Inventory And Home Sales Flat In August

Sales of previously owned homes were unchanged from the month before in August, according to new data from the National Association of Realtors. The number of available homes for sale was also flat, with unsold inventory at a 4.3-month supply at the current sales pace. But, though there was little change in the numbers, Lawrence Yun, NAR’s chief economist, says buyers may be getting ready to move. “Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum,” Yun said. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.” In other words, though there hasn’t been a significant change in conditions, there is a sense that price increases and low inventory are beginning to move in the right direction. This can be seen in the regional results, which show that some areas are improving at a quicker pace than others. Another indicator that relief may be on the way is how long the typical property stayed on the market in August. That’s because, the number of days homes were available before selling moved up for the first time in months. But, despite the improvement, properties are still selling quickly. In fact, the typical home sold in just 29 days in August. More here.

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Three Things Every Real Estate Investor Needs To Do

It’s tempting to think there isn’t a lot to know before becoming a real estate investor. After all, it can’t be that much different than buying a house as a primary residence, right? Wrong. In fact, being a successful real estate investor means running a business. And, like any business, it’s best to know your stuff and play by the rules. Here are a few things to think about if you’d like to be a successful real estate investor.

Educate Yourself: Before doing anything else, do your homework. That means, learning the different types of properties, terminology, laws, and financial ins-and-outs. There is plenty of information out there – in addition to finding local investors to talk to and learn from. Just make sure the information you’re using is up-to-date. Laws change and so do markets. You don’t want your information to be 10 years old. Make sure you give yourself a good education and know exactly what you’re getting into.

Figure Out Your Strategy: There are many different types of properties and financing strategies. And depending on your goals, some may be better suited to you than others. For example, buying a single-family home isn’t the same as buying a multi-unit property. Not to mention, vacation rentals, commercial properties, and corporate rentals. In addition, there are many different avenues you can take to finance your business. Unless you’re sitting on a pile of cash and want to use it – and risk losing it – you’re probably going to want to look into the best way to finance your business that protects you while allowing you to grow.

Know Your Market: In addition to educating yourself about running an investment business and figuring out the best strategy to pursue, you have to know your market. That means, having a feel for what types of properties are available, prices, potential rental income, maintenance costs, and the differences between locations and neighborhoods. Where you own property will help determine the types of tenants you attract, for example. If you don’t have a firm grasp of your area, price per square foot, vacancy rates, and comps, you could be putting yourself at risk of buying the wrong property for the wrong reasons. And that means losing money. However, if you know your business, your strategy, and your market, you’ll be more likely to make smart choices that reduce your risks and boost your return.

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Mortgage Rate Rise May Be Spurring Buyer Activity

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up last week, with rates for 30-year fixed-rate mortgages with conforming loan balances at their highest level in more than seven years. But, despite the increase, mortgage application volume – which includes both buyers requesting loans to buy homes and refinance activity – actually increased from the week before. Could it be that buyers are looking to get into the market before mortgage rates move any higher? Well, purchase loan demand was virtually flat from one week earlier and is now only four percent higher than at the same time last year, when rates were lower. However, the fact that application demand didn’t fall as rates hit a multi-year high indicates that Americans may be hoping to take advantage while they’re still lower than historically normal. Joel Kan, an MBA economist, says rates, once again last week, were driven by positive economic data. “As markets received various pieces of data indicating economic strength such as wage growth, inflation, and jobless claims, Treasury rates were up over the week,” Kan told CNBC. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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Lumber Prices And Demand Keep Builders Confident

The new home market is an important indicator for anyone interested in making a move in the near future. Mostly, this is because the number of new homes being built and put on the market has an affect on home prices across the board. And so, keeping an eye on how confident builders feel can be a good way of gauging upcoming affordability conditions. For this reason, the National Association of Home Builders conducts a monthly survey of builders and scores their perceptions on a scale where any number above 50 indicates more of them view conditions as good than poor. In September, their Housing Market Index was unchanged from the month before but still high at 67. Randy Noel, NAHB’s chairman, says builders are feeling optimistic due to a high level of demand and lower lumber prices. “Despite rising affordability concerns, builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market,” Noel said. “The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes competitively priced.” More here.

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Young Americans Choose The City Over Suburbs

When choosing where you’d like to live, there are a number of factors that you have to weigh. For example, some people may value privacy over convenience while others may prefer proximity to family and friends over entertainment and recreation options. In short, it’s a personal choice. And a lot of times it comes down to whether you’d like to live in a city setting or the suburbs. This is a common debate and one that typically falls along demographic lines. In other words, where you are in life will determine where you want to live. More proof of this is found in a recent report detailing the preferences of millennials. According to the results, young Americans overwhelming choose metropolitan areas known for their hip neighborhoods and closeness to job opportunities. In fact, a look at the top 10 zip codes with the largest population of millennials shows that areas like Chicago’s West Loop, Boston’s North End, and Manhattan’s Financial District are overwhelmingly popular with a younger demographic. Other city neighborhoods that make the list include Capitol Hill in Denver, Mission Bay in San Francisco, and Dallas’ Arts District. More here.

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Today’s Home Buyers Likely To Find Financing First

Buying a home is not something most people do very often. Unless you’re a real-estate investor or have to move frequently for work, you’re likely going to stay in the home you buy for more than a couple of years. In fact, recent data shows homeowners tend to stay in their house somewhere between 10 and 13 years. So it shouldn’t be surprising that there are some common misconceptions about the buying process and the best way to go about finding and buying a house. But, according to a recent survey, one common misstep is becoming less and less common. That’s because, the survey found nearly two thirds of recent buyers looked for financing before looking at homes and, among first-time buyers the number jumped to 85 percent. This is the right way to do things for a couple of reasons. First, meeting with a mortgage professional before heading out on the trail will let you know exactly where your price range is and what you may be qualified to borrow. Secondly, in a competitive market, having your financing already lined up means you can act fast when you find a home you love. If you’re not prequalified, a more prepared buyer is likely to make an offer and have the home under contract before you’ve even completed your application. More here.

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Housing Forecast Has Good News For Buyers

In large part, home prices are a simple calculation of supply and demand. When there are more homes than interested buyers, home prices fall. When the opposite is true, home prices rise. In recent years, demand from potential home buyers has risen and the number of available homes for sale has not, which is why prices have gone up. To some extent, that’s because builders have been building fewer new homes. There are a number of reasons for this, including the recession that followed the financial crisis, rising labor and material costs, and a lack of available lots to build on. But, since building more homes is the fastest way to improve inventory levels and moderate price increases, this has caused affordability conditions to suffer and made finding a home to buy challenging for buyers in some markets. But a recent forecast from Freedonia Focus Reports may be good news for Americans interested in buying a home in the near future. According to the forecast, the number of new homes built will grow 2.4 percent annually through 2022 due to “rising levels of employment and strengthening consumer finances.” If true, that should help slow increasing prices and bring more choices for buyers of both new and existing homes. More here.

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