Experts Predict 2015 to Be the Year of Homeownership for Millions of Millennials

By Hadley Malcolm

Experts Predict 2015 to Be the Year of Homeownership for Millions of MillennialsCorrections and clarifications: A previous version of this story incorrectly identified the types of financing charges APR applies to.

A low credit score thwarted Marie Kapelke and her husband Mike Biethan’s plans to try to buy a house early last year.

 

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House Price Growth Shows Signs Of Normalizing:

By Michael Neal

Year over year House Price Growth in Case Shiller 20 City HPIThe recent release by the Federal Housing Finance Ag

ency (FHFA) shows that its measure of house prices, House Price Index – Purchase Only, rose by 5.3% on a 12-month seasonally adjusted basis in November 2014. This marks the 34th consecutive month of year-over-year growth. Over this period of more than two-and-a-half years, house prices have risen by 19.0% and have now surpassed their October 2005 level.

Similarly, the recent release from Standard and Poor’s (S&P) and Case-Shiller indicates that their measure of house prices, the House Price Index – 20 City Composite, rose by 4.3% on a year-over-year seasonally adjusted basis. This is the 30th consecutive month of year-over-year increases in the house price index. Over this period of two-and-a-half years, house prices have risen by 19.8%. This version of the S&P/Case-Shiller House Price Index is now just above its April 2005 level.

 

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Housing-Market Will Pick Up, Economists Say

By Laura Kusisto

Housing-Market Will Pick Up, Economists SayEconomists at the International Builders Show said that while 2014 proved disappointing they expect construction and home buying to accelerate in 2015, driven by strong job growth and improving consumer confidence.

Housing has been unusually slow to recover from the housing crash and recession. Economists typically expect the housing market to surge when the overall economy picks up strength. Housing did improve in 2012 and 2013, then largely flattened in 2014, said the economists, speaking at the National Association of Home Builders’ annual convention in Las Vegas on Tuesday.

“The leading reason behind a better year this year is that the overall economy is doing better,” said David Crowe of the Homebuilders Association.

 

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Housing Costs For Renters Rose By $20.6 Billion This Year

By John Gittelsohn

Housing Costs For Renters Rose By $20.6 Billion This YearU.S. renters paid $441 billion for apartments and houses this year, a $20.6 billion increase, as fewer Americans owned their homes and landlords with tight inventories raised leasing charges, Zillow Inc. (Z) said today.

The number of rental households grew by 2 percent, or 770,000, nationally during 2014, according to the Seattle-based real estate information service. In the New York metropolitan area, the largest U.S. housing market, the number of rental residences expanded by 63,000 to 3.4 million, with tenants spending a total of $50 billion for shelter.

Demand for rentals has grown after owners of more than 5 million U.S. homes went through foreclosure since 2007, mortgage lending tightened and younger families postponed buying because they can’t afford or prefer not to own property. That may change slowly as rents rise and the economy improves, said Skylar Olsen, senior economist at Zillow.

 

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Did You Know Growth In Economic Output Was Revised Upward To A Seasonally Adjusted Annual Rate Of 5.0% For The Third Quarter?

By Robert Denk

Real GDP GrowthThe Bureau of Economic Analysis (BEA) released its third estimate of real GDP growth for the third quarter. Growth in economic output was revised upward to a seasonally adjusted annual rate of 5.0% from 3.9% in the second and 3.5% in the advance estimate. The pace was 4.6% in the second quarter.

The revisions were largely concentrated in personal consumption expenditures (PCE) and fixed nonresidential investment, a very positive signal for momentum in final demand going forward. PCE growth accelerated to an annualized pace of 3.2% from 2.5% in the second quarter. Growth in fixed nonresidential investment accelerated to 8.9% from 7.1%.

 

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Did You Know The Real Estate Equity Position Of U.S. Households Increased Nearly 1.6% For The Third Quarter?

By Josh Miller

Household Balance SheetAccording to NAHB tabulations of the third quarter Federal Reserve Flow of Funds, the real estate equity position of U.S. households (the difference between assets and liabilities) increased nearly 1.6% for the quarter.

The market value of real estate held by U.S. households increased $180 billion dollars during the quarter, while liabilities (home mortgages) remained virtually unchanged. The value household-owned real estate, including owner-occupied and second homes, totaled $20.4 trillion for the quarter. Total home mortgage debt outstanding stands at $9.4 trillion.

 

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Did You Know The HMI Has Been In The Mid-To-High 50s Index Level For The Past Six Months?

By David Crowe

NAHB/Wells Fargo/ Housing Market IndexFollowing a four-point uptick last month, builder confidence in the market for newly built single-family homes fell one point in December to a level of 57 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

After a sluggish start to 2014, the HMI has stabilized in the mid-to-high 50s index level trend for the past six months, which is consistent with our assessment that we are in a slow march back to normal. As we head into 2015, the housing market should continue to recover at a steady, gradual pace.

Home builders in many markets across the country have seen their businesses improve over the course of the year, and we expect builders to remain confident in 2015

 

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Why Do We Seasonally Adjust Statistics?

By Josh Miller

Why Do We Seasonally Adjust Statistics? As sure as foliage changes color in the fall and snow falls in the winter, economics statistics experience predictable changes during the year. To take these predictable changes into account, statistics are often seasonally adjusted. In seasonally adjusting economics statistics, analysts are better able to compare from one period to the next and better able to identify trends outside the norm.

Major economic indicators such as gross domestic product (GDP) are commonly reported as seasonally adjusted. Housing statistics commonly reported as seasonally adjusted to name a few, include housing starts, existing home sales, and residential construction employment.

Chart 1 below presents monthly single-family housing starts not seasonally adjusted. The chart highlights the up and down movement of the data series.

 

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Housing Activity Is Continuing To Improve

Housing Activity Is Continuing To ImproveSome data released late last month, during all the preparations for Thanksgiving, has some analysts wondering about the future direction of the U.S. housing market — and, by extension, the overall economy.

Just before the holiday, the U.S. Census Bureau announced that sales of new, single-family homes in October were at a seasonally-adjusted, annual rate of 458,000. That number was just a very slight uptick compared to the revised September estimate of 455,000.

And one week earlier, the government announced starts for U.S. single-family homes, which make up the majority of the nation’s housing market, rose 4.2 percent in October, compared to a month earlier.

 

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Did You Know That October’s New Home The October 2013 Sales?

By Robert Dietz

Did You Know That October's New Home The October 2013 Sales?

New home sales posted a slight gain in October after downward revisions for prior months, according to data released by the Census Bureau and HUD.

Sales of new single-family homes were up 0.7% over a downwardly revised pace for September. The October seasonally adjusted annual sales rate came in at 458,000. This is 1.8% higher than the October 2013 sales rate.

Inventory of new single-family homes for sale rose to 212,000, which marks a 5.6 months’ supply at the current sales rate. Consistent with the rise in builder confidence, as reported by the NAHB/Wells Fargo Housing Market Index, home builders are increasing inventory as the market continues along a path of gradual recovery.

 

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