"We had a triple crown of April home sales reports, so 2016 is in the pole position to earn best year of home sales in a decade."
"Home sales typically rise in the spring and summer months, and we anticipate acceleration in home sales that will surpass 2007's pace by late summer."
"Homeowners who underestimate their homes' values not only underestimate their home equity, they also likely underestimate: 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes."
"At any given time in our history, demographics would explain 60-80% of what's happening [in the market], and we are in a period of time where Millennials make up a largest demographic group according to the Census, at 84 million."
"84% of current renters have the desire to own. While 36% believe they cannot afford a home and 60% of renters believe it would be 'difficult' to qualify for a mortgage.
"Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy."
by The KCM Crew on June 2, 2016 in For Buyers, For Sellers, Housing Market Update
Yesterday, we ran a post quoting major housing experts on the increasing strength of the U.S. housing market. We were pleasantly surprised that, on the same day, the Wall Street Journal decided to run a front page story titled, “Housing Recovery Picks Up Steam” (article available to WSJ subscribers).
The first paragraph of the article says it best:
“Home prices are back to near-record highs across the U.S. amid rising demand and supply constraints, a sign that the lopsided housing-market recovery of the past five years is gaining some strength.” (emphasis added).
Some openly question how the real estate market can be gaining ground if the overall economy is still struggling. According to the WSJ, it is:
“Despite the unbalanced recovery, Federal Reserve officials have seen housing as a bright spot for the U.S. economy in recent years. Residential construction has contributed to overall economic output for eight straight quarters, expanding at a 17% annual rate in a first quarter marked by slow growth in other sectors.”
The housing market is gaining strength and all indicators point to an even stronger real estate market moving forward.
"Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they'll outpace home price appreciation in the year ahead."
"With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now."
by The KCM Crew on May 5, 2016 in First Time Homebuyers, For Buyers, Housing Market Update, Move-Up Buyers, Pricing
With home prices expected to appreciate by over 5% this year, some are beginning to worry about a new housing bubble forming. Warren Buffet addressed this issue last week in an article by Fortune Magazine. He simply explained:
“I don’t see a nationwide bubble in real estate right now at all.”
Later, when questioned whether real estate and/or mortgaging could present the same challenges for the economy as they did in 2008, Buffet said:
“I don’t think we will have a repeat of that.”
It is easily explained by the theory of supply and demand. There is a lack of housing inventory for sale while demand for that inventory is very strong. According to a recentsurvey of agents by the National Association of Realtors (NAR), buyer traffic was seen as either “strong” or “very strong” in 44 of the 50 states (the exceptions being: Alaska, Wyoming, North Dakota, West Virginia, Connecticut and Delaware).
Also, in NAR’s latest Pending Home Sales Report, it was revealed that the index was the highest it has been in a year.
As prices rise, more families will have increased equity in their homes which will enable them to put their home on the market. As more listings come to market, price increases should slow to more normal levels.
Anand Nallathambi, President & CEO of CoreLogic, recently addressed the issue:
“Home price gains have clearly been a driving force in building positive equity for homeowners. Longer term, we anticipate a better balance of supply and demand in many markets which will help sustain healthy & affordable home values into the future.”
"Recent data darkened the growth outlook for the first quarter of 2016. However, despite the disappointing economic reports, we still forecast housing to maintain its momentum in 2016. We've revised down our forecast for economic growth to reflect the recent data for the first quarter, but our outlook for the balance of the year remains modestly optimistic for the economy."
"We maintain our positive view on housing. In fact, the declines in long-term interest rates that accompanied much of the recent news should increase mortgage market activity."
"We expect housing to be an engine of growth. Construction activity will pick up as we enter the spring and summer months, and rising home values will bolster consumers and help support renewed confidence in the remaining months of this year."