December 2015 — The single-family rental market will continue to stay strong for years to come, according to Frank Nothaft, chief economist for CoreLogic and former chief economist at Freddie Mac.
Nothaft is bullish on the sector because the largest demographic group is 22- to 25-year-old millennials who are getting ready to form new households. The average age of first-time homebuyers, on the other hand, has moved up into the 30s.
“Since the great recession began, household formation has been anemic,” Nothaft notes in a column for HousingWire. “But this year household formation will be at its highest point in 10 years — close to 1.7 million new households — many of which will be renters.”
More than 5.8 million homeowners lost their homes to foreclosure during the housing crisis over the last seven years. Many have become renters, which has boosted growth of the single-family detached rental stock. For example, Nothaft singles out markets like Phoenix and Las Vegas, which faced a significant plunge in home values during the housing crisis, that have had an increase in its single-family rental stock by up to 80 percent.
December 2015 — More consumers are scoring 800 or above on their FICO credit scores—19.9 percent today vs. 19.6 percent just six months earlier. Nearly one in five has joined the elite FICO 800 club.
At the same time, fewer are scoring below 550. In fact, there’s been a clear pattern of decline in this segment since the low point of the economy in late 2009/early 2010, reports Fair Isaac Corporation.
Some of this trend may be a result of the lowest-scoring consumers “dropping out” from traditional credit usage, and by extension no longer having valid FICO Scores. Still, this decline is encouraging. It indicates that overall more consumers using credit are managing it responsibly enough to not be among the lowest scorers.
December 2015 — Half of all American adults now live in one-person households, a rapidly growing number, according to the Bureau of Labor Statistics. The singles demographic is likely to reshape multifamily communities and single-family home designs going forward, according to Builder Online.
In 1976, only 37 percent of adults were single. As of this past summer, that percentage has bloomed to 50.2 percent, or about 124.6 million singles. It marks the first time that single Americans make up the majority of the adult population since the government began tracking such data.
“Analysts project that this group of adults will job hop more often, bring new types of living arrangements into the housing market (think friends buying homes together), and expect their environments to adapt to their frequently changing lifestyles. As a result, floor plans will go from static to flexible as living arrangements change more frequently,” said Susan Yashinsky, vice president of innovation trends for Waterford, Mich.-based Sphere Trending, LLC.
Affordability will be key, since single homebuyers will have less income per household than dual-earner couples.
December 2015 — Thanks to loosening mortgage requirements and depreciating values, buyers may finally find greater selection and tempering prices in the coming year.
More lenders say they’re easing up some of their lending standards across all loan types, according to Fannie Mae’s recent Mortgage Lender Sentiment Survey. The survey shows the gap between lenders who are reporting an easing in credit as opposed to those who are reporting a tightening climbed 20 percentage points. Additionally, more lenders say they plan to ease credit standards over the next three months.
“For the first time in seven quarters, we see a pronounced increase in the share of lenders, particularly medium- and larger-sized lenders, reporting on net an easing of credit standards in both GSE eligible and non-GSE eligible loan categories,” says Doug Duncan, Fannie Mae’s chief economist.
“This is a significant result in light of public discourse on credit availability and standards. We expect lenders’ tendency toward easing credit standards, together with relatively low mortgage rates, to support buyers and thus housing market expansion,” said Duncan.
December 2015 — Here’s why saving for a down payment on a home purchase is a growing challenge for many Americans: About 62 percent of Americans have less than $1,000 in their savings accounts, and 21 percent don’t even have a savings account, according to a new survey of more than 5,000 adults conducted by Google Consumer Survey for GOBankingRates.com.
“It’s worrisome that such a large percentage of Americans have so little set aside in a savings account,” says Cameron Huddleston, a personal financial analyst for GOBankingRates.com. “They likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends and family, or even their retirement accounts, to cover unexpected expenses.”
Echoing these findings, a similar survey by Bankrate.com earlier this year of 1,000 adults found that 62 percent of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair. If they needed money, the Americans surveyed say they would raise the money by reducing spending elsewhere (26 percent), borrowing from family and friends (16 percent), or using credit cards (12 percent).
December 2015 — Rural households often face significant hurdles to obtaining mortgage financing, in part because there simply aren’t many lenders in sparsely populated areas. Incomes are often low as well.
That’s why a little-known program of the U.S. Rural Housing Service is something you might want to let homebuyers know about. The agency’s Sec. 502 direct loans are intended for low-income households (50-80 percent of area median income) who live outside population centers and haven’t been able to obtain financing from conventional lenders. The loans are made directly by the agency and come with zero-down, one-percent financing terms.
For more information, see: http://www.rd.usda.gov/about-rd/agencies/rural-housing-service.
November 2015 — The Ocean County Board of Realtors reports home values continued to rise through August 2015, and homes are spending less time on the market, which illustrates a high demand for housing in Ocean County and a housing market that remains dedicated to recovery.
Adult communities also saw a 6.5% rise in the number of new listings—in August of 2014, there were 444 new listings, while August of 2015 saw 4473 new listings. Adult communities had 298 closed sales in August 2014 and 309 in August of 2015, resulting in a 3.7% increase.
The Single Family Home market saw 1,093 new listings in August of 2014 and 1,096 in August of 2015, resulting in a 0.3% increase in the number of new listings. Single family homes saw a 13.7% increase in the number of closed sales, from 467 closed sales in August 2014 to 531 in August 2015.
Townhouse-condos saw a 4.9% decrease in the number of new listings, from 163 in August 2014 to 155 in August 2015. Closed sales for townhouse-condos increased by 6.1%, from 66 in August 2014 to 70 this August.
November 2015 — In 2015, Facebook passed 1.49 billion monthly active users, 874 million mobile users, and 728 million daily users. Combine those staggering numbers with recent NAR stats that show that more than half of all homebuyers learn about houses on social media sites, and you’ll quickly understand why establishing a Facebook network to interact with clients is necessary for success.
Here are four ways to turn those Facebook followers into clients:
1. Utilize Facebook Analytics. Facebook offers a series of free tools for real estate pros to measure the effectiveness of their Facebook marketing efforts. In addition to a business page, Facebook also offers insights, analytics and targeted advertising as a way to improve your branding presence and increase your conversion rate. Analytics can tell you which of your posts are engaging followers, allowing you to create similar content for more interaction. Also, use your Facebook insights to determine the type of audience most frequently interacting with your posts, and then tailor your content and marketing accordingly.
November 2015 — More than 70 percent of real estate agents purchased online leads in 2014. But do they find it worthwhile? Inman recently surveyed real estate agents about the effectiveness of online leads in their business. Bottom line? Converting leads into business isn’t easy. The majority of agents said online leads accounted for 5 percent or less of their closed business in 2014. Forty percent said online leads accounted for 2.5 percent or less of their business last year. The vast majority of respondents think one word-of-mouth referral is more valuable than 10 online leads.
However, some agents have luck with online leads, attributing 46 percent or more of their deals in 2014 to online leads. These agents might have more discipline than others when it comes to converting leads. They might also do a better job of selecting the type of online leads that deliver the best results.
November 2015 — Consumers remain optimistic about the long-term prospects of the housing market. Still, homeowners say they’re hesitant to list their home for sale for a number of surprising reasons, according to Berkshire Hathaway HomeServices’ Homeowner Sentiment Survey.
The most common obstacles cited by homeowners for not yet listing their home are due to inventory concerns, including “waiting for the right opportunity” and “haven’t found my ideal home yet.”
What’s more, of consumers considering selling their home but who have not yet listed, 73 percent say that home prices have not recovered from pre-recession levels enough for them to sell. Sixty-eight percent of current homeowners surveyed said underwater mortgages remain a big barrier to them. Sixty-one percent say they’re uneasy about the economy, which has kept them from selling.
And some 55 percent of homeowners contemplating selling said they’d be more likely to do so if they had additional information on the home-selling process.
November 2015 — No surprise here for agents representing enthusiastic sellers; for the seventh consecutive month, the gap has widened between what home owners say their home is worth compared to what appraisers say, according to Quicken Loans’ Home Price Perception Index.
Homeowner estimates now stand 2.65 percent higher than appraiser opinions, the largest gap in more than a year, according to the index.
“The perception trend of most of this year suggests home owners may be assuming that home values have been in a steady, linear path upward,” says Bob Walters, Quicken Loans chief economist. “In reality, home values have remained mostly flat this year, and this false assumption may be leaving home owners disappointed when their appraisals come in.”
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