U.S. housing markets are gaining as demand for homes exceeds available supplies in many areas. The National Association of Home Builders/ Wells Fargo Housing Market Index (HMI) for June increased by eight points over May’s reading to achieve a positive reading of 52. This last happened in August-September of 2002, when HMI monthly readings also jumped by eight points.
Any reading over 50 indicates that more builders consider housing market conditions positive than negative. June’s reading was the first time the HMI reading surpassed a reading of 50 since April 2006.
Limited Inventory Drives Sales Of New Homes
Rick Judson, NAHB Chairman, cited short supplies of existing homes as a factor driving sales of new homes. As demand for homes grows and inventories of available existing homes fall, buyers are increasingly buying new homes.
Sales of existing homes continue to be impacted by factors such as homes worth less than the mortgages held against them and sellers taking a “wait and see” attitude toward listing their homes for sale.
All three of the components of June’s national HMI gained:
The reading for current sales conditions rose from 48 to 56.
Expectations for future sales gained nine points to 61.
June’s reading for buyer foot traffic in new homes gained seven points for a reading of 40.
Regional Home Builder Confidence Grows In 3 Of 4 Regions
The 3-month rolling average readings for regional home builder confidence showed increases in three of four regions:
Northeast: Builder confidence increased by one point to 37.
Midwest: Builder confidence rose by one point to 47.
South: Builder confidence rose by four points to 46.
West: Builder confidence dropped by one point to 48.
High demand and a shortage lots available for building new homes contributed to the West’s slight decrease in builder confidence. Overall, increasing home builder confidence is a sign of economic recovery, but as the economy gains momentum and home prices continue rising, mortgage rates can be expected to rise as well.
Housing Starts Up 28% Annually In May
The U.S. Department of Commerce reported Wednesday that national housing starts rose by 6.80 percent from April’s revised reading. May’s reading of 914,000 housing starts was reported on a seasonally adjusted annual basis. May’s reading was 28.80 percent higher than for May 2012.
Single-family housing starts (one to four units) fell short of investor expectations of 953,000 but exceeded April’s revised reading of 856,000.
Multi-family housing starts surpassed single-family housing starts, but any additions to low inventories of single-family homes could ease the difference between high demand and low inventories of available homes. Meeting demand for homes would temper rising home prices, which could help potential buyers qualify for mortgage loans.
Foreclosure actions increased by 2.0 percent in May from April’s 75 month low point for foreclosure activity according to RealtyTrac’s U.S. Foreclosure Market Report released June 11. However, the good news is that May 2013 foreclosure filings were still 28 percent below May 2012 filings.
RealtyTrac reports that approximately one in 885 homes were in some stage of foreclosure in May. This does not mean that 1 in 885 homes was lost to foreclosure, but it does indicate that documents related to some phase of foreclosure (Notice of Default, Notice of Trustee Sale, and Bank Reposession) were filed.
Actual lender repossessions (REO) increased by 11 percent in May, but were down by 29 percent as compared to May 2012. 33 states reported increases in REOs with North Carolina, Oregon and Wisconsin having the highest numbers of REO properties added.
Judicial Foreclosure States Lagging In Clearing Foreclosure Inventory
Foreclosure starts were up by 4 percent in May, but were 33 percent lower than for May of 2012. States using judicial foreclosure proceedings were 5 of the top 6 states for foreclosure filings. The state of Nevada, which uses non-judicial foreclosure proceedings, was second after Florida and ahead of Ohio, South Carolina and Illinois.
In general, judicial foreclosure proceedings take longer to complete than non-judicial foreclosures. This results in homes being unavailable for sale for longer periods of time. Lenders are required to complete the foreclosure process and in some cases, they must await expiration of a redemption period before a foreclosed home can be repaired and sold.
In states using non-judicial foreclosure proceedings, the time between the initial foreclosure filing and the foreclosure sale can be as little as three to four months. Quickly turning over foreclosed homes is helpful for improving regional housing markets and making more homes available for purchase. Economists have recently cited low inventories of homes as holding back housing markets in some areas.
Bank Owned Properties Provide Buying Opportunities
Lender-owned properties provide potential opportunities for first-time buyers and others seeking affordable homes. Mortgage lenders tend to offer attractive sale terms on REO properties, as their objective is to move these homes out of their inventories as quickly as possible.
Some foreclosure properties are also lacking current maintenance and are often sold as-is. DIY enthusiasts can buy and renovate foreclosed homes for owner occupancy or investment.
It’s a good idea to discuss your interest in the opportunities available for financing a Layton lender-owned home with your trusted mortgage professional.
Last week’s news was relatively quiet with no data significant to the mortgage lending released until Wednesday, when the federal government announced a $138 billion budget deficit for May.
According to the U.S. Treasury this figure is 11 percent higher than for May of 2012, but the federal budget is expected to come in with less than a -$1 trillion deficit for the 2013 fiscal year, which runs from October to September.
The Treasury estimates that the 2013 budget deficit will come in at approximately -$642 billion, well below fiscal 2012′s deficit of -$1.1 trillion. The federal budget has been running deficits over -$1 trillion since 2008.
Employment Market Continues To Strengthen
On Thursday, the Weekly Jobless Claims report brought good news; jobless claims fell from the prior week’s 346,000 jobless claims to 334,000 jobless claims. This was also less than expectations of 350,000 jobless claims. As more workers gain steady employment, this will enable more would-be home buyers to become active buyers.
May Retail sales also showed slight improvement as they moved from 0.60 percent from April’s 0.10 percent.
According to Freddie Mac’s Primary Mortgage Market Survey (PMMS), the average mortgage rate for a 30year fixed rate mortgage rose from last week’s 3.91 percent to 3.98 percent with discount points unchanged at 0.70 percent. The average rate for a 15-year fixed rate mortgage rose from last week’s 3.03 percent to 3.10 percent with discount points holding at 0.70 percent.
What‘s Coming Up This Week
Next week’s economic news schedule has a number of reports due including Wednesday’s FOMC statement and Fed Chair Ben Bernanke’s press conference. This meeting and press conference are significant as any move by the Fed to reduce or cease its current quantitative easing (QE) program could cause mortgage rates to rise further.
Monday’s news includes the Home Builders Index for June. Tuesday brings the Consumer Price Index (CPI) for May and the Core CPI, also for May. The indices measure prices paid by consumers for goods and services; the Core CPI eliminates the volatile food and energy sectors included in the CPI. Rising or falling consumer costs influence how much discretionary income consumers have for saving toward buying a home.
No news is scheduled for Wednesday other than the FOMC statement and press conference.
Thursday brings the Existing Home Sales Report, Weekly Jobs Report, Freddie Mac PMMS and Leading Indicators. These reports are expected to provide news about U.S. housing markets, mortgage rates and economic influences impacting consumers.
Whenever a scene in a film or television show takes place in a private home, have you ever thought about who owns that property? Well, it could be you!
The fact is that film and television production companies are always on the lookout for new locations where they can shoot their footage. If you advertise your property in the right way, your home could have its 15 minutes of fame as the set for a film or a television show episode.
Many production companies have been gradually switching over the last few years into filming at ‘authentic’ private properties rather than in film sets and studios.
You don’t have to own a stunning mansion or a historic property to rent out your home as a film location. Film and TV location scouts are looking for a wide range of different homes, from small condos to townhouses to log cabins and any other style of dwelling.
Turning Your Home Into Hollywood
Of course, the obvious advantage of renting out your property as a film location is that you can get paid hundreds and sometimes even thousands of dollars per day just for letting a film crew take over your kitchen or dining room. Also, you will have the prestige and excitement of being able to meet celebrities and see your home featured on the big screen.
However, the process may disrupt your routine for a day or two or possibly longer. The film crew might want to move furniture around and you might even find yourself having to move out for a while. If you need to stay in a hotel during filming, make sure that the amount you are getting paid is enough to compensate for the costs of accommodation.
If you think that renting out your home as a film set sounds like a good idea for you, there are a number of different websites where you can list the property and post photos. Sometimes your real estate professional can help refer you to a specialist in the local area who consistently works with location scouts and producers.
When you are making the arrangements, make sure that you draft up a contract that states your fee, how long the filming will take, the type of production and an agreement to return your house to the original state that it was found in.
If you are interested in purchasing a Layton home that could be film-worthy, please give us a call!
Many home buyers have found the perfect house, signed on the dotted line and may think they’ve watched enough home improvement shows to know if the home they’re getting is in good shape. Unfortunately, some buyers make the mistake of skipping a home inspection in order to save a little cash.
Even if a home has already stolen your heart and you’re ready to pay for it as-is, you need to bite the bullet and hire a home inspector to let you know what repairs and financial repercussions await you.
Why You Should Hire A Home Inspector
You might know a thing or two about home remodeling and repairs. However, most people are not experts on the inner workings of a home. That is why it’s important to hire a professional to search for potential furnace issues, electrical wiring mishaps, plumbing weaknesses or roofing deterioration to name a few.
While a home might look like it’s in perfect condition on the surface, there could be major issues hiding beneath its façade. That’s why it really is imperative for your safety that you hire an inspector to scrutinize the bones of your home. Understanding any imperfections may also help you budget for immediate and future repairs.
When to Schedule the Home Inspection
Once you’ve signed a purchase contract, you’ll want to schedule a home inspection before the inspection period has ended. Even though you’ve signed the offer, an inspector could just find something that you just cannot live with or afford to fix.
While you would normally schedule an inspection after you’ve signed a contract, it’s important to have an inspector or two picked out beforehand. Ask your real estate professional or friends and family for referrals and then contact the inspectors for pricing and a list of what they will and will not cover at the inspection.
Once again, remember that the cheapest price may not be the best deal on home inspections. Have a good understanding of what, and who, you are investing in.
Even if you do know a lot about the structure, plumbing and wiring of houses, don’t let your ego get the better of you. It’s important to shell out the additional money to hire an inspector and cover your assets. You’d hate to end up with a home that needs major renovations and not have known about it.
For more information on hiring a professional for your Layton home inspection or for a referral, please call today!