David Breidenbach
Century 21 Award

Realtor®

CA DRE License Number: 01297253

Century 21 Award
9934 Mercy Road, Suite 200 San Diego CA 92129

​4/21/2016​


CALIFORNIA ASSOCIATION OF REALTORS



C.A.R. Market Matters

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Home prices see highest increase since 2007

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Why Housing Will Spring Ahead

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March existing home sales and median price accelerate from previous month and year

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Potential home buyers sidelined until their credit improves

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It Could Take Years for Millennials to Save for a Down Payment

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Additional Stories

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Talking Points

      

 

 

 

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March existing home sales and median price accelerate from previous month and year
Source: C.A.R.

California home sales rose from both the previous month and year to post the highest sales pace in six months, while strained housing supplies continued to push home prices higher, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Making sense of the story

  • Existing, single-family home sales totaled 415,220 in March on a seasonally adjusted annualized rate, up 5.5 percent from February and 5.7 percent above March 2015.
  • March’s statewide median home price was $483,280, up 8.9 percent from February and up 4 percent from March 2015.
  • The median number of days it took to sell a single-family home declined in March to 29.9 days, compared with 41.4 days in February and 34.2 days in March 2015.
  • March’s sales level rose above the 400,000 level for the first time in three months.
  • C.A.R. President Pat “Ziggy” Zicarelli commented, “California’s housing market is moving in the right direction as we enter the spring home-buying season, but sales growth will likely be isolated in areas where inventory is more abundant and housing affordability is less of an issue. For example, in the Bay Area, where inventory is extremely tight, annual sales are down in the double-digits in seven of the region’s nine counties.”
  • The number of active listings increased slightly for the third consecutive month after declining for five straight months, but was not enough to boost housing supplies. Active listings increased 3.9 percent from February on a statewide basis.
  • The increase in active listings was outpaced by the rate of home sales, causing C.A.R.’s Unsold Inventory Index to drop from 4.6 months in February to 3.6 months in March.

Read the full story

Talking Points …

  • Existing home sales surged 5.1 percent to an annual rate of 5.33 million units last month. February's sales pace was revised slightly down to 5.07 million units from the previously reported 5.08 million units, according to the National Association of REALTORS®.
  • Economists had forecast sales rising 3.5 percent to a 5.30 million-unit pace in March. Sales were up 1.5 percent from a year ago. The number of unsold homes on the market in March rose 5.9 percent from February to 1.98 million units. Supply was, however, down 1.5 percent from a year ago.
  • Existing home sales rose in all four regions last month, jumping 11.1 percent in the Northeast and accelerating 9.8 percent in the Midwest.

Home prices see highest increase since 2007
Source: HousingWire

According to RealtyTrac’s March and Q1 U.S. Home Sales report, home sellers in March sold their homes for an average 17  percent gain, or $30,500 more than the purchase price, making it the highest average monthly price gain for home sellers since December of 2007. The largest gains occurred in San Francisco with a 72 percent gain. This was followed by San Jose, California with gains of 60 percent; Boulder, Colorado with 53 percent; Prescott, Arizona with 51 percent; and Los Angeles at 48 percent. However, in California, increased home prices have caused a slower start to the spring home-buying season, with a decrease of 4.7 percent in home sales from March 2015.
Read the full story

 

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Why Housing Will Spring Ahead

Source: Wall St. Journal

 

Full-fledged recovery for housing is still a while away. But after a long time of near dormancy, it looks like it is starting to stir, as the conditions for improvement are there. The job market has continued to strengthen—there were 2.8 million more people working last month than in the same month a year ago. More people are striking out on their own: Goldman Sachs estimates the number of newly formed households eclipsed 1 million last year, marking the first time that has happened since 2006. What’s more, the firm estimates 1.2 million new households will be added in each of the next four years. That being said, the U.S. housing market isn’t close to what historically would be considered normal. Last year, a combined 5.1 million new and used homes were sold in the U.S—not quite as many as in 1998, when the working-age population was one-fifth lower than it is now.
Read the full story


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Potential home buyers sidelined until their credit improves
Source: HousingWire

 
Thirty-four percent of future home buyers think their credit scores could hurt their chances of owning a home, according to a recent survey by Experian. Also, 45 percent even delayed purchasing a home in order to work on improving their credit score. On a positive note, many of these future home buyers are taking an active role in improving their credit score. Nearly 70 percent of the respondents stated they are paying their bills on time, and 60 percent are paying off debt. Another 28 percent of future home buyers are also keeping balances low on credit cards and 15 percent are protecting their credit information from identity theft and fraud. The survey also found that 35 percent of future buyers said they don’t know what steps to take to qualify for a greater loan amount.
Read the full story


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It Could Take Years for Big-City Millennials to Save for a Down Payment

Source: Bloomberg

 

Millennials are looking forward to buying a home, but many have grossly underestimated just how much they'll need for that all-important down payment. Millennials in about half of large metropolitan areas are underestimating how much they'll need for a down payment on their first home and are not saving at a fast enough pace, according to a new report. Surveyed millennials reported current savings at $14,469, monthly savings of $360, and help from outside sources of $8,264, on average. At that pace, it'll take them nearly 28 years to save enough money for a down payment, even though 37 percent of millennials said they're planning to buy between three and five years from now.
Read the full story


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Confidence Among U.S. Homebuilders Little Changed in April
Source: Bloomberg

The housing market lacked momentum as the spring selling season got under way based on the National Association of Home Builders/Wells Fargo builder sentiment gauge, which held at 58 this month. It has been at 58 since February, as confidence among U.S. homebuilders was little changed in April. Readings greater than 50 mean more respondents report good market conditions. Better buyer traffic and growing optimism about the outlook for the next six months made up for a drop in current sales of single-family homes, the report showed, underscoring that demand is lackluster even as hiring strengthens and borrowing costs remain low. Overall, builders appear to remain cautiously optimistic about construction growth in 2016.
Read the full story
 

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

​4/14/2016​


CALIFORNIA ASSOCIATION OF REALTORS

C.A.R. Market Matters

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Mortgage Rates for 30-Year U.S. Loans Drop to Lowest Since 2013

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Mortgage Credit Availability Tightens Up

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Investors shift to niche properties; fewer paying all cash, C.A.R. survey finds

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Student Debt Is Holding Back Millennials? Not So Fast

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Homes with Barn Doors and Farmhouse Sinks Fetch Higher Prices

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

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Investors shift to niche properties; fewer paying all cash, C.A.R. survey finds
Source: C.A.R.

More real estate investors are turning to niche properties and away from investing in single-family homes and multifamily properties than they have in recent years, according to a CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) survey of its members about their interactions with real estate investors. C.A.R.’s 2016 California Investor Survey found 10 percent of investors purchased commercial, land, mobile homes, or other types of properties in the past year, up from 7 percent in 2015 and 6.7 percent in 2014.

Making sense of the story

  • Given a lack of inventory of distressed homes on the market, the share of single-family homes being purchased by investors has been declining gradually since 2013.
  • Seventy percent of investors purchased single-family homes in 2016, down from 78 percent in 2013.
  • The share of investors who purchased multifamily properties also declined slightly, dipping from 21 percent in 2015 to 19 percent in 2016.
  • Among the reasons investors cited for buying include good location (38 percent), followed by rate of return (30 percent), good price (17 percent), and future development potential (7 percent).
  • With fewer available distressed properties, the share of equity transactions has increased steadily, rising from 70 percent in 2014 to 87 percent in 2016.
  • Fewer investors (62 percent) are renting out their properties in 2016, compared to last year (65 percent).
  • Twenty-six percent of investors are flipping their properties, unchanged from last year, but down from 28 percent in 2014. Twelve percent plan to leave the property vacant, use it as a vacation rental, or other use.

Read the full story

Talking Points …

  • Total mortgage application volume jumped 10 percent last week from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association. Near record low mortgage rates may be pushing more home buyers into this spring's housing market.
  • Refinance applications have been surging for weeks and gained 11 percent last week, seasonally adjusted.
  • Mortgage applications to purchase a home, which fell two weeks ago despite lower rates, kicked into gear last week, rising a solid 9 percent from the previous week and 24 percent compared with one year ago. This is the second-highest level for purchase applications since May 2010.

Mortgage Rates for 30-Year U.S. Loans Drop to Lowest Since 2013
Source: Bloomberg

The average rate for a 30-year fixed mortgage was 3.58 percent, down from 3.59 percent last week and the lowest since May 2013, according to Freddie Mac. Overall, mortgage rates for 30-year U.S. loans dropped to the lowest level in almost three years, aiding home buyers during the housing market’s busiest season for transactions. The average 15-year rate slipped to 2.86 percent from 2.88 percent. Mortgage rates are not expected to increase anytime soon. The Federal Reserve decided to hold interest rates unchanged last month to wait for more clarity on whether slower growth abroad will hobble the U.S. economy.
Read the full story

 

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Mortgage Credit Availability Tightens Up

Source: DSNews.com

 

Mortgage credit availability fell 0.2 percent to 123.5 in March, according to the Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers Association (MBA).  The report states, “A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.” Administrative changes drove declines in the availability of conventional and super conforming loan programs, and those were partially offset by slightly relaxed lending standards on government lending programs. Overall, these findings are confirmed by Fannie Mae’s first quarter 2016 Mortgage Lender Sentiment Survey, which found that the share of lenders that expect credit standards to ease over the next three months decreased from last quarter for all mortgage types.
Read the full story


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Student Debt Is Holding Back Millennials? Not So Fast
Source: Wall St. Journal

 
New research suggests student debt is indeed a barrier for a significant minority—college dropouts—but that it’s generally not holding back those who earned degrees. The key findings: The likelihood of holding a mortgage, getting married, and having children increase with age and educational attainment. And those who took out student debt and earned a degree are far more likely to have done those things than those who borrowed and dropped out. Among 25-to-30-year-olds who borrowed for college and earned a bachelor’s or higher, 38 percent held a mortgage—the highest of any other group. Among those with a bachelor’s or higher who still owed student debt, 35 percent held a mortgage—the second-highest. Those who took out student debt but never earned a degree—just 14 percent had a mortgage.
Read the full story


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Homes with Barn Doors and Farmhouse Sinks Fetch Higher Prices

Source: Yahoo! Finance

 

Homes with barn doors, shaker cabinets, and farmhouse sinks sell for a price 13 percent higher than expected, according to a study that analyzed more than 2 million home listings across the United States between January 2014 and March 2016. From among all 60 terms analyzed, the one that associated with the highest sale premium was “barn doors,’ followed by, in order, shaker cabinet, farmhouse sink, subway tile, quartz, craftsman, and exposed brick. Listings with these keywords also sold significantly faster than others. Other keywords that brought higher prices and faster sales include: pendant light, frameless shower, heated floors, stainless steel, granite, backsplash, tankless water heater, and outdoor kitchen.
Read the full story


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Why rents in SoCal will keep rising in the coming years
Source: KPCC

Researchers found that in 2015, more than 38,000 construction permits were issued in Southern California for new apartment units; however, that inventory will not be enough to satisfy the demand for housing. Therefore, it is expected that the average rent on an apartment in much of Southern California will rise by at least $100 over the next two years. Raphael Bostic, interim director of USC’s Lusk Center for Real Estate, commented, “Though multifamily construction permits are back to pre-recession levels and have provided some relief, population and employment growth are driving up demand faster than new inventory can hit the market. For renters, new construction has simply kept a bad situation from getting drastically worse.”
Read the full story 

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814

 

​4/7/2016 ​

C.A.R. Market Matters

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Does Increase in Renovation Plans Suggest People Unwilling To Move?

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Why Aren’t New Homes Going Up That Millennials Can Afford?

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First-Time Home Buyers Want to Skip the Starter Home, Shop for the Long Term

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No More Garages? Redfin CEO Says Self-Driving Cars Will Change Urban Real Estate

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California's economy expected to outpace that of U.S. this year

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

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First-Time Home Buyers Want to Skip the Starter Home, Shop for the Long Term
Source: HousingWire

As peak home-buying season begins, first-time home buyers are prioritizing their long-term residential needs, according to the inaugural Bank of America Home Buyer Insights Report. Seventy-five percent of first-time buyers would prefer to bypass the starter home and purchase a place that will meet their future needs, even if that means waiting to save more, and 35 percent plan to retire there.

Making sense of the story

  • The same number of home buyers consider saving for or paying off a home (92 percent) as important as saving for retirement (91 percent).
  • Two-thirds of first-time millennial home buyers expect some kind of assistance from their parents when buying a home, ranging from financial support to assistance moving in.
  • More than half of first-time buyers are looking for a home in the suburbs.
  • Eighty-five percent of first-time home buyers would use a tool that automatically withdrew money from their paycheck to save up for a home purchase.
  • First-time home buyers are highly motivated by aspirational and emotional factors when making the decision to buy a home. For instance, 52 percent would like a place to call their own and 43 percent said owning a home is something they have always wanted to do.
  • Thirty-seven percent of first-time buyers said they would rather spend money on a mortgage than rent, 36 percent said they want more space, 17 percent plan to have a child, and 14 percent are getting married.
  • D. Steve Boland, Consumer Lending executive for Bank of America, commented, “Today’s aspiring home buyers want to be selective and believe they should wait until they can afford to buy a home they’ll live in for years to come. They’re also realistic about the need to save for a down payment.”

Read the full story

Talking Points …

  • Mortgage applications slightly grew 2.7 percent from one week earlier, with the seasonally adjusted purchase index decreasing 2 percent from one week earlier, according to the Mortgage Bankers Association.
  • Driving the rise in mortgage applications, the refinance index increased 7 percent from the previous week.  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased from 3.94 percent to 3.86 percent.
  • The Federal Housing Administration’s share of total applications barely fell to 11.3 percent from 11.5 percent the week prior. The Veteran Affairs’ share of total applications decreased to 12.2 percent from 12.9 percent the week prior.

Does Increase in Home Renovation Plans Suggest People Unwilling To Move?
Source: Marketplace

Twenty-eight percent of U.S. homeowners plan to remodel, expand, or otherwise improve their homes in the next 12 months, according to the latest Bankrate Money Pulse survey. Even lower-income homeowners are planning to renovate by using savings, credit cards, or bank loans.  Some people might just be sprucing up their houses to sell them, but planning big projects seems to indicate many homeowners plan to stay put and finally tackle projects they put off during the recession. About 52 percent of homeowners planning a project over the next year indicate they want to work on their driveways, decks, patios, pools, landscaping, or fencing. One professor commented that the housing crisis forced many people to give up on the idea of buying a big, fancy house, especially since housing prices have risen out of reach.
Read the full story


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Why Aren’t New Homes Going Up That Millennials Can Afford?

Source: Yahoo! Finance

 

Hopeful home buyers who have to navigate newly strict lending standards to get the necessary cash for a new home aren’t the only ones facing a hard time to obtain financing.  Developers and builders also have had a harder time getting the financing needed to embark on new projects, which limits the amount of new construction. The bulk of residential construction around the country is done by smaller builders who typically go to local lenders such as banks and credit unions for financing. Robert Dietz, chief economist at the National Association of Home Builders, commented, “There are limits to how fast the industry can grow, given the industry has to rebuild its workforce, rebuild the building lots supply, and also have an increased access to lending for builder loans.”
Read the full story


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No More Garages? Redfin CEO Says Self-Driving Cars Will Change Urban Real Estate
Source: Geek Wire

 
Experts believe self-driving cars will dramatically change transportation and urban life, but it’s not clear how fast such change will transpire. Redfin CEO Glenn Kelman writes, “A third of urban real estate is devoted to parking garages that could become parks; there are eight U.S. parking spaces for every car in operation, for as many as two billion U.S. spaces overall. Thirteen percent of every lot for a typical single-family home is now dedicated to a garage.” He added that a car has been the pet that Americans insist on accommodating, in numbers ten times higher than modern parts of Asia like Hong Kong, despite the space and cost dynamics related to cars that could change with the advent of self-driving vehicles.
Read the full story


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California's economy expected to outpace that of U.S. this year

Source: LA Times

 

The state’s economy will grow faster this year than the national economy, and unemployment will drop to 5 percent in early 2017, according to a new report by the UCLA Anderson Forecast. In 2016, personal income in California will grow 3.6 percent, compared with 4.5 percent in 2015, the report said. Wages and salaries in the state, not adjusting for inflation, will grow about 5.7 percent this year, according to the projections. That's down from 7.5 percent last year. That means Californians will earn $60 billion more in wages than in 2015. The U.S. economy overall will expand 2.7 percent, according to the report.
Read the full story


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Want Solar Panels on Your Roof? Here's What You Need to Know
Source: Atlantic

The cost of solar keeps on falling and the number of installations keeps rising, but there are a lot of important questions to consider before making the jump to solar energy. The nonprofit Interstate Renewable Energy Council has just released a consumer checklist and other resources for rooftop solar since the number of experienced buyers is limited. For instance, it’s advised that potential buyers start with an energy audit and look for efficiency upgrades before you draw up blueprints, as the amount of solar energy you need to produce depends on how much energy you actually use.
Read the full story

Campaign Asks “Who’s Your REALTOR®?”
Source: C.A.R.

On Monday, April 4, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) launched its annual consumer advertising campaign. The campaign illustrates the value REALTORS® provide not only to home buyers and sellers, but also the community at large. C.A.R. partnered with media giants NBC TV and iHeartRadio to help spread the message that California REALTORS® are there to help their clients every step of the way. As part of the campaign, C.A.R. updated its consumer website ChampionsOfHome.com, which provides tips for home buyers and sellers. Consumers also can view the commercials.
More info

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814

 

 

​3/31/2016​


CALIFORNIA ASSOCIATION OF REALTORS

C.A.R. Market Matters

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U.S. Home Prices Still Rising at Steady Clip

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Rising construction costs squeeze housing supply

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Economists Study the Effect of Student Debt on Access to Homeownership

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Hot Housing Markets Pinch Seniors

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Shiller Touts Homeownership as a Savings Program and Investment

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

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Economists Study the Effect of Student Debt on Access to Homeownership
Source: NAR

The rising level of student debt and the relatively high default rates for student loans have raised concerns about the impact on future homeownership among student borrowers. Federal Reserve Board economists Dr. Daniel Ringo and Dr. Alvaro Mezza recently presented the results of a paper estimating the impact of an increase in student debt on homeownership.

Making sense of the story

  • A 10 percent increase in student loan debt decreases the homeownership rate by one to two percentage points 24 months out of school.
  • In terms of numbers, a 10 percent increase in tuition fee (which is associated with student debt) reduces the number of potential homeowners by 280 individuals per 10,000 college goers two years after exiting school, which is equivalent to 170 individuals per 10,000 individuals.
  • A 10 percent increase in student loan debt causes a 0.6 percentage point increase in the probability that the borrower falls into the subprime category (credit score of 620 or less) and a 0.8 percentage point increase in the probability that a borrower falls into deeply subprime.
  • A 10 percent increase in debt is associated with a 0.7 percentage points increase in delinquency rates.
  • The authors did not find conclusive evidence that an increase in student loans leads to a lower mortgage balance.
  • Notably, an increase of 10 percent in student debt only delays the home purchase rate of a given cohort by about three months, based on the authors’ estimates.
  • The authors caution that tighter credit underwriting standards after 2005 suggest that the drag of student debt on homeownership may be greater, with lenders more sensitive to debt-to-income and loan-to-value ratios.

Read the full story

Talking Points …

  • U.S. household spending has fully recovered since the latest recession, but income hasn’t, squeezing budgets and pushing many lower-income families into the red, according to a Pew Charitable Trusts report.
  • Pew found that as of 2014, median income before taxes had fallen by 13 percent from a decade earlier, while expenditures had increased by nearly 14 percent. That left families across the income spectrum with fewer funds for savings and investment.
  • Housing, transportation, and food drove much of the rise in spending, leaving families with less financial wiggle room. Rent is now eating up nearly half of the income of low-income families, Pew found.

U.S. Home Prices Still Rising at Steady Clip
Source: Wall St. Journal

Will the housing market continue to experience tight inventory, thereby leading to rising prices and sales volatility? According to the latest S&P/Case-Shiller Home Price Index, the answer appears to be yes, as home prices continued rising at a steady clip in January with the index rising 5.4 percent in the 12 months ended in January, slightly greater than a 5.3 percent increase in December. The 10-city index gained 5.1 percent from a year earlier and the 20-city index gained 5.7 percent year-over-year. While home-price growth appears to have stabilized at an annual rate of close to 5 percent, the pace of sales has fluctuated, in part because of a lack of homes for sale and because high prices have started to scare some buyers.
Read the full story


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Rising construction costs squeeze housing supply

Source: HousingWire

 

Housing demand in major cities and urban areas is high, but the price to build is expensive, driving prices continually higher. According to analysis presented by Pacific Union Insights, a lack of new construction is a major supply problem facing many desirable and economically vibrant U.S. cities, with California experiencing one of the most severe shortages. California’s regulatory environment poses many obstacles to new construction, causing land prices, labor costs, and home prices to appreciate well above the national average. Millennials in particular are struggling to save enough money for a home since prices are rising faster than their pay.
Read the full story


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Hot Housing Markets Pinch Seniors
Source: Wall St. Journal

 
More than 6.1 million people age 65 and older rented their primary residences in 2014, up 29 percent from 2001, according to Harvard University’s Joint Center for Housing Studies. But with high housing costs and rents increasing, many seniors are facing the financial challenge of affording rent, especially on a fixed income. Seniors have become susceptible to rent increases, particularly in high-demand areas. Many seniors who lost homes in the housing crash will be renting for the rest of their lives, because they have less time than younger households to recover financially. Of all renters, those age 75 and older have the greatest incidence of “severe” cost burdens, meaning more than half of their incomes go to rent, according to Harvard research.
Read the full story


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Shiller Touts Homeownership as a Savings Program and Investment

Source: Fox Business

 

One of the economists who developed the S&P/Case-Shiller Home Price Index, Robert Shiller, touted the benefits of a home as an asset. He stated, “The other thing about housing is that if you put yourself into a mortgage and you pay it off, you’re putting yourself into a saving program. A lot of people don’t save outside of some kind of a discipline device like that. So in that sense housing is a good investment.” Shiller also commented that following the recession, people aren’t as impressed by big McMansions anymore as they used to be and that housing markets are substantially driven by psychology, i.e. the way people think.
Read the full story


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Survey: More Buyers Confident that They Understand the Home-Buying Process
Source: HousingWire

Buyers are becoming more confident that they understand the home-buying process, according to a survey of 1,000 potential home buyers by the online brokerage firm Owners.com. The survey found that 69 percent of respondents gave themselves an “A” or “B” grade when it comes to understanding the home-buying process, suggesting confidence in their ability to navigate the real estate market. Also, 80 percent of home buyers are confident that the 2016 home buying environment will be as good as or better than it was five years ago, and 92 percent say that mortgage interest rates are “somewhat to very important” to their decision on when to buy.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)


C.A.R. Market Matters

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Survey: Financial Illiteracy is Rampant Among College Students

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Fewer of Us Save, More Are Confident of Retirement

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Homeownership increasingly difficult for average Americans

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U.S. new home sales rise on strong gains in the West

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More Americans Are Again Moving to Suburbs Than Cities

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

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Homeownership increasingly difficult for average Americans
Source: Reuters

Home prices are rising faster than wages in most of the United States, making homeownership increasingly difficult for average Americans in some of the most populous areas of the country, according to a report released by RealtyTrac.

Making sense of the story

  • Home prices in 9 percent of the U.S. housing market are now less affordable than their historic norms.
  • The report found that home price growth exceeded wage growth in nearly two thirds of the nation's housing markets so far this year, with urban centers like San Francisco and New York City among the least affordable.
  • The report analyzed median home prices derived from publicly recorded sales deed data and average wage data from the U.S. Bureau of Labor Statistics in 456 U.S. counties with a combined population of 221 million.
  • Out of the 456 counties analyzed in the report, 43 counties (9 percent) had an affordability index below 100 in the first quarter of 2016, meaning buying a home was less affordable than the historically normal level for that county going back to the first quarter of 2005.
  • Daren Blomquist, senior vice president at RealtyTrac, commented, “While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets.”
  • In Q1 2012, when median home prices bottomed out nationally, only two counties out of the 456 analyzed (less than one-half percent) exceeded their historically normal affordability levels.
  • Annual change in median home prices in Q1 2016 outpaced annual change in average weekly wages in Q3 2015 in 276 of the 456 counties analyzed for the report (61 percent).

Read the full story

Talking Points …

  • Investor activity in the existing-home sales market has been on the rise as of late. The share of investor-purchased homes rose from 17 percent in January to 18 percent in February, which was the highest investor share since April 2014.
  • Approximately 64 of those investors paid cash for the homes they purchased in February.
  • As a further indicator that investor activity is increasing, the distressed sales share rose by 1 percentage point over the month in February up to 10 percent (7 percent foreclosures, 3 percent short sales). Investors were also able to purchase distressed inventory at much lower prices in February—the average discount for foreclosed homes during the month was 17 percent below market value, up 4 percentage points from January.

Survey: Financial Illiteracy is Rampant Among College Students
Source: DSNews.com

According to a survey of college students in the Bay Area, 59.3 percent of respondents could not produce a broad definition of a credit score. LendU conducted the survey and its CEO commented, “Unfortunately, we found that the majority of current college students know very little about building and maintaining consumer credit. Our results are once again startling, disturbing, and showcase the appalling level of financial illiteracy among our country’s brightest minds.” Also, 42.4 percent of respondents could not name even one way to improve a credit score. Nearly half (45.5 percent) of respondents could not identify even one factor used to determine a credit score; 65 percent said they did not have a credit card in their own name; and 72 percent of the respondents who did have a credit card said they did not know their credit score.
Read the full story


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Fewer of Us Save, More Are Confident of Retirement

Source: Bloomberg

 

The percentage of workers who are either “very” or “somewhat confident” that they will be able to afford a comfortable retirement now stands at 63 percent, up from 51 percent three years ago and 49 percent in 2011. However, while the retirement confidence of Americans has improved, there hasn’t exactly been a surge in the number of people who are saving, according to the 26th annual Retirement Confidence Survey released by the nonprofit Employee Benefit Research Institute (EBRI). The percentage of workers saying they or their spouse saved for retirement is 69 percent in 2016, down from 75 percent in 2009. Fewer than half of workers (48 percent) have even tried to figure out how much money they'll need to live on in retirement.
Read the full story


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U.S. new home sales rise on strong gains in the West
Source: Reuters

 
New U.S. single-family home sales rebounded modestly in February as a surge in the West offset sharp declines in other regions, pointing to a gradually improving housing sector amid a dearth of properties available on the market. According to the Commerce Department, home sales rose 2.0 percent to a seasonally adjusted annual rate of 512,000 units. January's sales pace was revised up to 502,000 units from the previously reported 494,000 units. New single-family home sales were driven by a 38.5 percent jump in the West last month, which reversed January's 32.7 percent dive.
Read the full story
 


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More Americans Are Again Moving to Suburbs Than Cities

Source: Wall St. Journal

 

The rate at which Americans are moving to the suburbs is once again outpacing the rate at which they are moving to cities. That picks up on a decades-long trend that only very temporarily reversed during the recession. Urban counties grew by 0.8 percent in 2015 to roughly 77 million people, compared with suburban counties, which grew by nearly 1 percent to 159 million people. Suburbs have been outpacing cities in population growth for decades. In 2001, suburbs grew about 1.2 percent while cities grew by about 0.7 percent. The trend was exacerbated by the housing boom, when easy mortgages helped buyers afford homes being built at a rapid pace in far-out suburbs.
Read the full story


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Fannie Mae and Freddie Mac: If You Can’t Kill Them, Merge Them?
Source: Wall St. Journal

What’s the best way to deal with mortgage-finance giants Fannie Mae and Freddie Mac? A group of housing policy experts has come together to propose in a new report that the entities should be merged into a government-owned corporation that would take over the responsibilities of buying mortgages, wrapping them into securities, and guaranteeing investors against default. The new government corporation, which the authors call the National Mortgage Reinsurance Corporation, would be required to sell to investors most of the risk that a mortgage defaults, though the government would ultimately guarantee that mortgage bonds got paid on time. Even if the plan doesn’t soon get traction, it is expected to reframe the debate.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814  

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

ndif]>

​3/17/2016​

 

C.A.R. Market Matters

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Confidence Among Homebuilders Holds at Nine-Month Low

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Fed leaves rates unchanged, sees only two hikes in 2016

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CA home sales gain steam in February as shift toward more affordable areas tempers prices

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Dorms for Adults? Venture Capital’s Answer to High-Priced Housing

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Lenders, Here’s How to Attract First-Time Home Buyers

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

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California home sales gain steam in February as shift toward more affordable areas tempers home prices
Source: C.A.R.

Moderating home price appreciation and improving housing inventory combined to spur California’s housing market in February as existing home sales increased from both the previous month and year, according to the CALIFORNIA ASSOCIATION OF REALTORS®.

Making sense of the story

  • Existing, single-family home sales totaled 393,360 in February on a seasonally adjusted annualized rate, up 2.6 percent from January and 6.4 percent above February 2015.
  • February’s statewide median home price was $446,460, down 4.7 percent from January and up 3.8 percent from February 2015.
  • Statewide sales of condos and townhomes rose 2.6 percent from January and 6.4 percent from February a year ago.
  • The February figure was up 2.6 percent from the revised 383,480 level in January and up 6.4 percent compared with home sales in February 2015 of a revised 369,630. February’s sales level was below the 400,000 level for the second straight month.
  • C.A.R. President Pat “Ziggy” Zicarelli commented, “Market activity continues to be dampened by low housing inventory as baby boomers stay in their homes longer and new home construction, while improving, falls below needed supplies.”
  • The number of active listings increased for the second consecutive month after declining for five straight months. Active listings increased 4.1 percent from January on a statewide basis.
  • The median number of days it took to sell a single-family home declined in February to 41.6 days, compared with 44.5 days in January and 44.1 days in February 2015.

Read the full story

Talking Points …

  • Total mortgage application volume fell 3.3 percent on a seasonally adjusted basis for the week from the previous week, according to the Mortgage Bankers Association.
  • A 6 percent drop in refinance volume was behind the weekly drop. Refinance activity has been falling steadily for the past month, now dipping to its lowest level since August.
  • The average contract interest rates for 30-year fixed rate mortgages with conforming balances ($417,000 or less) increased to 3.94 percent from 3.89 percent, with points increasing to 0.42 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio loans.

Confidence Among U.S. Homebuilders Holds at Nine-Month Low
Source: Bloomberg

Due to the waning of sales prospects, confidence among U.S. homebuilders held in March at a nine-month low, thereby suggesting that the housing market may be struggling to accelerate as the spring-selling season approaches. The National Association of Home Builders/Wells Fargo builder sentiment index was 58 this month, matching the February reading that was the weakest since May. A crimped supply of available properties – especially for first-time buyers – is limiting further improvement. The measure of the six-month outlook declined to 61, a one-year low, from 64. Builder confidence improved in two of four U.S. regions, with the biggest gain coming in the South.
Read the full story


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Fed leaves interest rates unchanged, sees only two hikes in 2016

Source: MarketWatch

 

Citing a weak global environment and volatile stock market, the Federal Reserve this week held interest rates steady and signaled it will lift them more slowly than previously indicated. In a statement, the Fed said it decided to leave the central bank’s benchmark interest rate in a range of 0.25 to 0.5 percent. The decision was widely expected. Fed Chairwoman Janet Yellen said in a statement that while the U.S. economy has been very resilient in recent months there are still risks at play. The good news is that household spending is growing at moderate rate, and continues to improve.
Read the full story


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Dorms for Adults? Venture Capital’s Answer to High-Priced Housing
Source: Wall St. Journal

 
As big cities across the country deal with major housing affordability issues, a handful of smaller startups are experimenting with “coliving,” a concept that involves tiny apartments, shared kitchens and lounges, and a communal atmosphere. Due to strong demand for housing, financial backers for this idea include Fidelity Investments and consumer-focused venture-capital fund Maveron, both of which are betting on hyper-fast expansion and startup-like profit. Venture capitalists seem to hope that 20-something residents moving to new cities will pay a premium to live in clusters of small apartments packed with peers in similar places in their lives. Residents are expected to pay $1,800 a month to live in what is essentially an upscale college dorm or a retirement home for the young.
Read the full story
 


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Lenders, Here’s How to Attract First-Time Home Buyers

Source: Associated Press

 

The share of first-time buyers remained at 32 percent in January for the second consecutive month and is up from 28 percent a year ago, so as first-time buyers slowly but surely make their way into the housing market, lenders can take steps to welcome their entrance into the market. Freddie Mac Vice President Danny Gardner commented, “As an industry, we have to drive a stake through a few stubborn myths that are draining life out of the market. These familiar myths lead potential buyers to overestimate the credit, income, and down payment savings they need for an affordable mortgage.” Low mortgage rates, stabilizing housing markets, and the nation's 86 million millennials and rapidly growing immigrant communities are expected to produce about 1.2 million new households a year for the next ten years.
Read the full story


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REALTORS® worry about shortage of new homes
Source: Consumer Affairs

A survey by the National Association of REALTORS® (NAR) shows a strong preference among consumers for single-family homes in the suburbs, but those homes are getting hard to find. The study reveals that 85 percent of current homeowners and 75 percent of renters would prefer to buy a single-family home. And they aren't looking for homes in the city. Only 15 percent of homeowners and 21 percent of renters would choose to buy a home in an urban area. According to NAR, the current imbalance between supply and demand has caused prices to rapidly escalate in several of the “hot” markets in the U.S. The lack of new homes, coupled with fewer homeowners putting their houses on the market, has created a shortage in some markets, and bidding wars by potential buyers.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

​3/10/2016​


CALIFORNIA ASSOCIATION OF REALTORS

C.A.R. Market Matters

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Millennials in the Burbs? The Latest Home-Buying Trends

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CFPB Director: Mortgage Credit is Still Too Tight

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The Evolving American Household: Growth in Multigenerational Living

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Foreign Buyers Are Pulling Back, REALTORS® Say

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Average US rate on 30-year mortgage edges up to 3.68 percent

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

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The Evolving American Household: Growth in Multigenerational Living
Source: Zillow

A growing share of American households now has three or more generations of the same family living under the same roof. During much of the 19th and early 20th centuries, extended families who were living in tight quarters was the norm, before the post-World War II baby boom pushed more nuclear families to begin forming their own households. But a combination of economic, cultural, and social forces is helping to spur a new rise in multigenerational households.

Making sense of the story

  • Extended families are increasingly driven to live together as a way to deal with housing affordability, and it is also a much more common phenomenon among rapidly growing Asian and Hispanic households.
  • The share of U.S. households with more than three generations under the same roof rose during the Great Recession, and has stayed high.
  • Farming communities and markets in the Southwest tend to have the highest proportions of multigenerational households.
  • Metros with the highest proportions of multigenerational households also tend to have larger shares of residents that work in agriculture.
  • Whites are less apt to live in a multigenerational household. But since 2000, the share of white multigenerational households has grown modestly.
  • Multigenerational households have higher combined incomes than smaller households, but have lower incomes per capita.
  • Asian multigenerational households are more likely to be headed by a member of the “middle” generation—an adult with dependent parents and children.

Read the full story

Talking Points …

  • According to the February Mortgage Bankers Association Builder Application Survey, new home purchases surged 24 percent in February, kicking off the spring buying season.
  • Conventional loans composed 67.7 percent of loan applications, FHA loans composed 18.7 percent, RHS/USDA loans composed 0.8 percent, and VA loans composed 12.8 percent. These levels are not too different from the month prior.
  • The average loan size of new homes increased from $325,806 in January to $328,370 in February.

Millennials in the Burbs? The Latest Home-Buying Trends
Source: Realtor.com

Sayonara, city-dwelling. Hello, suburbs. According to a recent report from the National Association of REALTORS® on generational trends in home buying and selling, just 17 percent of buyers under the age of 35 closed on urban residences, down from 21 percent a year earlier. Skyscraper-high prices in top markets may be pushing millennials to look outside of urban life for a place to call home. Suburbs exerted a strong pull on buyers of all age ranges. About 51 percent of millennial home buyers scooped up residences in the suburbs or a subdivision compared with 58 percent of Generation Xers (ages 36 to 50); 51 percent of baby boomers ages 51 to 60; 53 percent of boomers ages 61 to 69; and 42 percent of the Silent Generation (70 and older).
Read the full story


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CFPB Director: Mortgage Credit is Still Too Tight

Source: DSNews.com

 

In a recent speech, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray called on the mortgage industry to facilitate homeownership for more Americans by addressing the state of credit, which he perceives as too tight. He stated, “There is ample opportunity in the mortgage market as it continues to heal, and you should be doing what you do best: serving your customers through great deals and great customer service. Homeownership still remains the most effective engine of wealth accumulation for the American middle class, and you are the ones who are making that happen and rebuilding a key marketplace that failed this country so brutally less than a decade ago.” The Urban Institute recently confirmed Cordray's remarks by finding that between 2009 and 2014, 5.2 million borrowers with less-than-pristine credit were unable to get a mortgage loan due to tight lending.
Read the full story


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Foreign Buyers Are Pulling Back, REALTORS® Say
Source: Wall St. Journal

 
A strong U.S. dollar and rising home prices have undermined demand from foreign buyers, according to the National Association of REALTORS®. Despite expectations that foreign buyers would flock to the safety of U.S. real estate amidst global economic tumult, there is growing evidence that many foreign buyers have been pulling back, in part because prices in many of the cities they favor, such as New York and San Francisco, have risen sharply. For instance, the median price of existing U.S. homes had increased 67 percent for a buyer from Brazil, factoring in the exchange rate, compared with a year earlier. For a buyer from Canada, it increased 27 percent and for a Chinese buyer, 14 percent.
Read the full story
 

 
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Average US rate on 30-year mortgage edges up to 3.68 percent

Source: Associated Press

 

It was the second straight weekly increase for long-term loan rates, which had declined since the start of the year amid global economic anxiety and market turbulence. It was only the second time this year that rates rose. Mortgage buyer Freddie Mac said the average rate on a 30-year, fixed-rate mortgage edged up to 3.68 percent from 3.64 percent last week. The average rate on 15-year fixed-rate mortgages increased to 2.96 percent from 2.94 percent last week. That being said, rates still remain at historically low levels at the start of the spring home buying season.
Read the full story


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How housing prices are driving low, middle-income families out of California
Source: Pasadena Star-News

High housing costs are pushing many people out of the state of California, despite higher wages and job growth, according to a new report from Beacon Economics. The report notes that 625,000 more U.S. residents left California between 2007 and 2014 than moved into the state. The vast majority ended up in Texas, Oregon, Nevada, Arizona, and Washington. Higher-wage workers continue to move in, which argues against the theory that high taxes are driving people away. Christopher Thornberg, a founding partner with Beacon, commented, “California has an employment boom with a housing problem. The state continues to offer great employment opportunities for all kinds of workers, but housing affordability and supply represent a significant problem.” In 2014, California ranked 49th in homeownership, with only 53.8 percent of homes being owner-occupied.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:

1121 L Street #600, Sacramento CA 95814

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

​2/25/2016​


CALIFORNIA ASSOCIATION OF REALTORS

C.A.R. Market Matters

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New home sales hit 494,000 in January, versus 520,000 estimate

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U.S. housing prices are likely to rise 5 percent in 2016

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California pending home sales take breather in January after months of solid gains last year

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The Incredible Rise of Urban Real Estate

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Sales of Existing U.S. Homes Rise to Second-Highest Since 2007

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

-----------------


California pending home sales take breather in January after months of solid gains last year
Source: C.A.R.

Statewide pending home sales in California decreased in January on a year-over-year basis for the first time since August 2014 as a shortage of homes for sale and low housing affordability persist and volatile financial markets distract buyers, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R).

Making sense of the story

  • Statewide pending home sales fell in January on an annual basis, with the Pending Home Sales Index (PHSI) decreasing 2.9 percent from 98.5 in January 2015 to 95.6 in January 2016, based on signed contracts.
  • On a monthly basis, California pending home sales rose from December, primarily due to seasonal factors.
  • The PHSI increased 21.1 percent from an index of 79 in December to 95.6 in January.
  • At the regional level, pending sales also were lower on a year-over-year basis in all areas. All regions experienced double-digit, month-to-month increases in pending sales.
  • San Francisco Bay Area pending sales rose 13.9 percent from December to reach an index of 106.5 in January, up from December’s 93.5 index and down 4.7 percent from January 2015’s 111.8 index.
  • Pending home sales in Southern California increased 10 percent from December to reach an index of 75.9 in January, up from December’s index of 69 and down 4.1 percent from an index of 79.1 a year ago.
  • Central Valley pending sales rose from December to reach an index of 72.7, up 11.9 percent from December’s 65 index and down 1.1 percent from January 2015’s 73.5 index.

Read the full story

Talking Points …

  • The seasonally adjusted number of homes for sale nationwide fell 8.6 percent year-over-year in January, and has now fallen year-over-year in each of the past 12 months, according to Zillow. Among the 35 largest metro markets, inventory fell year-over-year in January in all but four, and fell by 10 percent or more from last January in 16 of those 35 markets.
  • The one constant across almost every market nationwide is low inventory. And that lack of homes for sale could have big impacts as the market gears up for the busy spring shopping season.
  • Traditionally, when inventory is very low, builders will help fill the void with newly constructed homes. But housing starts reached a three-month low in January, indicating that newly built homes will not be a significant benefit for buyers in coming months.

New home sales hit 494,000 in January, versus 520,000 estimate
Source: CNBC

New U.S. single-family home sales tumbled in January from a 10-month high as sales in the West region plunged, but the overall housing market recovery remains intact. Sales dropped 9.2 percent to a seasonally adjusted annual rate of 494,000 units, almost unwinding December's sharp increase, according to the Commerce Department. December's sales pace was unrevised at 544,000 units. Sales in the West, which has seen a sharp increase in home prices amid tight inventories, plummeted 32.1 percent to a rate of 110,000 units, the lowest level since July 2014.
Read the full story


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U.S. housing prices are likely to rise 5 percent in 2016

Source: Reuters

 

U.S. home prices are likely to rise 5 percent this year, followed by nearly as solid gains in 2017, according to a poll of economic analysts. This prediction is compared with the 4.0 percent forecast in December's poll. In 2017, home prices will rise 4.0 percent, followed by 3.5 percent in 2018, the poll suggested. Notably, some analysts cited the possibility of a U.S. economic slowdown affecting the course of U.S. home prices. Thirty-year U.S. mortgage rates, currently around 3.65 percent, are also seen as unlikely to be a hindrance in the near future. Respondents said they need to rise to around 6.0 percent before starting to seriously restrain housing activity.
Read the full story

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The Incredible Rise of Urban Real Estate
Source: The Atlantic

 
Urban homes nationwide are now valued at roughly 25 percent more than suburban ones on a per-square foot basis ($198 versus $156 per square foot), according to a new report from Zillow. This marks a notable shift from the late 1990s and early 2000s, when urban and suburban homes in the U.S. used to be worth about the same on a per-square foot basis. However, since the mid-2000s, urban homes have been worth more per square foot. By the end of 2015, the average value of an urban home exceeded that of its suburban counterparts by 2 percent ($269,036 compared to $263,987). The extremely high price of urban homes in talent and knowledge hubs of various cities is clearly driving this trend.
Read the full story
 


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Sales of Existing U.S. Homes Rise to Second-Highest Since 2007

Source: Bloomberg

 

In a positive sign for the housing industry, sales of previously owned U.S. homes unexpectedly rose in January to the second-highest pace since early 2007. Closings, which usually take place a month or two after a contract is signed, advanced 0.4 percent to a 5.47 million annual rate. Near record-low mortgage rates, steady job gains, and better wage growth are helping encourage prospective buyers, including first-time purchasers. Compared with a year earlier, purchases increased 7.5 percent in January before adjusting for seasonal variations.
Read the full story


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Home Depot sales beat on housing recovery
Source: Reuters

Home Depot Inc., the world's largest home improvement chain, reported better-than-expected sales, boosted by an improving housing market and mild weather. The store is likely benefiting from a pent-up demand for houses after the 2008 financial recession. Low interest rates and growth in jobs, wages, and credit are also spurring customers to spend more on renovating homes. Net sales rose 9.5 percent to $20.98 billion in the fourth quarter.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

2/11/2016


CALIFORNIA ASSOCIATION OF REALTORS

C.A.R. Market Matters

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Home-Price Growth Sped Up Last Year

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Is a home the new luxury item?

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Inventory shortages push homeownership further out of reach

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Is virtual touring next for the housing market?

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Does Your Gender Affect Your Credit Score?

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Additional Stories

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Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

-----------------


Inventory shortages push homeownership further out of reach
Source: HousingWire

A lack of housing inventory continues to stifle the housing market, making it difficult for potential homeowners to get on the property ladder, according to the latest quarterly report from the National Association of REALTORS® (NAR).

 

Making sense of the story

  • The median existing single-family home price increased in 81 percent of measured markets.
  • The NAR report cited that 145 out of 1791 metropolitan statistical areas (MSAs) had gains based on closings in the fourth quarter compared with the fourth quarter of 2014.
  • There were slightly fewer rising markets in the fourth quarter compared to the third quarter, when price gains were recorded in 87 percent of metro areas.
  • “Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead,” said Lawrence Yun, NAR chief economist. 
  • The unshakeable trend of inadequate supply in relation to the overall pool of prospective buyers inflicted upward pressure on home prices.
  • As a result, homeownership continues to be out of reach for a number of qualified buyers in the top job producing, but costliest, parts of the country – especially on the West Coast and parts of the South.
  • The report also stated that the national median existing single-family home price in the fourth quarter was $222,700, up 6.9 percent from the fourth quarter of 2014.

Read the full story

Talking Points …

  • A sharp drop in interest rates prompted more homeowners to refinance their mortgages last week, especially those with large loans, according to the Mortgage Bankers Association.
  • Total mortgage application volume increased 9.3 percent on a seasonally adjusted basis from the previous week. Interest rate-dependent refinances were almost entirely behind the gains.
  • Applications to refinance a home loan rose 16 percent from the previous week, seasonally adjusted, while those to purchase a home rose just 0.2 percent for the week.

Home-Price Growth Sped Up Last Year
Source: Wall St. Journal

Home-price growth accelerated late last year, as a lack of supply continues to drive up prices despite cooling demand. The national median existing single-family home price grew nearly 7 percent to $222,700 in the fourth quarter, compared with the same time last year, according to a new report from the National Association of REALTORS®. Prices increased 5.4 percent in the third quarter compared with a year earlier. Notably, this increase in price occurred despite the fact that the pace of sales slowed.
Read the full story


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Is a home the new luxury item?

Source: CNBC

 

Almost half of those people who don't own a home said their financial situation is standing in the way, and since finances and bad credit are preventing homeownership for many, a single-family home may soon be considered a luxury item. According to a report by Bankrate.com, 29 percent said they can't afford a down payment and 16 percent said their credit isn't good enough to qualify for a mortgage. Despite mortgage rates near the lowest levels ever, housing prices are also still sky high in many parts of the country, making affordability an issue for many potential homeowners. In addition, low inventory has made the competition stiff for entry-level homes.
Read the full story

 
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Is virtual touring next for the housing market?
Source: HousingWire

 
Virtual touring may be in the near future for the housing market, according to Rich Barton, co-founder of Zillow. He added that virtual reality goggles are “an interesting technology vector that we’re pushing on.” Zillow Group is marking its 10th anniversary. The company has expanded rapidly, now occupying 12 floors with nearly 1,000 employees in Seattle, and 2,200 overall in the U.S. Barton also said that Zillow is also looking at the “basic mechanics of home shopping and the way documents are transferred. That’s going to change. We are going to be leading on all of it.”
Read the full story
 


- - - - - - -

 

Does Your Gender Affect Your Credit Score?

Source: Bloomberg

 

The average credit score in the U.S. for men is 630 out of a possible 850, compared with 621 for women. What's more intriguing is that men maintain that credit edge even though their average overall debt and average credit card balance exceed the averages for women. Men's higher wages may help explain the difference in results, which come from a study of users of the website Credit Sesame. If a higher income means you manage your credit better, you may get a higher credit score and a higher credit limit. A higher limit means that you can carry the same or a higher balance than the next person, but you'll be using a smaller percentage of your available credit. And utilizing a low percentage of your total credit is good for your credit score.
Read the full story


- - - - - - -

Homeowners Reap Bigger Savings on Car Insurance
Source: CFA

According to a new analysis of premiums by the nonprofit Consumer Federation of America (CFA), premiums averaged seven percent higher – about $112 per year – for drivers who rent instead of own homes. Overall, the CFA found that major auto insurance companies charge good drivers as much as 47 percent more for basic liability auto insurance if they don’t own their home. CFA used company websites to solicit two premiums in each city for a 30-year old female motorist who has a 2005 Honda Civic and a perfect driving record.  The only characteristic that was altered during the testing was whether she owned or rented her home.
Read the full story

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1/14/2016
CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA ASSOCIATION OF REALTORS
C.A.R. Market Matters

marketmatters_toc.gif
market_arrow.jpg Return of the Single Female Home Buyer
market_arrow.jpg HUD Secretary Castro Chats Housing on Colbert
market_arrow.jpg The Typical American Lives Only 18 Miles from Mom
market_arrow.jpg Facebook’s 10-Mile, $10,000 Solution to Housing and Long Commutes
market_arrow.jpg Fed: Tight Inventory Still Dogs Housing Markets
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
 
-----------------
 


The Typical American Lives Only 18 Miles from Mom
Source: NY Times

Over the last few decades, Americans have become less mobile, and most adults – especially those with less education or lower incomes — do not venture far from their hometowns, according to analysis from the New York Times. In fact, the typical adult lives only 18 miles from his or her mother.

Making sense of the story

  • The data reveal a country of close-knit families, with members of multiple generations leaning on one another for financial and practical support.
  • Over all, the median distance Americans live from their mother is 18 miles, and only 20 percent live more than a couple hours’ drive from their parents.
  • The biggest determinants of how far people venture from home are education and income. Those with college and professional degrees are much more likely to live farther from their parents than those with a high school education.
  • Wealthier people can afford to pay for services like child and elder care, while low-income families are more likely to rely on nearby relatives. It seems likely that the more education someone has, the farther from home they go.
  • Families live closest in the Northeast and the South, and farthest apart on the West Coast and in the Mountain States. Part of the reason is probably cultural — Western families have historically been the least rooted.
  • Married people live farther from their parents than singles, and women are slightly likelier than men to leave their hometowns.
  • With the exception of college or military service, 37 percent of Americans had never lived outside their hometown, and 57 percent had never lived outside their home state.

Read the full story

Talking Points …

  • Mortgage application volume increased 21.3 percent last week versus the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association (MBA). This proves that the sharp drop in mortgage activity over the holidays was clearly temporary.
  • Lynn Fisher, MBA's vice president of research and economics, commented "The good news for the new year is that following the holidays, application activity last week resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off."
  • Mortgage applications to purchase a home increased 18 percent from the previous week, seasonally adjusted, and were 19 percent higher than the same week one year ago. Applications to refinance loans increased 24 percent last week from the previous week but were 38 percent lower than the same week one year ago.

Return of the Single Female Home Buyer
Source: Bloomberg

After the housing crisis, lenders made it harder to qualify for mortgages, and the percentage of single female buyers dropped from 21 percent of purchasers in 2009 to 15 percent this year. But it appears single women could be poised to make a comeback in the housing market. For instance, the majority of respondents to a prospective home buyer survey by real estate brokerage Redfin have been women. In addition, in many U.S. cities, the share of women earning more than $100,000 increased the most from 2012 to 2014. In urban areas, their incomes are rising faster than those of single men.
Read the full story


- - - - - - -
 
 
HUD Secretary Castro Chats Housing on Late Show with Stephen Colbert
Source: Reverse Mortgage Daily
 
 
 
 
Department of Housing and Urban Development (HUD) Secretary Julián Castro appeared as a special guest recently on The Late Show with Stephen Colbert, where he discussed HUD’s role in the housing market recovery and those pesky rumors about the vice president nomination. Castro touted HUD’s efforts to decrease veteran homelessness and the Neighborhood Stabilization Program that helped revitalize neighborhoods across the U.S. that have suffered from foreclosures. Colbert also asked him to rate the likelihood that Clinton actually approached him about being vice president.
Read the full story


- - - - - - -

 
Facebook’s 10-Mile, $10,000 Solution to Housing and Long Commutes
Source: KQED

Tech workers who live in San Francisco and commute to work in Silicon Valley have been blamed for driving up rents in the area and causing congestion on local transportation corridors. Facebook is now offering payments of $10,000 and up to workers who relocate to within 10 miles of its main campus. However, there are concerns that residents in nearby communities — East Palo Alto, Menlo Park and Redwood City, for instance — will be threatened by the announcement, as they will find themselves competing for housing with well-paid Facebook workers. The policy may add to tension in the region about the surge in housing prices and the lack of housing available in the area due to the dominant presence of tech companies.
Read the full story


- - - - - - -

Fed: Tight Inventory Still Dogs Housing Markets
Source: DSNews.com
 
 
 
The Federal Reserve has released its first Beige Book of 2016, and despite existing-home sales falling to their slowest pace in 19 months in November, the 12 Federal Reserve Districts reported mixed but slightly improved housing markets for the six-week period leading up to January 4. Part of the reason that inventories remain low is that residential construction in the single-family home space "remains sluggish, with developers reluctant to build inventories," according to the Fed. Multifamily construction, on the other hand, "continues to be brisk," as most of the 12 districts reported modest or moderate growth in commercial construction. Overall, economic activity expanded in nine of the 12 districts since the previous Beige Book was issued in December.
Read the full story


- - - - - - -

Fannie Mae: Housing market needs incomes to grow
Source: Yahoo! Finance

The chief economist of Fannie Mae is warning that housing affordability—or lack thereof—is going to put a damper on the housing market’s growth. A big factor in the strength of the market and the story for housing is very much tied to whether incomes increase, according to Fannie Mae’s analysis. Doug Duncan, chief economist for Fannie Mae, commented, "Our theme for the year is [that] housing affordability constrains as the expansion matures. Both rents and house prices are appreciating at pretty strong levels. And what is required is to see income growth, particularly at the medium and lower income levels."
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

Powered By Blackbaud
1/7/2016
CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA ASSOCIATION OF REALTORS
C.A.R. Market Matters

marketmatters_toc.gif
market_arrow.jpg U.S. housing data signals economic strength; manufacturing weak
market_arrow.jpg Lack of affordable housing pushes Toyota from California to Texas
market_arrow.jpg California pending home sales dial back in November
market_arrow.jpg Millennial generation most fiscally cautious since Depression
market_arrow.jpg Financing from shadow banks is on the rise
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
View "Beyond the Headlines," a version specifically formatted for consumers that you can print, share via email, or post on your website.
 
-----------------
 


California pending home sales dial back in November
Source: C.A.R.

California pending home sales retreated in November primarily due to seasonal factors and delayed escrow closings caused by new loan disclosure rules, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said. 

Making sense of the story

  • Statewide pending home sales fell in November, with the Pending Home Sales Index (PHSI)* declining 11.4 percent from 113.4 in October to 100.4 in November, based on signed contracts. The month-to-month decrease was the largest since December 2014.
  • On an annual basis, California pending home sales remained strong and continued to improve from 2014 with double-digit gains. Statewide pending sales were up 13.6 percent from the 88.4 index recorded in November 2014. Pending sales have been increasing on a year-over-year basis since November 2014.
  • At the regional level, pending sales were higher on a year-over-year basis in all areas, with Southern California, Central Valley, and San Francisco Bay Area all increasing at a double-digit rate compared to last November. All regions experienced a month-to-month decline in pending sales.
  • The share of equity sales – or non-distressed property sales – dipped slightly in November but remained at the highest levels since the fall of 2007. Equity sales now make up 93.4 percent of all sales, up from 90.9 percent a year ago.
  • With home prices leveling off in recent months, more sellers are adjusting their listing price to become more in line with buyers′ expectations. About one-third (30 percent) of properties had price reductions in November, down from 32 percent in October.
  • When asked what REALTORS®′ biggest concerns are, more than one in four (28 percent) said a shortage of homes for sale, 22 percent indicated declining housing affordability, and 12 percent said overinflated home prices.
  • REALTORS′ were optimistic about next year®s housing market, with the vast majority (89 percent) expecting similar or better market conditions in 2016, the highest share since spring 2015.

Read the full story

Talking Points …

  • America®s 43 million renter households spent $535 billion on rent in 2015, up $19 billion, or 4 (3.7 %) percent, from $516 billion in 2014. The increase was driven both by rising rents and a surge in the number of U.S. renter households, which grew by about 1.8 million this year compared to 2014.
  • The amount spent on rent was roughly evenly split among renters in multifamily apartment buildings, who spent a combined $239 billion, and renters of single-family homes, who spent about $245 billion.
  • American®s 2015 rental expenditures were roughly comparable to the total budget of the Department of Defense (about $575 billion) and almost five times what Americans spent on dental care in 2014. Using his entire net worth – estimated by the 2015 Forbes 400 at $47 billion – Amazon.com CEO Jeff Bezos could have paid roughly one month’s rent for every American renter in 2015.
  • About two-thirds of the total rent paid nationwide in 2015 was paid by renters in the country’s 50 largest metro areas. New York-area renters spent a combined $56 billion on rent in 2015, followed by Los Angeles-area renters (almost $35 billion spent cumulatively on rent in 2015) and San Francisco-area renters (who spent about $17 billion on rent).

U.S. housing data signals economic strength; manufacturing weak
Source:Reuters

As 2015 drew to a close, the Commerce Department reported that building permits in November vaulted 11 percent to a 1.29 million-unit rate, the highest level since June. Groundbreaking jumped 10.5 percent to a seasonally adjusted annual pace of 1.17 million units. With permits running ahead of starts, home building is likely to remain supported in the months ahead. November marked the eighth straight month that housing starts remained above 1 million units, the longest stretch since 2007. Despite these signs of strength in the housing market, other data showed the industrial sector continuing to struggle under the weight of a strong dollar, cutbacks in inventory investment as well as spending cuts by energy firms in response to persistently low oil prices."
Read the full story


- - - - - - -
 
 
Lack of affordable housing pushes Toyota from California to Texas
Source: Dallas Business Journal
 
 
 
 
Toyota recently decided to plant its North American headquarters in Plano, Texas, bringing in more than 3,000 jobs, mostly from Torrance, Calif. According to a professor with inside knowledge of the move, the main driver of Toyota’s move from California was housing costs. Toyota did the math and found that housing costs in Los Angeles County, where Torrance is located, are three times per square foot the cost of a house in Dallas-Fort Worth. The median home in Dallas-Fort Worth costs about $210,000, and the median income is roughly $58,000. In Torrance the median home price is $508,000 and the median income is $76,000.
Read the full story

- - - - - - -

 
Millennial generation most fiscally cautious since Depression
Source: Los Angeles Times

A new study finds that the millennial generation is the most financially conservative since the Great Depression. According to UBS Wealth Management Americas, these younger Americans are reluctant to take big financial risks due to the trauma of the global financial crisis in 2008. More than one-third of people aged 21 to 36 say they're financially conservative and their actions speak even louder than their words. The average millennial has 52 percent of his or her portfolio in cash, more than twice the 23 percent of other investors. A mere 28 percent of millennials see the point of long-term investing, and only 12 percent would stash so-called found money in the stock market, according to the survey.
Read the full story


- - - - - - -

Financing from shadow banks is on the rise
Source: Bloomberg
 
 
 
World Bank data show that the percent of U.S. private-sector funding provided by banks has fallen to almost the lowest point since 1960, illustrating the growing importance of nonbank financing, otherwise known as the "shadow banking system." A strategist who first brought attention to banks misstating key benchmark lending rates during the financial crisis in 2008 is sounding the alarm bells about the economy being much more dependent on the fast-money shadow-bank financing—which is more fickle in terms of extending credit and can expand or contract much quicker. Shadow banking includes all private-sector funding that isn't provided by deposit-taking banks, so it can include bond funds as well as hedge funds, insurance companies, and pension funds.
Read the full story


- - - - - - -

Nearly 95 percent of young renters want to buy, but many say they can't afford it
Source: Wall St. Journal

A recent survey by the National Association of REALTORS® finds that nearly 95 percent of renters 34 years old or younger want to own a home in the future and overall, 83 percent of renters said they have a desire to own. More than half of renters said they haven’t yet bought a home because they couldn't afford one, while just 19 percent said they prefer the flexibility of renting. Notably, only half of all households polled—renters and homeowners—said they believe the economy is currently improving, and 44 percent said they believe the country is in a recession, so there is a lack of optimism about the economic conditions that will allow them to pursue homeownership.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

Powered By Blackbaud

​1/14/2016​


CALIFORNIA ASSOCIATION OF REALTORS

C.A.R. Market Matters

marketmatters_toc.gif

market_arrow.jpg

Return of the Single Female Home Buyer

market_arrow.jpg

HUD Secretary Castro Chats Housing on Colbert

market_arrow.jpg

The Typical American Lives Only 18 Miles from Mom

market_arrow.jpg

Facebook’s 10-Mile, $10,000 Solution to Housing and Long Commutes

market_arrow.jpg

Fed: Tight Inventory Still Dogs Housing Markets

market_arrow.jpg

Additional Stories

market_arrow.jpg

Talking Points

      

 

-----------------


The Typical American Lives Only 18 Miles from Mom
Source: NY Times

Over the last few decades, Americans have become less mobile, and most adults – especially those with less education or lower incomes — do not venture far from their hometowns, according to analysis from the New York Times. In fact, the typical adult lives only 18 miles from his or her mother.

Making sense of the story

  • The data reveal a country of close-knit families, with members of multiple generations leaning on one another for financial and practical support.
  • Over all, the median distance Americans live from their mother is 18 miles, and only 20 percent live more than a couple hours’ drive from their parents.
  • The biggest determinants of how far people venture from home are education and income. Those with college and professional degrees are much more likely to live farther from their parents than those with a high school education.
  • Wealthier people can afford to pay for services like child and elder care, while low-income families are more likely to rely on nearby relatives. It seems likely that the more education someone has, the farther from home they go. 
  • Families live closest in the Northeast and the South, and farthest apart on the West Coast and in the Mountain States. Part of the reason is probably cultural — Western families have historically been the least rooted.
  • Married people live farther from their parents than singles, and women are slightly likelier than men to leave their hometowns.
  • With the exception of college or military service, 37 percent of Americans had never lived outside their hometown, and 57 percent had never lived outside their home state.

Read the full story

Talking Points …

  • Mortgage application volume increased 21.3 percent last week versus the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association (MBA). This proves that the sharp drop in mortgage activity over the holidays was clearly temporary.
  • Lynn Fisher, MBA's vice president of research and economics, commented “The good news for the new year is that following the holidays, application activity last week resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off.”
  • Mortgage applications to purchase a home increased 18 percent from the previous week, seasonally adjusted, and were 19 percent higher than the same week one year ago. Applications to refinance loans increased 24 percent last week from the previous week but were 38 percent lower than the same week one year ago.

Return of the Single Female Home Buyer
Source: Bloomberg

After the housing crisis, lenders made it harder to qualify for mortgages, and the percentage of single female buyers dropped from 21 percent of purchasers in 2009 to 15 percent this year. But it appears single women could be poised to make a comeback in the housing market. For instance, the majority of respondents to a prospective home buyer survey by real estate brokerage Redfin have been women. In addition, in many U.S. cities, the share of women earning more than $100,000 increased the most from 2012 to 2014. In urban areas, their incomes are rising faster than those of single men.
Read the full story


- - - - - - -

 

HUD Secretary Castro Chats Housing on Late Show with Stephen Colbert

Source: Reverse Mortgage Daily

 

Department of Housing and Urban Development (HUD) Secretary Julián Castro appeared as a special guest recently on The Late Show with Stephen Colbert, where he discussed HUD’s role in the housing market recovery and those pesky rumors about the vice president nomination. Castro touted HUD’s efforts to decrease veteran homelessness and the Neighborhood Stabilization Program that helped revitalize neighborhoods across the U.S. that have suffered from foreclosures. Colbert also asked him to rate the likelihood that Clinton actually approached him about being vice president.
Read the full story


- - - - - - -

Facebook’s 10-Mile, $10,000 Solution to Housing and Long Commutes
Source: KQED

 
Tech workers who live in San Francisco and commute to work in Silicon Valley have been blamed for driving up rents in the area and causing congestion on local transportation corridors. Facebook is now offering payments of $10,000 and up to workers who relocate to within 10 miles of its main campus. However, there are concerns that residents in nearby communities — East Palo Alto, Menlo Park and Redwood City, for instance — will be threatened by the announcement, as they will find themselves competing for housing with well-paid Facebook workers. The policy may add to tension in the region about the surge in housing prices and the lack of housing available in the area due to the dominant presence of tech companies.
Read the full story
 


- - - - - - -

 

Fed: Tight Inventory Still Dogs Housing Markets

Source: DSNews.com

 

The Federal Reserve has released its first Beige Book of 2016, and despite existing-home sales falling to their slowest pace in 19 months in November, the 12 Federal Reserve Districts reported mixed but slightly improved housing markets for the six-week period leading up to January 4. Part of the reason that inventories remain low is that residential construction in the single-family home space “remains sluggish, with developers reluctant to build inventories,” according to the Fed. Multifamily construction, on the other hand, “continues to be brisk,” as most of the 12 districts reported modest or moderate growth in commercial construction. Overall, economic activity expanded in nine of the 12 districts since the previous Beige Book was issued in December.
Read the full story


- - - - - - -

Fannie Mae: Housing market needs incomes to grow
Source: Yahoo! Finance

The chief economist of Fannie Mae is warning that housing affordability—or lack thereof—is going to put a damper on the housing market’s growth. A big factor in the strength of the market and the story for housing is very much tied to whether incomes increase, according to Fannie Mae’s analysis. Doug Duncan, chief economist for Fannie Mae, commented, “Our theme for the year is [that] housing affordability constrains as the expansion matures. Both rents and house prices are appreciating at pretty strong levels. And what is required is to see income growth, particularly at the medium and lower income levels.”
Read the full story

marketmatters_sm.gif
FacebookLinkedInTwitterYouTube

 

 


C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

<![if f]>

​1/7/2016​


CALIFORNIA ASSOCIATION OF REALTORS

C.A.R. Market Matters

marketmatters_toc.gif

market_arrow.jpg

U.S. housing data signals economic strength; manufacturing weak

market_arrow.jpg

Lack of affordable housing pushes Toyota from California to Texas

market_arrow.jpg

California pending home sales dial back in November

market_arrow.jpg

Millennial generation most fiscally cautious since Depression

market_arrow.jpg

Financing from shadow banks is on the rise

market_arrow.jpg

Additional Stories

market_arrow.jpg

Talking Points

      

View “Beyond the Headlines,” a version specifically formatted for consumers that you can print, share via email, or post on your website.

 

 

-----------------


California pending home sales dial back in November
Source: C.A.R.

California pending home sales retreated in November primarily due to seasonal factors and delayed escrow closings caused by new loan disclosure rules, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said. 

Making sense of the story

  • Statewide pending home sales fell in November, with the Pending Home Sales Index (PHSI)* declining 11.4 percent from 113.4 in October to 100.4 in November, based on signed contracts. The month-to-month decrease was the largest since December 2014.  
     
  • On an annual basis, California pending home sales remained strong and continued to improve from 2014 with double-digit gains. Statewide pending sales were up 13.6 percent from the 88.4 index recorded in November 2014. Pending sales have been increasing on a year-over-year basis since November 2014. 
     
  • At the regional level, pending sales were higher on a year-over-year basis in all areas, with Southern California, Central Valley, and San Francisco Bay Area all increasing at a double-digit rate compared to last November. All regions experienced a month-to-month decline in pending sales.
     
  • The share of equity sales – or non-distressed property sales – dipped slightly in November but remained at the highest levels since the fall of 2007. Equity sales now make up 93.4 percent of all sales, up from 90.9 percent a year ago.
     
  • With home prices leveling off in recent months, more sellers are adjusting their listing price to become more in line with buyers’ expectations. About one-third (30 percent) of properties had price reductions in November, down from 32 percent in October.
     
  • When asked what REALTORS®’ biggest concerns are, more than one in four (28 percent) said a shortage of homes for sale, 22 percent indicated declining housing affordability, and 12 percent said overinflated home prices.
     
  • REALTORS® were optimistic about next year’s housing market, with the vast majority (89 percent) expecting similar or better market conditions in 2016, the highest share since spring 2015.

Read the full story

Talking Points …

  • America’s 43 million renter households spent $535 billion on rent in 2015, up $19 billion, or 4 (3.7 %) percent, from $516 billion in 2014. The increase was driven both by rising rents and a surge in the number of U.S. renter households, which grew by about 1.8 million this year compared to 2014.
  • The amount spent on rent was roughly evenly split among renters in multifamily apartment buildings, who spent a combined $239 billion, and renters of single-family homes, who spent about $245 billion.
  • American’s 2015 rental expenditures were roughly comparable to the total budget of the Department of Defense (about $575 billion) and almost five times what Americans spent on dental care in 2014. Using his entire net worth – estimated by the 2015 Forbes 400 at $47 billion – Amazon.com CEO Jeff Bezos could have paid roughly one month’s rent for every American renter in 2015.
  • About two-thirds of the total rent paid nationwide in 2015 was paid by renters in the country’s 50 largest metro areas. New York-area renters spent a combined $56 billion on rent in 2015, followed by Los Angeles-area renters (almost $35 billion spent cumulatively on rent in 2015) and San Francisco-area renters (who spent about $17 billion on rent).

U.S. housing data signals economic strength; manufacturing weak
Source: Reuters

As 2015 drew to a close, the Commerce Department reported that building permits in November vaulted 11 percent to a 1.29 million-unit rate, the highest level since June. Groundbreaking jumped 10.5 percent to a seasonally adjusted annual pace of 1.17 million units. With permits running ahead of starts, home building is likely to remain supported in the months ahead. November marked the eighth straight month that housing starts remained above 1 million units, the longest stretch since 2007. Despite these signs of strength in the housing market, other data showed the industrial sector continuing to struggle under the weight of a strong dollar, cutbacks in inventory investment as well as spending cuts by energy firms in response to persistently low oil prices.”
Read the full story


- - - - - - -

 

Lack of affordable housing pushes Toyota from California to Texas 

Source: Dallas Business Journal

 

Toyota recently decided to plant its North American headquarters in Plano, Texas, bringing in more than 3,000 jobs, mostly from Torrance, Calif. According to a professor with inside knowledge of the move, the main driver of Toyota’s move from California was housing costs. Toyota did the math and found that housing costs in Los Angeles County, where Torrance is located, are three times per square foot the cost of a house in Dallas-Fort Worth. The median home in Dallas-Fort Worth costs about $210,000, and the median income is roughly $58,000. In Torrance the median home price is $508,000 and the median income is $76,000.
Read the full story

- - - - - - -

Millennial generation most fiscally cautious since Depression
Source: Los Angeles Times

 
A new study finds that the millennial generation is the most financially conservative since the Great Depression. According to UBS Wealth Management Americas, these younger Americans are reluctant to take big financial risks due to the trauma of the global financial crisis in 2008. More than one-third of people aged 21 to 36 say they’re financially conservative and their actions speak even louder than their words. The average millennial has 52 percent of his or her portfolio in cash, more than twice the 23 percent of other investors. A mere 28 percent of millennials see the point of long-term investing, and only 12 percent would stash so-called found money in the stock market, according to the survey.
Read the full story
 


- - - - - - -

 

Financing from shadow banks is on the rise

Source: Bloomberg

 

World Bank data show that the percent of U.S. private-sector funding provided by banks has fallen to almost the lowest point since 1960, illustrating the growing importance of nonbank financing, otherwise known as the “shadow banking system.” A strategist who first brought attention to banks misstating key benchmark lending rates during the financial crisis in 2008 is sounding the alarm bells about the economy being much more dependent on the fast-money shadow-bank financing—which is more fickle in terms of extending credit and can expand or contract much quicker. Shadow banking includes all private-sector funding that isn't provided by deposit-taking banks, so it can include bond funds as well as hedge funds, insurance companies, and pension funds.
Read the full story


- - - - - - -

Nearly 95 percent of young renters want to buy, but many say they can't afford it
Source: Wall St. Journal

A recent survey by the National Association of REALTORS® finds that nearly 95 percent of renters 34 years old or younger want to own a home in the future and overall, 83 percent of renters said they have a desire to own. More than half of renters said they haven’t yet bought a home because they couldn’t afford one, while just 19 percent said they prefer the flexibility of renting. Notably, only half of all households polled—renters and homeowners—said they believe the economy is currently improving, and 44 percent said they believe the country is in a recession, so there is a lack of optimism about the economic conditions that will allow them to pursue homeownership.
Read the full story

marketmatters_sm.gif
FacebookLinkedInTwitterYouTube

 

 


C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

 

 

 

 

             

Copyright © 2016 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

 



12/17/2015
CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA ASSOCIATION OF REALTORS
C.A.R. Market Matters

marketmatters_toc.gif
market_arrow.jpg Job Growth to Finally Boost Homebuilding?
market_arrow.jpg The Hot, New Company Benefit: Student Debt Repayment
market_arrow.jpg Study Finds Majority of Millennials Have $1,000 or Less in Savings
market_arrow.jpg Half of all U.S. renters are over 40
market_arrow.jpg Here's why 2016 will bring good news for potential home buyers
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
View "Beyond the Headlines," a version specifically formatted for consumers that you can print, share via email, or post on your website.
 
-----------------
 


Study Finds Majority of Millennials Have $1,000 or Less in Savings
Source: Bustle

Millennials are projected to number 75.3 million for 2015, surpassing a projected 74.9 million for Baby Boomers. Millennials will therefore comprise a greater percentage of the population than Baby Boomers for the first time. Howmuch.net conducted a survey to gain insight into the saving habits of this age group. Since millennials are growing as a percentage of the population, their savings and spending habits will increasingly have a major impact on the overall economy.

Making sense of the story

  • More than 50 percent of millennials have less than $1,000 in savings. This would indicate that most millennials do not have a cushion to fall back on in case of an emergency, not to mention the funds for a down payment on a home.
  • The survey found 56.3 percent of millennials earning $25,000 to $49,000 had less than $1,000 in savings. This compared with 31.2 percent of those earning $75,000 to $99,999.
  • Among those earning $100,000 to $149,000, 14.8 percent had savings of $5,000 to $10,000.
  • Also, 14.3 percent of those with savings of $10,000 to $20,000 were those millennials with incomes in excess of $150,000, the highest percentage in that range of savings.
  • For a gender comparison, 56.7 percent of females have less than $1,000 in savings as compared to 46.5 percent for males.
  • Notably, 57.6 percent of respondents from the ages of 18 to 24 have less than $1,000 in savings. This compared to 47.1 percent of those from the ages of 25 to 34.
  • For savings of $1,000 to $5,000, 19.6 percent of respondents from 18 to 24 had savings in this range, compared to 16.6 percent of those from 25 to 34.

Read the full story

Talking Points …

  • The aggregate home equity position of U.S. households has shown continued improvement. Household holdings of real estate totaled $21.826 trillion in the third quarter of 2015, $1.365 trillion higher than its level in the third quarter of 2014, , $20.461 trillion, according to the Federal Reserve’s Financial Accounts of the U.S.
  • At the same time, home mortgage debt outstanding, $9.460 trillion in the third quarter of 2015, rose by $78.0 billion over the same period. Since the total value of household-held real estate rose faster than the aggregate amount of mortgage debt outstanding, then home equity held by households grew.
  • Over the year, total home equity held by households grew by $1.286 trillion, 11.6 percent, to $12.366 trillion. Household’s home equity is now 56.7 percent of household real estate.

Job Growth to Finally Boost Homebuilding?
Source: REALTOR® Magazine

The construction sector is expected to add 790,400 jobs through 2024 – the fourth highest job growth projection among major industries, according to the Bureau of Labor Statistics (BLS). "In percentage terms, the construction sector ranks second in terms of expected growth," the National Association of Home Builders reports on the findings. "The construction industry is expected to experience 1.2 percent compounded annual growth for jobs over 2014-2024." However, even with the uptick, employment in the construction sector still would not be pushed above 2004 levels. From 2004 to 2014, about 837,800 construction jobs were lost on a net basis.
Read the full story


- - - - - - -
 
 
The Hot, New Company Benefit: Student Debt Repayment
Source: Bloomberg
 
 
 
 
A handful of companies are offering to pay part of their employees' student debts, an increasingly popular perk that could help employees improve their finances, such as having the means to save for a down payment on a home. However, student loan payment programs are still a relatively uncommon perk. Only 3 percent of more than 450 surveyed companies offer student loan repayment programs as a part of their benefit plans, according to the Society for Human Resource Management's 2015 Employee Benefit Survey. As college graduates have more and more debt to deal with, this benefit could become a more popular trend. Some predict that debt repayment will become as common as health benefits.
Read the full story


- - - - - - -

 
Half of all U.S. renters are over 40
Source: Marketplace

While millennials are certainly renting, so too are their parents—so much so that there just doesn't seem to be enough affordable rental units to go around. Christopher Herbert, Managing Director of Harvard University's Joint Center for Housing Studies, commented, "We've seen vacancy rates at their lowest level in decades and rents growing at their fastest pace in 30 years. With all those people looking for rentals, it's increasing competition and making the market ever tighter." The increase in older renters is a legacy of the housing crisis, and with all generations hoping to rent, prices are going up.
Read the full story


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Here's why 2016 will bring good news for potential home buyers
Source: HousingWire
 
 
 
Redfin's forecast for 2016 pronounces that, "Most economists agree that housing prices and sales will continue to grow in 2016, just at a slower pace. Call it a slowdown, but not bad news." The online portal notes that the housing market will be fairly uneventful next year, but moderate growth is more sustainable, and therefore better for buyers. Redfin's five housing market predictions for 2016 include prices and sales will grow half as fast, and Americans will have a better shot at qualifying for a mortgage with easier credit. Redfin also expects first-time buyers to make up a bigger portion of the market than they did this year.
Read the full story


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8 Surprising Predictors of Housing Prices
Source: Realtor.com

It's no surprise that home buyers and owners like to know which way prices are heading. But when it comes to nailing the best deal in real estate, there are eight surprising indicators of change in home prices, according to realtor.com®. For instance, a study found that for every $1 decrease in gas prices, home prices increase by roughly $4,000 and the average time to sell a property decreases by 25 days. And it's not just gas prices that are worth monitoring. Homes near a Trader Joe's are worth 5 percent more than homes near a Whole Foods, according to RealtyTrac. Also, moving a residential housing unit one mile closer to a professional sports facility increases its value by $793. Other indicators include marijuana laws, casinos, temperature changes, trees on a street, and proximity to highways.
Read the full story

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EDITED BY: Jeannette Brown

 

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12/14/2015
CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA ASSOCIATION OF REALTORS
C.A.R. Market Matters

marketmatters_toc.gif
market_arrow.jpg Americans' household wealth falls for first time in 4 years
market_arrow.jpg Mortgage market will completely recover next year
market_arrow.jpg Nearly Half of Renters Put Too Much Toward Rent
market_arrow.jpg Average rate on 30-year mortgages rises to 3.95 Percent
market_arrow.jpg Are we Driving into Another Housing Bubble?
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
View "Beyond the Headlines," a version specifically formatted for consumers that you can print, share via email, or post on your website.
 
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Nearly Half of Renters Put Too Much Toward Rent
Source: Wall St. Journal

A record number of renters are spending more than 30 percent of their incomes on rent, which is a ratio that economists consider financially burdensome, according to a report released this week by Harvard University’s Joint Center for Housing Studies titled, "America’s Rental Housing: Expanding Options for Diverse and Growing Demand."

Making sense of the story

  • More than 21 million households are burdened by how much they pay in rent, up from fewer than 15 million in 2001.
  • Nearly half of renters are paying more than 30 percent of their incomes in rent, the report says. While that is a slight improvement from 2011, it remains above where it has been for most of the last 13 years.
  • Inflation-adjusted rents rose 7 percent from 2001 to 2014, while renter household incomes fell 9 percent, creating affordability challenges for many renters.
  • In contrast, the number of rental units expanded by just 8.2 million, most of that from the conversion of single-family homes into rentals.
  • Another factor exacerbating affordability is that much of the new supply is aimed at higher-income renters. The median asking rent for new market-rate apartments hit $1,372 last year, a 26 percent increase from 2012.
  • The number of higher-income renters earning $100,000 or more has grown by 1.6 million over the last decade.  Households over age 40 now make up the majority of renters, according to the report.
  • It is likely to take years for some of housing being built now to come down in price, leaving cities struggling to hold onto middle-class families.

Read the full story

Talking Points …

  • Despite dropping 6 percent, mortgage applications for new home purchases still came in better than expected, the Mortgage Bankers Association's Builder Application Survey data for November 2015.
  • Broken up by product type, conventional loans composed 68.4 percent of loan applications, FHA loans composed 18.1 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 12.6 percent.
  • Additionally, the average loan size of new homes decreased from $320,881 in October to $320,854 in November.

Americans' household wealth falls for first time in 4 years
Source: LA Times

Household net worth fell for the first time in four years after the stock market's sharp decline in August and September took its toll on Americans' finances in the third quarter. According to the Federal Reserve, Americans' stock and mutual fund portfolios plunged $2.3 trillion in the July-September quarter. That far outweighed a $482 billion increase in home values. Overall, household net worth fell to $85.2 trillion from $86.4 trillion in the second quarter. While this could affect consumer spending, consumer credit, which includes auto loans, student loans, and credit cards, increased at a solid 7.2 percent annual rate. Outstanding mortgage debt rose 1.6 percent.
Read the full story


- - - - - - -
 
 
Mortgage market will completely recover next year 
Source: HousingWire
 
 
 
 
The consumer lending market, including mortgages, is expected to recover completely in 2016, according to a new report from Transunion. The report states that the mortgage market will return to its pre-crisis state by the end of 2016. It forecasts that the national mortgage loan serious delinquency rate, which is the ratio of borrowers 60 or more days past due, will decline from 2.5 percent at the end of 2015 to 2.06 percent at the conclusion of 2016. The average mortgage debt per consumer is projected to finish 2015 at $189,917 and rise to $192,512 by the end of 2016.
Read the full story


- - - - - - -

 
Average rate on 30-year mortgages rises to 3.95 Percent
Source: LA Times
 
Amid expectations that the Federal Reserve will raise its key short-term interest rate next week, average long-term U.S. mortgage rates edged higher this week following three straight weeks of declines. Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage rose to 3.95 percent from 3.93 percent a week earlier. The average rate on 15-year fixed-rate mortgages increased to 3.19 percent from 3.16 percent. The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan remained at 0.5 point.
Read the full story


- - - - - - -

Are we Driving into Another Housing Bubble?
Source: DS News
 
 
 
As home prices soar to new heights—with no sign of decline—housing bubbles appear to be popping up in many markets. For example, Zillow's Home Price Expectations Survey of 108 panelists showed that one-third of respondents agreed that the San Francisco housing market is in a bubble, while 20 percent indicated that the market is at-risk for bubble conditions in the next year. In addition to San Francisco, California, New York City, New York; Houston, Texas, and Los Angeles, California; Miami, Florida; San Diego, California; and Seattle, Washington were at the top of Zillow's list markets that are already in a housing bubble.
Read the full story


- - - - - - -

35 Percent of U.S. Markets at New All-Time Home Price Peaks in 2015
Source: Realty Trac

RealtyTrac released its October 2015 U.S. Home Sales Report, which shows that among 94 major metro areas analyzed for the report, 33 markets (35 percent) have now reached new all-time home price peaks in 2015. The report also shows that the median sales price of U.S. single family homes and condos in October was $207,500, up 1 percent from the previous month and up 10 percent from a year ago — the highest year-over-year percentage increase since February 2014.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

 

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020

FOR PERMISSION TO REPRINT CONTENT FROM C.A.R. MARKET MATTERS, please complete this request form.

Copyright © 2015 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

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12/10/2015
CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA ASSOCIATION OF REALTORS
C.A.R. Market Matters

marketmatters_toc.gif
market_arrow.jpg Americans' household wealth falls for first time in 4 years
market_arrow.jpg Mortgage market will completely recover next year
market_arrow.jpg Nearly Half of Renters Put Too Much Toward Rent
market_arrow.jpg Average rate on 30-year mortgages rises to 3.95 Percent
market_arrow.jpg Are we Driving into Another Housing Bubble?
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
View "Beyond the Headlines," a version specifically formatted for consumers that you can print, share via email, or post on your website.
 
-----------------
 


Nearly Half of Renters Put Too Much Toward Rent
Source: Wall St. Journal

A record number of renters are spending more than 30 percent of their incomes on rent, which is a ratio that economists consider financially burdensome, according to a report released this week by Harvard University’s Joint Center for Housing Studies titled, "America’s Rental Housing: Expanding Options for Diverse and Growing Demand."

Making sense of the story

  • More than 21 million households are burdened by how much they pay in rent, up from fewer than 15 million in 2001.
  • Nearly half of renters are paying more than 30 percent of their incomes in rent, the report says. While that is a slight improvement from 2011, it remains above where it has been for most of the last 13 years.
  • Inflation-adjusted rents rose 7 percent from 2001 to 2014, while renter household incomes fell 9 percent, creating affordability challenges for many renters.
  • In contrast, the number of rental units expanded by just 8.2 million, most of that from the conversion of single-family homes into rentals.
  • Another factor exacerbating affordability is that much of the new supply is aimed at higher-income renters. The median asking rent for new market-rate apartments hit $1,372 last year, a 26 percent increase from 2012.
  • The number of higher-income renters earning $100,000 or more has grown by 1.6 million over the last decade.  Households over age 40 now make up the majority of renters, according to the report.
  • It is likely to take years for some of housing being built now to come down in price, leaving cities struggling to hold onto middle-class families.

Read the full story

Talking Points …

  • Despite dropping 6 percent, mortgage applications for new home purchases still came in better than expected, the Mortgage Bankers Association's Builder Application Survey data for November 2015.
  • Broken up by product type, conventional loans composed 68.4 percent of loan applications, FHA loans composed 18.1 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 12.6 percent.
  • Additionally, the average loan size of new homes decreased from $320,881 in October to $320,854 in November.

Americans' household wealth falls for first time in 4 years
Source: LA Times

Household net worth fell for the first time in four years after the stock market's sharp decline in August and September took its toll on Americans' finances in the third quarter. According to the Federal Reserve, Americans' stock and mutual fund portfolios plunged $2.3 trillion in the July-September quarter. That far outweighed a $482 billion increase in home values. Overall, household net worth fell to $85.2 trillion from $86.4 trillion in the second quarter. While this could affect consumer spending, consumer credit, which includes auto loans, student loans, and credit cards, increased at a solid 7.2 percent annual rate. Outstanding mortgage debt rose 1.6 percent.
Read the full story


- - - - - - -
 
 
Mortgage market will completely recover next year 
Source: HousingWire
 
 
 
 
The consumer lending market, including mortgages, is expected to recover completely in 2016, according to a new report from Transunion. The report states that the mortgage market will return to its pre-crisis state by the end of 2016. It forecasts that the national mortgage loan serious delinquency rate, which is the ratio of borrowers 60 or more days past due, will decline from 2.5 percent at the end of 2015 to 2.06 percent at the conclusion of 2016. The average mortgage debt per consumer is projected to finish 2015 at $189,917 and rise to $192,512 by the end of 2016.
Read the full story


- - - - - - -

 
Average rate on 30-year mortgages rises to 3.95 Percent
Source: LA Times
 
Amid expectations that the Federal Reserve will raise its key short-term interest rate next week, average long-term U.S. mortgage rates edged higher this week following three straight weeks of declines. Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage rose to 3.95 percent from 3.93 percent a week earlier. The average rate on 15-year fixed-rate mortgages increased to 3.19 percent from 3.16 percent. The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan remained at 0.5 point.
Read the full story


- - - - - - -

Are we Driving into Another Housing Bubble?
Source: DS News
 
 
 
As home prices soar to new heights—with no sign of decline—housing bubbles appear to be popping up in many markets. For example, Zillow's Home Price Expectations Survey of 108 panelists showed that one-third of respondents agreed that the San Francisco housing market is in a bubble, while 20 percent indicated that the market is at-risk for bubble conditions in the next year. In addition to San Francisco, California, New York City, New York; Houston, Texas, and Los Angeles, California; Miami, Florida; San Diego, California; and Seattle, Washington were at the top of Zillow's list markets that are already in a housing bubble.
Read the full story


- - - - - - -

35 Percent of U.S. Markets at New All-Time Home Price Peaks in 2015
Source: Realty Trac

RealtyTrac released its October 2015 U.S. Home Sales Report, which shows that among 94 major metro areas analyzed for the report, 33 markets (35 percent) have now reached new all-time home price peaks in 2015. The report also shows that the median sales price of U.S. single family homes and condos in October was $207,500, up 1 percent from the previous month and up 10 percent from a year ago — the highest year-over-year percentage increase since February 2014.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown

Copyright © 2015 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

Powered By Blackbaud
12/3/2015
CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA ASSOCIATION OF REALTORS
C.A.R. Market Matters

marketmatters_toc.gif
market_arrow.jpg Americans Spent More on Housing, Health Care Last Year
market_arrow.jpg 40 percent of young adults who live on their own still get money from parents
market_arrow.jpg 2016 home sales to be best since 2006
market_arrow.jpg U.S. construction spending rises solidly to near 8-year high
market_arrow.jpg Helsinki Suburb Offers Millennials Cheap Rent if They Live in a Senior Center
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
View "Beyond the Headlines," a version specifically formatted for consumers that you can print, share via email, or post on your website.
 
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2016 home sales to be best since 2006
Source: CNBC

New home construction and moderate gains in the existing home market will deliver the necessary one-two punch to push total home sales to the highest levels since 2006, according to the 2016 housing forecast issued today by realtor.com®.

Making sense of the story

  • The 2016 housing market is expected to be a picture of moderate but solid growth as acceleration in existing home sales and prices both slow to 3 percent year over year due to higher mortgage rates, continuing tight credit standards, and lower affordability.
  • The new construction market will see more significant gains in the coming year as new home starts increase 12 percent year over year and new home sales grow 16 percent year over year.
  • Total sales for existing and new homes will reach 6 million for the first time since 2006, a result of a strong gross domestic product increase of 2.5 percent and continued job creation.
  • These healthy economic indicators will be tempered by lack of access to credit and rising home prices, which will ultimately limit housing demand and growth.
  • Chief Economist Jonathan Smoke commented, "Next year's moderate gains in existing prices and sales, versus the accelerated growth we've seen in previous years, indicate that we are entering a normal, but healthy housing market."
  • Millennials are expected make up the largest demographic of home buyers in 2016, having represented 30 percent of the existing home market. Driven by increasing income, millennials will seek out homes that meet the needs of their growing families.
  • Providence, Rhode Island, is ranked as the hottest market for 2016, with the San Diego region and Sacramento also in the top 10.

Read the full story

Talking Points …

  • Pending home sales barely moved in October as the housing market starts to flatline in the fall, according to the most recent report from the National Association of REALTORS®.
  • The index, a forward-looking indicator based on contract signings, has now increased year over year for 14 consecutive months. In fact, October’s pending sales were 3.9 percent above October 2014.
  • Despite rising prices and tight inventories in the West, the region posted a 1.7 percent uptick in October and is 10.4 percent above a year ago.

Americans Spent More on Housing, Health Care Last Year
Source: Wall St. Journal

The Commerce Department reports that housing and utilities and health care accounted for almost one-third of the rise in consumer spending nationwide in 2014. This confirms fears that rising housing costs are at least partly squeezing out some discretionary spending. Across all states, spending on housing and utilities grew 4.1 percent in 2014, with North Dakota posting the biggest rise at 8 percent. Nationwide, spending was up 4.2 percent last year versus 3.1 percent in 2013.
Read the full story


- - - - - - -
 
 
40 percent of young adults who live on their own still get money from parents
Source: Yahoo! Finance
 
 
 
 
More than 40 percent of young adults between the ages of 25 and 32 who don’t live at home still receive some sort of financial help from their parents. This lack of financial independence was analyzed in in the journal Social Currents by Anna Manzoni, an assistant professor of sociology at North Carolina State University. Manzoni also found that attending a four-year educational institution makes people more likely to rely on mom and dad, especially those from higher socioeconomic backgrounds. Notably, those who received financial aid from their parents during college are also more likely to live with their parents post-grad than those who paid for school on their own.
Read the full story


- - - - - - -

 
U.S. construction spending rises solidly to near 8-year high
Source: Reuters

While there has been some slowing in consumer spending and persistent weakness in manufacturing, the national economy may be on firmer ground as U.S. construction spending rose more than expected in October with outlays rising across the board. Construction spending increased 1.0 percent to a seasonally adjusted $1.11 trillion rate, the highest level since December 2007, after an unrevised 0.6 percent gain in September, according to the Commerce Department. Construction spending has risen every month this year and is likely to support the economy in the final three months of the year.
Read the full story


- - - - - - -

Helsinki Suburb Offers Millennials Cheap Rent if They Live in a Senior Center
Source: The Atlantic
 
 
 
Helsinki reportedly has notoriously high rents, so millennials under the age of 25 took notice when they could grab a small studio apartment for $265 a month. But notably, the studios are located in a home for seniors, one where the young studio-dwellers would be expected to spend three-to-five hours a week with the older residents. The city-funded project aims to address youth homelessness, reduce social isolation, and encourage mixing between the generations. Younger people get an affordable place to live and some contact with older folks who aren’t their grandparents. The idea has been applauded as a way to provide young people with a socially useful way to find affordable housing while making senior homes livelier, less isolated places.
Read the full story


- - - - - - -

Real Home Prices Could Take 17 Years to Return to Peak
Source: Wall St. Journal

New analysis by real-estate information firm CoreLogic finds that when adjusted for inflation, home prices are years away from hitting the lofty heights of the housing boom. Indeed, economists there say that prices are unlikely to surpass 2006 levels until 2023 or beyond, some 17 years past the peak. The rise and fall in prices without adjusting for inflation matter for existing homeowners because they determine whether or not they are underwater on their mortgages. The rapid run-up in prices in recent years has made it easier for people to sell their homes because they no longer owe more on their mortgage than the home is worth.
Read the full story

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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

If you wish to update the email address to which this newsletter is sent, please do not reply to this email. EMAIL ADDRESS change requests must be directed to your local association.

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CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA ASSOCIATION OF REALTORS
C.A.R. Market Matters

marketmatters_toc.gif
market_arrow.jpg Renters aren’t saving to buy a house
market_arrow.jpg Embracing Big Data: The Future of Real Estate
market_arrow.jpg Higher interest rates lower CA housing affordability in 3rd quarter
market_arrow.jpg The U.S. May Be the World’s Richest Country, But It Ranks 14th in Financial Literacy
market_arrow.jpg U.S. housing starts hit seven-month low
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
View "Beyond the Headlines," a version specifically formatted for consumers that you can print, share via email, or post on your website.
 
-----------------
 


Higher interest rates lower California housing affordability in third quarter
Source: C.A.R.

California’s housing market softened in October as both statewide sales and median price contracted from the previous month; however, the market is still on target to meet forecast projections, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Making sense of the story

  • Home sales exceeded the 400,000 level in October for the seventh consecutive month and posted higher on a year-to-year basis for the ninth straight month.
  • Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 403,510 units in October, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.
  • The October figure was down 5.1 percent from the revised 425,120 level in September and up 1.3 percent compared with home sales in October 2014 of a revised 398,510.
  • The year-to-year increase was the lowest since January 2015 and was significantly below the six-month average of 9.7 percent observed between April 2015 and September 2015.
  • The median price of an existing, single-family detached California home slipped 1.3 percent in October to $475,990 from a revised $482,150 in September.
  • October’s median price was 5.7 percent higher than the revised $450,460 recorded in October 2014.
  • While sales continued to improve from last year at the state level, the number of active listings continued to drop from the previous year. Active listings for California dropped 5.6 percent from September and decreased 7.6 percent from October 2014.

Read the full story

Talking Points …

  • About 0.38 percent of loans went into the foreclosure process during the third quarter, which is the lowest rate since the second quarter of 2005, according to a new report from the Mortgage Bankers Association.
  • About 3.57 percent of loans were at least 90 days past due, the lowest rate since the third quarter of 2007. A healthy job market and rising home prices have led to a steady abatement of the foreclosure crisis over the past five years.
  • Now, the foreclosure problem is largely isolated to loans made before 2009 and a few intractable markets that have been slow to process them.

Renters aren’t saving to buy a house
Source: CNBC

Renters in survey after survey say they want to be home buyers, but are they setting aside the cash to make it happen? Not according to a survey conducted in October by Harris Poll for Freddie Mac. More renters said they consider saving for emergencies (59 percent), retirement (51 percent), and children's education (50 percent) an "essential/high priority." Only 39 percent said saving for a down payment was a high priority. This is particularly surprising given fast-rising rents. The share of renters who say they now have to put off plans to purchase a home rose to 55 percent in October from 44 percent in the last Freddie Mac survey.
Read the full story


- - - - - - -
 
 
Embracing Big Data: The Future of Real Estate 
Source: C.A.R.
 
 
 
 
C.A.R. Chief Technology Officer Josh Sharfman recently convened four experts for a special roundtable, hosted by the Center for California Real Estate, to discuss the future of big data and real estate. As the prevalence and usability of data science continues to grow across the real estate industry, it’s important for the real estate industry to embrace big data. The panel covered the practical applications of big data to the real estate field and why being proactive with big data can benefit REALTORS® strategically both now and in the long run.
Read the full story


- - - - - - -

 
The U.S. May Be the World’s Richest Country, But It Ranks 14th in Financial Literacy
Source: Wall St. Journal

Financial literacy is an important part of becoming a homeowner and maintaining a home in good financial standing. But a sprawling global survey of financial literacy around the world finds that the U.S. ranks 14th, behind Singapore and the Czech Republic. Despite widespread use of financial products like credit cards, mortgages, and student debt, U.S. financial literacy was relatively weak and some developed countries were even weaker. In most developed countries, including the U.S., young people have lower financial literacy scores than middle-aged people. This pattern, however, is reversed in the developing world, as in China.
Read the full story


- - - - - - -

U.S. housing starts hit seven-month low; setback seen as temporary
Source: Reuters
 
 
 
A steep decline in the construction of multi-family homes weighed down U.S. housing starts, which fell to a seven-month low in October. However, a surge in building permits suggested the housing market remained on solid ground. October marked the seventh straight month that starts remained above 1 million units, the longest stretch since 2007. Building permits increased 4.1 percent to a 1.15 million-unit rate. The Commerce Department reported that groundbreaking dropped 11 percent to a seasonally adjusted annual pace of 1.06 million units last month, the lowest level since March.
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The Impact of Student Loan Debt on the Housing Decisions of Young Renters
Source: Harvard

A new research brief from Harvard University analyzes the extent to which young renter households in their 20s and 30s are burdened by their student loan payments and explore the potential implications of these payment burdens on future decisions to pursue homeownership. Reflecting both increases in student loan payment amounts and income declines among young renters, the research finds that the prevalence of young renters with medium or high student debt burdens accelerated following the Great Recession. Between 2007 and 2013, the share of young renters with high student loan burdens nearly quadrupled, from 5 percent to 19 percent.
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C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown, jeannetteb@car.org

 

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C.A.R. Market Matters

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market_arrow.jpg A Record Share of Young Women Are Living at Home
market_arrow.jpg There Are Plenty of New Apartments Being Built — Just Not Affordable Ones
market_arrow.jpg Higher interest rates lower CA housing affordability in 3rd quarter
market_arrow.jpg Larger US homes: Offsetting gains from energy efficiency
market_arrow.jpg Key reasons why 2016 is a good time to buy a home
market_arrow.jpg Additional Stories
market_arrow.jpg Talking Points
 
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Higher interest rates lower California housing affordability in third quarter
Source: C.A.R.

Relatively flat home prices weren’t enough to ease housing affordability as higher interest rates reduced the number of Californians who could buy a home in the third quarter, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Making sense of the story

  • Twenty-nine percent of California households could afford to purchase the $487,420 median-priced home in the third quarter, down from 30 percent in second-quarter 2015 and unchanged from 29 percent in third quarter 2014.
  • A minimum annual income of $98,350 was needed to make monthly payments of $2,460, including principal, interest, and taxes on a 30-year, fixed-rate mortgage at 4.16 percent interest rate.
  • Thirty-eight percent of home buyers were able to purchase the $390,740 median-priced condo or townhome. An annual income of $78,840 was required to make a monthly payment of $1,970.
  • The median home price was $485,910 in second-quarter 2015, and an annual income of $96,140 was needed to purchase a home at that price. The effective composite interest rate in second-quarter 2015 was 3.95 percent.
  • Compared to the previous year, housing affordability declined in all regions except Marin, San Luis Obispo, Santa Barbara, and Santa Cruz, which improved, and held steady in five regions (Napa, Orange, Monterey, Merced, and Placer).
  • The remaining 19 regions (Alameda, Contra Costa, San Francisco, San Mateo, Santa Clara, Solano, Sonoma, Los Angeles, Riverside, San Bernardino, San Diego, Ventura, Fresno, Kings, Madera, Sacramento, San Joaquin, Stanislaus, and Tulare) saw declines in housing affordability from the previous year.
  • Other Bay Area counties, such as Santa Clara, Solano, and Sonoma, experienced significant affordability drops as home buyers looking for more affordable homes moved to outlying counties and drove home prices higher.

Read the full story

Talking Points …

  • Newly started foreclosures rose 12 percent in October from September, according to a new report from RealtyTrac, a foreclosure listing company.
  • This is the largest monthly increase since August 2011, and more than twice the gain from September to October in the last five years. Just over 48,000 properties started the process in October, still 14 percent less than a year ago.
  • Part of the annual increase this year could be due to already troubled loans that were modified but are now re-defaulting. More than half (57 percent) of new foreclosures in August were re-defaults, according to Black Knight Financial Services.

A Record Share of Young Women Are Living at Home
Source: Wall St. Journal

New analysis from the Pew Research Center shows that a larger share of young American women are living with family now than at any time since the 1940s, as more of them forgo early marriage for higher education. While the Great Recession nudged many millennials back to their parents’ homes, the shift is particularly apparent among women. In 1940, 36.2 percent of women age 18 to 34 lived with their parents or other relatives, and by 2014, the share of women living with family had climbed back up to 36.4 percent. Women today are five times as likely to be enrolled in college than in 1940, when only 5 percent of 18-to-34-year-olds were pursuing a degree.
Read the full story


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There Are Plenty of New Apartments Being Built—Just Not Affordable Ones 
Source: The Atlantic
 
 
 
 
Rental prices have been skyrocketing in just about every American city. Since the ranks of renters are growing without a corresponding increase in construction, rents are rising across the board. Nationwide, rental prices increased by 3.7 percent from September 2014 to September 2015, according to Zillow. But new analysis shows that the price of housing is increasing a whole lot more for those at the bottom of the economic ladder than for those at the top. A lot more construction is happening at the top of the market, where developers and builders are quickly getting luxury apartments to market. Meanwhile, construction has been slow for cheaper apartments.
Read the full story

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Source: Vox

The average size of American homes has ballooned since 1970. While American homes today are about 31 percent more energy-efficient (as measured in energy use per square foot) than they were in 1970, their growing size has negated these gains in efficiency. In fact, since square footage has risen about 28 percent, on average, there's basically been no change in overall energy intensity. That being said, the shift in US population to the South and Southwest has saved energy for heating and cooling homes.
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Key reasons why 2016 is a good time to buy a home
Source: HousingWire
 
 
 
Key economic indicators and changes to the mortgage process could make 2016 a promising year to become a homeowner. Firstly, rental rates are continuing to rise, and there are no signs that increases will stop in 2016. Secondly, interest rates are still historically very low. Thirdly, new mortgage terms make the process clearer for the purchaser, which could be of great benefit to first-time buyers.
Read the full story

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High Rents Put Would-Be Home Buyers in a Catch-22
Source: DSNews.com

Many would-be home buyers are caught in a catch-22: They cannot afford a down payment because they are putting so much money toward rent, and the reason they are putting so much money toward rent is they can't afford a down payment. Dr. Svenja Gudell, Zillow's Chief Economist, commented, "In general, paying a mortgage is more affordable than renting, and has been for some time. Unfortunately, many current renters aren't able to realize the savings that come with homeownership because as home values and rents keep rising, it's getting increasingly difficult to clear the down payment hurdle." Consequently, 13 percent of home purchases were bought using a loan or gift from friends or family for the down payment.
Read the full story

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This message was sent to breidyiii@gmail.com. Visit your subscription management page to modify your email communication preferences or to update your personal profile. To stop receiving this email in the future, click to remove yourself from this list.

C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Jeannette Brown, jeannetteb@car.org

 

EXECUTIVE OFFICES:
525 South Virgil Ave., Los Angeles CA 90020
phone (213) 739-8200; fax (213) 480-7724

LEGISLATIVE OFFICES:
1121 L Street #600, Sacramento CA 95814
phone (916) 492-5200; fax (916) 444-2033

 

ADVERTISING INQUIRIES: learn how you can advertise in this email newsletter.

If you wish to update the email address to which this newsletter is sent, please do not reply to this email. EMAIL ADDRESS change requests must be directed to your local association.

QUESTIONS OR COMMENTS: contact C.A.R.

FOR PERMISSION TO REPRINT CONTENT FROM C.A.R. MARKET MATTERS, please complete this request form.

Copyright © 2015 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

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