Housing market remains strong, despite mortgage rate worries

The Federal Reserve is raising interest rates, and that's led some to worry that mortgage rates will spike and put an end to the housing boom in the United States.

Not so fast, according to the head of a big homebuilder.

Stuart Miller, executive chairman of Miami-based builder Lennar, said Tuesday that "concerns about rising interest rates and construction costs have been offset by low unemployment and increasing wages."

He added that there is still a "short supply" of houses on the market after "years of underproduction of new homes." And he said "demand remained strong" and "affordability remained consistent" thanks to rates that remain relatively low.

Miller made those remarks in Lennar's earnings release Tuesday morning. The company reported revenue and profits that topped Wall Street's forecasts.

Shares of Lennar (LEN) surged more than 7% on the news. Rival builders Pulte (PHM), DR Horton (DHI), Toll Brothers (TOL) and KB Home (KBH) all rose too.

Lennar's results are an encouraging sign for the group, which has been hit hard this year on fears that higher interest rates will start to take a bite out of demand for new homes.
Builder stocks have been hit hard this year, with many of them -- including Lennar -- falling more than 20% in 2018.

But Lennar's results and other recent data may be assuaging fears that the bottom is going to fall out of the housing market.

The federal government said Monday that new home sales in May were better than expected, citing particular strength in the southern part of the US.

That should be good news for the broader economy.

Lewis Alexander, chief US economist at Nomura, said in a report Tuesday that he was raising his GDP estimate for the second quarter, citing the stronger home sales figures and expectations of higher broker commissions.

And according to the closely watched S&P Case-Shiller index that was released Tuesday morning, home prices continued to rise across the country -- with 17 of the 20 cities tracked in the index registering increases.

"Given the combination of strong demand and lean inventories, especially for existing homes, we expect home prices to continue appreciating at a modest pace for the remainder of the year," said Barclays economist Pooja Sriram in a report Tuesday.

As long as the housing market remains stable, that should give consumers more confidence. To that end, the government reported strong retail sales figures for May earlier this month.
And it was led by healthy gains at home-improvement stores like Home Depot (HD) and Lowe's(LOW). These chains tend to do well when people are looking to sell their home.

source: http://money.cnn.com/2018/06/26/investing/lennar-housing-market-home-building/index.html

for more real estate information and training, visit our website at http://rdtrainingsystems.com.

The Housing Crisis Is Officially Over

 

The financial crisis was a decade ago, and many Americans have recovered. At the peak of the economic downturn, more than 30 percent of American homeowners owed lenders more than the value of their homes. Now, that number has finally dropped to under 10 percent.

However, millions are still reeling from aftershocks of the housing crisis: Nearly 4.5 million homeowners are underwater on their mortgages, according to a new report from Zillow.

Click to read more about which states are still being hit hard by the foreclosure crisis.

In the late 2000s, the housing bubble burst sent home values into a freefall, with the typical U.S. home losing more than a quarter of its value when the market crashed, sending millions of homeowners into negative equity.

Know: 19 Reasons Your Mortgage Loan Could Get Rejected

The situation is improving, but the outlook can appear bleak for Americans with underwater mortgages. Relief can be found with some options that exist for homeowners to avoid foreclosure:

• Stay and pay: Don’t continue to throw money at a bad investment, but if the sense of obligation pulls you, you can continue to pay your mortgage bill month after month in the hope that your situation improves.
• Consider a short sale: The goal is to get out of your home quickly and for the bank to forgive remaining debt. Homeowners should be prepared to sell their houses for a lower price than they paid for it.
• Walk away: Only pull this strategic default card if you’re prepared for the consequences of a drop in credit score, a credit report blemish and guaranteed difficulty in securing a future loan.
• Refinance your home: A lower interest rate and lower monthly payment through refinancing your mortgage might give you the relief you need in the short and long term.
• Get a deed in lieu of foreclosure: This allows you to give the house to the lender and avoid foreclosure proceedings altogether. Chief among the benefits is that you are immediately released from most or all indebtedness associated with the defaulted loan and your credit suffers less.
• Get a reverse mortgage: Available to individuals ages 62 and older, eligible homeowners can access a portion of their home equity by borrowing against it. Seniors can take the money in a lump sum, receive monthly payments, draw on it like a line of credit or use any combination of the three. The homeowner’s obligation to repay the loan is deferred until the homeowner dies or the home is sold.
• Home loan modification: With a loan modification, lenders lower the interest rate and payment, either temporarily or permanently. It is also fairly common for lenders to extend the term of the loan or to allow borrowers to make up missed payments by tacking them on to the end of the loan or spreading them out over the remaining loan.

Read: Pros and Cons of Getting a Deed in Lieu of Foreclosure

The best option to avoid foreclosure is to stay ahead of your bills, if possible. Research government mortgage assistance agencies like Home Affordable Refinance Program (HARP), Hardest Hit Fund (HHF) and Department of Housing and Urban Development (HUD) for free guidance on how to prevent a foreclosure.

source: https://finance.yahoo.com/news/housing-crisis-officially-over-182836139.html

for more information visit our website http://rdtrainingsystems.com

RD Training Systems Is Coming to Orlando, Florida in April 2018

Rick Kurtz and RD Training Systems are bringing their real estate training to Orlando, Florida this coming April 2018.

ORLANDO FLORIDA,  -- Rick Kurtz and RD Training Systems are bringing their real estate training to Orlando, Florida this coming April 2018. This groundbreaking real estate training is to help professional agents stay up-to-date and on the top of many competitors. This training will give the participants a lot of good tools that can help them become a thriving result. There are a lot of things to be expected during the meeting, including high power and minute-to-minute content-rich presentations. Rick Kurtz, the speaker, focuses on proven systems which are made by Realtors for Realtors.

This seminar will teach real agents how to run a real estate business.

If you would like to know how to come to this or any of our other events, please don't hesitate to reach out and let us know.

Call us today at (844) 454-8787 or visit our website at http://rdtrainingsystems.com.

As real estate agents, we are constantly inundated with offers of training to improve upon our existing business plans from marketing to the service we provide. With all that we have to choose from, it can be a wild west of uncovering what will be of the most value and deliver us the most up to date and effective strategies. All of this while also anticipating what is next going to be at the forefront of the real estate industry.

SOURCE RD Training Systems

Downsizing your home: How to determine if a smaller house is the right move

Tim and Tracey Kerin knew it was time to downsize soon after their grandson Maximus was born.

"We started to re-evaluate what's important to us at this stage in life and decided that our health and family were more important than a larger home with a big backyard and pool," says Tim, 58, who along with Tracey, 59, operate a commercial cleaning and construction business.

Last December, the Kerins packed up a two-story colonial replete with a beautifully landscaped garden in Damascus, Maryland, and moved to New Smyrna Beach, Florida, near their sons Justin, 35, and Jason, 33, and their families. And of course, they get to see Maximus, now 2. "We usually see Max a couple of times a week, and he spends one night every weekend, which we look forward to," Tim says.

The Kerins are not alone in their quest for a simple life centered on happiness. According to a recent TD Ameritrade Survey, 42 percent of preretirees are likely to downsize if they haven't done so already. Some 25 percent of respondents are moving to a warmer climate, and 17 percent are relocating closer to loved ones.

Another critical consideration is cost. "Retiring with a lower mortgage payment, property tax bill, smaller place to clean and maintain can be attractive," says Dennis LaVoy, CFP of Telos Financial in Plymouth, Michigan.

Run the numbers

Before downsizing, homeowners should run the numbers to make sure it makes financial sense.
"Look at costs associated with selling the primary home, such as preparing the house for sale, agent's commission, moving and buying a smaller home to get an idea of the fixed costs to relocate," says Aaron Galileo, senior loan officer at Investors Home Mortgage in Howell, New Jersey.

Once a person decides to downsize, he or she must keep lifestyle in mind. "You need to save as much as you can for retirement to keep your lifestyle intact," says Jeff White, a financial analyst at FitSmallBusiness.com. "If you can lower your monthly mortgage payment from $2,500 for the big home to $1,200 per month for a nice condo that fits you and your spouse, why not leap and invest the extra $1,300 into your retirement plan?"

Consider the space you need

The amount of space you have may also influence your decision to scale down. "If the kids have moved out and you're an empty-nester, do you need all of that space?" asks Brian Graves, co-founder of Everything But the House, an online estate sale marketplace. He says factor in how much space you need based on your family dynamic and the frequency of out-of-town guests.

For some homeowners, maintaining a property, especially an older one, is no longer attractive. That was the case for Sean Dougherty, age 51, and his wife, Juliana V. Atinaja-Dougherty, 56. In February, they moved into a two-bedroom, two-bath apartment in Manhattan after living for more than 20 years in the 2,000-square-foot single-family ranch house in Clifton, New Jersey, where his wife grew up. "The house was run down in small, but noticeable ways, and we kind of lost the emotional energy to fix it up for sale, so we priced it to sell," says Sean, a senior vice president at a public relations firm, and Juliana, an attorney. "Plus, we always wanted to move back to New York at some point, and having reached a point where we are more financially comfortable, it made sense."

Factor in cost-of-living changes

Part of their decision was doing the math and figuring out they could afford to do it, especially given that the move to New York would increase their cost-of-living expenses substantially thanks to the rent they now pay. The other part was wanting to enjoy the entertainment and cultural experiences of big-city living.

"In my case, I wanted to do more in New York like seeing friends, taking in a Broadway show or going to a book reading without worrying about the frustrating commute back to New Jersey," Sean says. Even still, they are happy with the move. "I put a ceiling on what we could afford, and I could still keep my job as my wife plans to retire soon," Sean says.

His best advice for those thinking about downsizing: "Don't wait too long. It's easy to live in the status quo of your life, but then you deny yourself other experiences."

source: https://www.cnbc.com/2018/04/09/downsizing-your-home-how-to-determine-if-a-smaller-house-is-the-right-move.html

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Home Prices in 20 U.S. Cities Advance More Than Forecast

A limited number of properties for sale against a backdrop of steady demand helped keep home prices elevated in January, according to S&P CoreLogic Case-Shiller data released Tuesday.

 

HIGHLIGHTS OF HOME PRICES (JANUARY)
20-city home-price index increased 6.4% y/y (est. 6.2%), after rising 6.3% y/y National gauge of home prices rose 6.2% y/y Seasonally adjusted 20-city index advanced 0.8% m/m (est. 0.6%)

Key Takeaways

Home prices continue to post solid gains across the country, with the largest advances occurring in the West. While demand is being spurred by robust job growth, inventory remains lean and is allowing sellers to raise asking prices. The number of previously owned houses on the market during the month was the lowest for any January in National Association of Realtors’ records back to 1999.

Higher property prices and mortgage rates near a four-year high, however, are putting a dent in affordability. New-home sales have declined for three straight months, according to government data released Friday, while first-time buyers of previously owned houses made up a smaller share of total purchases in February.

 

 

Economist Views

“The home price surge continues,” David Blitzer, chairman of the S&P index committee, said in a statement. “Two factors supporting price increases are the low inventory of homes for sale and the low vacancy rate among owner-occupied housing.”

 

Other Details

• All 20 cities in the index showed year-over-year gains, led by a 12.9 percent increase in Seattle and an 11.1 percent gain in Las Vegas
• After seasonal adjustment, Seattle, San Francisco and Atlanta had the biggest month-over-month gains
• Washington has the smallest month-over-month advance at 0.2 percent

source: https://www.bloomberg.com/news/articles/2018-03-27/home-prices-in-20-u-s-cities-advance-more-than-forecast

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US existing-home sales climbed 3% in February

(Photo: Steven Senne, AP)

WASHINGTON — U.S. sales of existing homes rebounded in February after declining for the previous two months, a sign that many Americans are still looking to buy despite rising prices and a shrinking number of homes available on the market.

The National Association of Realtors said Wednesday that sales rose 3% last month to a seasonally adjusted annual rate of 5.54 million. This increase after declining sales in January and December suggests that competition will be heated during the traditional spring home-buying season.

"The upward trend in home sales remains intact but there are headwinds in the way," said Jennifer Lee, a senior economist at BMO Capital Markets.

The shortage of properties for sale is creating a challenge for would-be homebuyers. As sales listings have steadily declined, prices have been climbing at the same time as a stronger job market has elevated demand — and, also, competition — for purchasing homes. Higher mortgage rates this year might also cause even fewer people to list their homes for sale, which would make the current supply squeeze worse.

The median home sales price was $241,700 in February, a 5.9% increase over the past year.

Prices are climbing, in part, because the number of sales listings has dropped. The supply of homes for sale declined 8.1% from a year ago to 1.59 million.

In February, sales climbed in the South and West but fell in the Northeast and Midwest.

First-time buyers appear to face the greatest obstacles from the decline in listings, according to an analysis by the real estate company Trulia. Starter homes have seen the steepest price increases as well as sharp drops in inventory — and a greater proportion of them are fixer-uppers that require additional investment from buyers.

Mortgage rates have been rising after President Donald Trump signed tax cuts into law toward the end of last year. The average 30-year mortgage rate was 4.44% last week, up from an average as low as 3.78% in early September, according to mortgage buyer Freddie Mac.

  

Real estate experts warn that higher rates could prompt more existing homeowners to keep their properties off the market, since selling their homes would require them to then buy a new home and pay more in mortgage interest.

 source: https://www.usatoday.com/story/money/personalfinance/real-estate/2018/03/21/us-existing-home-sales-climbed-3-percent-february/445184002/

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Mortgage Rates Focus Shifts from Fed News to Geopolitical Risk

After dipping by about 10 basis points in the middle of last week, mortgage rates recovered all of that drop and are now in line with where they stood a week ago, just shy of four-year highs. The average prime 30-year fixed mortgage rate quoted on Zillow stood at 4.29 percent on Wednesday.

Incoming economic news and Federal Reserve expectations have dominated market headlines in recent news cycles, but political/geopolitical developments once again seized markets' attention this week. Growing uncertainty about the direction of U.S. trade policy has pushed up the near-term risks to the American economy. Abroad, the results of elections in Italy raise risks to the European economic outlook.

To be clear, Fed news was still in the background: In testimony to the Senate Banking Committee on Thursday, Fed Chair Jerome Powell moderated comments made earlier in the week implying a faster pace of interest rate hikes than had been expected, but Fed Gov. Lael Brainard gave a speech echoing Powell's initial comments. In addition, reports of the likely candidates to fill the Fed's currently open Vice Chair role point to a more hawkish tilt to the Federal Open Market Committee.

The main economic news due this week is Friday's monthly jobs report. Absent a major disappointment, geopolitical news is likely to continue dominating the headlines.

The post Mortgage Rates Focus Shifts from Fed News to Geopolitical Risk appeared first on Zillow Research.

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