Photo Source: Realtor.com
The level of New Homes on the market is at the highest since January 2009—almost 10 years! New Home Sales, however, were down almost 9 percent in October, below expectations; though, a decrease in signed contracts on new homes was expected.
Home renovations: the popular solution for those who don’t want to face the homebuying competition or have hesitations with increased home prices. Not to mention, many have secured a very low mortgage interest rate they don’t want to give up by moving. In fact, there’s been about a 30 percent increase in home remodeling projects over the last five years, and unfortunately over 30 percent haven’t set aside the money for such renovations.
Home prices are slowing down and it’s welcomed news. The Case-Shiller Home Price Index, tracking changes in the value of residential Real Estate, showed a 5.5 percent annual gain for the National Index. The Federal Housing Finance Agency (FHFA) Housing Price Index, highlighting home appreciation on single-family housing, rose 0.2 percent in September and showed a 6 percent annual gain. For both these indices, the year over year appreciation rate decreased very slightly (talking .1 or .2 percent). This does not mean home prices overall decreased but rather are rising at a slower rate than they did last year. This is not a negative appreciation but rather a slower positive appreciation. (It’s a good time for cash out refinances before home prices do drop, though; help fund those renovation projects.)
Mortgage Applications for last week were up 5.5 percent, with purchases up 9 percent and refinances up 1 percent.
Over the last 20 years rent prices have more than doubled, going from about $450 in 1998 to over $1000 in the third quarter of 2018; and since 2008, the average rent for a new apartment has increased 28 percent. Over the last 10 years, the average size of a new apartment has decreased 5 percent—paying for less! California apartments have decreased in size by 12 percent. What’s driving this decline in size? Millennials looking to save a penny—they’d rather live in a smaller unit because of rental costs—and construction limitations: cost and space. Building smaller can yield room for more units to be built, increasing profit.
Debt doesn’t love Michigan—or maybe it does? Two Michigan cities, Ann Arbor and Lansing, made the Cities Where Home Buyers Have the Least Debt list with the former ranking at number 2! The median mortgage borrower’s debt-to-income (DTI) ratio is only 33.7 percent for the city. Honolulu held the highest DTI at 45.1 percent.
Older homeowners love Florida, with the state dominating all of the top 5 Metros with the Highest Average Homeowner Age. With the temperatures dropping in Michigan, we can’t blame anyone retiring to Florida.