Average 30-year mortgage rate declines

Source: Associated Press Long-term U.S. mortgage rates edged lower this week. As rates remain at historically low levels, homeowners taking advantage of the chance to refinance their mortgages have pushed up refinancing activity. Mortgage giant Freddie Mac said Thursday the average for the benchmark 30-year fixed-rate mortgage declined to 3.44 percent from 3.46 percent last week. The average rate is down from 3.90 percent a year ago, and is close to its all-time low of 3.31 percent in November 2012. The 15-year fixed mortgage rate eased to 2.76 percent from 2.77 percent. Read the full story

Beware: Scammers may be posing as your REALTOR®

Source: Credit.com Prospective homebuyers are being scammed by hackers who are stealing passwords when people log into free Wi-Fi networks or click on suspicious emails. Scammers are searching homebuyers’ or real estate agents’ inboxes for messages related to real estate transactions. Once they find you’re in the process of buying a home, they’ll send a fake message from your agent or attorney, title representative alerting you to new money wiring instructions to a fraudulent account. Before making a wire transfer, call your agent to verify. Beware of links sent by email and instead of clicking on a link in an email to go to an organization’s website, look up the real URL and type the web address yourself. Report any suspicious activity to the FTC. Read the full story

Generation X: The Middle Child

Boomers on the Hunt

Best Buyer Tools

Market Matters

Time to Think About Refinancing Your Mortgage? Source: NY Times Due to shifts in global bond markets, the average interest rate on a 30-year fixed-rate mortgage was 3.49 percent Monday, which is down from 4.2 percent a year ago and 3.9 percent at the start of 2016. As a result, now may a good time to check the rate on your home mortgage, because borrowers could save money by refinancing. For that, American homeowners can thank British voters, central banks in Europe and Japan, and a global economy that just can’t get out of first gear. Furthermore, mortgage rates could fall further in the weeks ahead as banks start to pass more of the savings from low rates in the bond market through to customers. Read the full story

Share of Student Loan Debt-Laden Borrowers RisingSource: DSNews.com Mortgage holders carrying student loan debt has increased by more than 40 percent over the past 10 years, bringing the count from 5.4 million in 2006 to 7.7 million in 2016, according to Black Knight Financial Services’ May 2016 Mortgage Monitor. Approximately 15 percent of active mortgages reside with borrowers who possess student loan debt. It was shown that borrowers with mortgages tend to perform better on student loan debt obligations than those without mortgages. The report also found the share of mortgage originations given to borrowers with student loan debt has increased to 19 percent of all originations, a new high in 2014. Borrowers with a 760+ credit score were shown to be the least likely to carry student debt, representing only less than 10 percent of that population. Read the full story     Nearly Two-Thirds of Americans Can’t Pass a Basic Test of Financial Literacy Source: Time Nearly two-thirds of Americans can’t calculate interest payments correctly, according to a new study. About a third said they didn’t even know how. Overall, a new study from the National Capability Study by the FINRA Foundation, which surveyed 27,564 Americans, found that nearly two-thirds of Americans couldn’t pass a basic financial literacy test, meaning they got fewer than four answers correct on a five-question quiz. Worse, the percentage of those who can pass the test has fallen consistently since the financial crisis to 37 percent last year, from 42 percent in 2009. That being said, the study found that many Americans have recovered from the financial crisis. Respondents who had no difficulty in covering expenses increased 12 percentage points, to 48 percent in 2015 from 36 percent in 2009. Read the full story   Can Local Governments Impede Housing Markets? Source: DSNews.com Housing markets have been adversely affected by the addition of significant building costs that did not exist as recently as 15 years ago, according to a recent survey of more than 100 builders by John Burns Real Estate Consulting (JBREC). Analysis of the top 33 markets in the country found that the number of new home communities has increased by only 4 percent in the last year, according to Burns. At that pace, the number of new homes permitted will not reach 1.1 million until 2023, which is consistent with historical averages. Local governments proved to be the primary reason that volume recovery was stronger in some areas than in others. The survey found that government attitudes toward housing tend to be either friendly and affordable or unfriendly and unaffordable. Read the full story   Is your client moving out of town? Find a The Housing Market Is Waving a Red Flag Source: Bloomberg Fervent speculation that abetted the housing bubble is showing up in the bloated share of foreclosures snapped up by third-party investors at auction—a record 31 percent in June, according to RealtyTrac data that starts in 2000. RealtyTrac senior vice president Daren Blomquist commented, “It's somewhat counterintuitive—as the market gets better and there are fewer foreclosures available, demand for those good deals, those bargains in the market goes up. When you see this high percentage of the properties going to third-party investors, that is a sign that these speculators may be over-inflating the market.” The third-party investors are gaining a bigger share of a shrinking pie, as foreclosure auctions made up 8 percent of all home sales in June, the lowest since August 2006. Read the full story

Market Matters

California pending home sales hold pace in May, C.A.R. reports Source: C.A.R. Building on April’s gain, California pending home sales continued to rebound on a year-to-year basis, as listings increased, primarily in seven of nine Bay Area counties, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Statewide pending home sales rose in May on an annual basis, with the Pending Home Sales Index (PHSI) increasing 3.8 percent from 131.4 in May 2015 to 136.5 in May 2016, based on signed contracts. May’s increase comes as welcome news since closed transactions declined in May despite low interest rates and high housing demand. California pending home sales declined 3.6 percent on a monthly basis compared to April, which was almost entirely due to seasonal factors. Read the full story

American consumers feel better about their financial situationSource: McKinsey & Company While McKinsey & Company’s 2014 survey found that 40 percent of Americans said they were living paycheck to paycheck, only 28 percent made that claim in 2015, according to the findings of the US Consumer Sentiment Survey. Only 23 percent of survey respondents, down from a high of 48 percent in 2009, said they are finding it harder to make ends meet than they did a year ago. Most Americans—65 percent—expressed no concern about losing their job. In general, fewer American consumers are feeling economic pressure today than at any time since 2008. But it’s still no bed of roses. Only 20 percent of Americans expressed optimism about the country’s economy. Read the full story    Presidential Elections Have Little Impact on California Housing Market Source: C.A.R. Presidential elections have historically had little or no negative impact on the California housing market, according to findings by C.A.R. In an analysis of home sales dating back to 1990, the average growth in home sales during an election year is usually either slightly higher or lower each month than in non-presidential election years. Notably, sales growth is rarely negative during an election year, and there is no evidence of a systematic negative impact on home sales or prices stemming from election season. In fact, C.A.R. found that growth in home sales at the end of an election year actually outperforms non-election years by 7.1 percentage points. In a separate poll by leading think tank The Futures Company commissioned by C.A.R.’s Center for California Real Estate, nearly three-fourths (70 percent) of survey respondents who plan to buy a home agreed that they would like the current presidential candidates to address how to make housing more affordable in their campaigns. Read the full story    Survey shows majority of Americans not getting financial advice Source: Investment News A majority of U.S. adults are not getting professional financial advice, and among those who are, almost half say their advisers don't feel like long-term partners, according to a survey from Northwestern Mutual. The survey also revealed a lack of understanding about financial planning, even among those who had an adviser. While 68 percent of people do not have a professional adviser, 45 percent do not even know where to get the help they need as they move through life's stages and need different financial solutions, according to the survey. Only 41 percent say they get tailored attention from their advisers, while 44 percent believe their advisers don't give them a complete picture of their finances. Read the full story       US existing home sales hit 9-year high Source: Reuters U.S. home resales rose in May to a more than nine-year high as improving supply increased choice for buyers, suggesting the economy remains on solid footing despite a sharp slowdown in job growth last month. According to the National Association of REALTORS®, existing home sales increased 1.8 percent to an annual rate of 5.53 million units last month, the highest level since February 2007. April's sales pace was revised down to 5.43 million units from the previously reported 5.45 million units. Sales were up 4.5 percent from a year ago. Read the full story

Schools Rule

Community Matters

Who's Checking Your Credit?

Remodel Reveals

Middle Class Squeeze

California suburbs growing fast as many are priced out of cities, data show

Source: LA Times According to state officials, suburban areas just outside of Los Angeles and San Francisco grew especially fast last year due to red-hot housing markets. As people attempt to remain within commuting distance while fleeing astronomical prices, many suburbs have increased in popularity.  For example, San Joaquin County, home to Stockton, grew faster than any other, up 1.3 percent to 733,000 people. San Joaquin was followed by Yolo, Riverside, and Santa Clara counties. Among cities with at least 30,000 people, the fastest-growing were concentrated primarily in the Inland Empire and Orange County: Porterville, Eastvale, Lake Forest, Beaumont, and Lake Elsinore. Supply needs have only grown for the state’s population, but the number of new housing units in California declined last year for the first time since the start of the economic recovery. Read the full story

What's in a Name?

W

Market Matters

High Rents May Force Buyers into the MarketSource: DSNews.com One in four home buyers reported that it was the high cost of rent that prompted them to go hunting for a house—a substantial increase from the share reported last summer, according to a survey by Redfin. First time buyers drove the increase, with more than 50 percent of them citing high rents as the reason they were looking to buy a home—more than double the 25 percent reported in August. Rents have been on the rise for several months now as demand for rental housing has increased due to a short supply of homes for sale. Redfin Chief Economist Nela Richardson commented, “Though enticed by high rents and low mortgage rates to begin a home search, first-time buyers [still] face a number of obstacles in today’s competitive market. In many cities, starter homes have seen the largest price increases because the supply of affordable homes on the market is so low and the demand for these homes is so high.” Read the full story   The Newlyweds’ Guide to Buying a Home Source: realtor.com   Thirty-five percent of married Americans purchased their first home together within two years of tying the knot, according to a study by Coldwell Banker, but there are a lot of factors that come into play when a couple pursues their first home together. A couple will have to discuss the unpleasant topic of credit scores, because if one person’s credit score is substantially lower than the other person’s, that could hinder the couple’s ability to qualify for a loan, or at least get an attractive interest rate. Considering future goals will also affect which type of home—and loan—is right for a couple, such as whether they will stay in a home short-term or plan to have kids soon. Read the full story U.S. consumer spending increase strongest in over six years Source: Reuters   U.S. consumer spending recorded its biggest increase in more than six years in April, and spending is likely to remain supported by strong gains in house prices, as well as a strengthening labor market, which is steadily pushing up wages. The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, surged 1.0 percent last month as households bought a range of goods and services. The strong consumer spending report joined data on goods exports, industrial production, housing starts, and home sales in suggesting the economy was regaining momentum after growing at a lackluster 0.8 percent annualized rate in the first quarter. Read the full story US Home Prices Rise in March as Spring Buying Season Begins Source: ABC   The Standard & Poor's/Case-Shiller 20-city home price index increased 5.4 percent in March compared with a year earlier, according to a report released this week. National home prices kept climbing in March as the spring home buying season began, but so far the higher costs haven't thwarted sales. Solid job growth, modest increases in wages and salaries, and low mortgage rates are fueling Americans' willingness to buy homes. Yet there is also a limited supply of homes on the market, which pushes up prices. Reportedly, the number of homes on the market is equal to less than 2 percent of U.S. households, the lowest percentage since the mid-1980s. Still, sales of existing homes rose 1.7 percent in April – the second straight increase – to an annual rate of 5.45 million. Read the full story

Our Slow Growth Future

Market Matters

5 things to know about Governor Brown’s proposed housing planSource: KPCC A $122 billion state budget was approved by Californian legislators this week and housing proved to be an unresolved issue that still lingers due to the potential for $400 million to go toward low-income housing projects. The main snag is that Governor Brown tied those funds to the Streamlining Affordable Housing Bill, which will allow developers to bypass much of the approval process for building new homes. Lawmakers would need to accept this proposal for the $400 million in funds to be made available. But those opposed to the proposal say the governor’s streamlining process threatens to cut residents and neighbors out of the development process. Read the full story   Homebuilders finally feel more positive Source: CNBC   Confidence among U.S. homebuilders improved in June after a period of stagnancy for four straight months, according to a monthly survey of builder sentiment from the National Association of Home Builders. NAHB Chairman Ed Brady commented, “Builders in many markets across the nation are reporting higher traffic and more committed buyers at their job sites. However, our members are also relating ongoing concerns regarding the shortage of buildable lots and labor and noting pockets of softness in scattered markets.” June's reading is the highest since January of this year but the same as June of 2015. Of the index's three components, all posted gains. Read the full story Mortgages and Buyers with Blemished Credit Records Source: Bloomberg   First-quarter numbers from the Federal Reserve Bank of New York's consumer credit panel reveal that the U.S. mortgage finance market today is tough for those without pristine credit. Some 58 percent of the $389 billion in mortgages originated went to people with an Equifax Risk Score of 760 or higher (scores range from 280 to 850). Counting by the number of loans, instead of dollars, the share was 51 percent, the New York Fed said. That means borrowers with a score in the range of 620 to 659, which many lenders view as below-prime credit, received just 4.6 percent of the dollar volume of mortgages in the quarter. While surveys say credit is loosening for some types of loans, standards are still far tighter than they were pre-crisis. Read the full story    Student loan debt is hurting the housing market, survey finds Source: Washington Post   Nearly three-quarters of people who are repaying student loans say their debt is hindering them from buying a home. The survey found that many would-be homeowners are increasingly burdened by student debt, according to the survey conducted by the National Association of REALTORS® and the nonprofit American Student Assistance. Seventy-one percent of those surveyed said their student loan debt is delaying them from buying a home. More than half said they expect that delay to last longer than five years. Because of their student debt, 69 percent said they don’t feel financially secure enough to buy a home, while 80 percent said they can’t save for a down payment. Read the full story

Video: Here's What Living in a

There's growing hype about tiny homes and micro-apartments. But what's it really like to live in one? ANew York Times reporter recently spent the night in a 302-square-foot micro-apartment. Read his in-depth account and watch a video here to understand the benefits and the drawbacks of this niche.

Has Money, Will Buy?

Millennials Under Pressure

Does Increase in Home Renovation Plans Suggest People Unwilling To Move?

Source: Marketplace

Twenty-eight percent of U.S. homeowners plan to remodel, expand, or otherwise improve their homes in the next 12 months, according to the latest Bankrate Money Pulse survey. Even lower-income homeowners are planning to renovate by using savings, credit cards, or bank loans. Some people might just be sprucing up their houses to sell them, but planning big projects seems to indicate many homeowners plan to stay put and finally tackle projects they put off during the recession. About 52 percent of homeowners planning a project over the next year indicate they want to work on their driveways, decks, patios, pools, landscaping, or fencing. One professor commented that the housing crisis forced many people to give up on the idea of buying a big, fancy house, especially since housing prices have risen out of reach.

Read the full story 

The Gen X Focus

Technology vs Community

Cash sales on homes continue to decline

Source: HousingWire

  Cash sales accounted for 36.4 percent of total home sales in November 2015, down 0.7 percent year over year. In November 2014, cash sales totaled 37.1 percent, and month-over-month cash sales increased by 2.5 percent from October to November. The year-over-year decrease was the lowest in almost three years. The elevated cash share for November was most likely related to the new federal mortgage rules that took effect in October 2015. The cash sales peaked in January 2011 at 46.6 percent. Prior to the housing crisis, the cash share of total home sales averaged about 25 percent.

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Average US rate on 30-year mortgage ticks up to 3.64 percent

Source: AP

  Global economic anxiety and market turbulence slightly eased, which led average long-term U.S. mortgage rates to rise this week for the first time in two months. The average rate on a 30-year fixed-rate mortgage increased to 3.64 percent from 3.62 percent, according to Freddie Mac. The average rate on 15-year fixed-rate mortgages edged up to 2.94 percent from 2.93 percent. Though markets have stabilized and some economic anxiety has eased, most experts don't expect the Federal Reserve to raise the short-term interest rate it controls anytime soon, following its rate hike in December.

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The New Shared Space

Home 'flipping' exceeds peak in some hot U.S. housing markets

Source: Reuters

Home flipping in 12 active metropolitan areas last year was above a peak set in 2005, just two years before the U.S. mortgage market started to collapse, according to a report by RealtyTrac. The rise in home flipping, which is buying and reselling a home to make a quick buck, has prompted concerns that local housing bubbles could be developing. Profits generated by home flipping also hit a 10-year high, with home flippers netting an average $55,000 per sale before renovation and transaction costs. Profits topped $100,000 in expensive markets such as New York and Los Angeles.

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What Boomers Want

New U.S. single-family home sales race to 10-month high

Source: Reuters

According to the Commerce Department, sales rose 10.8 percent to a seasonally adjusted annual rate of 544,000 units, the highest level since February. Sales last month were likely buoyed by unseasonably mild weather and a rise in the supply of homes on the market, which increased choices for buyers. New home sales soared 14.5 percent to 501,000 units in 2015, the highest level since 2007. Economists had forecast new home sales, which account for about 9.1 percent of the housing market, edging up to a 500,000 unit-rate last month. Sales surged in December to their highest level in 10 months, which is the latest indication that the housing sector remains on firmer footing.

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Why Buy?

First-Time Buyers: How Much Down Payment Do You Really Need These Days?

Source: U.S. News Saving enough money for a 20 percent down payment can be daunting task, but the good news is that buyers can often qualify for a mortgage with a lower down payment. Marietta Rodriguez, vice president of national homeownership programs and lending for NeighborWorks America, commented, “The narrative that in order to buy a house in America today you need 20 percent down is just not true. There are a lot of different products that offer low down payment options.” That being said, if you pay less upfront, your mortgage balance is higher, and if you don't make a minimum down payment of 20 percent, you will usually be required to pay private mortgage insurance. Potential home buyers should talk to their REALTOR® for advice on pursuing homeownership. Read the full story

US homes have gotten huge — offsetting the gains from energy efficiency

Source: Vox
  The average size of American homes has ballooned since 1970. While American homes today are about 31 percent more energy-efficient (as measured in energy use per square foot) than they were in 1970, their growing size has negated these gains in efficiency. In fact, since square footage has risen about 28 percent, on average, there's basically been no change in overall energy intensity. That being said, the shift in US population to the South and Southwest has saved energy for heating and cooling homes.
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There Are Plenty of New Apartments Being Built—Just Not Affordable Ones

Source: The Atlantic
Rental prices have been skyrocketing in just about every American city. Since the ranks of renters are growing without a corresponding increase in construction, rents are rising across the board. Nationwide, rental prices increased by 3.7 percent from September 2014 to September 2015, according to Zillow. But new analysis shows that the price of housing is increasing a whole lot more for those at the bottom of the economic ladder than for those at the top. A lot more construction is happening at the top of the market, where developers and builders are quickly getting luxury apartments to market. Meanwhile, construction has been slow for cheaper apartments.

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A Record Share of Young Women Are Living at Home

New analysis from the Pew Research Center shows that a larger share of young American women are living with family now than at any time since the 1940s, as more of them forgo early marriage for higher education. While the Great Recession nudged many millennials back to their parents’ homes, the shift is particularly apparent among women. In 1940, 36.2 percent of women age 18 to 34 lived with their parents or other relatives, and by 2014, the share of women living with family had climbed back up to 36.4 percent. Women today are five times as likely to be enrolled in college than in 1940, when only 5 percent of 18-to-34-year-olds were pursuing a degree.
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Home Improvements that Pay Off

Real Home Prices Could Take 17 Years to Return to Peak

Source: Wall St. Journal
New analysis by real-estate information firm CoreLogic finds that when adjusted for inflation, home prices are years away from hitting the lofty heights of the housing boom. Indeed, economists there say that prices are unlikely to surpass 2006 levels until 2023 or beyond, some 17 years past the peak. The rise and fall in prices without adjusting for inflation matter for existing homeowners because they determine whether or not they are underwater on their mortgages. The rapid run-up in prices in recent years has made it easier for people to sell their homes because they no longer owe more on their mortgage than the home is worth.

Read the full story

Interest Rate Update

Interest rates are still looking good. Even with the .25% hike in the Federal Funds Rate long term interest rates remain at historic lows.

30 Year Fixed up to $417,000 3.50% to 3.75%
30 Year Fixed “Agency” up to $625,500 3.625% to 3.875%
30 Year Fixed FHA up to $417,000 3.25% to 3.50%
30 Year Fixed FHA “Jumbo” up to $729,500 3.25% to 3.50%

Freddie Mac Makes “Bold” Prediction

Officials from residential giant Freddie Mac are predicting that housing starts and home prices will reach their highest levels since 2006. That is a nationwide prediction. Low interest rates, an improving job market, and a gradual increase in housing supply will fuel a strong 2016. The chief economist for Freddie Mac stated “housing markets are poised for their best year in a decade”. The prediction also states that the housing markets should sustain their momentum through 2017 which is always good news.

Helsinki Suburb Offers Millennials Cheap Rent if They Live in a Senior Center

Source: The Atlantic

  Helsinki reportedly has notoriously high rents, so millennials under the age of 25 took notice when they could grab a small studio apartment for $265 a month. But notably, the studios are located in a home for seniors, one where the young studio-dwellers would be expected to spend three-to-five hours a week with the older residents. The city-funded project aims to address youth homelessness, reduce social isolation, and encourage mixing between the generations. Younger people get an affordable place to live and some contact with older folks who aren’t their grandparents. The idea has been applauded as a way to provide young people with a socially useful way to find affordable housing while making senior homes livelier, less isolated places.

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U.S. construction spending rises solidly to near 8-year high

Source: Reuters
  While there has been some slowing in consumer spending and persistent weakness in manufacturing, the national economy may be on firmer ground as U.S. construction spending rose more than expected in October with outlays rising across the board. Construction spending increased 1.0 percent to a seasonally adjusted $1.11 trillion rate, the highest level since December 2007, after an unrevised 0.6 percent gain in September, according to the Commerce Department. Construction spending has risen every month this year and is likely to support the economy in the final three months of the year.

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40 percent of young adults who live on their own still get money from parents

Source: Yahoo! Finance
  More than 40 percent of young adults between the ages of 25 and 32 who don’t live at home still receive some sort of financial help from their parents. This lack of financial independence was analyzed in in the journal Social Currents by Anna Manzoni, an assistant professor of sociology at North Carolina State University. Manzoni also found that attending a four-year educational institution makes people more likely to rely on mom and dad, especially those from higher socioeconomic backgrounds. Notably, those who received financial aid from their parents during college are also more likely to live with their parents post-grad than those who paid for school on their own.

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Americans Spent More on Housing, Health Care Last Year

Source: Wall St. Journal
The Commerce Department reports that housing and utilities and health care accounted for almost one-third of the rise in consumer spending nationwide in 2014. This confirms fears that rising housing costs are at least partly squeezing out some discretionary spending. Across all states, spending on housing and utilities grew 4.1 percent in 2014, with North Dakota posting the biggest rise at 8 percent. Nationwide, spending was up 4.2 percent last year versus 3.1 percent in 2013.

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Calling All First Time Buyers!

Interest Rate Update - March 21, 2016

Interest Rate Update Interest rates are still looking good. Even with the .25% hike in the Federal Funds Rate long term interest rates remain at historic lows.


30 Year Fixed up to $417,000 3.50% to 3.75%
30 Year Fixed “Agency” up to $625,500 3.625% to 3.875%
30 Year Fixed FHA up to $417,000 3.25% to 3.50%
30 Year Fixed FHA “Jumbo” up to $729,500 3.25% to 3.50%

Update From Fannie Mae Here is what Fannie Mae is saying, “A less optimistic outlook for future wage gains coupled with continued strong home price appreciation booted by lean inventory, is adding to the housing affordability challenge. Our latest home purchase sentiment index shows that high home prices are a top reason for consumer’s perception that it is a bad time to buy a home. However, low mortgage rates should help support moderate housing expansion as we move through the year”.
How Does This Affect You ? In a nutshell Fannie Mae is saying that home prices should moderate and the low interest rate environment will keep people buying homes. Remember also that Fannie Mae is talking on a nationwide stage. Here in Southern California the housing industry tends to do better than other areas. So spread the word that rates are still at historic levels and property is still moving.

Nearly 95 percent of young renters want to buy, but many say they can't afford it

Source: Wall St. Journal
A recent survey by the National Association of REALTORS® finds that nearly 95 percent of renters 34 years old or younger want to own a home in the future and overall, 83 percent of renters said they have a desire to own. More than half of renters said they haven’t yet bought a home because they couldn’t afford one, while just 19 percent said they prefer the flexibility of renting. Notably, only half of all households polled—renters and homeowners—said they believe the economy is currently improving, and 44 percent said they believe the country is in a recession, so there is a lack of optimism about the economic conditions that will allow them to pursue homeownership.
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Millennial generation most fiscally cautious since Depression

Source: Los Angeles Times

  A new study finds that the millennial generation is the most financially conservative since the Great Depression. According to UBS Wealth Management Americas, these younger Americans are reluctant to take big financial risks due to the trauma of the global financial crisis in 2008. More than one-third of people aged 21 to 36 say they’re financially conservative and their actions speak even louder than their words. The average millennial has 52 percent of his or her portfolio in cash, more than twice the 23 percent of other investors. A mere 28 percent of millennials see the point of long-term investing, and only 12 percent would stash so-called found money in the stock market, according to the survey.

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Lack of affordable housing pushes Toyota from California to Texas

Source: Dallas Business Journal

  Toyota recently decided to plant its North American headquarters in Plano, Texas, bringing in more than 3,000 jobs, mostly from Torrance, Calif. According to a professor with inside knowledge of the move, the main driver of Toyota’s move from California was housing costs. Toyota did the math and found that housing costs in Los Angeles County, where Torrance is located, are three times per square foot the cost of a house in Dallas-Fort Worth. The median home in Dallas-Fort Worth costs about $210,000, and the median income is roughly $58,000. In Torrance the median home price is $508,000 and the median income is $76,000.

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U.S. housing data signals economic strength; manufacturing weak

Source: Reuters
As 2015 drew to a close, the Commerce Department reported that building permits in November vaulted 11 percent to a 1.29 million-unit rate, the highest level since June. Groundbreaking jumped 10.5 percent to a seasonally adjusted annual pace of 1.17 million units. With permits running ahead of starts, home building is likely to remain supported in the months ahead. November marked the eighth straight month that housing starts remained above 1 million units, the longest stretch since 2007. Despite these signs of strength in the housing market, other data showed the industrial sector continuing to struggle under the weight of a strong dollar, cutbacks in inventory investment as well as spending cuts by energy firms in response to persistently low oil prices.”
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Renovation Realities

Fannie Mae: Housing market needs incomes to grow

Source: Yahoo! Finance

The chief economist of Fannie Mae is warning that housing affordability—or lack thereof—is going to put a damper on the housing market’s growth. A big factor in the strength of the market and the story for housing is very much tied to whether incomes increase, according to Fannie Mae’s analysis. Doug Duncan, chief economist for Fannie Mae, commented, “Our theme for the year is [that] housing affordability constrains as the expansion matures. Both rents and house prices are appreciating at pretty strong levels. And what is required is to see income growth, particularly at the medium and lower income levels.”

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Happy Valentine's Day

Fed: Tight Inventory Still Dogs Housing Markets

Source: DSNews.com
  The Federal Reserve has released its first Beige Book of 2016, and despite existing-home sales falling to their slowest pace in 19 months in November, the 12 Federal Reserve Districts reported mixed but slightly improved housing markets for the six-week period leading up to January 4. Part of the reason that inventories remain low is that residential construction in the single-family home space “remains sluggish, with developers reluctant to build inventories,” according to the Fed. Multifamily construction, on the other hand, “continues to be brisk,” as most of the 12 districts reported modest or moderate growth in commercial construction. Overall, economic activity expanded in nine of the 12 districts since the previous Beige Book was issued in December.

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Facebook’s 10-Mile, $10,000 Solution to Housing and Long Commutes

Source: KQED
  Tech workers who live in San Francisco and commute to work in Silicon Valley have been blamed for driving up rents in the area and causing congestion on local transportation corridors. Facebook is now offering payments of $10,000 and up to workers who relocate to within 10 miles of its main campus. However, there are concerns that residents in nearby communities — East Palo Alto, Menlo Park and Redwood City, for instance — will be threatened by the announcement, as they will find themselves competing for housing with well-paid Facebook workers. The policy may add to tension in the region about the surge in housing prices and the lack of housing available in the area due to the dominant presence of tech companies.

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HUD Secretary Castro Chats Housing on Late Show with Stephen Colbert

Source: Reverse Mortgage Daily

  Department of Housing and Urban Development (HUD) Secretary Julián Castro appeared as a special guest recently on The Late Show with Stephen Colbert, where he discussed HUD’s role in the housing market recovery and those pesky rumors about the vice president nomination. Castro touted HUD’s efforts to decrease veteran homelessness and the Neighborhood Stabilization Program that helped revitalize neighborhoods across the U.S. that have suffered from foreclosures. Colbert also asked him to rate the likelihood that Clinton actually approached him about being vice president.

Read the full story

Interest Rate Update

Interest rates are still looking good. Even with the .25% hike in the Federal Funds Rate long term interest rates remain at historic lows.

30 Year Fixed up to $417,000 3.75% to 4.125%
30 Year Fixed “Agency” up to $625,500 3.875% to 4.25%
30 Year Fixed FHA up to $417,000 3.50% to 3.75%
30 Year Fixed FHA “Jumbo” up to $729,500 3.625% to 3.875%

Here We Go! Get Ready to Ramp it Up With the current struggles in the stock market the fixed interest rates have actually started to ease downward again. This is an election year and the people in power can’t afford to go into the election with a sluggish economy. Right now the housing industry is about the strongest sector of the economy and they can’t let that slow down if at all possible. The media news is all good for the continued strength of the housing market. The Orange County Register on Wednesday this week reported on the front page “Home Prices Edge Close to Record”. Fannie Mae also issued reports that the housing recovery “will continue to march on” and a new report out today says the sales of existing homes in December surged nearly 15% over November. The report says that is the largest monthly jump in history.

How Does This Affect You ? I have maintained for many years that the key component to the housing market is the media. In this case it is not just the local newspaper that is gushing about the strength of the real estate market but other creditable media and news outlets. So enjoy the ride and pass this information along.

Return of the Single Female Home Buyer

Source: Bloomberg

After the housing crisis, lenders made it harder to qualify for mortgages, and the percentage of single female buyers dropped from 21 percent of purchasers in 2009 to 15 percent this year. But it appears single women could be poised to make a comeback in the housing market. For instance, the majority of respondents to a prospective home buyer survey by real estate brokerage Redfin have been women. In addition, in many U.S. cities, the share of women earning more than $100,000 increased the most from 2012 to 2014. In urban areas, their incomes are rising faster than those of single men. Read the full story

Market Matters

Homebuilders feeling happiest in 10 years Source: Yahoo! Finance U.S. homebuilder sentiment jumped 3 points in October to a level of 64 on the National Association of Home Builders/Wells Fargo Housing Market Index, which is proof that the single-family housing market is making lasting gains as more serious buyers come forward. An index rating above 50 is considered positive sentiment. Sales expectations in the next six months rose 7 points to 75, while current sales conditions rose 3 points to 70. Buyer traffic, however, didn't move, sitting at 47— the only component still in negative territory. Read the full story   Homeownership Help: The Growing Importance of the Bank of Mom & Dad  Source: Zillow   Potential home buyers are increasingly relying on money from mom and dad as younger Americans look to secure the necessary funds for a down payment. The combination of rising home values, slow income growth, and still-tight credit markets has resulted in a growing reliance on intra-family loans and gifts meant to be used as down payments for younger home buyers. Overall, presumed first-time home buyers who bought in the years after the recession were roughly twice as likely to have received down payment assistance from friends and family as those who bought prior to the recession. The growing importance in the home-buying process of loans and gifts from family and friends underscores the challenge that securing a suitable down payment represents for younger home buyers. Read the full story Home Construction Rebounds Amid Surge in Multifamily Units Source: Wall St. Journal   A sharp increase in construction of apartments and other multifamily housing has led U.S. home building to rebound in September after two straight months of declines. Housing starts rose 6.5 percent from a month earlier to a seasonally adjusted annual rate of 1.21 million in September, and an 18.3 percent surge in multifamily units, which include apartments and condominiums, led the increase. Builders are confident home buyers will return to the housing market, drawn by an improved job market, higher rental costs, and continuing low interest rates from the Federal Reserve. Read the full story   Millennials’ top competition for condos might be their parents Source: Washington Post   Roughly 10,000 baby boomers are retiring each day, and recent data shows that half of those who plan to move will downsize when they do. As a result, millennials have tough new competition for the condominiums and apartments that are heating up the nation’s housing market. In fact, boomers are renting apartments and buying condos at more than twice the rate of their millennial children. This means cash-strapped millennials may not be able to snag affordable units in buildings developed to house 20-somethings in urban areas. Read the full story Millennials Less Likely to Identify Credit-Altering Life Events Source: DSNews.comMillennials are less likely than baby boomers to identify milestone life events that could affect their credit, according to a new survey released by TransUnion. In fact, less than half of millennials surveyed could cite specific major life events that could negatively or positively affect credit, such as divorce (40 percent compared to 57 percent of boomers) or the death of a spouse (26 percent compared to 48 percent of boomers). Read the full story

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