Yajnesh Rai

Home Buyer and Seller Generational Trends | www.nar.realtor

Highlights

Since 2013, the National Association of REALTORS® has been writing the Home Buyers and Sellers Generational Trends Report. This report provides insights into differences and similarities across generations of home buyers and home sellers. The home buyer and seller data is taken from the annual Profile of Home Buyers and Sellers.

• Millennials are the largest share of home buyers at 36 percent. Sixty-five percent of these buyers were also first-time home buyers.
• Gen Xers consists of 26 percent of recent home buyers. They are the most racially and ethnically diverse population of home buyers, with 26 percent identifying they are a race other than White/Caucasian.
• Younger Baby Boomers consist of 18 percent of recent buyers. They have higher median household incomes and are more likely to have children under the age of 18 in their home.
• Older Baby Boomers consist of 14 percent of recent buyers. They typically move the longest distance at a median of 30 miles and are less likely to make compromises on their home purchase.
• The Silent Generation are 6 percent of recent buyers. They are least likely to purchase a detached single-family home. Twenty-eight percent purchased in senior-related housing and they tend to purchase the newest homes.
• All generations of buyers continue to consult a real estate agent or broker to help them buy and sell their home.

Dip in Rates Provides ‘Stability’ for Home Sales | Realtor Magazine

 

 

© REALTOR® Magazine

 

Borrowers saw a little relief from recent increases. Mortgage rates dropped slightly this week, with the 30-year fixed-rate mortgage averaging 4.59 percent, Freddie Mac reports.

“This stability is much needed for home sales, which have crested because of the multiyear run up in prices, tight affordable inventory, and this year’s higher rates,” says Sam Khater, Freddie Mac’s chief economist. “Going forward, the strong economy will support the housing market, but with affordability pressures mounting, further spikes in mortgage rates will lead to continued softening in home price growth.”

Home prices are still climbing and rates are up from 3.90 percent a year ago. “Some prospective buyers are definitely feeling an affordability crunch,” Khater says.

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 9:

• 30-year fixed-rate mortgages: averaged 4.59 percent, with an average 0.5 point, dropping from last week’s 4.60 percent average. Last year at this time, 30-year rates averaged 3.90 percent.
• 15-year fixed-rate mortgages: averaged 4.05 percent, with an average 0.5 point, falling from last week’s 4.08 percent average. A year ago, 15-year rates averaged 3.18 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.90 percent, with an average 0.3 point, falling from last week’s 3.93 percent average. A year ago, 5-year ARMs averaged 3.14 percent.

Another ‘Client’ to Please: The Family Pet | Realtor Magazine

Home buyers are increasingly being swayed by their pets when choosing which property to purchase. Three-quarters of home buyers say they would even pass up an otherwise perfect home—their dream home—if it did not meet their pets’ needs, according to a new realtor.com® survey of more than 1,000 consumers who’ve closed on a home in 2018.

“It’s heartwarming to find that people will put their pets’ needs first, even when it comes to one of the biggest financial decisions they will ever make,” says Nate Johnson, chief marketing officer for realtor.com®. “This survey shows that we really do consider pets part of the family—and that their needs are a critical part of finding the perfect home.”

Pet owners comprised 80 percent of recent home buyers—with dogs and cats being the most common types of pet—according to the survey. Younger buyers and those with children appeared to be the most influenced by their pets’ needs when shopping for a home, according to the survey.

Pet owners gave their two most desired features in a home: a large backyard and outdoor space. Other top features pet owners say they valued in a home included a garage, large square footage, a dog run, sturdy flooring, and close proximity to outdoor spaces.

No Housing Recession Over the Horizon | Realtor Magazine

Media reports are increasingly focused on whether a major home sale slowdown, or maybe even a crash, is in the making, in part because many hot housing markets are seeing slackening buyer demand, and nationally 2018 is expected to end with fewer home sales than 2017. But the possibility of a crash is unlikely, says Lawrence Yun, chief economist for the National Association of REALTORS®.

 

In a piece he contributed to Forbes, Yun says hot markets are seeing a slowdown not because of weak buyer demand, which could be an indicator of a true slowdown, but insufficient supply. When homes come on the market, especially in areas like Seattle and Denver that have strong job growth and little unemployment, they are typically snapped up.

In other positive signs, home price growth remains strong in markets across the country—about 5 percent on a nationwide basis so far this year—and there are no signs of the credit excesses that characterized the housing crisis 10 years ago. “Lending standards today are still stringent, as evidenced by the higher-than-normal credit scores of those who are able to obtain a mortgage,” Yun says. “That is why mortgage default and foreclosure rates are at historic lows.”

In short, Yun says, today’s housing problem stems from insufficient inventory. The supply problem is driving up home prices and worsening affordability and keeping sales from matching demand. That is a serious problem and the answer is to encourage builders to increase supply, Yun says, but it is not a prelude to a crash.

Apartment Rents Just Jumped Higher in Most Cities | Realtor Magazine

Apartment rents climbed in 88 percent of the 250 largest U.S. cities, with the national average rent reaching an all-time high in July, RentCafe reports. Seasonal demand and a rise in rental activity has offset a wave of new apartments that have opened up this year, the national rental listing service notes.

The national average rent climbed to a record high of $1,409 in July, up 2.8 percent year over year.

The largest apartment rental increases were in Orlando (7.7 percent year over year); Las Vegas (6.4 percent); and Phoenix (6.2 percent). On the other hand, the slowest growing rents were in San Antonio, Texas (1.6 percent); Manhattan (1.7 percent); and Washington, D.C. (2 percent).

“The apartment industry has experience significant supply growth nationwide in cities with substantial job growth, expanding public transport and changing land use policies,” says Doug Ressler, director of business intelligence at Yardi Matrix. “Demand is split between affordable apartments and luxury class apartments, with an increasing need for workforce housing.”

 

© RentCafe

Hike in Mortgage Rates Erases Affordability Relief | Realtor Magazine

 

 

© REALTOR® Magazine

 

Borrowers got stuck with higher mortgage rates again this week. The 30-year fixed-rate mortgage climbed for the second consecutive week, averaging 4.6 percent. Mortgage rates are now at their fourth highest level of the year, Freddie Mac reports.

“The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months,” says Sam Khater, Freddie Mac’s chief economist.

The Federal Reserve this week voted to hold off on raising its short-term rate, “but the embers of a strong economy potentially stoking higher inflation, borrowing costs will likely modestly rise in the coming months,” Khater adds.

Even with home price growth easing slightly in some markets, Khater notes that mortgage rates hovering near a seven-year high will certainly create affordability challenges for prospective buyers looking to close on a home purchase.

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 2:

• 30-year fixed-rate mortgages: averaged 4.60 percent, with an average 0.4 point, rising from last week’s 4.54 percent average. Last year at this time, 30-year rates averaged 3.93 percent.
• 15-year fixed-rate mortgages: averaged 4.08 percent, with an average 0.4 point, increasing from last week’s 4.02 percent average. A year ago, 15-year rates averaged 3.18 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.93 percent, with an average 0.2 point, rising from last week’s 3.87 percent average. A year ago, 5-year ARMs averaged 3.15 percent.

Fed Leaves Rates Alone But Hints at Future Hikes | Realtor Magazine

The Federal Reserve decided Wednesday to hold off on raising its short-term interest rates. But it hinted that it likely will deliver its third interest rate increase of the year at its next meeting in late September. The Fed’s key rate does not have a direct impact on mortgage rates, but it usually influences them.

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“Economic activity has been rising at a strong rate,” the Fed’s statement read. Economic output rose at a 4.1 percent annual rate in the second quarter, which is the highest three-month increase since 2014.

In June, the Fed had raised its benchmark rate to a range between 1.75 percent and 2 percent. On Wednesday, it voted unanimously to keep the rate at 2 percent. The Fed has hinted at two more increases before the end of 2018.

“The cost of borrowing has increased, whether you are dealing with mortgage loans, auto loans, student loans, or credit cards,” Ric Edelman, co-founder and executive chairman of Edelman Financial Services, told CNBC. “It’s more expensive now than it was a month ago and it’s projected that it will get higher still.”

The economy, the Fed, and inflation all have an influence over long-term fixed-rate mortgages. Mortgage rates have already been on the rise, with the 30-year fixed-rate mortgage averaging about 4.71 percent, up from 4.09 percent in 2015, CNBC reports.

Those with adjustable-rate mortgages or home equity lines of credit will also be affected. Greg McBride, chief financial analyst at Bankrate, recommends those with ARMs to refinance into a fixed-rate mortgage that will likely offer a lower rate than what an ARM will adjust to later this year. Homeowners with HELOCs, McBride adds, may want to ask their lender to freeze the interest rate on their outstanding balance or consider refinancing into a fixed-rate home equity loan (note that there are caps on how much owners can access).

Inventory Climbs in a Third of Largest U.S. Cities | Realtor Magazine

Housing inventories in high-priced markets are gradually making a turnaround. One-third of the largest 45 U.S. metros saw a yearly increase in housing inventory in July, realtor.com® reports. In some markets, the inventory increase has been dramatic. For example, in Silicon Valley, the San Jose metro posted a 44 percent increase in inventory compared to a year ago.

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The greater number of choices, however, doesn’t mean lower prices. The median list price continues to rise and remained at an all-time high of $299,000 in July, unchanged from June, realtor.com® reports. In the 45 largest metros that realtor.com® tracked, prices are notably higher in markets where inventory is on the rise.

The uptick in housing inventories appears to be concentrated in high-priced housing markets, realtor.com® reports. The inventory of homes listed above $350,000 rose 5.7 percent, while the inventory of homes below $200,000 plunged 15.6 percent. The inventory of homes between $200,000 and $350,000 was essentially flat, decreasing slightly at 0.6 percent.

“July inventory growth is in high-priced, competitive markets, and often at the pricier end of these markets,” says Danielle Hale, realtor.com®’s chief economist. “Although signs of an inventory turnaround are encouraging, whether they mean good news for buyers remains to be seen. These areas are seeing more new listings and some construction growth, but high prices and fast-selling homes are causing some buyer hesitation which is reflected in fewer home sales.”

 

© realtor.com

 

*Excluded: Denver, Columbus, Las Vegas, Nashville and Birmingham data is under revision and excluded due to MLS feed changes. Adjusted: Washington and Baltimore inventory trends are adjusted to show total listing movement instead of active listing movement due to MLS feed changes. Active listings are non-pending, for-sale home listings.

How Much Cigarette Smoke Decreases Resale Value | Realtor Magazine

Smoking in a home can reduce that property’s resale value by up to 29 percent, according to realtor.com®. And home buyers who fall for a home that reeks of smoke shouldn’t assume the odor will go away as soon as the smoker moves out.

Tobacco-specific nitrosamines and nitrous acid can cling to walls and other surfaces within the house. “You could breathe in several hundred nanograms of these carcinogens long after the last cigarette burned out,” warns Joshua Miller, director of technical training at Rainbox International, a home restoration company.

Researchers at San Diego State University measured third-hand smoke pollutant levels in smokers’ homes after they moved out. They found that pollutants remained two months later, even after the homes had been cleaned and vented.

Sellers are not required to disclose that someone smoked inside a home. Buyers can detect a smoky smell themselves, or they may suspect a strong wave of air fresheners is masking an odor. A home inspector may be able to weigh in, too, or buyers can have their agent ask the seller’s listing agent directly.

Removing the cigarette smell from a home is not easy and sometimes removing entire systems is the only way to remove the stench quickly—the smoke will seep into everything.

What If Your Listing Stinks?

“Clean the air ducts,” advises Richard Ciresi, owner of Aire Serv in Louisville, Ky. “Professional air duct cleaning is an effective way to eliminate odors that manifest when you turn on the furnace or AC.”

He also suggests changing the filter on your HVAC unit as frequently as every 30 to 45 days.

Miller recommends washing the walls and ceiling with a 3:1 vinegar-water mixture. “Ceilings can be the biggest culprit in a persisting smoke smell in a home, since cigarette smoke tends to travel upwards and latch onto the first surface it comes in contact with,” Miller says.

Repainting the walls may help but the smell will eventually come back if homeowners don’t first use an odor-neutralizing primer, such as Kilz, before repainting.

Fabrics can also hold smoke. “You can sprinkle a deodorizing powder like baking soda on carpets,” Miller suggests. Odors can cling onto lightbulbs as well, so be sure to insert fresh bulbs.

Consumers: Family Ties Don’t Trump Free Dream Home | Realtor Magazine

Just how much would consumers be willing to give up if they could get their dream home for free? Residential lender FindAMortgageBroker.com posed this question to about 1,000 homeowners and non-homeowners. The lender is not giving away a free dream home, but wanted to find out to what extent Americans value the idea of a dream home.

Consumers’ willingness to shut off communication with friends and family was surprising, at 16 percent, says Mat Ishbia, CEO of United Wholesale Mortgage in Pontiac, Mich., about the study’s findings. “You wouldn’t be able to show off that dream home,” he told CNBC. Eighteen percent of respondents also said they’d be willing to give away their beloved pet to get their dream home for free.

American homeowners and non-homeowners were given eight scenarios and asked if they would give up items or people to own a dream home for free. Here’s how they responded:

• 35% would eat fast food for every meal for one year;
• 17% would vote against their own political leanings for the rest of their life;
• 18% would give away their pet(s);
• 26% would turn down an offer for their dream career;
• 19% wouldn’t step foot outdoors for two years;
• 53% would not openly root for the Cleveland Browns for the rest of their life;
• 16% would abruptly cut off all communication with everyone they know for one year;
• 49% would drink nothing but water for five years.

 

The lender had a message for its surveyed participants: Before you take any extremes in making such sacrifices, talk to a lender. A lack of certainty is the biggest roadblock to buying a home, Ishbia says. He says too many consumers make guesses about what they need to qualify for a mortgage. Gaps in knowledge can create internal barriers and hinder searching for more information, he says. Getting a mortgage is “an emotional process, and one of the biggest financial decisions you’ll make,” Ishbia says.