Buyers Leverage More Tech in Home Searches

Buyers Leverage More Tech in Home Searches. Image courtesy of dream designs / FreeDigitalPhotos.net

Housing Affordability Takes Another Dip

Housing Affordability Takes Another Dip. Image courtesy of hywards / FreeDigitalPhotos.net

As rising home prices continue to outpace income gains, Americans across the nation are finding it harder to buy, according to the National Association of REALTORS®’ latest reading of its Housing Affordability Index.

The median price for a single-family home in the U.S. is up 5.8 percent from a year ago, at $235,500 as of July. The Western region of the country has seen the largest year-over-year increases in prices at 8.4 percent, followed by the South at 7.1 percent and Midwest at 6.5 percent. The Northeast saw the slowest price growth at 1.8 percent, according to NAR.

Affordability has fallen from one month ago in all regions of the United States, with the West posting the largest drop in the affordability index (2.1 percent). The South dropped the least in affordability month-over-month, falling only 0.4 percent. Compared to a year ago, affordability has fallen in all regions, except the Northeast which saw a 2 percent increase. The West again posted the largest decline in affordability year-over-year at 4.3 percent, and the Midwest had the smallest decline of 3 percent.

“Housing markets with low inventory levels may continue to experience rising home prices—however, improvement in job creation and steady income gains help offset major price growth,” writes NAR Research Data Specialist Michael Hyman on the Economists’ Outlook blog. “Mortgage applications are currently down for new and existing homes which could be seasonal or a sign that rising rates are having an impact on affordability.”

Source: “Housing Affordability Numbers for July,” National Association of REALTORS® Economists’ Outlook blog (Sept. 15, 2015)

College Major as Predictor of House Prospects?

College Major as Predictor of House Prospects? Image courtesy of nenetus / FreeDigitalPhotos.net

Graduates’ college major may have a lot to do with how much home they can afford later on, according to a new analysis by realtor.com®.

For example, for engineering majors, they’ll likely be successful in the housing market. Out of 300 majors evaluated by realtor.com®, petroleum engineers had the highest salaries that translated into being able to afford more house. Petroleum engineers had a midcareer salary of $168,000 and grads of that major could afford to buy up to $744,000 – more than three times the national average list price.

On the other end of the spectrum, education and liberal arts majors didn’t fare as well as engineering jobs. Early-childhood education had a midcareer salary of $38,000, which is barely enough to purchase a home at $168,000 (which is below the national median). Social work is also among the lowest paid careers, with a midcareer salary of $45,700.

Realtor.com® used Payscale’s midcareer salary estimates and realtor.com®’s own affordability calculator to calculate the maximum price typical grads could afford after working for 10 years according to their major. Midcareer employees with a bachelor’s degree earn a median salary of $77,006, which means they can afford a house costing up to $341,000 – about 60 percent more than a high school graduate.

Source: “How Your College Major Predicts What House You Can Afford,” realtor.com® (Sept. 14, 2015)

Sellers Irk Home Buyers

Sellers Irk Home Buyers. Image courtesy of Vichaya Kiatying-Angsulee / FreeDigitalPhotos.net

Home sellers can do lots of things that drive home buyers’ nuts, from playing mind games to taking things in the home when they move out that they shouldn’t have, says McKay Price, assistant professor of real estate finance at Lehigh University.

Bankrate.com recently highlighted a few ways that sellers are getting on the nerves of buyers. Among those top offenses:

• Playing mind games. “What drives a buyer crazy? Falling in love with a house that’s not really for sale,” according to the Bankrate.com article. “Or one that has problems that a seller refuses to fix.” Buyers are getting annoyed at homes that need repairs that sellers refuse to make. When a home inspection reveals a home needs a new water heater or roof, for example, sellers often make the repair or adjust the price. But some stubborn sellers insist on doing nothing, says Justin Knoll, president of Madison & Co. Properties and past president of the Denver Board of REALTORS®. For buyers who go ahead, the question becomes: “Where’s that money going to come from down the road?” he notes.

• Fixture feuds. Some sellers may take more from the home than their allowed, including the chandeliers and maybe even the toilets. Price says one family showed up on moving day to find that sellers removed every single light bulb in the house. Another couple noticed on their final walk-through the sellers had stripped away all the window coverings, even though they were included in the sales contract. (Read more: The Pain of Fixture Feuds.)
• Becoming offended. Buyers look at comparables with their real estate agents and look at the asking price – which they agree is too high – and then submit a solid offer. But the offer then gets ignored and the seller appears offended.

“Are they really that thin-skinned? Is it a tactic? And to a serious buyer, does it even make a difference?” the Bankrate.com article notes. Pat Vredevoogd Combs, vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich., says that it’s never smart for a seller to ignore an offer. “Even though it’s your home, it’s a financial transaction,” she says. “I’d rather have a lowball offer and be able to negotiate than no offer at all. … I tell my clients, look, this is a starting point.”

Read more ways that sellers irk buyers at Bankrate.com.

Source: “Ugh! Here Are 6 Things That Home Sellers Do That Drive Buyers Nuts,” Bankrate.com (September 2015)