A Sign That More Housing Inventory Is Coming

The following article is stat driven and has been the barometer for the housing market climate. If you are the statistical type you will appreciate the info. If you’re not you should read it over. I think you’ll get the point.

Homeowners who have decided to stay put in their current properties may soon be ready for a move, helping to relieve stubbornly tight housing inventory. The evidence is in Fannie Mae’s latest Home Purchase Sentiment Index, in which the number of consumers who say now is a good time to sell a home neared an all-time high. The index—which is a measure of about 1,000 consumers’ attitudes toward housing—rose 1.2 points in August to a reading of 88, reflecting a year-over-year jump of 21 percentage points in the number of consumers who looked favorably on selling. The August reading is just shy of the index’s record high of 88.3, set in July.

Meanwhile, the number of consumers who say now is a good time to buy dropped 5 percentage points in August to a new survey low for the second consecutive month. The number of those who look favorably on buying is down 16 percentage points year over year, Fannie Mae reports.

“In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today,” says Fannie Mae chief economist Doug Duncan. “The net ‘good time to sell’ share is now double the net ‘good time to buy’ share, with record-high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”

Here are some additional findings from Fannie Mae’s August sentiment index reading:

  • 36 percent: Consumers who say now is a good time to sell, an uptick of 8 percentage points from July.
  • 18 percent: Consumers who say now is a good time to buy a home, a new survey low.
  • 48 percent: Americans who say home prices will rise, up 1 percentage point month over month.
  • 74 percent: Consumers who say they are not concerned about losing their job, a 1 percentage point drop in August.
  • 16 percent: Americans who say their household income is significantly higher than it was 12 months ago, unchanged from July. Source: Fannie Mae.


Fannie Freddie and Pornography

I’m often asked by clients and friends how the recent “Housing Market Bubble Burst” originated. Simple answer is bad loan practices. Lending money to  Buyers who would not have qualified if the qualifying conditions were not lowered by the Government and Lending Institutions. Watch and listen to the video. It’s humorous and at the same informative.


Realtor.com®: Now is the Time to Buy

Source: Realtor.com

“Now is the time to buy”. I have directed those words to many Buyers over the years. When I say that I’m telling them the truth. It’s not a sales pitch it’s fact. On the contrary I’ve told Buyers it’s not a good time to buy. Sometimes there are circumstances that restrict the Buyers ability to proceed. The article below offers some compelling advice.

Those Purchasing a home right now could help potential buyers save more than $200,000 over the next 30 years, according to the inaugural Opportunity Cost Report released today by realtor.com. This report attempts to show in dollars and cents the cost of delaying purchasing a home in 382 housing markets throughout in the United States.

In compiling this report, Jonathan Smoke, chief economist for realtor.com® weighed many factors, including the long-term financial impact of owning versus renting, the amount estimated that renters will lose in waiting to buy, and the financial benefits of home ownership by market.

Interest rates, home prices and the cost of  rent are all predicted to go up throughout the year, which will impact the decision to delay purchasing a home, the report notes.

“Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of  the projected increase in mortgage rates and continuing price appreciation,” says Smoke.  “The problem is inventory is low, which has many would-be home buyers –especially first timers – standing on the sidelines and missing out on potentially material financial gains.”

So what does this estimated long-term wealth gain really look like? Smoke reports that while some housing markets are more buyer-friendly than others, nationally the average buyer is set to gain $217,726 over a 30-year period based on today’s dollars. Additionally, in 88 percent of metro areas, the financial benefit of buying a home right now accumulates at least $100,000 over 30 years.

“This analysis looks solely at the financial reasons to buy a home, based on assumptions about rising mortgage rates and changes in home values,” says Smoke. “It’s important to remember that a home purchase decision is deeply personal. Potential buyers need to consider factors such as upcoming life events, job security and potential relocation, in addition to financial benefits, because they too can have a significant impact on ownership.”

These are the 10 markets with long-term wealth gains exceeding $500,000

  1. Santa Cruz-Watsonville, Calif.: $1,006,413
  2. Santa Rosa, Calif.: $883,068
  3. San Jose-Sunnyvale-Santa Clara, Calif.: $782,144
  4. Urban Honolulu, Hawaii: $714,748
  5. Napa, Calif.: $712,192
  6. Denver-Aurora-Lakewood, Colo.: $696,131
  7. Salinas, Calif.: $553,158
  8. San Diego-Carlsbad, Calif.: $518,382
  9. San Luis Obispo-Paso Robles-Arroyo Grande, Calif.: $510,719
  10. Fairbanks, Alaska.: $507,368


Economists Deflate Bubbling Mumblings

Source: Wall Street Journal

Home prices are skyrocketing.  The median existing-home price for all housing types was $219,400 in April – 8.9 percent above last year. This marks the largest percentage gain in home prices since January 2014, according to the National Association Of Realtors.

The run up in prices is prompting some housing analysts to question whether another housing bubble could be brewing. However, economists are quick to note that this isn’t 2006 and there’s no reason for concern of a repeat, at least for now.

For one, economists point out that while home prices are still rising, the rate of appreciation lately has been showing signs of slowing.

“There is no bubble to be anxious about,” David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices, told The Wall Street Journal. Home price increases in many markets is “a lot softer” than a year ago, he says.

Also, economists say that oversupply is not an issue this time around, since builders have drastically reduced the number of homes they’re building. Also notable, home buyers are taking out more conservative loans – 30-year fixed-rate mortgages – unlike the housing bubble when subprime, adjustable-rate mortgages soared in popularity.

While some housing markets – like San Francisco and Denver – have surpassed their previous 2006 peaks in home prices, economists still aren’t concerned. They say that’s a sign of a normal housing market “because in a bubble prices typically rise in tandem across the country, rather than responding to the strength of local economies,” reports The Wall Street Journal.

Lawrence Yun, chief economist for the National Association of REALTORS®, says that prices have risen quickly but he also isn’t alarmed about a housing bubble. However, he is concerned that housing affordability will continue to soften.