August 14, 2014 As 2014 reaches its second half, the labor market has continued its steady improvement and many consumers have started to regain confidence in the strength and sustainability of the economy. Over the final two quarters, those factors could spawn more demand for homebuying. May and June saw a significant upswing in new home sales, offering promise that the first-quarter slowdown was mostly weather-induced and, more importantly, fully in the rearview. Still, in many areas of the country - particularly crowded metro regions along the coasts, such as Boston, New York or San Francisco - demand continues to exceed available inventory levels. As such, both first-time and move-up buyers need to be aware of some of the roadblocks that may present themselves. A recent CNBC piece detailed some of the common mistakes and misconceptions of modern-day house hunters - all of which prospective buyers should be aware of and try to avoid when entering into sometimes competitive environments. Under these circumstances, the margin for error is thin, so being educated, prepared and aware of your surroundings is essential. Here are a few of the more recurring themes: Overvaluing online information. Sometimes it seems there are new resources, following in the footsteps of the likes of Zillow and Trulia, being unveiled every week. And these tools and applications can offer a lot of insight for buyers. But too often people make the mistake of treating them as a sort of guiding gospel when they are really just price estimations dictated by constant changes to the marketplace. It's dangerous to assume that these estimations are automatically in line with what the seller will be asking for, especially as neighborhoods change, with property values appreciating thanks to comparable recent sales or fewer foreclosures in the area. The safest approach is often to employ the services of a trusted real estate professional who knows the area, and allow their expertise to guide you, especially during a bidding process. Failing to realize renting may be the better option. Owning a home is an undeniably attractive proposition, but only if you're prepared for all the costs and responsibilities that come with it. That means paying for homeowners insurance, title insurance, closing costs and perhaps even association fees - all of which can quickly add up to a total that's comparable to what your monthly mortgage payments equal. Make sure you conduct a thorough rent-versus-buy analysis based on the market in question, your income, expenditures and the duration of time you plan to stay in the given area. If you're unsure whether living in the neighborhood for at least five years appeals, then buying probably isn't the best decision. Underestimating the power and presence of all-cash buyers. Traditional buyers use home loans to pay for their purchases, but the post-recession market has been anything but traditional. Cash buyers dominated many parts of Arizona, California and Nevada, among other places, scooping up foreclosed or otherwise distressed homes en masse, often rehabilitating them and reselling for profit. The process, commonly known as flipping, has eased somewhat in terms of the regularity with which it's seen, but certain purchase markets are still influenced by these sort of buyers. In many instances, they represent the interests of large-scale investors, show up with cash in hand and make offers that are hard to compete with. From the sellers' perspective, a high cash offer is tough to beat, since it simplifies the process and represents a sure thing. For buyers using a mortgage, the best defense against these competitors is credit cleanup, along with best efforts to save as much for a down payment as possible and to ensure that all other finances are in order.

Amid concerns about inventory and buyer demand, the housing market received positive reports from two separate sources during the week of July 21, offering promise that a corner has fully been turned.

The National Association of Realtors reported that existing home sales increased by 2.6 percent during June, hitting an eight-month high. The annualized rate of sales for existing homes is now at 5.04 million, while the national median home price hit its highest point since 2007, at $233,300. Meanwhile, a separate report from the Mortgage Bankers Association revealed that the volume of new home loan applications was up 3 percent through July 18 - an indication that demand may be picking up as summer hits its second half.

Mortgage applications volumes have been among the most inconsistent metrics of late, with HousingWire noting that the recent spike comes less than a month after a week-over-week drop in originations of more than 9 percent. Still, the convergence of an uptick in existing home sales and more prospective buyers applying for mortgages can't be overlooked, especially when so much has been made of the need for sustainable demand.

The MBA's refinance index was up 4 percent and the unadjusted purchase index was up 1 percent on week-over-week basis, though the latter gauge remained 16 percent below where it sat during the same week in 2013. Some of the renewed demand can be attributed to mortgage interest rates, which have remained flat and relatively low by historical standards. Affordability, in general, has improved, despite the fact that the median price is up nationally. In many of the metro areas where inventory concerns persist, appreciation rates have eased, offering many consumers better odds.

Picking up the pace 

 

According to the NAR, housing market expansion exceeded a 3 percent annualized rate for the second quarter and is expected to further accelerate through the end of the year. As a Reuters report noted, labor market stability, along with the affordability factors and improving inventory levels, could be setting the table for a second-half housing resurgence that buoys the economy as a whole.

"We may see a late season summer push in housing activity," Nela Richardson, chief economist for Redfin, told Reuters. "Inventory is picking up and mortgage rates are hovering around lows for the year, which make things a bit easier for first-time buyers." Offering yet another glimmer of optimism, homebuilding stocks were up following the NAR and MBA reports' releases, with the Dow Jones construction index rising 1.5 percent.

Amid concerns about inventory and buyer demand, the housing market received positive reports from two separate sources during the week of July 21, offering promise that a corner has fully been turned.

The National Association of Realtors reported that existing home sales increased by 2.6 percent during June, hitting an eight-month high. The annualized rate of sales for existing homes is now at 5.04 million, while the national median home price hit its highest point since 2007, at $233,300. Meanwhile, a separate report from the Mortgage Bankers Association revealed that the volume of new home loan applications was up 3 percent through July 18 - an indication that demand may be picking up as summer hits its second half.

Mortgage applications volumes have been among the most inconsistent metrics of late, with HousingWire noting that the recent spike comes less than a month after a week-over-week drop in originations of more than 9 percent. Still, the convergence of an uptick in existing home sales and more prospective buyers applying for mortgages can't be overlooked, especially when so much has been made of the need for sustainable demand.

The MBA's refinance index was up 4 percent and the unadjusted purchase index was up 1 percent on week-over-week basis, though the latter gauge remained 16 percent below where it sat during the same week in 2013. Some of the renewed demand can be attributed to mortgage interest rates, which have remained flat and relatively low by historical standards. Affordability, in general, has improved, despite the fact that the median price is up nationally. In many of the metro areas where inventory concerns persist, appreciation rates have eased, offering many consumers better odds.

Picking up the pace 

 

According to the NAR, housing market expansion exceeded a 3 percent annualized rate for the second quarter and is expected to further accelerate through the end of the year. As a Reuters report noted, labor market stability, along with the affordability factors and improving inventory levels, could be setting the table for a second-half housing resurgence that buoys the economy as a whole.

"We may see a late season summer push in housing activity," Nela Richardson, chief economist for Redfin, told Reuters. "Inventory is picking up and mortgage rates are hovering around lows for the year, which make things a bit easier for first-time buyers." Offering yet another glimmer of optimism, homebuilding stocks were up following the NAR and MBA reports' releases, with the Dow Jones construction index rising 1.5 percent.

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  August 19, 2014

  Amid concerns about inventory and buyer demand, the housing market received positive reports from two separate sources during the week of July 21, offering promise that a corner has fully been turned.

  The National Association of Realtors reported that existing home sales increased by 2.6 percent during June, hitting an eight-month high. The annualized rate of sales for existing homes is now at 5.04 million, while the national median home price hit its highest point since 2007, at $233,300. Meanwhile, a separate report from the Mortgage Bankers Association revealed that the volume of new home loan applications was up 3 percent through July 18 - an indication that demand may be picking up as summer hits its second half.

  Mortgage applications volumes have been among the most inconsistent metrics of late, with HousingWire noting that the recent spike comes less than a month after a week-over-week drop in originations of more than 9 percent. Still, the convergence of an uptick in existing home sales and more prospective buyers applying for mortgages can't be overlooked, especially when so much has been made of the need for sustainable demand.

  The MBA's refinance index was up 4 percent and the unadjusted purchase index was up 1 percent on week-over-week basis, though the latter gauge remained 16 percent below where it sat during the same week in 2013. Some of the renewed demand can be attributed to mortgage interest rates, which have remained flat and relatively low by historical standards. Affordability, in general, has improved, despite the fact that the median price is up nationally. In many of the metro areas where inventory concerns persist, appreciation rates have eased, offering many consumers better odds.

  Picking up the pace 

   

  
  According to the NAR, housing market expansion exceeded a 3 percent annualized rate for the second quarter and is expected to further accelerate through the end of the year. As a Reuters report noted, labor market stability, along with the affordability factors and improving inventory levels, could be setting the table for a second-half housing resurgence that buoys the economy as a whole.

  "We may see a late season summer push in housing activity," Nela Richardson, chief economist for Redfin, told Reuters. "Inventory is picking up and mortgage rates are hovering around lows for the year, which make things a bit easier for first-time buyers." Offering yet another glimmer of optimism, homebuilding stocks were up following the NAR and MBA reports' releases, with the Dow Jones construction index rising 1.5 percent.

   

   

   

   

Residential Construction Metrics Rose Significantly in July

Mortgage Rates Hold Ground at Recent Lows

Confidence among homebuilders improved substantially from June to July, offering an indication that the housing market could possess some underlying strength.

Builder confidence sagged earlier this year, thanks primarily to winter weather conditions that hindered construction projects and hurt sales across the Midwest and Northeast. Even with purchase rates slumping again to begin the third quarter, the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) eclipsed a rather noteworthy benchmark by climbing to a reading of 53 for July. Scores greater than 50 signal that there are more industry members expressing optimism about the current conditions than there are who are down on the market.

July represented the first month since January that the HMI registered a score of better than 50, and given the index's traditional reliability as a barometer for near-future market activity, the latest returns are promising. For much of 2014, inflated costs for building materials and permits, along with tight inventory in many areas of the U.S., have dampened the outlooks of builders regarding the housing industry as a whole. But the late spring and early summer have seen the job market continue to make progress, with the latest Employment Situation Summary for June revealing that the national unemployment rate fell to 6.1 percent - the lowest level in nearly six years.

"An improving job market goes hand in hand with a rise in builder confidence," said David Crowe, chief economist for the NAHB. "As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home."

Improving market conditions mean opportunities abound

Americans applied for fewer mortgages to begin July, according to a survey from the Mortgage Bankers Association, but prospective shoppers may be pleased to find that every component of the HMI was improved for July. Builders responded that sales conditions were better, while the index for future sales expectations was up, as well. The gauge of prospective buyer traffic was the only index component lagging behind, but there's a hope that with the labor market improvements, consumer sentiment will also be improved.

"This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace," said Kevin Kelly, chairman of the NAHB.

The next step, of course, is for that demand to manifest itself in the form of more buying activity.

Prospective homebuyers received promising news regarding affordability with the latest Primary Mortgage Market Survey, released July 17.

The average 30-year fixed-rate mortgage dipped to 4.13 percent through mid-July, a decline of 0.6 percent from the week before and 4.37 percent a year earlier. Fifteen-year FRMs, meanwhile, dropped from 3.24 percent to 3.23 percent on a week-over-week basis, compared with 3.41 percent in mid-July 2013. Five-year Treasury-indexed adjustable-rate mortgages were also down, dropping from 2.99 percent to 2.97 percent week over week, and from 3.17 percent a year earlier.

Frank Nothaft, vice president and chief economist for Freddie Mac, attributed the latest dips to economic data that revealed some weakness after a strong June jobs report. Federal Reserve Chair Janet Yellen also made statements earlier in the week alluding to the need to keep monetary policy accommodative, reiterating that the central bank won't move to raise interest rates until further signs of economic stability have presented themselves.

"Mortgage rates were little changed amid a week of light economic reports," Nothaft explained. "Of the few releases, industrial production rose by 0.2 percent in June, below the market consensus forecast. Also, the producer price index for final demand rose 0.4 percent in June, rebounding from a 0.2 percent decline this prior month."

From a consumer perspective, these rates constitute a welcome sign in a market where inventory is still rather tight and lending standards have remained rather stringent. Mortgage interest levels continue to hover near historical lows, and a separate report - the CoreLogic Home Price Index - noted that a slowdown in price appreciation has occurred not only for the high end of the market, but across all buying classes.

Homebuyer Affordability Gradually Improving August 01, 2014 Prospective homebuyers received promising news regarding affordability with the latest Primary Mortgage Market Survey, released July 17. The average 30-year fixed-rate mortgage dipped to 4.13 percent through mid-July, a decline of 0.6 percent from the week before and 4.37 percent a year earlier. Fifteen-year FRMs, meanwhile, dropped from 3.24 percent to 3.23 percent on a week-over-week basis, compared with 3.41 percent in mid-July 2013. Five-year Treasury-indexed adjustable-rate mortgages were also down, dropping from 2.99 percent to 2.97 percent week over week, and from 3.17 percent a year earlier. Frank Nothaft, vice president and chief economist for Freddie Mac, attributed the latest dips to economic data that revealed some weakness after a strong June jobs report. Federal Reserve Chair Janet Yellen also made statements earlier in the week alluding to the need to keep monetary policy accommodative, reiterating that the central bank won't move to raise interest rates until further signs of economic stability have presented themselves. "Mortgage rates were little changed amid a week of light economic reports," Nothaft explained. "Of the few releases, industrial production rose by 0.2 percent in June, below the market consensus forecast. Also, the producer price index for final demand rose 0.4 percent in June, rebounding from a 0.2 percent decline this prior month." From a consumer perspective, these rates constitute a welcome sign in a market where inventory is still rather tight and lending standards have remained rather stringent. Mortgage interest levels continue to hover near historical lows, and a separate report - the CoreLogic Home Price Index - noted that a slowdown in price appreciation has occurred not only for the high end of the market, but across all buying classes. Market Conditions Improving for Builders and Buyers August 01, 2014 Confidence among homebuilders improved substantially from June to July, offering an indication that the housing market could possess some underlying strength. Builder confidence sagged earlier this year, thanks primarily to winter weather conditions that hindered construction projects and hurt sales across the Midwest and Northeast. Even with purchase rates slumping again to begin the third quarter, the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) eclipsed a rather noteworthy benchmark by climbing to a reading of 53 for July. Scores greater than 50 signal that there are more industry members expressing optimism about the current conditions than there are who are down on the market. July represented the first month since January that the HMI registered a score of better than 50, and given the index's traditional reliability as a barometer for near-future market activity, the latest returns are promising. For much of 2014, inflated costs for building materials and permits, along with tight inventory in many areas of the U.S., have dampened the outlooks of builders regarding the housing industry as a whole. But the late spring and early summer have seen the job market continue to make progress, with the latest Employment Situation Summary for June revealing that the national unemployment rate fell to 6.1 percent - the lowest level in nearly six years. "An improving job market goes hand in hand with a rise in builder confidence," said David Crowe, chief economist for the NAHB. "As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home." Improving market conditions mean opportunities abound Americans applied for fewer mortgages to begin July, according to a survey from the Mortgage Bankers Association, but prospective shoppers may be pleased to find that every component of the HMI was improved for July. Builders responded that sales conditions were better, while the index for future sales expectations was up, as well. The gauge of prospective buyer traffic was the only index component lagging behind, but there's a hope that with the labor market improvements, consumer sentiment will also be improved. "This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace," said Kevin Kelly, chairman of the NAHB. The next step, of course, is for that demand to manifest itself in the form of more buying activity.