Real Estate News 12/31/18

 Findings from the National Association of Home Builders' (NAHB's) Housing Trends Survey Report indicate that prospective home buyers take the decision seriously. In its fourth and final report derived from the third quarter survey, NAHB analyst Rose Quint says that 13 percent of those polled indicated they intend to buy a home in the next 12 months and of those, almost half (46 percent) have already begun the search. Of those, 54 percent have been trying to find the right home for at least three months. The numbers indicate that home buying is a protracted event and NAHB asked respondents why it was taking so long. The number one reason given was the difficulty finding a home at a price the buyer could afford. This was followed by responses that were essentially variations on the same theme; they are unable to find a home with the desired features, or in the right neighborhood, or because of the competitive nature of homebuying. But they are a hardy and determined bunch. When those who have been in the hunt for three months or more were asked what they intended to do if the right house remains elusive, 61 percent said they would continue the pursuit in their preferred location while 37 percent said they would expand the area in which they were willing to live. Slightly less than one quarter were open to buying a smaller or older home while 16 percent indicated they would raise their price target. Only 18 percent said they will give up trying to buy a home. Source: NAMB

A sizeable share of homebuyers and renters say they didn’t physically walk through the property they decided on -- one in five. But almost three quarters said that they toured or viewed images online before deciding which homes to physically visit. The survey also reveals that 60% of respondents said they prefer to see homes furnished and professionally staged, or both furnished and empty, before making a purchase or signing a lease. When moving into a new space, 65.4% of respondents said their top pain points included the stress of buying new furniture at once, shopping for furniture or designing their homes and finding furnishings to match their existing pieces. The study was carried out by roOomy, a virtual staging and 3D modeling company which has just launched custom augmented reality (AR) and virtual reality (VR) tools for the real estate industry. The technologies allow for enhanced live views or an immersive digital experience. Source: MPA

Freddie Mac released its forecast for 2019, predicting the housing market will see modest growth, and revealing the “great unknown” for the year ahead. The biggest unknown for housing in 2019 are the current negative trends, according to Freddie Mac’s forecast. These trends include lack of housing supply and whether the shortage will persist, as well as rising interest rates and if the market will adjust to these rates and resume its modest growth. “Almost all the trends in the U.S. housing market have been negative in recent months as housing market activity continues to adjust to higher rates on home loans,” Freddie Mac Chief Economist Sam Khater said. “If new home sales are to resume growth in 2019, builders may have to shift their focus to more modestly priced homes and smaller sized homes to help offset housing affordability concerns,” Khater said. “But with cost pressures pinching profitability, this will be a significant challenge.” A recent forecast from agreed affordability will be a rising concern in 2019, saying homebuyers and sellers alike will struggle next year. Freddie Mac also forecasted 2018 will end with 3% annual GDP growth, followed by 2.4% in 2019 and 1.8% in 2020. The total number of home sales will decrease 1.6% to 6.02 million in 2018, but then slowly gain momentum and increase 1% to 6.08 million in 2019 and 2% to 6.2 million in 20202. Home prices will continue to increase, rising 5.1% in 2018, then moderating slightly to a growth rate of 4.3% in 2019 and falling to a growth of 2.9% in 2020. Source: HousingWire 

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