Selling AZ With Rebecca : October 2013

Thursday, October 31, 2013

Fed Leaves Rates Unchanged Again

DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 31, 2013

The Federal Reserve says the economy hasn’t grown enough for it to end its $85 billion-a-month bond-purchasing program. The program has been helping to keep mortgage rates low, but fears mounted this summer that the Fed would begin winding it down. That has caused mortgage rates to tick up and made borrowers more concerned about the costs of a mortgage.

For now, the Fed remains in a wait-and-see mode and plans to hold its stimulus in place.

The Fed’s announcement Wednesday, following a two-day policy-making committee meeting, did not make clear when or how it will make changes to its stimulus program when it does decide to act, The New York Times reports. The Fed’s move, however, has reinforced its commitment to hold short-term interest rates near zero through next year and into 2015.

The Fed noted employment is improving, and it is optimistic about the “growing underlying strength in the broader economy.”

“Taking into account the extent of federal fiscal retrenchment over the past year, the committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy,” the Federal Open Market Committee says. “However, the committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”

Source: “Fed Extends Stimulus as Growth Stumbles,” The New York Times (Oct. 30, 2013)

http://realtormag.realtor.org/daily-news/2013/10/31/fed-leaves-rates-unchanged-again

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Wednesday, October 30, 2013

Survey Reveals How Long it Takes to Build a Home

DAILY REAL ESTATE NEWS | WEDNESDAY, OCTOBER 30, 2013

On average, it takes 7 months to build a new home from scratch, which includes obtaining the building permit, according to the 2012 Survey of Construction from the Census Bureau.

Homes that are built for sale take the shortest amount of time, averaging between 5 and 6 months.

Meanwhile, houses where the owners have the land take the longest — about 8 months if built by a contractor, but more than 11 months if they are owner-built, according to the Census.

The wait can be considerably longer, depending on the region of the country too, the data shows. For example, New England and Middle Atlantic regions have some of the longest lag times with new-home construction, averaging between 9 and 10 months. On the other hand, builders in the East South Central Division complete homes, on average, in 7 months.

To learn more about preparing buyers for the nuances of new-home construction, the Real Estate Buyer’s Agency Council will be launching a newly updated New-Home Construction and Buyer Representation Course during the 2013 REALTORS(R) Conference & Expo in San Francisco on Nov. 7.

Source: “How Long Does It Take to Build a House?” National Association of Home Builders’ Eye on Housing (October 2013) and REALTOR® Magazine Daily News

http://realtormag.realtor.org/daily-news/2013/10/30/survey-reveals-how-long-it-takes-build-home

http://www.rebeccasellsaz.com

Tuesday, October 29, 2013

Mortgage Rates Become Housing’s Thorn

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 29, 2013

Higher mortgage rates and home prices are being blamed for a fall in home sales in September.

The National Association of REALTORS® reported Monday that contracts on pending home sales fell 5.6 percent in September, the fourth consecutive month that the measure has dropped. NAR’s Pending Home Sales Index, which reflects contracts, not closings, is at its lowest level since December 2012.

http://link.brightcove.com/services/player/bcpid1465406675?bctid=2769205477001

“Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” says Lawrence Yun, NAR’s chief economist. Affordability has dropped to a five-year low due to rising mortgage rates and home prices that have outpaced income growth, NAR says.

Mortgage rates began rising in May when the Federal Reserve announced that it would likely reduce its $85 billion-per-month bond-purchasing program before the end of the year. The program has kept rates at record lows the past few years. The Fed decided at its mid-September meeting to hold off on tapering the program for now. The move has helped rates decline somewhat in recent weeks.

Still, 30-year fixed-mortgage rates averaged 3.41 percent a year ago compared to 4.13 percent last week, Freddie Mac reports.

“Expected rising mortgage interest rates will further lower affordability in upcoming months,” Yun said recently.

Every time mortgage rates tick up, it can effect a buyer’s purchasing power. For example, a 1 percent rate change — which occurred over the summer — could decrease a buyers’ purchasing power by more than 10 percent, according to mortgage blogger Dan Green with The Mortgage Reports.

— By Melissa Dittmann Tracey

http://realtormag.realtor.org/daily-news/2013/10/29/mortgage-rates-become-housing-s-thorn

http://www.rebeccasellsaz.com

Monday, October 28, 2013

Study: Higher Home Prices Lead to More Sales

DAILY REAL ESTATE NEWS | MONDAY, OCTOBER 28, 2013

If home prices edge higher, the housing market will see higher home sales, according to a new paper by two senior economists with the Federal Reserve Bank of San Francisco. The economists note that it’s not that the higher prices entice buyers as much as the higher prices entice owners to sell their homes, thereby helping to alleviate current inventory shortages.

Many sellers are still waiting out the market until home prices rise more, economists William Hedberg and John Krainer write in an article in the Federal Reserve Bank of San Francisco's Economic Letter titled “Why Are Housing Inventories Low?” In the past year, existing-home prices have edged up 11.7 percent, according to the National Association of REALTORS®.

Still, despite rising appreciation, some sellers are underwater on their mortgage or do not have enough equity yet to motivate them to sell. Research has shown that counties with a high share of underwater mortgages tend to have the smallest for-sale inventories.

The economists say that a distinct pattern exists in housing inventories, with the number of homes for sale rising in good times and falling in bad times. Some of it can be explained by credit, they say. Lenders tend to ease credit restrictions during good economic times, which helps more buyers enter the market.

But the economists say that the level of home prices and changes in employment are by far the variables that most influences the inventory of homes for sale. “Once these are accounted for other variables, such as changes in the for-rent inventory, the underwater share, or local price-rent ratios, do little to explain the inventory of houses for sale,” Mortgage News Daily reports on the study. "Thus, current home owners may be making a rational choice to postpone selling in the hope that prices will rise further. However, this behavior tends to be short run. In the longer run, the link between the level of house prices and for-sale inventories is strong. If prices continue to rise, inventories for sale should eventually rise too."

The housing markets that have seen the strongest house price appreciation and job growth are the ones that are seeing for-sale inventories rise the most, the economists note.

Source: “More People Will Buy Homes if Prices go Up, Wait... What?” Mortgage News Daily (Oct. 21, 2013)

Read more

Home Sales Down, Inventory Up

http://realtormag.realtor.org/daily-news/2013/10/28/study-higher-home-prices-lead-more-sales

http://www.rebeccasellsaz.com

Selling AZ With Rebecca

Thursday, October 31, 2013

Fed Leaves Rates Unchanged Again

Wednesday, October 30, 2013

Survey Reveals How Long it Takes to Build a Home

Tuesday, October 29, 2013

Mortgage Rates Become Housing’s Thorn

Monday, October 28, 2013

Study: Higher Home Prices Lead to More Sales

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