It’s Still More Affordable to Buy Than Rent

It’s Still More Affordable to Buy Than Rent

In about two-thirds of the country – or 66 percent of the largest U.S. counties – it’s more affordable to buy a home than to rent one, according to a report by ATTOM Data Solutions.

They compared the monthly rents of three-bedroom apartments to monthly payments on median-priced homes (including the mortgages, property taxes, and insurance) across 540 counties.

“It feels like buying a home is getting tougher and tougher from an affordability standpoint,” says Daren Blomquist, ATTOM’s senior vice president. “But the low interest rates have really helped.”

Mortgage rates, however, are expected to rise in the near future. That could dampen the affordability prospects in the future.

“Even a fairly slight increase in mortgage rates could flip the equation and make it more affordable to rent than to buy,” Blomquist says.

According to the report, rents have been surging faster than home prices in about 27 percent of the markets measured.

In the country’s most populated counties, the following places topped the list as most affordable to buy than rent: Cook County (Chicago), Ill.; Maricopa County (Phoenix), Arizona, Miami-Dade County, Fla.; San Bernardino County, Cal. in inland Southern California; Clark County (Las Vegas), Nev.; Tarrant County, Texas in the Dallas metro area; Wayne County (Detroit), Mich.; Broward County, Fla. in the Miami metro area; Bexar County (San Antonio), Texas; and Philadelphia County, Pa.

Source: “Buying a Home May Be  More Affordable Than You Think,” realtor.com® (Jan. 5, 2017) and ATTOM Data Solutions

Rising Rates Dampen Consumers’ Moods

Rising Rates Dampen Consumers’ Moods

Mortgage rate increases are chipping away at home buyer sentiment, shows the latest reading from Fannie Mae’s Home Purchase Sentiment Index. For the fifth consecutive month, consumer sentiment dropped in December and most of that centered on perceptions over rising borrowing costs.

The share of consumers expecting mortgage rates to drop over the next 12 months, as well as those who believe their household income is significantly higher today compared to a year ago, dropped four and five percentage points, respectively, according to the index.

“Despite the post-election bump in general consumer attitudes, a rapid rise in mortgage rate expectations has tamped down home purchase sentiment, at least in the near term,” says Doug Duncan, Fannie Mae’s chief economist.

That could change, Duncan says. The spike in interest rates reflects, in part, the market’s anticipation of “pro-growth policies from the incoming administration,” Duncan adds. “If this optimism comes to fruition, it should translate into stronger income growth and increased job security for consumers – the two HPSI components that could help support housing sentiment this year.”

Here are some more highlights from the latest reading:

• 32 percent of Americans surveyed in December say it is a good time to buy a home, an increase of 2 percentage points from November.
• 13 percent of consumers say now is a good time to sell, unchanged from the prior month. Thirty-eight percent of consumers say it’s a bad time to sell.
• 35 percent of consumers believe home prices will go up.
• 68 percent of respondents say they are not concerned about losing their job, a 4 percentage point month-over-month increase.
• 10 percent who say their household income is significantly higher than it was 12 months ago, a 5 percentage drop from November.

Source: Fannie Mae

Builders to Press Entry-Level Market in 2017

Builders to Press Entry-Level Market in 2017

The call for a greater number of entry-level homes may finally get answered in 2017. Inventories for entry-level homes has remained stubbornly low, greatly limiting the number of affordable homes to first-time home buyer.

The number of available homes with less than 1,800 square feet has continued to decrease, reaching a new low of 16 percent, according to a recent report by Drew Reading, U.S. home building analyst at Bloomberg Intelligence.

More builders realize that inventories need to be higher, and that the demand is there. However, they’ve been slow to deliver due to rapidly rising land and regulatory costs that have made building entry-level homes less lucrative to their business. Indeed, regulation costs have risen 30 percent since 2011, according to data from the National Association of Home Builders. Those rising costs have been passed on to not only the builder but home buyers too.

Still, more builders are finding a way to eke out more business in the entry-level market in 2017. Town home construction has soared to an all-time high, increasing 29 percent as builders turn to it more to counter high land costs as well as meet the community preferences of entry-level buyers.

Further, builder giants are devoting more of their market shares to the entry-level sector. D.R. Horton has been offering Express Homes to expand its reach into the market. Twenty-seven percent of its total homes sold in 2016 were from its Express Homes.

Lennar also is targeting more affordable markets with greater entry-level homes and floor plan options. It hopes to focus more than a quarter of its sales on that sector in 2017.

Pulte neared the 30 percent mark in 2016 for closings to first-time buyers. Meritage is going even bolder in trying to capture the market: Setting a target goal of 40 percent sales closings to entry-level buyers for 2017.

The majority of entry-level buyers are millennials. Their incomes are on the rise so home ownership may be more within reach. In the past, their incomes were only rising about 1.6 percent but are now topping 5.5 percent. Mortgage lending standards are easing somewhat to help more first-time borrowers get approved for a loan too.

Source: “Top Builders’ Unique Strategies to Capture Entry-Level Buyers,” HIVE (Jan. 4, 2017)

The Best Window Treatments for Sellers

The Best Window Treatments for Sellers

Window treatments offer many benefits to sellers: They can bolster the look of a home’s interior, making a positive first impression on buyers, allowing them to envision themselves in the home. They also offer the added value of privacy and potential energy cost savings, an aspect many savvy buyers will appreciate.

Furthermore, choosing the right window treatments may enable a seller to enhance a house’s curb appeal and could help a residence attract attention in a crowded real estate market.

Katie Laird, director of Social Marketing for Blinds.com, shares four window treatments that can transform a seller’s home and make it stand out in the market.

1. Faux Wood Blinds

Faux wood blinds will complement a home’s interior and exterior, regardless of a house’s size or style. Many faux wood blind options are available to match a home’s décor perfectly. From cordless blinds to moisture-resistant varieties, these blinds maintain their appearance and quality for an extended period of time.

Also, faux wood blinds replicate the look and feel of real wood at a fraction of the cost. The blinds even feature a synthetic material that makes them simple to clean and maintain.

2. Roman Shades

For those who are searching for eye-catching and versatile window treatments, Roman shades come in a wide range of fabrics, colors, patterns and styles, making them fit seamlessly into a range of décor styles.

The benefits of Roman shades extend beyond their appearance. Roman shades are attractive to buyers because they enable homeowners to control the amount of light that enters a room and act as a barrier against drafty windows, ensuring they can keep heat indoors in winter and sunlight outside in summer.

3. Vertical Blinds

Vertical blinds are stylish and practical window treatments. They feature vanes – narrow strips that hang from a headrail – that come in fabric, wood and vinyl. Vertical blinds deliver a lot of control as to how much light enters the home while maintaining privacy: a selling point for many buyers.

4. Honeycomb Shades

Honeycomb shades offer a number of advantages that help them stand out from other window treatments. First, honeycomb shades deliver exceptional insulation, allowing homeowners to lower their monthly energy costs. The shades have been shown to help improve acoustics in homes and are constructed in various pleat sizes for installation in all types of houses.

Honeycomb shades are offered in a broad array of bold and subtle colors as well and offer a modern look, serving as superior window treatments that are sure to stand out to home buyers.

Window treatments can make a world of difference for home sellers, particularly in a competitive real estate market. With any of the aforementioned window treatments at your disposal, you can enhance a home’s interior and exterior instantly.

Source: Katie Laird, director of social marketing for Blinds.com and a frequent public speaker on Social Media Marketing, Social Customer Care and profitable company culture.

This May Be It for the Luxury Rental Boom

This May Be It for the Luxury Rental Boom

A seven-year boom in the high-end apartment sector may be nearing an end. Landlords of luxury rental properties likely will need to cut rents and offer concessions as supply starts to outstrip demand across the country, The Wall Street Journal reports.

Landlords reportedly in New York already are offering up to three months of free rent on some developments. In Los Angeles, some landlords are offering six months of free parking. In Houston, landlords are reportedly even waving the security deposit on some rentals.

“This will be a very challenged leasing environment almost everywhere,” says Jay Parsons, MPF Research vice president.

Apartment rents have jumped more than 26 percent since early 2010. The growth has outstripped inflation and income growth. In 2016, rents showed a slowing of increases. Rents rose by 3.8 percent. That is down from a 5.6 percent year-to-year growth in the third quarter of 2015, according to a report by MPF Research.

A flood of new apartments have hit the market in recent years, and most of those reflect developers’ focus on the high-end sector. The number of upscale apartments emerging on the market, however, is outpacing the number of renters, and that gap is expected to widen in 2017.

For example, the New York Area is expected to have nearly 30,000 new apartments enter its pipeline this year. That is double the historical average, according to Axiometrics. What’s more, about 85 percent of those new apartments are considered luxury. Dallas will see nearly 25,000 new apartments compared to its long-term average of about 9,000, while Los Angeles is expected to see more than double its historical average.

Source: “Luxury Apartment Boom Looks Set to Fizzle in 2017,” The Wall Street Journal (Jan. 2, 2017) [Log-in required.]

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