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RealtyTrac released its August 2015 U.S. Home Sales Report, which shows single family home and condo sales through August were on pace for an eight-year high nationwide and in 110 out of 204 (54%) metropolitan statistical areas with sufficient sales data.
A total of 1,947,028 U.S. single family homes and condos sold through August in 2015, up 5.4% from the same time period a year ago to the highest total for the first eight months of the year since 2007, when there were 2,069,963 sales. The 110 metro areas on pace for at least an eight-year high in home through August included Los Angeles, Phoenix, Dallas, Denver, Riverside-San Bernardino, Detroit, Seattle, Tampa, Minneapolis and Portland.
Out of the 204 local markets, 58 (28%) were on pace through August to reach nine-year highs in home sales in 2015, and 22 (11%) were on pace through August to reach 10-year highs, including Denver, San Diego, the Florida markets of Sarasota, Naples, and Palm Bay, along with Grand Rapids, Michigan and Reno, Nevada.
“The continued strength in sales volume across a wide spectrum of markets in August indicates that shockwaves from recent global stock market instability have not weakened the housing recovery and in fact there is evidence that the instability has fueled more demand for U.S. real estate,” said Daren Blomquist, vice president of RealtyTrac. “The share of cash sales nationwide in August bounced back from a seven-year low in July, and the month-over-month increase in cash sales share was more pronounced in markets that have traditionally been magnets for foreign cash buyers, including Boston, Las Vegas, San Francisco, Seattle and New York.”
The share of buyers using Federal Housing Administration (FHA) loans – typically loan down payment loans with an average down payment of about 3 percent – continued to increase in August, when 23.1% of all single family and condo sales were to FHA borrowers, up from 23.0% in July and up from 17.8% in August 2014.
“It wasn’t just cash buyers that kept home sales volume strong in August,” Blomquist noted. “The share of buyers using FHA loans in August increased 30 percent from a year ago, and the year-over-year increase in the share of FHA buyers was 50 percent or more in markets such as Nashville, Phoenix, Colorado Springs, Portland and San Diego. Those markets with a solid and fast-growing share of FHA buyers are poised for longer, more sustainable growth going forward than markets that are more dependent on capricious cash buyers.”
Among metropolitan statistical areas with a population of at least 1 million, those with the highest share of FHA buyers were Las Vegas, Riverside-San Bernardino, Baltimore, Phoenix and Atlanta.
You know that chair in your home that no one ever sits in? It felt right when you were in the store buying it, but now for anyone who tries to sit in it…it just doesn’t feel right at all. That’s just one example of how easy it is to be an over-decorator. Luckily, this article from BrightNest offers some tips on how to recognize if you’re over-decorating your home, and advice on how to do it right.
“Everything in moderation” is one of those blanket statements that actually applies to most things. Ice cream. Alcohol. Netflix.
And decorating!
If you go crazy with decorating, your home might eventually turn into a Frankenstein monster of décor, which isn’t going to make anyone happy. But the first step is acceptance.
Here are signs you might be over decorating your home:
Every shopping trip you take somehow includes a decor item. Can’t swing by Target without picking up a cute lamp, rug or wall ornament? These impulsive buys take a toll on your budget and your chic bedroom. To prevent these impulse buys, take time to plan out your decorations in each room based on color, texture, lighting, beauty, and functionality. Before you head to the checkout aisle with something new, ask yourself if it fits into your established plan.
Your home decor Pinterest board is 5,000 pins deep. There will always be a new trend, a new gadget, and a new motivational poster on the ‘net. If your home is decorated but you still find yourself feverishly browsing the home decor section of Pinterest, it might be time to give it a rest. Try a new board!
DIY projects control your weekend…every weekend. Trying to fashion your 5th DIY headboard? Might be time to give the DIY decorations a break. Instead, you could feng shui your existing furniture.
You have furniture that is never used. Whether it’s a chair that no one sits in (ever, no matter how many guests) or a dresser table that is completely empty, unused furniture is a sure sign you have too much of it. Evaluate each piece and ask if it serves a functional purpose, not just a stylish one. If it doesn’t, toss it.
South Carolina and Washington are two states that are leading the way in construction employment, according to the latest data from the Bureau of Labor Statistics. This article from the National Association of Home Builders’ Eye On Housing blog highlights some of the details of the report.
Regional data from the Bureau of Labor Statistics (BLS) reveal that states in the West and Southeast are experiencing relatively faster growth rates for construction employment.
Regional employment data for August from the BLS and NAHB analysis indicates that the states with the largest gains in year-over-year construction employment, in percentage terms, were Arkansas (13.6%), Idaho (10%), South Carolina (9.1%), Iowa (8.9%), Kansas (8.1%) and Washington (8%). Thirty-six states plus the District of Columbia experienced year-over-year gains in construction employment as of August.
The largest year-over-year employment gains were witnessed in Utah (4%), Oregon (3.5%), Florida (3.3%), Nevada (3.3%), and Washington (3.2%).
This past Friday, the Federal Reserve released its latest figures on the housing wealth of Americans. Here are some of the findings, as reported by CBS Money Watch.
Rising home values drove a modest increase in Americans’ household wealth to a new high of $85.7 trillion in the April-June quarter.
The Federal Reserve said Friday that Americans’ stock portfolios climbed $61 billion in value, while housing wealth increased $499 billion. Total household wealth is up from $85 trillion in the first quarter.
Rising household wealth can help boost growth by making consumers feel wealthier and more likely to spend. Economists estimate that consumer spending rises 3 cents to 5 cents for every dollar increase in wealth. Household spending across a wide variety of categories drives about two-thirds of the economy
Americans also stepped up borrowing, a sign of confidence in the economy. The jump in mortgage lending reflects the fact that home sales are rising at a solid pace, and that fewer sales are being made to investors and wealthy individuals, who frequently pay cash for homes. Sales of existing homes have risen nearly 10 percent in the past year and have reached prerecession levels.
There’s been a lot of online chatter recently about an Elite Daily article that argues against the idea that millennials should be saving their money. This article from Jillian Berman of MarketWatch provides a counterpoint to that Elite Daily article, highlighting how saving money now is the right thing to do for millennials. Listed among some of the more “selfish” reasons to save money for your future self: the ability to buy a new home of your own.
Financially responsible 20-somethings everywhere were feeling indignant earlier this week after millennial news site Elite Daily published an article arguing that young people who save money are essentially boring.
After all, they’re forgoing frequent taxi rides, high-priced cocktails with colleagues and delicious food at trendy restaurants all in the name of retirement – something they won’t be able to enjoy at least until they are so old they’re officially boring.
But for many young people the decision isn’t between living their 20s to the fullest and socking money away. With wages for young college-educated workers lower than they were 15 years ago and millions of young people saddled by student debt, millennials’ financial priorities often come down to a choice between shacking up with several roommates or shirking their student loan responsibilities.
“My life changed when I became frugal by choice instead of frugal by necessity,” said Stefanie O’Connell, the author of the “The Broke and Beautiful Life,” a personal finance book. O’Connell initially started budgeting aggressively when she wasn’t getting regular paychecks as an actress. Now, thanks to a budding writing and blogging career, she’s able to save 20% of her income and – gasp – still enjoy her life.
In fact, O’Connell views saving as a selfish act, because it’s literally setting aside money for her future self.
By socking some of her paycheck away for five years, Ashley Rey, a financial adviser at Wells Fargo in Short Hills, NJ, was able to own her own home by 27. Yes, 27! She was able to do this while partaking in horseback riding, an expensive hobby. She did have to cut back a bit on socializing, going out only one night every weekend instead of two.
“I can say that I’m a proud recent home buyer, but I did not eat beans and rice every night to get there,” Rey said.
Imagine a universe where instead of sending an ungodly portion of your income every month to a landlord, you could be using that to pay down a mortgage on something that is yours and will (hopefully) increase your wealth one day. Also you can paint the walls whatever color you want and never have to switch them back.
According to the results of a new online survey, Americans are less concerned about raising mortgage rates than they are about being able to get a mortgage or finding a home they like. The survey, featured in this article from Trulia, shows that mortgage rates would need to be higher than 6% to discourage prospective homebuyers from buying a home.
While the jury is still out on what the Federal Reserve is going to do about the Fed Funds rate increase, there is certainty that it will happen at some point in the near future. When the Feds decide to raise rates, any increase will be nominal and gradual. The anticipation is that the initial increase will be only 25 basis points (e.g., from 3.75% to 4.00%). This is still about 50 basis points lower than the high reached in the summer of 2013 when the Federal Reserve first announced that it would start fading out of its easy monetary policy.
If rates increase 25 basis points, mortgage rates are still at historical lows and exceptionally favorable for homebuyers. The actual impact on a typical homebuyer will be marginal, but this really depends on the buyer’s budget. According to a new survey conducted online by Harris Poll on behalf of Trulia from September 14 -16, 2015 among 2,031 U.S. adults 18 and older, 69% of Americans who would ever buy a home said $250,000 or less is the maximum price that they would be willing to pay to buy their first or next home.
So for a buyer with household income of $60,000 and 20% down payment, the increase in mortgage rates on a 30-year fixed rate loan from 3.75% to 4.00%, would mean that the maximum amount they could spend on a home would fall from about $308,000 to $301,000 – keeping within the budget of most Americans. The drop is relatively larger for a buyer with household income of $100,000, but their budget is also relatively larger.
Long story short, an increase in rates would not turn people off from buying a home, but it may slightly lower the price range in which they are looking to buy.
Most importantly though, if the Federal Reserve decides to raise rates this year, it will be because they are confident that the economy will weather any short-term shocks. Over the longer term, the strong economic fundamentals, including robust job growth, better-paying jobs, rising wages, strong consumer demand, and demographic currents in favor of the housing market will boost demand for homes.
Mortgage borrowing is back, according to the results of the latest financial accounts report from the Federal Reserve, highlighted in this article from Victoria Stilwell of Bloomberg.
The ability to get a mortgage has been one of the biggest obstacles to the housing market since the financial crisis, as only the most qualified borrowers were able to get a home loan. Now, that’s changing.
Outstanding home mortgage debt in the U.S. posted a 0.5 percent increase in the second quarter from the year before, the Fed’s financial accounts report on Friday showed. That’s the first year-over-year gain in mortgage debt since 2008, ending a streak of contraction that was unrivaled in data going back to 1949.
“This strikes us as a key turning point for the U.S. housing market, since it is obviously much easier to support an increase in sales volume and prices with a growing pool of finance,” Michael Shaoul, chief executive officer of Marketfield Asset Management LLC in New York, wrote in a note to clients. “It also confirms some of the loan officer surveys that have suggested that mortgage lending standards are finally loosening at the same time that a stronger labor market increases the pool of willing and able borrowers.”
In addition to less stringent lending standards, a labor market that’s added 1.7 million jobs this year should help potential home-buyers get back in the game. Rising rents may also provide some incentive as they rival a mortgage payment.
During its two-day meeting this week, the Federal Reserve decided to keep interest rates steady. But with two more Fed meetings planned in 2015, in October and December, analysts are predicting the rise in rates will happen before the end of the year. This article from Crissinda Ponder of Bankrate provides some advice on how the rise in rates should affect the timing decisions of anyone who’s planning to purchase a home this year or in 2016.
Mortgage rates have been at historically low levels for a while now. The benchmark 30-year fixed-rate mortgage has averaged 4.01% over the past 52 weeks, according to Bankrate data.
That’s likely to change when the Federal Reserve finally decides to raise the federal funds rate, which has been near 0 for close to a decade. The central bank opted not to begin liftoff at the conclusion of this week’s Federal Open Market Committee meeting, but a rate increase is inevitable.
Interest rates on mortgages may move higher before the first increase of the federal funds rate is implemented, which could be at the meeting in December, says Realtor.com chief economist Jonathan Smoke.
“Those planning to get into the housing market in 2016 may want to consider a home purchase before the end of the 2015,” Smoke says.
The data team at Realtor.com did some complicated math (also factoring in a bit of geography) to determine how much home a typical graduate can afford after working for 10 years, based on their major.
It’s the classic college-age query: “What’s your major?” But maybe the real question should be: What kind of house do you want to live in?
Here’s a nonshocker: Not all college majors are created equal, especially when you consider those four years of tuition as an investment in future earnings. A few years down the road, when you’re ready to settle down and purchase a home, your specific college concentration may very well have a lot to do with how much you can afford.
Despite the controversy around rising tuition and student debt that make some doubt whether a college degree is still worth it, a 2014 analysis by the Federal Reserve Bank of New York shows the average value of a college degree has remained near its all-time high since 1970.
According to PayScale, a midcareer employee with a bachelor’s degree earns a median salary of $77,006, meaning he or she can afford a house costing up to $341,000. That’s about 60% more than a high school graduate.
Out of all 300-plus majors, petroleum engineering came out on top: With a midcareer salary of $168,000, these grads can afford to buy as high as $744,000, more than three times the national median list price. Even those fresh out of college land impressive starting salaries of $101,000. Unsurprisingly, other engineering branches (e.g., chemical engineering, computer science engineering) are also more likely to earn six-figure salaries with a few years’ experience.
