As the spring home buying season approaches, there are many moving parts analysts and experts look at to determine how home buyers and sellers might fare. Economic growth, the job market, interest rates, home prices, buyer demand, and inventory are just some of the factors that will determine how many hopeful home buyers find new homes this year. According to one outlook – from Fannie Mae’s Economic and Strategic Research Group – conditions are good for buyers, except for one specific, long-standing obstacle. “We don’t expect rates to play much of a role in total home sales, especially with anticipated stronger disposable household income growth,” Doug Duncan, Fannie Mae’s chief economist, said. “The ongoing inventory shortages should constrain sales despite otherwise ripe home buying conditions.” In other words, though mortgage rates may inch upward this year, so will household income. That leaves inventory as the main challenge to buyers this spring. With fewer homes for sale, there will be more competition and pressure on prices. More here. 
Buyer Basics: What Matters Most To Men Vs. Women
If you’re buying a house – rather than having one built to your specifications – you’re going to have to compromise. You’re probably not going to find everything on your wish list in one house, and certainly not in a home that also just happens to be perfectly in your price range. Which is to say, the home buying process will force you to make decisions about what matters most to you and what you would like but can live without. How you make these decisions will be based, in part, on your particular needs and goals but, according to one recent survey, it may also be based on gender. That’s because, when asked which home features mattered most to them, men and women had slightly different opinions. For example, the number of bedrooms in a home is nearly 7 percent more important to women than men. So is being close to good schools, which was 6.6 percent more important to women. On the other hand, the inclusion of exterior maintenance was 5.1 percent more important to men than women. Whatever the case, spending some time thinking about what home features matter most to you before heading out house hunting will make you a better prepared, and more decisive, buyer. More here.
Contracts To Buy Homes Rise For 3rd Straight Month
If you look at just about any reading of the current housing market, you’ll find that there are a lot of Americans interested in buying a home right now. Whether it’s because of pent-up demand that built up in the years following the housing crash or a drive to buy now while mortgage rates are still well below their historical norm, the fact is buyer demand is high. The most recent National Association of Realtors’ Pending Home Sales Index provides more evidence of this. That’s because the index – which measures the number of signed contracts to buy homes – ended the year with its third consecutive monthly increase. Lawrence Yun, NAR’s chief economist, says the housing market has started the year with a little bit of momentum. “Another month of modest increases in contract activity is evidence that the housing market has a small trace of momentum at the start of 2018,” Yun said. “Jobs are plentiful, wages are finally climbing and the prospect of higher mortgage rates are perhaps encouraging more aspiring buyers to begin their search now. More here.
How To Know When It’s Time To Move
Are Home Price Increases Beginning To Slow?
Home prices have been increasing for some time now. Largely this is because, in many markets, there are more interested buyers than there are homes available for sale. Inventory shortages can cause more competition for the homes that are for sale, which leads to spiking prices and decreasing affordability conditions. This, of course, has been a concern for potential home buyers. But, according to new research, there may be reason to believe that the rate at which home prices have been increasing is beginning to slow. For example, the most recent Home Price Index from Black Knight Financial shows the rate of monthly price appreciation declined one third from the month before in September. That was the sixth consecutive month of slowing growth. Also, half of the nation’s 20 largest states and 17 of the biggest metro areas saw home prices fall last month. If this trend continues, it could be encouraging news for home buyers hoping to buy a house this winter or those looking toward a spring home purchase. More here.
Contract Signings Improve In October
Among the many indicators used to track the health of the housing market, the National Association of Realtors’ Pending Home Sales Index is unique. That’s because, rather than count the number of homes that sold in any given month, it counts the number of signed contracts to buy homes. So what’s the difference? Well, contracts are typically signed about a month before the actual closing date. Which means, pending sales offer a glimpse of where future sales might be. And, according to the most recent report, sales might soon see a lift. That’s because the number of contracts signed in October was up 3.5 percent and marked the first increase in three months. Lawrence Yun, NAR’s chief economist, said the improvement was encouraging but challenges still remain. “Home shoppers had better luck finding a home to buy in October, but slim pickings and consistently fast price gains continue to frustrate and prevent too many would-be buyers from reaching the market.” In short, buyer demand still outweighs the number of homes available to buy but recent news offers some reason to believe improvements are on the horizon. More here.
Rising Home Values Mean Immediate Gains For Buyers
There are many factors to consider when deciding whether or not it’s a good time for you to buy a house. Most of these are personal and have to do with the needs and desires of you and your family. Market conditions may influence your decision, but ultimately the best time for you to buy a house is when you’re ready. And while that’s largely true, knowing what’s going on in the market can still be important, as it gives you a feel for what to expect during your home search and after. For example, recent research shows that the average house is $12,500 more valuable today than it was just a year ago. And, though that will be disappointing news to buyers who have seen their purchasing power reduced over the last year, it should also be encouraging to prospective buyers – as rising prices may mean your future home’s value continues to increase once you’ve become the owner. In other words, if home prices continue to increase at the same pace during the next year, buying a house now may mean you’re – not only getting a better deal now than you would if you wait – but you’ll also be able to start building equity almost immediately. More here.
How Buying A Home Can Help Save You Money
The argument for or against buying a home usually rests, to some extent, on wealth creation. Conventional wisdom says homeowners – through equity and price appreciation – are building wealth, while renters are throwing their money away each month. Of course, there are some notable instances where that basic argument seemed discredited. Take the most recent financial crisis and housing crash, for example. Following the crash, many people began to question the typical arguments in favor of homeownership, as homeowners saw their home values plummet. Now, a new study from Florida Atlantic University, Florida International University, and the University of Wyoming says homeownership offers no financial advantage when compared to renting and investing in a portfolio of stocks and bonds. However, the study’s findings are based on an assumption that renters will use any extra money, not on consumption, but on investing for the future. According to the results, “The analysis showed that households that are likely to not reinvest buy-rent cash differentials should mostly own rather than rent their primary residence as ownership forces them to save.” In other words, you can create wealth while renting, if you’re disciplined and invest wisely. If not, buying is a better deal. More here.
Rising Number Of
Homeowners Are Equity Rich
Nearly 60% Of Homes Within Reach of Typical Buyer
Not surprisingly, affordability ranks high among home buyers’ concerns. Rising prices and rumors of future mortgage rate increases have some prospective buyers questioning whether or not they can handle the financial obligations that come along with homeownership. However, new data from the National Association of Home Builders says, in most markets, they can. That’s because, the NAHB’s quarterly measure of affordability found 58.3 percent of new and existing homes sold between the beginning of July and the end of September were affordable to families earning the median income of $68,000. That’s encouraging news for hopeful home shoppers. And, according to Robert Dietz, NAHB’s chief economist, there are a rising number of them hoping to take advantage of conditions while they’re still favorable. “Solid economic growth, along with ongoing quarterly job gains and rising household formations, are fueling housing demand,” Dietz said. “Tight inventories and a forecast of rising mortgage interest rates through 2018 will keep home prices on a gradual upward path and slowly lessen housing affordability in the quarters ahead.” More here.
