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As the recovery of the U.S. housing market continues, some of the most recent indicators show that real estate is the healthiest it’s been in a decade. In this article from MarketWatch, Jeff Reeves of InvestorPlace.com walks through the latest encouraging results, highlighting why there are good reasons to expect home values to keep rising.
Current and prospective homeowners shouldn’t let the epic pain of the previous housing crisis color their expectations forever. With each passing month, the recovery in housing looks to be not only sustainable, but even gathering steam.
The health of the housing market is a reflection of the health of American family budgets, with the two waxing and waning together. Consumers are doing very well, thanks to a better job market, and upward movement on wages, as indicated in the May unemployment report. Retail sales have reflected this strength, too, with better numbers lately. And according to the Federal Reserve, American families’ net worth has surged to a new record, owing to a rebound in the economy, stock market and home values. That all adds up to a bright outlook for consumer confidence, and for the housing market as a result.
The Mortgage Bankers Association reported in its latest weekly survey that applications from prospective borrowers were up 8.4% on a seasonally adjusted basis. The American Bankers Association said in its recently released annual survey that loans to first-time homebuyers have ticked up to 14%, the highest level in the history of the 22-year-old survey. More applications and loans are great, but it’s also crucial to note that the quality of those loans is strong, too.
The National Association of Home Builders reported that builder confidence was rebounding after a slow start to the year, and up to a nine-month high. Not only did this top expectations, but it put the NAHB survey firmly in expansion mode, with a reading of 59; anything above 50 signals a favorable view. Furthermore, expectations of sales now and in the future “are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” according to the NAHB.
Military Times has released its first-ever Best for Vets: Places to Live feature, highlighting the most popular large, medium and small cities that military veterans are calling “home.”
For years, maybe decades, you have lived where the U.S. government has told you to live. So when that discharge paperwork comes through, how do you decide where to go?
Many veterans don’t stray far from the military bases they were assigned to, government data indicates, and some will return to cities where they were previously stationed.
That’s probably a big factor behind a veteran population in San Antonio above 100,000, said Bob Murdock, director of the city’s Office of Military Affairs.
“When they were assigned here at one time or another, they had a very positive experience with the community,” Murdock said. “We are very proud of the moniker that we are Military City USA.”
A total of 577 places, as designated by the Census Bureau, were considered as part of the project. Only 75 made the cut.
One of the best things about San Diego, said United Veterans Council of San Diego County Chairman Jack Harkins, is its higher education system. The city features as part of that system San Diego State University and the University of San Diego, both of which made our Best for Vets: Colleges 2015 rankings. The city also has a very strong military culture, as many service members have learned from being stationed in it – or from watching baseball highlights: The San Diego Padres wear camouflage uniforms at every Sunday home game as a tribute to the city’s service members and veterans.
The concept of how a credit score works is fairly simple: the higher your score, the lower the amount of interest you’ll pay on your loans. But what’s not so simple is when errors on your report get in the way of your good credit. In a recent study of the U.S. credit reporting industry, the FTC concluded that 5% of consumers had errors on one of their three major credit reports. This article from U.S. News offers some advice on how to check for errors, and get them corrected, to ensure that you’re not paying more for a mortgage or other loans.
There’s no magic wand to wave or button you can press. You have to contact each of the major credit bureaus, and that takes time, patience and a little know-how. Usually it isn’t a difficult process, but it will help you to keep the following in mind.
If you aren’t checking your credit reports occasionally, you won’t know there’s incorrect information on them. You can get one free credit report a year from each major credit bureau – TransUnion, Experian and Equifax – and if you stagger your requests, so that you receive one report every few months, that’s an effective way to continually monitor your credit throughout the year.
If the error is a small one, say a $30 debt that you’re positive you never owed, and it’s several years old, you may well decide that it’s better to just fix the problem through the credit bureau’s online dispute form (you’ll have to go to all three sites and fill out three forms).
But if you have a major problem, many experts advise you go old school and send your gripes in writing to each credit bureau.
It’s easy to wonder whether it really matters that you have a few erroneous items on your credit report. But if the error really is legitimate, odds are, you will get the credit bureau to agree to take the item off your report.
CoreLogic released the results this week of its Equity Report for the first quarter of 2015, showing an increase in home equity nationwide of $694 billion year over year.
Approximately 254,000 properties regained equity in the first quarter of 2015, bringing the total of residential mortgaged properties with equity nationwide up to 44.9 million – approximately 90 percent of all mortgages.
While more than a quarter of a million homes regained equity during Q1, the percentage of residential properties with negative equity – commonly referred to as being “underwater” or “upside down,” meaning the borrower owes more on the mortgage than the home is worth – declined year-over-year by about 19.4 percent from 6.3 million homes in Q1 2014 down to 5.1 million homes in Q1 2015. The 5.1 million homes with negative equity in Q1 represent about 10.2 percent of all residential mortgages nationwide.
“Many homeowners are emerging from the negative equity trap, which bodes well for a continued recovery in the housing market,” said Anand Nallathambi, president and CEO of CoreLogic. “With the economy improving and homeowners building equity, albeit slowly, the potential exists for an increase in housing stock available for sale, which would ease the current imbalance in supply and demand. There are still about 5 million homeowners who are underwater and we estimate that a further 5 percent appreciation in home values across the U.S. would reduce the number of owners with negative equity by about one million.”
“The CoreLogic Home Price Index for the U.S. was up 2.5 percent during the first quarter of 2015, which has improved the equity position of homeowners,” said Frank Nothaft, chief economist for CoreLogic. “About 90 percent of homeowners now have housing equity and, as a result, have experienced an increase in wealth, which can spur additional consumption and investment expenditures. The remaining 10 percent of owners with negative equity will find their home value rising while they continue to pay down principal on their amortizing mortgage loan.”
The state with the highest percentage of residential mortgages in positive equity in Q1 was Texas at 97.7 percent.
Following an incredibly strong month of housing starts in the month of May, the government’s June report showed a decline in starts, along with a substantial uptick in building permits. This article from Forbes highlights the results of the report, released today.
Groundbreakings on new homes fell by a 11.1% in May but building permits hit a new eight-year high, the U.S. Commerce Department said Tuesday. The numbers are one positive sign that the inventory shortage holding back the housing recovery could ease.
Housing starts stood at a seasonally adjusted, annual rate of 1.036 million in May. While lower than April’s level, that rate of new home construction is 5.1% above May 2014′s rate of 986,000. Single-family housing starts in May fell by 5.4% from April, hitting a (seasonally adjusted, annual) rate of 680,000.
But the permit numbers beat economists’ expectations. In fact, May permitting activity reached a (seasonally adjusted, annual) rate of 1.275 million, the highest level for the nation since August 2007, when the rate stood at 1.321 million. May building permits were 25.4% higher than a year earlier, when the estimate stood at 1.017 million, and 11.8% higher than April’s 1.14 million.
Builder confidence in the market for newly constructed, single-family homes rose five points in June to a level of 59, according to the National Association of Home Builders/Wells Fargo Housing Market Index, released Monday.
A summer staycation at home and around your hometown is an excellent way to enjoy time off from work, while keeping your summer expenses in check. In this article, U.S. News provides some helpful tips for saving money while making the most of your summer staycation.
At first, you might think that spending your valuable time off in your own hometown is not that exciting. But chances are you haven’t seen it through a tourist’s eyes. Even just staying home, planning some renovation projects and relaxing by the local pool can be a worthy way to spend a staycation.
It’s easy to fall into a trap of lounging around the house, watching TV and going through the motions of your normal day-to-day chores on your “staycation” – but that’s where planning can help. When you book a vacation to somewhere new, you don’t usually just show up and hope for the best, right? Typically, you conduct some research about the area, make a few reservations and schedule an itinerary to make the most of your time there. Do the same thing for your staycation. Choose a few activities for each day so that you have something new and exciting to look forward to when you wake up.
You might even want to invest in a tourist guide to your own city or at least browse some websites designed for visitors. You could learn about some new destinations that are right in your own backyard.
On the first day of your staycation, get all the chores and errands out of the way so that you can enjoy the rest of your time off stress-free. Tidy up the house, clean the bathroom, do the laundry and fill the fridge.
If you’re thinking about purchasing a home, financial experts recommend that you act sooner rather than later. This article from Bankrate explains why.
Interest rates may be at historic lows, but most financial advisers agree they can’t stay low forever. While the Federal Reserve is still talking about increasing interest rates, there are a few moves that savvy consumers can make to get their financial house in order before those low rates are history.
“The general consensus is that rates will rise. Nobody expects it to be a dramatic shift, but the clock is ticking on today’s low rates,” says Craig Martin, director in the mortgage practice for J.D. Power and Associates.
The first thing you should think about when it comes to rising interest rates is your home. That’s because over the course of a 30-year fixed-rate $200,000 mortgage, half of 1 percentage point of interest means a difference of almost $20,000.
Financial advisers agree that if you are on the fence about buying or refinancing, now is the time to act.
“If somebody had a mortgage, that would be one of the first things I’d talk about,” says Tony D’Amico, CEO of financial advisory firm The Fidato Group.
However, Martin cautions that just because rates are low doesn’t mean you should jump into a mortgage without thinking everything through. “Do it for the right reasons,” Martin says.
He says the loan product that makes the most sense depends largely on the situation of those involved.
“If you are in your mid-20s and you think you will be stable for around five years, you might look at an adjustable-rate product that will lock in for a short time period,” Martin says.
But if you expect to be somewhere for the rest of your life, a fixed-rate mortgage makes more sense.
There are several personal and financial advantages of sharing a home with your parents, but there are also a lot of financial considerations that need to be taken into account to make the process as enjoyable as possible. This article from U.S. News highlights some of the most important things to consider.
There’s a lot of talk of boomerang kids who come back to live with mom and dad after graduating from college, but sometimes parents can boomerang, too. Sometimes, it can make sense for a mother or father to move in with an adult child. Heck, it might even be fun.
But naturally, as with all living arrangements, you could find the financial part of having your parents living with you could get messy, if you don’t think through all of the issues first. There are so many considerations, but as you think it through, here are a few items you should mull over.
For example, you’ll probably split some of the bills, which may work out well for both of you. Whatever you do, you’ll want to discuss everything beforehand and try to devise a system that works for you.
As for taxes, insurance and other paperwork – if your parents are pretty young, then they’re probably on their own here. But if your parents are getting up there and need help, you’d be wise to ensure they’re keeping up with their financial paperwork.
You also may want to call your insurance agent if your parent is bringing any valuables to your home that you would hate to lose in a burglary or fire.
If your parents are having health issues, or appear poised to be, it’s no secret that you may be in for a lot of chauffeuring, which could impact everything from your career to your gas budget. On the other hand, you may find that having your parents around helps your finances, not to mention your quality of life.
After a solid first quarter for the housing market, along with the most recent housing data that mostly topped expectations, economists expect the housing market to lead the way in the US economy’s rebound in the second quarter. This article from Business Insider highlights all the housing and economic data that is confirming economists’ outlook for a healthy 2015.
Many economists are convinced that the housing market is the strongest it’s been in years. Moreover, economists think this will be the catalyst that powers the economy going forward.
In a note last month, Morgan Stanley economists including Vishwanath Tirupattur wrote: “Despite a weak first quarter on several fronts of the US economy, the housing sector has been a source of relative strength. In our view, the US housing sector is poised to accelerate into the spring, a traditionally strong period for housing.”
And in a note on Wednesday, the same team wrote, “May was arguably the most positive month for housing data in quite some time, and Monday’s construction spending print was the cherry on top.”
Existing home sales are picking up steam, 6.6% higher for the first three months of this year than the first quarter of 2014. Morgan Stanley notes that all regions of the country have seen growth. New home sales have seen “impressive gains,” outpacing growth over the past two years.
Home prices have risen in the first half of the year. Combining the indexes that measure prices, Morgan Stanley estimates growth of between 4.1% and 6.8%.
Starts and permits are just slightly higher for the quarter compared to the same period last year (+3.9%). However, the index of building permits, a combination of the tally of permits for new construction and renovations, is up 8%.
