National Average Rent Surges to Record High

After a brief slowdown in the growth of rental prices, they were back on the rise last month, with the national average rent soaring to an all-time high, RentCafé reports. In June, actual rents in the 250 largest U.S. cities rose 2.9 percent and reached an all-time high of $1,405. Renters, on average, are paying $40 more per month than they did a year ago. Renters in Orlando, Fla., saw one of the largest year-over-year increases, at 8.4 percent. Rents averaged $1,387 there in June. Rents in Las Vegas and Phoenix also rose 7 percent and 6.4 percent, respectively.

Demand for rentals is high, fueled by the growing trend of homeowners swapping their homes for rental apartments, says Doug Ressler, director of Business Intelligence at Yardi Matrix. “Generational and demographic changes, shifting employing opportunities, policy and economic influences are impacting the housing market and turning home buyers into renters nationally,” he says. Ressler adds that rapid home appreciation and rising construction costs are having a significant impact as well. “Student loan debt, smaller household sizes, larger down payment requirements, and rising interest rates are also contributing to this change,” he says.

RentCafe chart, highest increases. Visit source link at the end of the article for full text.

Source:
For more info on this article, visit: Realtor Magazine
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Insights from Lee Ann Canaday!

Check out this week’s edition (June 15 2018) of the Orange County Business Journal to see insights from our very own Lee Ann Canaday and learn all there is to know about how to sell and buy homes from the very best in the field!

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Economy Expands in May—Where Does Housing Stand?

The economy in May remained on a soaring streak, with a lift in jobs and the lowest unemployment in years. The expansion is a help for the housing market, but is it enough to relieve supply woes?

According to Lawrence Yun, chief economist of the National Association of REALTORS® (NAR), there is an imbalance between inventory and jobs—conditions that fuel unaffordability, despite earnings increasing 2.7 percent year-over-year.

“Housing demand will be supported by the continuing job gains, even as mortgage rates rise,” Yun said in a statement. “The latest monthly job addition of 223,000 brings the total net new job creations over the past 24 months to 4.4 million. Over the comparable two-year period, however, 2.4 million new housing units were built. In a strong economy such as now, over 3 million homes should have been built.

“With the unemployment rate falling to 3.8 percent—the lowest in 18 years—wages are picking up, but more home construction is needed to better satisfy the rising demand,” said Yun. “Otherwise, the housing shortage will push up home prices out-of-reach, even for households with good stable jobs.”

Encouragingly, construction created 25,000 jobs in May; one factor in the housing shortage has been a scarcity of skilled workers. In April, existing inventory was 6.3 percent lower year-over-year, NAR reported, and existing home prices, over the same time, were up 5.3 percent.

Along with the boost in demand for housing, there is discussion that the employment figures could prompt the Federal Reserve to raise rates four times this year, instead of the projected three. A bump to the central rate could impact mortgage rates, which have been steadily ticking up. The policymaker raised the rate in March, and is meeting next in June.

“[The] pick-up in wage growth will increase the likelihood of the Federal Reserve raising interest rates three more times during 2018,” said Brian Schaitkin, senior economist at The Conference Board, an economic measurer, in a statement. “Given the strong economic environment and increased signs of upward pressure on prices, faster wage growth represents an additional signal to the bank that the economy is bumping up against capacity constraints.”

For more info on the article, visit: RIS Media

Homeowners: May Is the Best Month to Sell

If you are considering listing this spring, now is the time.

May is the best bet for home sellers, according to an analysis by ATTOM Data Solutions, which found that the average seller gains 5.9 percent more than market value—the highest of all months—in the fifth month of the year.

June is profitable for sellers, as well, with an average 5.8 percent premium, with June 28, pointedly, reeling in 9.1 percent—the best day of the year. May 29 and May 31 are also high-returning, with an 8.2 percent premium and an 8.3 percent premium, respectively.

For homeowners, the key is timeliness. According to the analysis, the advantage drops off sharply after June, with a 3.8 percent premium in July, a 4.2 percent premium in August, and back down to a 3.2 percent premium in September. Through the remainder of the year, the average seller earns between 1.6 percent and 2.6 percent over market value—considerably less than had they acted during the May peak.

The analysis findings’ are reminiscent of spring 2017, when May 1 through May 15 was found to be the ideal listing window. The difference now is that inventory is tighter—down 7.2 percent year-over-year—and, although homeowners are getting multiple offers, there is the burden of buying another home at the record prices they are today.

Still, it is a seller’s market, and the numbers have it: In the first three months of 2018, the average seller recouped 29.5 percent, or $53,369 at resale.

 

For more info, visit: RIS Media

Is 2018 the year to buy a house?

Home buyers aren’t going to catch much of a break this year.

Sellers will remain in the driver’s seat as buyers continue to face affordability issues thanks to low housing supply.

“The challenges for buyers in the market haven’t changed that much from last year” said Keith Gumbinger, vice president of mortgage website HSH.com.

What’s more, home loans are expected to get more expensive as the year progresses.

Here’s what home buyers and sellers can expect from the housing market this year:

Homes will remain in tight supply

The supply of housing still won’t be able to keep up with demand this year, experts predict. And the homes that do hit the market will sell fast.

A balanced housing market tends to have about six months of supply, according to Nela Richardson, chief economist at Redfin. In December, the market had less than three months of supply, and homes were selling five days faster than the year before.

Richardson expects 3% more sales this year compared to 2017. But competition will be fierce.

“First-time buyers are going to have to juggle a lot of balls,” she said. “As long as we have an inventory shortage we will have bidding wars.”

The good news is that home building is expected to increase 10% this year, according to Lawrence Yun, chief economist for the National Association of Realtors, to reach around 1.3 million new single-family homes. But that’s still not enough to keep up with population growth and job creation.

Builders had been focusing on the more profitable luxury market during the housing recovery. But Gumbinger expects them to shift downmarket.

“They have been shifting toward more middle-market and starter homes,” he said. “Rather than the 3,500-square-foot home, the focus has been more lower cost.”

Home prices will slow

Home prices have risen exponentially in many housing markets — especially those with thriving job markets. Experts expect home values to continue to rise nationwide — but at a slower pace.

“Prices cant go up at the pace they have been in those hot markets forever,” said Gumbinger. “Because of the difficult in affordability, sales will slow in those marketplaces.”

Richardson is expecting a 6% increase in home prices nationally this year while Yun predicts a more temperate 2% gain.

Yun said southern states like Texas, Florida, and Georgia could see stronger home price appreciation as Americans seeking more affordable housing and strong job markets continue to move in.

Loans will get more expensive

After sitting below 4% for much of 2017, mortgage rates are expected to rise — a little.

“This will be the year mortgage rates make some measurable increases,” said Yun. “Not anything significant or alarming, but it could hit 4.5% by year end, and that will tame some of the home-buying enthusiasm.”

Mortgages have already crossed the 4% threshold in 2018, hitting 4.04% last week.

“Be as prepared as you can,” recommended Gumbinger. “Get your credit as high as it can be, get your loan paperwork in order and easy to get to.”

For more info on this article, visit: CNN MONEY

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