Economist: 3 Major Things You Need To Know About The 2014 Housing Market

March 22, 2014

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The following list was put together by a veteran housing economist, asked by HousingWire for his opinion on the near-term future of the markets we cover daily. Here’s David Berson’s take on the 3 things you need to know about housing in 2014. First, 2014 should prove to be the strongest year for housing activity since before the Great Recession. Housing activity (home sales and housing starts) has increased modestly over the past several years, but is still at levels well-below sustainable trends. For both economic and demographic reasons, 2014 should be the year when activity reaches the highest level since 2006/2007. Secondly, demographics should start to favor housing activity. And mortgage availability shouldn’t worsen and may improve. The increase in new households expected to be created this year, spurred by a stronger job market, should find that qualifying for a mortgage loan will be somewhat easier in 2014 than in prior years. [Read this article]

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Home Sales Increased By 8% Year Over Year In February

March 22, 2014

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Home sales increased by 8 percent year over year in February to a non-seasonally adjusted annual sales pace of 4.09 million, 3.8 percent higher than 3.94 million pace reported for January. This was the highest sales pace for the month of February since 2007. Improvement in February home sales were led by newly constructed homes which increased by 23 percent, followed by re-sales which increased by 18 percent. Distressed sales, which include real-estate owned (REO) and short sales, were on the decline, continuing the trend in the shift towards healthy home sales. Distressed sales accounted for 15.6 percent of total sales in February 2014, a strong improvement from the same time a year ago when they made up 22.8 percent of total sales. California saw a 17.8 percentage point drop in the distressed sales share, the largest of any state. [Read this article]

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February Gains Point to Seller Optimism

March 22, 2014

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Realtor.com released its February Monthly Housing Trend Report, which showed an increase in listing prices as well as an increase of housing inventory. The increase in both list price as well as inventory points to a “strong early beginning to this spring’s home buying season,” the report said. Nationally, median listing price increased to $199,000, year-over year. The gain of median listing price represents a 7.6 percent increase from the previous year, and is up 2.05 percent from the previous month. “Overall these figures indicate a continued reinforcement of steady gains and market stabilization that we’ve been watching since late last summer,” said Steve Berkowitz, CEO of Move, Inc. “Seller confidence is the factor to watch as we head into the spring home buying season, and these are very encouraging indicators – not only are more homes coming onto the market, but typically we don’t see a rise in asking prices this early into the year. This is the market these sellers have been waiting for.” [Read this article]

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A Glimpse At Tomorrow’s Homes: 5 Ways Your Home Is Changing

March 22, 2014

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In early February, the National Association of Home Builders (NAHB) and the National Kitchen and Bath Association (NKBA) gathered for the first annual Design and Construction Week in Las Vegas, a new event that drew over 75,000 builders, designers, and product manufacturers. Technology is making its mark in the home building industry. We all aspire for a little touch of luxury in our homes. Before the recession, the perception of luxury was linked to square footage, a Roman tub, or granite counters. Today’s definition of luxury has evolved into something that’s more accessible. Architectural styles typically enjoy a 15-to-25-year run. We are now at the end of the age of the McMansion and entering into a new era of traditional forms with a clean modern feel. White kitchens with either shaker cabinets or smooth European inspired fronts are replacing dark stains and country kitchen profiles. Double-height entries and great rooms are being replaced with more intimate nine- and 10-foot ceilings. Useable storage is essential. [Read this article]

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Borrowers Paying Mortgages Over Credit Cards Again

March 22, 2014

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As the housing market and hiring continue to recover, consumers are making their mortgage payments a priority again. A growing number of borrowers are paying off their home loans before their credit card debts, reversing a trend first seen in September 2008, according to a TransUnion study that examined the delinquency rates of borrowers with mortgages, auto loans and credit card debt. The delinquency rate for mortgages fell to 1.71% in December, down from 3.32% in September 2008. Meanwhile, the rate of credit card delinquencies was 1.83% in December, down from 3.29% in 2008. The economic recovery has eased loan payment problems of all kinds. Unemployment, at a February rate of 6.7%, is more than three percentage points lower than it was in September 2009 when mortgage delinquencies reached a peak of 4.92%, according to TransUnion’s data. [Read this article]

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Consumers Show Renewed Confidence In Housing Recovery

March 11, 2014

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After starting the year on a low note, consumer attitudes toward housing brightened overall in February, according to Fannie Mae. Asked about home price trends over the next year, 50 percent of respondents in Fannie Mae’s February National Housing Survey said they expect improvements, a recovery from a slide to 43 percent in January. Having dropped 1.2 percentage points to start the year, the average home price change expectation rebounded just as sharply to 3.2 percent, matching the December survey. That renewed confidence in home prices spurred a boost in those saying now is a good time to buy a home; that number was up 3 percentage points from January to 68 percent. [Read this article]

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Household Worth In U.S. Climbs By $2.95 Trillion To Record

March 11, 2014

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Household wealth in the U.S. increased from October through December, as gains in stock portfolios and home prices boosted Americans’ finances. Net worth for households and non-profit groups rose by $2.95 trillion in the fourth quarter, or 3.8 percent from the previous three months, to a record $80.7 trillion, the Federal Reserve said. More jobs, higher stock prices and improved home values have all helped consumers clean up their balance sheets in the years following the biggest recession since the Great Depression. “The gains in wealth are cumulative and they’re likely to have, over time, a more positive effect on consumer spending,” said Sam Coffin, an economist at UBS Securities LLC in Stamford, Connecticut. Looking ahead, gains will be “a bit less rapid, but we do have continued improvement.” An improving housing market also boosted household wealth. [Read this article]

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5 Ways Children Hold The Key To Housing’s Future

March 11, 2014

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Why did the financial crisis happen in the first place? More importantly, can we learn enough from history to stop it repeating? The Consumer Financial Protection Bureau is doing what it can to ensure that the same situation never happens again. “We have an opportunity to see that America does better by its children. Now more than ever, as we emerge from the deepest financial and economic crisis of our lifetimes, people need the know-how to manage the ways and means of their lives,” Richard Cordray, director of the CFPB, said at the President’s Advisory Council for Financial capability for Young Americans Meeting. “The choices they face in the financial marketplace – with instruments like mortgages, credit cards, auto loans, student loans, credit reporting, and more – are increasingly complex,” he continued. Cordray outlined five ways young childhood education is the key to helping shape housing’s future. [Read this article]

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Rising Home Prices Shrink California Distressed Sales

March 11, 2014

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The California Association of Realtors (CAR) released a new report, revealing sales of distressed homes have plummeted in the past five years. The report comments that sales of distressed homes have shrunk due to rising home prices. In January, 2009, 69.5 percent of all homes sold in California were distressed, which included short sales and real estate-owned properties. The report issued Monday noted that five years later, distressed home sales made up only 15.6 percent of sold homes. During the same time period, the report notes, “California’s median home price has soared more than 64 percent from $249,960 in January 2009 to $410,990 in January 2014.” “The dramatic drop in the share of distressed sales throughout the state reflects a market that is fully transitioning from the housing downturn,” said CAR President Kevin Brown. [Read this article]

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Post image for It’s Still Cheaper To Buy A Home Than Rent: What You’ll Pay In The 10 Biggest Cities

Despite rising home prices and climbing mortgage rates, it’s still cheaper to buy a home than rent one in major cities across the country, according to Trulia, which analyzed data in 100 metro areas. But home prices are just one factor to consider. Deciding whether to buy or rent also depends on the location and how long you plan to stay there. Nationwide, homebuyers who remain in their homes for seven years will save an average of 38% over renting, Trulia found. A year ago, buying was 44% cheaper. That means all of the initial transaction costs of buying a home – the broker’s commission, title insurance, legal fees and other closing costs – will be offset by benefits, like tax write-offs and price appreciation. And those costs will become cheaper than the total costs of renting, which include insurance and agent commissions. [Read this article]

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