Discussing the latest reports on home prices from NAR and CoreLogic, a deal may be happening for Flood Insurance, how housing and the economy is doing plus more!
Home Prices Increase 7%
Home prices nationwide, including distressed sales, increased year over year by 7 percent in September 2017 compared with September 2016 and increased month over month by 0.9 percent in September 2017 compared with August 2017.
The CoreLogic HPI Forecast indicates that home prices will increase by 4.7 percent on a year-over-year basis from September 2017 to September 2018, and on a month-over-month basis home prices are expected to decrease by 0.1 percent from September 2017 to October 2017.
Frank Martell, president and CEO of CoreLogic said:
A strengthening economy, healthy consumer balance sheets and low mortgage interest rates are supporting the continued strong demand for residential real estate. While demand and home price growth is in a sweet spot, a third of metropolitan markets are overvalued and this will become more of an issue if prices continue to rise next year as we anticipate.
Remember this is talking about home prices for the entire U.S. and does not tell you what is happening in every local market. If you have questions about home prices in the Anderson SC area, please contact me!
Home Prices Maintain Fast Growth in Third Quarter
Severely lacking inventory levels across the country pinched sales growth and kept home prices rising at a steady clip in nearly all metro areas in the third quarter, according to the latest quarterly report by the National Association of Realtors®.
The national median existing single–family home price in the third quarter was $254,000, which is up 5.3 percent from the third quarter of 2016 ($241,300). The median price during the second quarter increased 6.1 percent from the second quarter of 2016.
Total existing–home sales, including single family and condos, slipped 3.1 percent to a seasonally adjusted annual rate of 5.39 million in the third quarter from 5.56 million in the second quarter, but are still 0.2 percent higher than the 5.38 million pace during the third quarter of 2016.
While the increase in prices is good, the low level of sales compared to the same quarter in 2016 is disturbing. The lack of inventory is to blame for the lackluster sales numbers and may be part of the reason for the robust price growth.
Lawrence Yun, Chief Economist at NAR, said:
Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had to outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.
If home prices are increasing where you want to buy a home, then you must think about the cost of waiting. Maybe you aren’t waiting as much as you as saving money for down payment…
A recent report from Down Payment Resource revealed that 61% of first-time home buyers bought used a down payment of 6% or less. Also, if we look at all home buyers using a mortgage, 73% put down less than 20%.
As you can see, you may be able to buy a home now! If you are interested in buying a home, I strongly suggest speaking to a mortgage professional about your options. You may be pleasantly surprised!
Right Direction or Wrong Track
From Rasmussen Reports:
Thirty-four percent (34%) of Likely U.S. Voters now think the country is heading in the right direction, according to a new Rasmussen Reports national telephone and online survey for the week ending November 2.
If only 34% think the country is headed in the right direction, what does that mean for home sales? While the inventory problem is quite obvious, are home sales low because lots of people think the country is headed in the wrong direction?
Something to think about…
Head of Office of Financial Research to Resign
The head of a U.S. government agency created to monitor financial markets after the 2007-2009 financial crisis will resign from the post at the end of this year.
Richard Berner, director of the Office of Financial Research (OFR), will be leaving that agency on Dec. 31, the Treasury Department announced on Monday. Berner helped create the agency as a Treasury official under President Barack Obama, and has led it since its creation in 2013.
The agency, created as part of the 2010 Dodd-Frank financial reform law, was charged with gathering data and analyzing trends across financial markets, in an effort to help sniff out looming threats before they jeopardize the economy. Housed within the Treasury Department, it lends its expertise to regulators tasked with guarding against such sweeping risks.
The banks and Wall Street will be working to either destroy this agency or have one of their minions take Berner’s place.
House Reaches Deal on Flood Insurance Overhaul
From The Hill:
The House is expected to vote within days on a bill renewing the federal flood insurance program after Republican leaders struck a deal over planned rate increases.
The House Rules Committee held a hearing late Monday afternoon on an updated bill to extend and overhaul the National Flood Insurance Program (NFIP). The Rules panel is the last stop for legislation before the House floor, meaning the new NFIP renewal bill could get a vote within days.
One of the controversial parts of the NFIP is that some homes have repeated losses and are able to receive payouts over and over. I am not happy about the repeated payouts for the same properties.
It seems that there should be a fair method to solve the repeated payouts for the same properties…
Some of the changes are fixing the program’s financial issues and promoting the development of a robust private flood insurance market. They will also update federal flood mapping procedures, increase penalties for residents of flood zones without insurance and allow private policies to satisfy the federal flood insurance mandate.
Housing Market Grows Modestly Even as Housing Production Lags
Markets in 197 of the 337 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity in the third quarter of 2017, according to the National Association of Home Builders/First American Leading Markets Index (LMI) released today. This represents a year-over-year net gain of 40 markets.
NAHB Chief Economist Robert Dietz said:
Home price appreciation remains the strongest component of the HMI, and strong employment numbers also bode well for the continued growth of the housing sector. While permits continue to inch upward, they remain the weakest element of the index and show that builders need to manage supply-side hurdles, such as rising material prices and labor shortages.
Check out the map:
Good news but even after all these years, we still have a way to go. This does not measure every part of the country so it things could be better or worse depending on where you live…
Mortgage Rates and Affordability for First-Time Home Buyers
As most prognosticators expected, the FOMC decided to leave the short-term Federal Funds rate unchanged. The operative words being 30-year and fixed in that statement. Thirty-year fixed-rate mortgages are influenced by long-term rates, little impacted by short-term FOMC action or inaction.
The more relevant question is, at what mortgage rate do homes become unaffordable for the other 36.1 percent of households (according to most recent Census estimate of the homeownership rate), who are not homeowners and who potentially would like to buy their first home?
While borrowing power for the potential home buyer has fallen relative to the low point of 2012, it remains high today and will remain high next year, relative to the long run average. If you don’t want to rent anymore and are considering becoming a homeowner, even if mortgage rates rise next year, your borrowing power will remain strong by historic standards.
Read that last sentence again…
That is it for today! Please be sure to subscribe and share this article ti impress your friends!