lock in rates. Total mortgage application volume for refinancings and home purchases jumped 6.3 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.

Even though mortgage rates remained steady during the week, refinance volume, which had been dropping in recent weeks, surged 13 percent last week.

The 30-year fixed-rate mortgage averaged 4.22 percent last week, unchanged from the previous week, the MBA reports.

“Treasury yields were slightly lower last week as testimony from [Fed Chair Janet] Yellen was perceived to be more dovish than expected and as the market received data signaling weaker inflation and retail sales for June,” says MBA economist Joel Kan. “These factors kept the 30-year fixed-contract rate flat over the week.”

Mortgage applications for home purchases rose just 1 percent last week compared to the week prior. Applications for home purchases are 7 percent higher than a year ago, the MBA reports.

“It could just as easily be some seasonal adjustment distortion, loosening of underwriting standards, or nice weather sparking home improvement goals,” Matthew Graham, chief operating officer of Mortgage News Daily, told CNBC.

What Thieves Are Most After in Homes | Realtor Magazine

Here are some sobering stats from the FBI: A robbery occurs every 1.6 minutes in the U.S., a burglary every 18.2 seconds, and a larceny theft every 5.4 seconds.

SafeHome, a home security systems reviews resource, analyzed FBI Uniform Crime Reporting data from 2015 to determine the items thieves most commonly target.

The most stolen items were classified as miscellaneous valuables, jewelry, and precious metals, according to the report. In some states, certain thefts were more common than others. For example, in Florida, Texas, Massachusetts, and Colorado, thieves were more likely to target diamonds, gold, silver, and other jewelry. Meanwhile, clothing was the most stolen items in seven states, including California and Tennessee.

Here are some sobering stats from the FBI: A robbery occurs every 1.6 minutes in the U.S., a burglary every 18.2 seconds, and a larceny theft every 5.4 seconds.

SafeHome, a home security systems reviews resource, analyzed FBI Uniform Crime Reporting data from 2015 to determine the items thieves most commonly target.

The most stolen items were classified as miscellaneous valuables, jewelry, and precious metals, according to the report. In some states, certain thefts were more common than others. For example, in Florida, Texas, Massachusetts, and Colorado, thieves were more likely to target diamonds, gold, silver, and other jewelry. Meanwhile, clothing was the most stolen items in seven states, including California and Tennessee.

Burglary is the unlawful entry of a place, such as a home or office. Burglaries don’t just happen at night, either: The report shows that assailants broke in during daytime hours or evening hours at the same rate. In fact, burglaries that occurred during daytime hours tended to result in a higher loss than those that occurred at night, according to the report.

Burglary is the unlawful entry of a place, such as a home or office. Burglaries don’t just happen at night, either: The report shows that assailants broke in during daytime hours or evening hours at the same rate. In fact, burglaries that occurred during daytime hours tended to result in a higher loss than those that occurred at night, according to the report.

Foreign Investment in the U.S. Homes Soars: Report – Mansion Global

 

1. China

2. Canada

3. UK

4. Mexico

5. India

 

Foreign investment in U.S. residential real estate jumped nearly 50% over the past year compared to the year prior thanks to a bump in Canadian purchases, according to an annual report from the National Association of Realtors.

In total, the group estimates non-citizens, including permanent residents and non-permanent buyers, spent $153 billion on U.S. homes between April 2016 and March 2017, up 49% from the 12 months prior, according to the report released Tuesday. Chinese, Canadians, British, Mexicans and Indians made up the top five buyers of U.S. homes—and all of these groups increased the amount of money spent on homes compared to the year before.

 

The association bases its data on an annual survey conducted each spring, to which 6,000 realtors responded in 2017. The survey asks about closed transactions in the previous 12 month period.

The reported jump in foreign purchases runs contrary to expectations, especially given the very strong dollar compared to most foreign currencies, said Lawrence Yun, the association’s chief economist.

 

“That was surprising since the strong dollar would have made it more costly,” Mr. Yun said. He speculated that foreigner buyers, like Chinese and Canadians—who come from countries where property values have grown exponentially over the past year—are using their appreciated housing equity in their home countries to buy second homes in the United States.

Of all foreign purchases in the U.S., around 10% were for homes priced at $1 million or more.

Canadians buy despite dollar strength

In Toronto, for example, the average sales price increased 24.5% in the year to April 2017, the same period tracked in the association’s report, according to figures from the Toronto Real Estate Board.  

Foreign home buyers in the U.S. have been most active in Florida, California and Texas. Florida alone accounted for 22% of foreign activity, fueled a great deal by an upswing in Canadian buyers.

Canadians have been the single biggest foreign buyer in the Fort Lauderdale market, according to a broker with the Realtors Association of Greater Fort Lauderdale.

 

The National Association of Realtors estimates that Canadians have more than doubled the amount of money they’ve spent on U.S. residential real estate, from $8.9 billion between April 2015 to March 2016 to $19 billion in the following 12-month period. That jump has happened in spite of the weakening Canadian currency, which is now about 70 cents to every U.S. dollar.

The draw of tropical climates and pools in the southern U.S. may be enough to overcome an unfavorable exchange rate.

“To a Canadian, palm trees are just about heaven,” said Diane Brennan, a Canadian-American broker with Coldwell Banker in Scottsdale, Arizona. The greater Phoenix area was a huge magnet for second home buyers from western Canada in the post-recession years until the price of oil collapsed.

Some Canadians are still buying in Arizona, but the bulk of activity is now Canadians selling their Arizona homes to benefit from the “double bang” of value appreciation and the other 30% they get from bringing U.S. dollars back to Canada, Ms. Brennan said.

Chinese remain top buyers in U.S.

The influx of Canadian buyers failed to unseat the Chinese as the biggest buyers of U.S. real estate for the fourth year in a row, according to the National Association of Realtors.

The Chinese spent $31.7 billion in U.S. residential real estate between April 2016 and March 2017— despite new government controls in China to keep money from leaving the country, the association reported. While Mr. Yun said California continues to be the primary destination for Chinese buyers, local brokerages said they haven’t seen any remarkable uptick in Chinese activity.

“The Chinese are the major players in foreign home buying in California, but I do have the tendency to think reports of their buying are exaggerated,” said Patrick Carlisle, chief market analyst at Paragon Real Estate Group.

“When someone buys real estate, there’s no requirement to record whether they are a citizen or not, so all the information about Chinese home buying in the U.S. is anecdotal,” he added.

 

Chinese buyers have traditionally bought homes in new condo developments in the Bay Area, and made considerable investment around colleges like Stanford University, where they buy homes for their children to live in.

Controls on Chinese capital outflows may already be cooling their purchases, according to the National Association of Realtors, which said that local brokerages are reporting fewer foreign buyers in 2017.

“It appears much of the activity occurred during the second half of 2016,” Mr. Yun said. “Realtors in some markets are reporting that the effect of tighter regulations on capital outflows in China and weaker currencies in Canada and the U.K. have somewhat cooled non-resident foreign buyer interest in early 2017.”

Most Expensive Items New Homeowners Buy | Realtor Magazine

Furniture, appliances, and remodeling projects are among the biggest expenses for new homeowners, who spend an average of $10,600 in the first year of homeownership, according to a recent analysis by the National Association of Home Builders. New owners spend an average of $3,778 on furnishings alone, according to NAHB’s analysis. Here are a few common expenditures recent home buyers made:

• Living room chairs and tables: $687
• Dining room and kitchen furniture: $345
• Window coverings: $215
• Sofas: $700
• Property alterations and repairs (particularly outdoor additions and alterations such as a new driveway, walkway, or fence): $3,729
• Appliances (particularly washers and dryers, lawnmowers and other yard equipment, and computer hardware and systems): $3,094

“The high level of spending by new home buyers may seem surprising—considering that many new homes come with installed appliances—but suggests that these purchases are nevertheless more frequent among these households,” the NAHB notes on its blog, Eye on Housing. A survey conducted by Home Innovation Research Labs shows that two-thirds of new homes built in 2015 came with no washer or dryer; 36 percent had no refrigerators. Most new homes, however, did come with cooking stoves, ranges, and ovens.