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The 2 Surprising Things Homebuyers Really Want

The 2 Surprising Things Homebuyers Really Want

In a market where current inventory is low, it’s normal to think buyers might be willing to give up a few desirable features in their home search in order to make finding a house a little easier. Don’t be fooled, though – there’s still an interest in the market for some key upgrades. Here’s a look at the two surprising things buyers seem to be searching for in today’s market, and how they’re impacting new home builds.

Homebuyers Are Not Giving Up Their Garages

The National Association of Home Builders (NAHB) recently released an article showing the percentage of new single-family homes completed in 2018. The data reveals,

  • 64% of new homes offer a 2-car garage
  • 21% have a garage large enough to hold 3 or more cars
  • 7% have a 1-car garage
  • 7% do not include a garage or carport
  • 1% have a carport

The following map represents this breakdown by region:

Evidently, a garage is something homebuyers are looking for in their searches, but that’s not all.

Homebuyers Are Not Giving Up Their Patios

Patios are on the radar for buyers as well. Community areas are often common amenities in new neighborhoods, but as it turns out, private outdoor spaces are quite desirable too. NAHB also found that,

“Of the roughly 876,000 single-family homes started in 2018, 59.4% came with patios…This is the highest the number has been since NAHB began tracking the series in 2005.”

As shown in the graph below, the number of new homes built with patios has been increasing for the past 9 years. Clearly, they’re a desirable feature for new homeowners too.

Bottom Line

Homebuyers are looking for garage space and outdoor patio living. If you’re a homeowner thinking of selling a house with these amenities, it appears buyers are willing to spring for those key features. Let’s get together today to determine the current value and demand for your home.

Oscar Busch
Mortgage Broker
Licensed in VA, DC, MD and FL
11350 Random Hills Rd 800
Fairfax, VA 22030
Phone: 571.404.0701
Fax: 571.404.0600
Mobile: 703.470.7538
obusch@advicehl.com
www.advicehomeloans.com
Company NMLS# 1863417 | MLO NMLS# 1326698

Housing starts go through the roof

Housing starts go through the roof

For the week of january 20, 2020

 

QUOTE OF THE WEEK

“The journey of a thousand miles begins with one step.”–Lao Tzu, Chinese philosopher

NATIONAL MARKET UPDATE

Ending the year big, Housing Starts shot up 16.9% in December, to a 1.608 million annual rate, their highest level in 13 years! Gains were seen in all major regions, and starts are now up 40.8% from a year ago.

Building Permits, at a post-recession high in November, took a break in December, down 3.9%. But permits are still at a 1.416 million annual rate, near the 1.5 million needed to take care of population growth and teardowns.

And the future looks bright. Fannie Mae’s latest forecast predicts that just the single-family part of the Housing Starts number should reach 975,000 units this year–the highest level since 2007!

 

REVIEW OF LAST WEEK

BULLS CHARGE… Bullish investors kept rallying, sending major stock indexes to new record highs. The Wall Streeters were fired up by a trifecta of strong economic data, good earnings, and solid trade progress.

Congress passed a new U.S., Mexico, Canada trade agreement, plus the Phase One trade deal with China was signed, seen by some as a major step in de-escalating trade tensions, though issues remain.

We saw encouraging bank earnings reports, mixed in with blowout Housing Starts, healthy Retail Sales for December and for the year, a jump in the Philly Fed manufacturing index, and rock-bottom jobless claims.

The week ended with the Dow UP 1.5%, to 29,348; the S&P 500 UP 2.0%, to 3,330; and the Nasdaq UP 2.3%, to 9,389.

Good economic news kept bond prices in check, yet the 30YR FNMA 4.0% bond ended UP .03, to $104.25. The national average 30-year fixed mortgage rate held steady, up a mere basis point (0.01%!) in Freddie Mac’s Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… The Mortgage Bankers Association reports purchase mortgage activity the first week of the year was 8% higher than the year before, at the highest level since 2009.

 

THIS WEEK’S FORECAST

EXISTING HOME SALES GAIN… In this holiday shortened week, the main economic report we’ll focus on is December Existing Home Sales, expected to continue climbing toward a 5.5 million annual sales rate.

The stock market and bond market are closed today, January 20, in observance of Martin Luther King Jr. Day.

NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.

 

FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months… Most economists are still comfortable forecasting no rate cuts–or hikes–this year. Note: In the lower chart, a 15% probability of change is an 85% probability the rate will stay the same.

Current Fed Funds Rate: 1.50%-1.75%

AFTER FOMC MEETING ON: CONSENSUS
Jan 29 1.50%-1.75%

Mar 18 1.50%-1.75%
Apr 29 1.50%-1.75%

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Jan 29 15%
Mar 18 16%
Apr 29 20%

BUSINESS TIP OF THE WEEK

Now that you’ve set your goals for the year (you have, right?), turn your attention to what’s in front of you today. Put your best effort into what you need to get done now, do that every day, and you’re sure to achieve the long-term results you want.

Oscar Busch
Mortgage Broker
Licensed in VA, DC, MD and FL
11350 Random Hills Rd 800
Fairfax, VA 22030
Phone: 571.404.0701
Fax: 571.404.0600
Mobile: 703.470.7538
obusch@advicehl.com
www.advicehomeloans.com
Company NMLS# 1863417 | MLO NMLS# 1326698

Homes Are More Affordable Today, Not Less Affordable!

Homes Are More Affordable Today, Not Less Affordable!

There’s a current narrative that owning a home today is less affordable than it has been in the past. The reason some are making this claim is because house prices have substantially increased over the last several years.

It’s not, however, just the price of a home that matters.

Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by approximately 3% over the last year.

The National Association of Realtors (NAR) releases a monthly Housing Affordability Index. The latest index shows that home affordability is better today than at almost any point over the last 30 years. The index determines how affordable homes are based on the following:

“A Home Affordability Index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index of 120 signifies that a family earning the median income has 20 percent more than the level of income needed pay the mortgage on a median-priced home, assuming a 20 percent down payment so that the monthly payment and interest will not exceed 25 percent of this level of income (qualifying income).”

The higher the index, therefore, the more affordable homes are. Here is a graph showing the index since 1990:

Obviously, affordability was better during the housing crash when distressed properties – foreclosures and short sales – sold at major discounts (2009-2015). Outside of that period, however, homes are more affordable today than any other year since 1990, except for 2016.

The report on the index also includes a section that calculates the mortgage payment on a median priced home as a percentage of the median national income. Historically, that percentage is just above 21%. Here are the percentages since June of 2018:

Again, we can see that affordability is much better today than the historical average and has been getting better over the last year and a half.

Bottom Line

Whether you’re thinking about buying your first home or moving up to the home of your dreams, don’t let the false narrative about affordability prevent you from moving forward. From an affordability standpoint, this is one of the best times to buy in the last 30 years.

Oscar Busch
Mortgage Broker
Licensed in VA, DC, MD and FL
11350 Random Hills Rd 800
Fairfax, VA 22030
Phone: 571.404.0701
Fax: 571.404.0600
Mobile: 703.470.7538
obusch@advicehl.com
www.advicehomeloans.com
Company NMLS# 1863417 | MLO NMLS# 1326698