Tuesday, March 19, 2013

Americans Expect Home Prices and Mortgage Rates to Increase

Consumer attitudes toward the economy and housing continue to diverge this winter, according to Fannie Mae’s February 2013 National Housing Survey results. On the one hand, consumers continue to express strong positive attitudes toward housing. On the other hand, sentiment about the economy and household finances is stalled. Average 12-month home price expectations and the share of consumers who believe home prices will go up over the next year both rose to record highs, and the percentage of Americans who say mortgage rates will rise reached its highest level since August 2011. At same time, Americans’ views on their personal financial situation, household income, and the direction of the economy fell or remained flat.
“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell."
“Since reaching its trough last September, the share of consumers expecting mortgage rates to rise has trended up,” said Duncan. “However, despite historically low mortgage rates, nearly half of borrowers have never refinanced their mortgage. Combined with the scheduled year-end HARP deadline, rising rate expectations should prompt some borrowers to refinance soon to take advantage of more favorable mortgage terms and add to their disposable income, helping to offset ongoing fiscal drag.”

►The percentage who think mortgage rates will go up increased by 4 percentage points to 45 percent, the highest level since August 2011, while those who think they will go down held steady at seven percent.
►Twenty-five percent of respondents say it is a good time to sell a house, the highest level since the survey’s inception in June 2010.
►Fifty percent of those surveyed say home prices will go up in the next 12 months, holding steady from January at the highest level since the survey’s inception.
►The share of respondents who said they would buy if they were going to move increased by two percentage points to 67 percent.


Fannie Mae's National Housing Survey polled 1,008 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, home ownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.


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Wednesday, March 13, 2013

Housing: It’s Becoming a Seller’s Market

The National Association of Realtors said on Thursday what home buyers in many parts of the United States have known for months: it’s becoming a seller’s market.

The number of homes listed for sale in January fell by 4.9%, leaving 1.74 million properties on the market. That’s the lowest since December of 1999, when there were 1.71 million homes on the market. By contrast, there were 2.91 million homes on the market two years ago at this time.

After adjusting for seasonal factors, home sales rose by just 0.4% in January, to an annual rate of 4.92 million units. Still, that’s up from 9.1% one year ago.

The upshot is that there’s a growing pool of buyers chasing a shrinking supply of homes. If the trend holds, prices will keep going up. At the current pace of sales, it would take just 4.2 months to sell the current supply of homes available for sale, down from a 6.2 months’ supply one year ago.

While inventories typically increase in the spring, the Realtors’ group has expressed growing concerns that sales volumes are being held back by the lack of choice. This is good news for homeowners who have watched home prices drop over the last six years, but it’s bad news for buyers—and for anyone that makes their living selling real estate.

Inventory declines have been the most dramatic in California, Arizona, and other markets that witnessed some of the largest home price declines. Those cities have large numbers of underwater borrowers—people who owe more than their homes are worth—while many others may have equity but aren’t willing to sell because prices have fallen so far.

Investors have also been aggressive in buying up properties that are selling for less than their replacement cost.
 
Home sales could rise to 5.2 million units this year, an increase of nearly 12% from last year, according to economists at Goldman Sachs GS -4.36%. They base their forecast on household formation and demographics, which both suggest rising demand for housing in the coming years, and affordability measures such as mortgage rates and home prices.

But the economists note that there’s a considerable amount of uncertainty that could make those targets hard to hit, particularly if there’s nothing for would-be buyers to purchase.

If you are interested in selling your home please contact the Andrea Crossman Group for more information 616-355-6387

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Tuesday, March 5, 2013

Home Prices Post Biggest Gain in Six Years

Home prices rose 8.3% in December from a year earlier, the biggest gain since May 2006, according to CoreLogic.

All but four states -- Pennsylvania, New Jersey, Illinois and Delaware -- posted increases.

Prices rose 0.4% in December from November, the 10th consecutive monthly advance.

Excluding foreclosures and short sales, which sell at deep discounts to the market price, home prices were up 7.5% on a year-on-year basis and 0.9% month-on-month. 

The states with the highest home-price appreciation in December were Arizona (20%), Nevada (15.3%), Idaho (14.6%), California (12.6%) and Hawaii (12.5%). 

"We are heading into 2013 with home prices on the rebound," said Anand Nallathambi, president and CEO of CoreLogic. "All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery."

 Housing appears to have some momentum, with prices expected to rise 7.9% in January from a year earlier, according to Core Logic's Pending Home Sales Index. Month over month, prices are likely to decline by 1%, reflecting the seasonal winter slowdown.

Excluding foreclosures and short sales, which sell at deep discounts to market prices, home prices are likely to rise 8.6% on a year-on-year basis and 0.7% on a month-on-month basis in January.

 -- Written by Shanthi Bharatwaj in New York  TheStreet