WHY 5% MORTGAGE RATES AREN'T A THREAT

Source: REALTOR® Mag

Mortgage rates are on the rise. Could that derail sales? According to First American’s Potential HomeSales model, even if the 30-year fixed-rate mortgage rose to 5 percent, the impact on the housing market would be modest.

Many economists are predicting that the 30-year fixed-rate mortgage will average 5 percent by the end of 2018 or early 2019.

First American’s Potential Home Sales model estimates the potential for existing-home sales based on market fundamentals. The market potential for existing-home sales based on current fundamentals is 6.11 million at a seasonally adjusted annualized rate. If the 30-year fixed-rate mortgage rose to 5 percent, the impact would be a slight decline to 6.1 million existing-home sales, according to the model.12 months.

Full story: 

https://magazine.realtor/daily-news/2018/06/19/why-5-mortgage-rates-aren-t-a-threat

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CALIFORNIA'S HOUSING MARKET HAS REACHED A BOILING POINT, AND A TYPICAL HOME COSTS $600,000

Source: Business Insider

For the first time in history, California's median home price hit $600,860, according to the California Association of Realtors (CAR). The record was based on home sale prices in May and was up 2.8 percent from April and 9.2 percent from May 2017.

California's median-priced home — where half of the homes sold below that number and half sold above— is more than double the national median home price of $264,800.

California's median price previously peaked at $594,530 over a decade ago, according to CAR.

"As we predicted last month, California's statewide median home price broke the previous pre-recession peak set in May 2007 and hit another high as tight supply conditions continued to pour fuel on the price appreciation fire," CAR Senior Vice President and Chief Economist Leslie Appleton-Young said in a press release.

The upward pressure on prices is caused by a major shortage of housing supply in the state, particularly in the bottom end of the market where homes are priced below $200,000. In the last year, availability of those homes declined by nearly 29 percent, while the supply of homes on the market priced at $1 million and up increased by more than 18 percent.

Still, buyer demand is in high gear. The median time it took to sell a single-family home in California in May was 15 days.

Full story: 

http://www.businessinsider.com/california-home-price-hits-record-high-2018-6

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MILLENNIALS MOVING OUT OF MOM AND DAD'S PLACE, STUDY SHOWS

Source: CNBC

If you have an adult child living at home, you could become an empty nester sooner than you thought.

The number of 18- to 34-year-olds living with parents last year edged down from 2016, according to new data from CoStar Group, a commercial real estate information company in New York.

Last year, 31.5 percent of that age cohort were living with Mom and Dad, down slightly from more than 32 percent in 2016. While still higher than the long-term average of under 28 percent, it's a downward trend the firm expects to continue due to the strength of the job market and overall economy.

"There are more individuals in that age cohort who are employed," said Michael Cohen, director of
advisory services at CoStar. "We also should see some wage gains in that age range. ... Both of those things help."

Cohen said the tight labor market — overall unemployment is about 3.8 percent — has led to a higher rate of workforce participation among younger adults.

Full story: 

https://www.cnbc.com/2018/06/20/millennials-moving-out-of-mom-and-dads-place-study-shows.html

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WHAT YOU SHOULD KNOW

• Mortgage application volume increased 5.1 percent from the previous week, according to the Mortgage Bankers Association's seasonally adjusted survey.

• The gain was driven by applications to refinance a home loan, which rose 6 percent for the week but were still 31 percent lower than a year ago, when interest rates were lower.

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged at 4.83 percent, with points decreasing to 0.48 from 0.53 (including the origination fee) for 80 percent loan-to-value ratio loans.

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