Is Buying a Home Still an Affordable Choice?

These days, determining the affordability of buying a home isn’t such a simple calculation. There are always a lot of variables to consider – including prices, mortgage rates, wages, and local factors – but today’s housing market contains a number of contradictions that may make it even more difficult for potential buyers to figure out.

For example, home prices have recently been making a lot of news, mostly because they’ve regained much or all of the value lost following the housing crash. At the same time, though, mortgage rates have remained just above historic lows for the past several years. In other words, if you live in an area where home prices have been slower to rebound, low mortgage rates likely mean homes are still a good deal in your neighborhood. On the other hand, in some areas – where home prices have pushed beyond previous highs and low inventory is limiting available choices – favorable mortgage rates make less of an impact.

Here in Fremont buying is affordable for the average household, though challenges remain. Thanks to very low mortgage rates, monthly mortgage payments are affordable for the average household despite currently high house prices. Nevertheless, hurdles to homeownership arise from the difficulty of finding a house.

 

This advertisement was provided by Jennifer Bixby, of the Bixby & Sorensen Team and the broker for Don Peterson and Associates Real Estate, 100 E 6th St. Jennifer can be reached at 402-721-9700 for answers to questions regarding your real estate needs.

Prices Move Higher as Homeowners Stay Put

Widely seen as the leading measure of U.S. home prices, the S&P Dow Jones Indices is a monthly look at home values that has been conducted for more than 27 years. According to the most recent release, national home prices are up 5.8 percent over last year, with the largest gains seen in the West and South.

David M. Blitzer managing director and chairman of the index committee at S&P Dow Jones Indices, says there’s some regional variation in how quickly prices are rising, but generally the issue is the number of homes available for sale. “Over the last year, analysts suggested that one factor pushing prices higher was the unusually low inventory of homes for sale,” Blitzer said in a press release. “People are staying in their homes longer rather than selling and trading up.” Because of this, there are fewer homes for buyers to choose from but home sellers, on the other hand, enjoy increasingly favorable conditions. And yet, many current homeowners are staying put.

If more homeowners put their homes up for sale, and new home construction continues to improve, the market will balance in the coming months and home price increases will begin to moderate.

 

This advertisement is provided by Jennifer Bixby, part of the Bixby & Sorensen Team and the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

 

Today’s Typical Home Sells in Less than a Month

Home buyers are out in large numbers this spring. Proof of that can be found in the most recent sales report from the National Association of Realtors. Their monthly tally of how many previously owned homes sold the month before found that the typical home for sale was on the market for just 29 days in April, down from 34 days the previous month.

That’s a strong indication that buyer demand is outpacing the number of homes for sale this spring. And that’s saying something, especially since April saw a 7.2 percent increase in for-sale inventory by the end of the month. In other words, there are more homes coming on the market but still not enough to match the number of interested home buyers.

Lawrence Yun, NAR’s chief economist, says affordable homes are going fastest. “Homes in the lower and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.” But despite the competition, buyers aren’t deterred. In fact, the number of first-time home buyers was up for the month and, a look at regional results, shows existing home sales are above or even with last year’s results in the South, West, and Midwest.

 

 

 

This article is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate and member of the Bixby & Sorensen Team, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

Housing Markets Nationwide Hit Key Milestone

There are many ways to gauge the health of the housing market. But no matter which way you look at it, the ultimate goal is to figure out where things are headed and how that will affect home buyers and sellers, as well as current and future homeowners.

In other words, the data may differ but it’s all getting at the same question. Take the National Association of Home Builders’ Leading Markets Index – which compares current conditions to previous norms. The NAHB’s index looks at employment info, home prices, and building permits in 340 metropolitan areas across the country in an effort to determine how those markets have rebounded since the housing crash and what they should expect going forward.

According to the latest results, markets nationwide are running at an average of 100 percent of normal economic and housing activity. And, if that sounds good, it’s because it is. “This is the first time the LMI has reached this key milestone and it shows how much our industry has improved since the depth of the Great Recession,” Granger MacDonald, NAHB’s chairman, said in a press release. But though the data shows great strides across a majority of markets, it also shows that – while employment levels and home prices have rebounded strongly – building permits still lag behind. That’s an issue because many markets are in need of new homes to help provide options for buyers and keep affordability conditions under control.

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his article is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

 

Fixer-Uppers Prove Popular with First Time Home Buyers

Last year, first-time home buyers spent 22 percent more renovating their new house than buyers the year before. The increase shows a significant spike in younger buyers who are willing to take on the challenge of buying a fixer-upper.

But what’s behind the surge? Well, one obvious reason to buy a house in need of some work is price. Naturally, if you’re going to find a bargain, it’s likely going to be because the house isn’t in the best shape. Depending on how handy you are – or how much savings you’ve built up – you may be inclined to grab a lower-priced house with a plan to upgrade it to your liking.

The other reason, which would help explain the recent spike, are current market conditions. Since inventory in many markets is low, there are fewer homes available for buyers to choose from. That means, more buyers are going to have to look at homes that may need a little help.

Nino Sitchinava, principal economist for Houzz, the company who conducted the survey, says recent buyers are always a big share of renovations and low inventory of affordable homes is helping to boost those numbers. “Younger and cash-constrained first-time buyers are responding to the low inventory of affordable homes by purchasing properties that require more than just cosmetic upgrades.”

 

This article is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

Millennials Turn Traditional When it’s Time to Buy

Whenever the topic of millennial home buyers comes up, the assumption is that they’re all searching for urban lofts and using the latest tech to find them. In other words, the next generation of home buyers isn’t interested in the old way of doing things.

However, survey after survey seems to contradict those assumptions. In fact, recent surveys have found millennials are far more traditional than most assume. For example, a recent survey of Americans between the ages of 18 and 34 found large majorities said they’d prefer to work with a local real-estate agent and lender as opposed to online services when searching for a house to buy.

Doria Lavagnino, co-founder and president of CentSai, the company behind the survey, says younger buyers want the comfort and reassurance of a recommendation from someone they trust. “Buying a home for the first time is daunting, and working with a local agent – particularly an agent referred by a parent or friend – could provide peace of mind.” The survey also found a majority of respondents said they plan to buy in the next two years and – among those who said they don’t plan on buying – nearly 70 percent said it’s because they can’t afford to, rather than because they prefer to rent.

 

 

 

This article is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

What does it Mean when a Home’s Sale is Pending?

There are steps to buying a home. You don’t just find a house, make an offer, and move in as soon as it’s accepted. In fact, though having an offer accepted is a big step, it’s really just the first of the closing process.

There are many things that need to be done before your accepted offer becomes a final sale. During this process, the house you’ve chosen is taken off the market but not officially sold. Until you’ve got keys to the house, it’s considered a “pending sale” or “under contract”.

Pending sales are important because they can be a good indicator of where home sales are headed. Because of this, the National Association of Realtors keeps track each month of the number of homes that are under contract as a way of watching what’s ahead for the market. For example, the NAR’s most recent Pending Home Sales Index was virtually flat from the month before. These results show that low inventory may be holding home sales back. “Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range,” Jennifer Bixby said.

In other words, what we can learn from how many pending sales there were in April is that buyers should be prepared to move fast this spring and sellers should expect to find favorable conditions.

 

 

 

This article is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

Educated Buyers Make Happier Homeowners

The best defense against making avoidable mistakes is education. The more you know about something, the less likely you are to screw it up. So you’d think home buyers would want to learn as much as possible before heading out to find a house to purchase. After all, buying a house is major financial transaction and a serious commitment. Yet, surveys of potential home buyers consistently find that large majorities of them share in some common misconceptions about what it takes to buy a house and how the process should unfold.

Recently, Fannie Mae’s Economic & Strategic Research Group interviewed real estate agents, buyers, and loan officers in an effort to figure out why there isn’t more focus on homeownership education before buying. Not surprisingly, most of their answers boiled down to there not being enough time during the process to focus on education. But common misunderstandings about down payment requirements, financing options, and the added costs of homeownership can scare off buyers or lead them to make unwise financial decisions. That’s why it’s always important, as a buyer, to ask questions along the way.

Though you may not have time for hitting the books, you can always lean on the expertise and knowledge of the professionals you hired to guide you along the way.

 

This article is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

Why Aren’t More Homeowners Looking To Sell?

Recent real estate data shows home buyer demand is high. There are a lot of buyers looking to take advantage of current conditions out of concern that mortgage rates may go up this year or prices will rise further. That, along with pent-up demand from younger buyers and previously underwater homeowners looking to finally move, means it should be a great time to sell a house.

So, if buyer demand is up and conditions are right, why aren’t more homeowners putting their homes up for sale? Well one reason, according to a recent survey, is that they’re afraid they won’t be able to find a suitable replacement for their current home. With inventory tight in many markets, some homeowners – who may otherwise be ready to sell – say they’re hesitant.

However, as more homeowners get in the market and off the sidelines, that will begin to change. In the meantime, buyers looking to purchase a home this spring should expect to see available homes for sale selling more quickly than they did last year.

In other words, there will likely be some competition for hot properties. Interested buyers will have to move fast. One way to beat the competition is to be prepared. If you’re a buyer, have your financing lined up in advance and have a professional Realtor working for you. Experienced representation will be key to winning negotiations in this hot market.

 

This article is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

Will This Year Be Better For Buyers Or Sellers?

If you want to know whether this year is going to be good for buyers or sellers or both, you need to watch for a couple of factors. First, take a look at the housing market. A recent uptick in mortgage rates, combined with higher prices and lower inventory, have made buying a home slightly less affordable than it was a couple of years ago.

However, mortgage rates are still historically low and, though prices continue to rise, they have slowed down. That means, though affordability isn’t what it was a few years ago, buying a home remains an affordable choice. This is especially true when taken together with recent economic data. That’s because, whether or not higher rates will deter potential buyers really depends more on whether or not those buyers feel financially secure and optimistic about their prospects. In other words, if Americans continue to see better job opportunities and higher wages, they’ll be less likely to hesitate when thinking about buying a house regardless of where rates and prices go.

According to the most recent outlook from Fannie Mae’s Economic & Strategic Research Group, how things play out will depend largely on young Americans. “Tight inventory remains a boon to home prices and Americans’ net worth, but it also continues to price out many would-be first-time homebuyers.” However, our research suggests that aging millennials, now boasting higher real wages, are beginning to narrow the homeownership attainment gap.

 

This advertisement is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St. Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.