Discussing the number of manufactured homes being built, a TBTF bank hit again for sleazy behavior, new homes shrinking, what it takes to buy a home and more!
Manufactured Home Shipments Increase
According to the latest Manufactured Housing Survey from the Census Bureau, the seasonally adjusted annual rate of shipments of manufactured homes increased from 79,000 in July 2017 to 85,000 in August 2017.
This is also higher than the 76,000 in August 2016. While this is good news, we are still below the peak of 108,000 back in January 2017.
With the high demand for affordable housing, manufactured homes have become increasingly popular. A recent post by Eye on Housing said:
From 2013 to the present, the level of manufactured homes has risen and manufactured homes’ share of total housing production have ticked up. Over this period, manufactured homes rose by 47% and manufactured homes’ share of total housing production rose from 6.1% to 6.7%. At the same time, total housing starts rose, but not as fast as manufactured homes. Single-family housing starts rose by 39% and multifamily housing starts rose by 19%.
For buyers that are interested in manufactured homes, you really need to research your options for financing. You must discuss in depth the requirements and limitations with your mortgage professional.
Wells Fargo Hit by Surprise Charge From Pre-Crisis Mortgages
Nearly a decade after the financial crisis, Wells Fargo & Co. is getting stung by bad behavior in the housing bubble. The company took a surprise $1 billion charge in the quarter for previously disclosed regulatory investigations into its pre-crisis mortgage activity, the third-largest U.S. lender said Friday in a statement. The expense pushed total costs to a record $14.4 billion.
You have to wonder why a company that shows a repeated pattern of behavior such as this is allowed to continue to operate?
What is Stopping Poor People From Moving?
From The Atlantic:
America used to be a place where moving one’s family and one’s life in search of greater opportunities was common. During the Gold Rush, the Depression, and the postwar expansion West millions of Americans left their hometowns for places where they could earn more and provide a better life for their children. But mobility has fallen in recent years. While 3.6 percent of the population moved to a different state between 1952 and 1953, that number had fallen to 2.7 percent between 1992 and 1993, and to 1.5 percent between 2015 and 2016. (The share of people who move at all, even within the same county, has fallen too, from 20 percent in 1947 to 11.2 percent today.)
But over the past 30 years, that regional income convergence has slowed. Economists say that is happening because net migration—the tendency of large numbers of people to move to a specific place—is waning, meaning that the supply of workers isn’t increasing fast enough in the rich areas to bring wages down, and isn’t falling fast enough in the poor areas to bring wages up. Why is this? Why have people stopped moving? The reason, economists believe, is that while there are good wages in economically vibrant cities like New York and San Francisco, housing prices are so high that they outweigh any gains people stand to make in earnings. As a result, high-income cities are still appealing to many workers, but only highly skilled workers who can command salaries high enough to make it worthwhile to move. Low-income workers will end up spending much of their incomes on housing if they move, and so stay put.
Not exactly surprising but does drive home the need for affordable housing in many areas of the country. We are lucky that you can find affordable housing and good paying jobs in the Anderson SC area.
US New Home Sizes Are Shrinking
From Business Insider:
New homes being built in the US are getting smaller.
This isn’t just about demand for McMansions, the extravagant suburban houses that some buyers are passing over for more practical and modern homes. Rather, it shows that builders are cutting down to provide homes that are both profitable and affordable amid a shortage of inventory, said Matthew Pointon, a property economist at Capital Economics.
The average size of new single-family homes sold in the US peaked in 2015 at 2,520 square feet, Pointon said. Land availability is also responsible; the median lot size for new homes sold last year fell to 8,428 sq. ft., the lowest in 39 years.
Less available land, higher construction costs and higher wages for builders all add up to more prudent building and higher costs for developers.
Good to hear that buyers are shifting towards homes that are more practical and affordable. This does not mean that home prices are decreasing. Just that home buyers are becoming more budget savvy.
The Fading Scent of the American Dream
From Charles Hugh Smith:
This is the reality: the American Dream is now reserved for the top 0.5%, with some phantom shreds falling to the top 5% who are tasked with generating a credible illusion of prosperity for the bottom 95%.
In other words, the American-Dream idea that life should get easier and more prosperous as the natural course of progress is still embedded in our collective memory, even though the collective reality has changed: for the bottom 95%, life is typically getting harder and less prosperous as the cost of living rises, wages are stagnant and the demands on workers increase.
Meanwhile, the asset bubbles inflated by central banks have enriched the top 10% of households, which own over 75% of all assets and take home over 50% of all household income.
We are faced with a rapidly changing society and economy that makes it harder to achieve the American Dream. It is up to you to take steps to achieve your dreams.
Debt As A Tool Of Enslavement
From Michael Snyder:
Did you know that 8 men now have as much wealth as the poorest 3.6 billion people living on the planet combined?
Every year, the gap between the planet’s ultra-wealthy and the poor just becomes greater and greater. This is something that I have written about frequently, and the “financialization” of the global economy is playing a major role in this trend.
The entire global financial system is based on debt, and this debt-based system endlessly funnels the wealth of the world to the very, very top of the pyramid.
You may find it odd that I would include an article about the dangers of debt. But done correctly, buying a home can lead to increasing your net worth and building wealth.
Buying a home is without a doubt one of the biggest financial obligations someone can undertake. I feel I must share articles that present the truth so buyers are well aware of the risks as well as the rewards of debt.
Buying a Home: Down Payments and Credit Score
According to the Aspiring Home Buyers Profile from NAR, lots of people do not know the facts about what is required to get a mortgage today. The survey found that the main reason that non-homeowners do not currently owning a home is they cannot afford one.
Which is totally logical and understandable. However, this survey also revealed 2 reasons that non-homeowners named as reasons why they do not own that must be addressed!
NAR’s research showed that people overestimate how much down payment they need to be able to get a mortgage. Based on the research, 39% of non-homeowners think they need more than 20% for a down payment to buy a home. In fact, there are several mortgages that require 3% or less down payment!
Some non-homeowners could buy a home IF they new the truth about down payment amounts ( and buying a home makes sense for the of course ).
A recent Ipson survey said that 62% of participants think they must have excellent credit to buy a home. Also, 43% think that a “good credit score” is over 780. These people would be surprised to learn that the average FICO® scores of approved mortgages are much lower.
The average conventional mortgage closed in August had a credit score of 752, while FHA mortgages closed with a score of 683. The average of all mortgages closed in August was 724. The chart below shows the make up of FICO® Scores for all mortgages approved in August:
As you can see, if buying a home makes sense for you, do not let these 2 misconceptions stop you. After reading this, you may realize that you are able to become a home owner now!