Google

A Let-Up for Prices? Housing Trends to Watch

Feb 25, 2018 by

The housing market is on the up-and-up, but at a lesser pace than in prior years. According to new research, buzzier markets are now stabilizing.

Appreciation is projected to slow in 41 of the top 100 metropolitan statistical areas (MSAs) this year, according to HouseCanary, which recently released its “5 Housing Trends That Are Changing the Market Today.” HouseCanary assessed the country’s 381 MSAs for affordability and appreciation. The areas with marked softening:

  1. Palm Bay-Melbourne-Titusville, Fla.
  2. North Port-Sarasota-Bradenton, Fla.
  3. Lakeland-Winter Haven, Fla.
  4. Cape Coral-Ft. Myers, Fla.
  5. Deltona-Daytona Beach-Ormond Beach, Fla.
  6. Phoenix-Mesa-Scottsdale, Ariz.
  7. Orlando-Kissimmee-Sanford, Fla.
  8. Miami-Ft. Lauderdale-West Palm Beach, Fla.
  9. Urban Honolulu, Hawaii
  10. Tampa-St. Petersburg-Clearwater, Fla.

HC_100_MSAs

“Although the housing market is still strong, with home prices still increasing in many markets, there is clear evidence of a considerable deceleration in the pace of those price increases,” says Alex Villacorta, executive vice president of Analytics for HouseCanary. “The rapid price growth in high-end and luxury markets seems to have stagnated as affordability continues to put downward pressure on home price appreciation.”

What factors are fueling the trend? The demand/supply dynamic, for one, Villacorta says. Buyers are out in droves, but inventory is lacking. The imbalance is pressuring prices—and affordability is suffering, in turn. Households in 30 of the top 100 MSAs are allocating more than 30 percent of their income to their mortgage, HouseCanary’s research shows. (Thirty percent is considered, generally, the ideal share.) Five of the top 100 MSAs are allocating more than 50 percent of their income.

Affordability is also impacted by mortgage rates, which Villacorta anticipates will land in the neighborhood of 4.75 percent by this time next year—a change that could deter homeowners with lower rates from selling, exacerbating inventory issues. The average 30-year, fixed mortgage rate has been on an uptick since the start of 2018.

The Tax Cuts and Jobs Act could have an effect on housing, as well, though how it could help or hurt the market is unclear. With change comes indecision, and Villacorta believes homebuyers and sellers could hold off on their plans until they know how the bill will impact them personally.

MORE: Housing and Tax Reform: Where Could the Impact Land?

“Clearly there are many challenges to stabilizing the housing market,” Villacorta says. “There is still a supply-and-demand problem, mortgage rates are still on the rise, affordability remains an issue in many major markets, and the wider-ranging effects of the new tax plan are still unknown—so it’s unclear whether this slowed growth will lead to housing market price plateaus or declines, but the conditions are certainly in place for that potential outcome.”

For more information, please visit www.housecanary.com.

DeVita_Suzanne_60x60Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post A Let-Up for Prices? Housing Trends to Watch appeared first on RISMedia.

RISMedia

read more

Related Posts

Share This

Housing Starts Blow by Expectations

Feb 18, 2018 by

Home-building activity blew by expectations in January, with housing starts up 9.7 percent to a rate of 1,326,000, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). Single-family housing starts increased 3.7 percent to 846,000. Starts for units in buildings with five units or more came in at 431,000.

Additionally, permits increased 7.4 percent from December to 1,396,000, according to the data. Single-family permits were down 1.7 percent, however, to 866,000, while permits for units in buildings with five units or more came in at 479,000.

Completions totaled 1,166,000 in January, falling 1.9 percent. Single-family completions increased 2.2 percent to 850,000, while completions for units in buildings with five units or more came in at 305,000.

“Terrific news on housing starts in January with a solid 10 percent gain,” said Lawrence Yun, chief economist of the National Association of REALTORS® (NAR), in a statement. “This rise in single-family housing construction will help tame home price growth, and the increase in multi-family units should continue to help slow rent growth. The large gain in housing starts in the West (10.7 percent) is especially welcomed, as that region has been facing acute housing shortages. Ultimately, there is still large room for improvement given the fact overall housing inventory is currently near historic lows.”

According to Yun, the ascent could cause the Federal Reserve to hit pause on rates. It will announce its decision to hold or raise them in March.

“This boost in housing supply not only helps the economy but may also help the Federal Reserve temper the pace of future short-term rate hikes,” Yun said. “That’s because the slow upward creep in the broad consumer price inflation is principally being driven by rising housing costs. Simply put, more housing supply means a lower inflation rate, and potentially a slower pace of interest rate increases by the Fed.”

For the latest real estate news and trends, bookmark RISMedia.com.

The post Housing Starts Blow by Expectations appeared first on RISMedia.

RISMedia

read more

Assessing the State of the Housing Union

Jan 28, 2018 by

In 2018, the challenge for the housing industry will be balancing bursting demand with a severe shortage of supply, according to realtor.com®’s State of the Housing Union, released in-step with the U.S. State of the Union this week. As with 2017, first-time buyers will have the hardest time, with little in their price point.

“The macro-factors that have defined real estate in recent years—strong demand and weak supply—continue to set the tone for the industry,” says Joseph Kirchner, senior economist for realtor.com.

The issues? Builders have been burdened by construction costs and lack of labor, and have concentrated on higher-priced homes.

“Builders will need to focus more on homes geared for moderate incomes, partner with the government on initiatives to transform distressed urban neighborhoods and overcome labor shortages through a combination of workforce development training and pressure to ease artificial restrictions on the supply of labor,” Kirchner says.

The dearth of inventory made prices rise, but sales struggle in 2017, according to data from realtor.com. Appreciation was at an average 5.8 percent, while pre-owned sales eked out a 1.1 percent gain. Comparing blue and red states:

R3-22836-StateofHousingUnion

A factor of significance: tax reform. In 2017, 2.5 percent of blue state mortgages were over $ 750,000—the limit on the mortgage interest deduction (MID) under the Tax Cuts and Jobs Act, which will apply to loans obtained on or after Dec. 15, 2017. Only 0.4 percent of red state mortgages were over the threshold.

“The new tax law that caps the mortgage interest deduction and the deductibility of state and local taxes can be expected to impact the upper-end market in 2018—precisely how and the extent of which remain to be seen,” says Kirchner.

Around the bill’s passage, realtor.com researchers surveyed Americans on their attitudes toward homeownership in light of reform. More than one-third were “concerned;” a considerable group of homebuyers and sellers reconsidered their plans.

For more information, please visit www.realtor.com.

DeVita_Suzanne_60x60Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Assessing the State of the Housing Union appeared first on RISMedia.

RISMedia

read more

Related Posts

Share This

Sitio web optimizado por: Diseño Web
Plugin Modo Mantenimiento patrocinado por: Wordpress modo mantenimiento