Discussing the increase in remodeling and new home mortgages, another prediction for home price increases in 2018, home prices and wealth building plus more!
Residential Remodeling Spending Increasing
NAHB predicts that remodeling spending for owner-occupied single-family homes will increase 4.9 percent in 2018 over 2017 and an additional 0.6 percent in 2019.
Paul Emrath, NAHB vice president for survey and housing policy research said:
NAHB estimates that real spending on home improvements will grow by nearly 5 percent in 2018, as below-normal rates of home building are creating an aging housing stock. Factors inhibiting stronger growth include the ongoing labor shortage and rising material prices.
Despite it being a seller’s market, many home owners are deciding to remodel their current home. And many home owners that are looking to sell will remodel and update their home before putting it on the market.
New Home Purchase Mortgage Applications Increase 7.8%
Really good news from Mortgage Bankers Association:
The Mortgage Bankers Association Builder Applications Survey data for December 2017 shows mortgage applications for new home purchases increased 7.8% compared to December 2016. Compared to November 2017, applications decreased by 18% relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
Lynn Fisher, MBA Vice President of Research and Economics said:
After playing catch-up for 2 months following the slowdown caused by hurricanes Harvey, Irma and Maria, mortgage applications for new homes declined in December to a more normal growth rate of 7.8% on a year over year basis. Looking at all of 2017, applications increased by 7.1 percent compared to 2016. Based on December applications, we forecast that new home sales fell in December but remained nearly 16 percent higher than a year ago, and we are anticipating only modest year over year growth for new home sales in 2018. Despite robust demand, a lack of labor and land will continue to constrain homebuilders.
The YoY increase is great news for both the economy and the housing market. Home buyers will love the new homes but anyone looking to sell an existing home will hate the tough competition.
Homes Prices Predicted to Climb in Next Year
Veros Real Estate Solutions recently reported that residential market values will continue their overall upward trends during the next 12 months. They are predicting an overall annual increase in home prices of +4.2%.
Please remember that Veros is talking about US home prices and not about home prices in your local real estate market. As always, working with a local experienced Realtor is the key to making informed decisions.
1 in 4 U.S. Home Sales in 2017 Sold Above List Price
From Zillow Research:
Roughly a quarter of U.S. home sellers got more from their home than they asked for last year – in some cases, much, much more.
Nationwide, buyers paid more than the list price on 24.1 percent of home sales in 2017, netting sellers an additional $7,000 on average over their initial offering price. The share of homes selling above list price has grown considerably since the beginning of the housing recovery in 2012, when slightly more than one in six home sales (17.8 percent) closed above asking price. And as the market has continued to recover, the share of above-ask sales has risen in each of the past three years compared to the year prior.
While this report from Zillow is talking about the entire US, you will see similar conditions in many areas of the US due to the strong competition from buyers.
One thing buyers can do to be competitive is Make an Offer the Seller Cannot Refuse
Buying More Affordable Than Renting in Most Markets in 2018
ATTOM Data Solutions recently released their 2018 Rental Affordability Report and it shows that buying a median-priced home is more affordable than renting a three-bedroom property in 240 of 447 U.S. counties analyzed for the report.
Daren Blomquist, vice president at ATTOM Data Solutions said:
Although buying is still more affordable than renting in the majority of U.S. housing markets, that majority is shrinking as home price appreciation continues to outpace rental growth in most areas. Renting has clearly become the lesser of two housing affordability evils in many major population centers, with renting more affordable than buying in 76 percent of counties that have a population of 1 million or more. And when broken down by population rather than number of markets, this data shows that the majority of the U.S. population — 64 percent — live in markets that are more affordable to rent than to buy.
It may appear that renting beats owning today but the advantages of owning over the long run could be a game changer when it comes to your financial future. Attom’s analysis for the Anderson SC area shows it is better to buy than rent.
Buying a cup of Starbucks will tastes good today but making your own coffee and putting the difference into a savings account will make a huge difference in 10 or 20 years. You can live for today but someday you will be glad you planned for tomorrow…
37% of Gen X Won’t Be Able to Afford to Retire
From USA Today:
Nearly four out of 10 (37%) of Generation X — those born between 1965 and the late 1970s — say they would like to stop working for good and “fully retire” someday, “but will not be able to afford to,” a new survey from TD Ameritrade, an online broker based in Omaha, found.
It is never to late to change. You will have to be realistic but sticking your head in the sand about your financial future is NOT the answer.
There are ways to build for your financial future…
Rising Home Prices and Wealth Building
According to the recent Pulsenomics’ Home Price Expectation Survey, house prices are predicted to increase on average 3.35% per year and by 24.34% cumulatively during the next five years.
If you bought a $250,000 home this month (January), how much equity could you build in the next 5 years based on the Pulsenomics survey?
Based on the projections in the Pulsenomics survey, you could gain $10,500 in equity in just one year! That is IF you buy a $250,000 home and we both know that you can get a nice home in the Anderson SC area for less than that!
The forced savings of paying a mortgage and the additional equity created by increasing home prices can lead to substantial wealth creation. It does NOT happen overnight and you must NOT buy a home that is more than you can safely afford.
Owning a home can be a great way to a brighter financial future!
Zillow Being Sued Over Zestimates Again
From The Real Daily:
Zillow being sued for Zestimates is nothing new, but they’re now being accused of concealing Zestimates on ‘Co-Conspirator Broker’ listings, violating federal Antitrust laws.
The latest Zillow legal troubles again surround their Zestimates; this time they are being sued for their Zestimates violating federal Antitrust laws. The company has allegedly violated and continue to violate Section 1 of the Sherman Act, 15 U.S.C. § 1 and the New Jersey Antitrust Act, N.J.S.A. 56:9-3.
Interesting that Zillow’s business practice of screwing real estate agents is being taken to court. The sad thing is that it isn’t just Zillow that does this…
Is screwing over a real estate agent a violation of antitrust laws? It appears a judge will be deciding this soon.
That is all I have time for today! Please subscribe and hit those share buttons if you enjoyed this post!