Friday, October 7, 2016


• Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,142,000, according to a report released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. This is 5.8 percent below the revised July estimate of 1,212,000, but is 0.9 percent above the August 2015 rate of 1,132,000.

• Small, mortgage applications ticked up 2.9 percent from one week earlier, according the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey for the week ending Sept. 30.

• The refinance share of mortgage activity edged up to 63.8 percent of total applications, increasing from 62.7 percent the previous week. The adjustable-rate mortgage share of activity increased to 4.5 percent of total applications.

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased from 3.66 percent to 3.62 percent, marking the lowest level since July 2016.

• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.6 percent from 3.64 percent.



house key background

The summer housing market saw high demand next to rising home prices, but don’t expect Fall to bring any relief. In fact, it could bring the hottest fall in a decade, new data from shows.

Home sales in September moved 4% faster than last year, according to the data. The number of days on market is also expected to decreased by three days from last year.

In August, Lawrence Yun, the National Association of Realtors Chief Economist, said that without new housing construction, the housing recovery could stall.

Housing inventory declined annually for 15 consecutive months, and properties closed 11 days quicker than August last year, according to the Pending Home sales report by NAR.

Inventory also remains down as less than 450,000 new listings came on the market in September, while the median home price rose 9% from last year to $250,000, a new high for the month.

“House hunters who were shut out this summer because of fierce competition could fare better this fall, with more opportunities to buy and mortgage rates still near all-time lows,” Chief Economist Jonathan Smoke said. “But don’t expect bargains—prices haven’t come down from this summer’s record highs.”

“Overall, the fundamental trends we have been seeing all year remain solidly in place as we enter the traditionally slower sales season, and pent-up demand remains substantial as buyers seek to get a home under contract while rates remain so low,” Smoke said.



California once drew legions of fortune seekers to its short-lived Gold Rush. Although few newcomers are likely to strike gold in the literal sense today, the Golden State continues to charm big dreamers — not just aspiring actors and tech-preneurs, either. California’s many other riches are a magnet for families in search of opportunity.

There’s no shortage of economic activity in the state, for one. California’s GDP of $2.5 trillion in 2015 exceeded those of all but five countries. That’s due in part to its way of setting kids up for success, by establishing some of the best universities in the world. And once employed, workers benefit from a comprehensive paid family-leave program. California was the first state to offer that incentive to American families and remains one of only a handful of states to implement such a policy.

Add to that list of priorities an abundance of fun and entertainment options, including Disneyland and Universal Studios. For outdoor-loving families, the state teems with natural beauty, providing plenty of opportunities to explore.

Such a combination of qualities makes California the ideal place for parents to raise their children. But it’s not all moonlight and roses throughout the state — some cities are more family-friendly than others. WalletHub’s analysts therefore compared 240 Golden State cities to determine which among them is most conducive to family life. In making such a comparison, we examined each city across 21 key metrics, ranging from “number of attractions” to “number of pediatricians per capita” to “unemployment rate.” Scroll down for the winners, additional expert commentary and a full description of our methodology.



Following a dip in home sales in 2016, California’s housing market will post a nominal increase in 2017, as supply shortages and affordability constraints hamper market activity, according to the “2017 California Housing Market Forecast,” released last week by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). 

Making sense of the story
• The C.A.R. forecast sees a modest increase in existing home sales of 1.4 percent next year to reach 413,000 units, up slightly from the projected 2016 sales figure of 407,300 homes sold. Sales in 2016 also will be virtually flat at 407,300 existing, single-family home sales, compared with the 408,800 pace of homes sold in 2015. 
• “Next year, California’s housing market will be driven by tight housing supplies and the lowest housing affordability in six years,” said C.A.R. President Pat “Ziggy” Zicarelli. “The market will experience regional differences, with more affordable areas, such as the Inland Empire and Central Valley, outperforming the urban coastal centers, where high home prices and a limited availability of homes on the market will hamper sales. As a result, the Southern California and Central Valley regions will see moderate sales increases, while the San Francisco Bay Area will experience a decline as home buyers migrate to peripheral cities with more affordable options.”
• The California median home price is forecast to increase 4.3 percent to $525,600 in 2017, following a projected 6.2 percent increase in 2016 to $503,900, representing the slowest rate of price appreciation in six years.
• “With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California’s housing market posting a modest increase in 2017,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity.”


Tuesday, August 23, 2016



Friday, July 1, 2016


U.S. home prices scaled new heights in April, with seven cities — Boston, Charlotte, Dallas, Denver, San Francisco, Seattle and Portland, Oregon — setting highs.

The Standard & Poor's/Case-Shiller 20-city home price index rose 5.4 percent in April compared with a year earlier, just below the 5.5 percent year-over-year gain posted in March.

Home values are now just 9.6 percent below their peak set nearly a decade ago, according to the report released Tuesday.

A shrinking supply of homes for sale has intensified competition from buyers and forced up prices. Demand has been further fueled by a healthy job market and historically low mortgage rates, which have made people more comfortable about paying higher home prices.

The number of listings has fallen 5.7 percent from a year ago, the National Association of Realtors said last week.

Home prices rose in all 20 major housing markets, with double-digit annual increases in Portland and Seattle.

"While strong price growth in these markets should help increase inventory in the coming months, homes will be significantly less affordable for homebuyers than this time last year," predicted Ralph McLaughlin, chief economist at the online real estate service Trulia.

Overall home ownership rates have dropped near a 48-year low in the aftermath of the housing bust that began in 2007. But sales have improved as the broader economy has slowly healed.

Sales of existing homes improved 1.8 percent last month to a seasonally adjusted annual rate of 5.53 million, according to the Realtors. It was the best pace since February 2007.

The foundation for much of that growth has been a low 4.7 percent unemployment rate, which reflects a stable period for workers. Rising prices have also been tempered by ultra-low mortgage rates, which have held monthly loan payments in check.

Mortgage buyer Freddie Mac said the 30-year fixed-rate mortgage averaged 3.56 percent last week — down from 4.02 percent a year ago and well below the long-term average of 6 percent.



New apartments hitting the rental market in 2016 are 8% smaller than they were 10 years ago, according to a recent report from online rental marketplace RentCafe.

Meanwhile, rents for all apartments on the market have risen 7% in the last five years.

This year, the average square footage of all new apartments, including studios, one-bedroom and two-bedroom apartments, was 934 square feet. Just a decade ago, the new units coming online offered an average of 1,015 square feet.

The national average for rent this year is $1,296 compared to $977 in 2011.

The report analyzed data from buildings in the 100 largest U.S. cities that have at least 50 units.

The biggest losers were new studio apartments, which have shrunk by nearly 18% since 2006 to an average 504 square feet this year.

One bedroom apartments are also getting smaller: shriveling 5% to 752 square feet from 794 square feet 10 years ago.

But not everything in the rental market is getting smaller.

Two-bedroom apartments have held relatively steady, increasing 1% to 1,126 in the last 10 years.

Developers have faced higher construction costs recently, especially in bigger cities, thanks in part to rising land costs and increased regulations.

Fitting more units in a building tends to bring a higher return on investment (similar to when airlines pack more seats on a plane).

Developers had hit the pause button on building in the wake of the 2008 housing crisis. The average size of a rental took its biggest hit from 2011 to 2012 when the size shrunk 2.8% in a single year.

Demand for rentals has been on the rise as Millennials delay homeownership, baby boomers look to downsize, home prices continue to rise and more people choose to live in cities.

"Most of the new apartments that are going up are in central areas, downtown, and there isn't a lot of space there, so developers are building up," said Ama Otet, RentCafe's real estate editor.

But rents have been rising faster than wages recently, which has created an affordability issue for many renters. Last week, a report from the Joint Center for Housing Studies of Harvard University showed more than 21 million people spend at least 30% of their paycheck on rent -- a record high.


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