Existing-Home Sales Slide 1.3 Percent in July
Listings in July typically went under contract in under 30 days for the fourth consecutive month because of high buyer demand, but existing-home sales ultimately pulled back as large declines in the Northeast and Midwest outweighed sales increases in the South and West, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 1.3 percent to a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1 percent above a year ago, but is the lowest of 2017.
Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”
“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors® continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”
According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage rose to 3.97 percent in July from 3.90 percent in June. The average commitment rate for all of 2016 was 3.65 percent.
To read the rest of this article, visit here
Buying a home is a big decision; make sure you don’t suffer from homebuyers’ regret by taking these things into consideration.
- What is the neighborhood atmosphere at night, when everyone’s home?
- How long will your commute be?
- Take a look at the CC&Rs, or the homeowner association rules. Are there any that are a no-go for you?
- If there are any specialty amenities on the property (like a septic system or pool), you may want to have an expert do a thorough inspection of them.
This infographic is from the CALIFORNIA ASSOCIATION OF REALTORS, at CAR.org.
Don’t fall for these 6 homebuying myths
“Buying a home is one of the biggest financial decisions you will make, and you’ll likely need to do a lot of planning and research before you take the leap. But don’t get snagged by misconceptions. Mortgage expert Tim Manni busts these six common real estate myths to help you find — and afford — your first home.”
- Your credit score is “good enough” to buy a home
- Loan pre-approval determines your price range
- Your home purchase is non-negotiable
Read the three other homebuying myths here, on Yahoo’s personal finance page: “Don’t fall for these 6 homebuying myths.”
Tips for homebuyers
Redfin Chief Economist says to win in a hot market, home buyers should take advantage of technology to find homes as soon as they are listed.
Making sense of the story:
- Arm yourself with tech tools to find available homes quickly. With the variety of apps available today, you can receive listing alerts so that you’re notified as soon as a home in your price range or search area hits the market.
- Buyers will gain an advantage from whatever concessions they can offer. Instead of a small earnest-money deposit, we’ve seen buyers put into escrow their entire down payment or even half of the purchase price.
You needn’t waive a contingency for inspection in the purchase contract.
- Rather, you can agree to pay the seller, say, $2,500, or next month’s mortgage payment, if you walk away.
Work with a local or reputable lender to get a pre¬approval for your mortgage that includes full documentation of your means to obtain a certain amount of financing in advance of a signed purchase contract.
- That may give you the confidence to waive a contingency for financing, and it’s almost as good as cash for closing a deal quickly.
- Because sellers can sell their homes in days but may take months to buy, you can gain leverage by offering to “rent back” their home to them for a certain number of months.
- Fall can be a good time to buy a home because prices generally peak in the summer and ease up in the fall.
- There’s a bit less inventory, but many fewer buyers. Plus, sellers who list in the fall are serious because they must leave because of job relocation, divorce or something else that made them miss the top of the season.
When home buyers purchase real estate, they often don’t factor in other expenses that they may incur.
Your new home is certainly a large expense, but have you considered the other purchases that may go hand-in-hand with that home’s cost?
This infographic is from the CALIFORNIA ASSOCIATION OF REALTORS, available here.
Homeownership rate jumps from 50-year low
Source: The Wall Street Journal
The U.S. homeownership rate may have finally bottomed out, as the share of Americans who own homes is steadily climbing. The ownership rate posted an increase in the second quarter, reversing a sharp downward trend that begun in the Great Recession.
The homeownership rate was 63.7 percent in the second quarter, the U.S. Census Bureau reported. That marks nearly a full percentage point increase from a year ago. Last year, the homeownership rate had plunged to a 50-year low of 62.9 percent.
“The addition of 1.2 million households being homeowners is clearly good news, as more households are participating in housing equity gains,” says Lawrence Yun, chief economist for the National Association of REALTORS®. “But let’s keep it in perspective: There are fewer homeowners today compared to a decade ago, while renter households have risen by 8 million.
So it is still the case that the massive $7 trillion in housing wealth gains from the cyclical low point has been accumulated by a fewer number of families in America. Further advances in homeownership are required to strengthen and broaden the middle class.”
It’s easy to be confused by all the different finance and money terms out there. Here are a few terms common to real estate:
Escrow is a safe, intermediary account for money when it’s moving between a buyer and seller. Placing funds there tells the seller: “I’m serious about this deal and I can pay.” During the time the down-payment is in escrow, a homebuyer can take care of due diligence, including a home inspection. If it turns out something is off about the house — like structural damage — the buyer can pull out.
You can also escrow money (yes, it’s a noun or verb) for fees beyond your mortgage, like property tax and mortgage and homeowners insurance. Federal Housing Administration-insured mortgages, for example, require escrow accounts. (“Money terms you’re too embarrassed to ask about.”
Even if you already know that APR means “annual percentage rate,” you might not understand what it is. Lenders are required to disclose the APR when lending, which is great for transparency…
The APR is the rate charged annually for borrowing money. But unlike an interest rate, it includes fees and other costs the transaction may include. So the APR is usually higher than the nominal interest rate. Also, unlike annual percentage yield (APY), the APR doesn’t take into account compounding interest. (“Money terms you’re too embarrassed to ask about.”
Read up on more financial and money terms here, on Money.CNN.com: “Money terms you’re too embarrassed to ask about.”