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S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices Up

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S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices UpApril readings for S&P Case-Shiller’s Housing Market Indices showed gains in home prices throughout the U.S. Rising prices were caused by shortages of previously-owned homes for sale and increasing buyer demand as the average 30-year mortgage rate exceeded six percent.  The southeastern region lost its top spot on S&P Case-Shiller’s 20-City Home Price Index as Chicago, Illinois, Atlanta, Georgia, and Tampa, Florida held the top three year-over-year home price growth rates for April.

Chicago, Illinois Breaks Southeast’s Lead on April Home Price Growth

The top three cities with the highest home price growth rates as reported in April’s   S&P Case-Shiller’s 20-City Home Price Index were Chicago, Illinois with a  year-over-year home price gain of 4.10 percent;  Atlanta, Georgia posted a year-over-year home price growth of 3.50 percent.  Tampa, Florida placed third in the 20-City Index with an average home price gain of 2.40 percent. All year-over-year readings for April home prices were seasonally adjusted.

Average home prices lagged in the West as the combined impact of high home prices and mortgage rates created affordability issues for would-be home buyers. Seattle, Washington saw average home prices drop by -12.40 percent year-over-year; San Francisco, California reported that year-over-year home prices declined by 11.10 percent in April. Home prices in Las Vegas, Nevada fell by 6.60 percent year-over-year.

Mortgage rates nearing 7 percent did not appear to impact home buyers to a great extent, but higher rates do increase the cost of home loans and monthly payments; current mortgage rates and rising home prices do not promote affordable opportunities for first-time and moderate-income home buyers.

FHFA House Price Index

In related news, the Federal Housing Finance Agency posted 0.50 percent month-to-month-home price growth in its  House Price Index for April. This index reports on home prices for homes sold by the Government Sponsored Enterprises Fannie Mae and Freddie Mac. These homes were acquired through foreclosure and were subject to original loan limits established by FHFA for mortgages acquired or guaranteed by Fannie Mae and Freddie Mac The GSEs’ loan limits cause a more moderate range of home price growth reported in  FHFA’s House Price Index as compared to data reported in the S&P Case-Shiller Home Price Indices.

Feeling Squeezed by Higher Rents? It Might Be Time to Consider Buying Your First Home

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Feeling Squeezed by Higher Rents? It Might Be Time to Consider Buying Your First HomeWith the cost of rent going up across the board and becoming even less affordable in metropolitan centers, it’s never been a better time to seriously consider home ownership. While the price of a home and all the associated costs can certainly seem like a tight squeeze after years of renting, here are some reasons you may want to consider giving up your rental and springing for a home instead.

It’s An Automatic Savings

It’s a sure bet that the money you spend on rent is going down the drain as soon as the month is over, but investing your money into a home each month means that you’re actually putting it into something tangible that you can profit from later on. While there are no certainties that the price of your home will improve, there’s a good chance you’ll stand to make a bit of money in the end that will easily offset the cost of insurance and property taxes involved in buying a home.

The Insecurity Of Apartment Living

With apartments being bought up all the time and torn down to make way for new developments, it’s always a possibility that the day may come when your home won’t be your home anymore. The good thing about using your purchasing power to invest in a home is that it gives you the freedom of feeling like you really have something that belongs to you, and you probably won’t have to worry as much about your loud next door neighbors or a landlord that never completes the required maintenance on your apartment.

You Can Consider A Roommate

An apartment often means a smaller amount of space, but it’s possible that a home purchase may provide you with a little bit of extra room and a place for a renter who can help with the monthly bills. Whether you decide on a friend, relative or someone you don’t know, this can be a great way to make home purchasing a little bit more economical and still provide you with the equity you’ll need to make it a worthwhile, long term investment.

With rent becoming less affordable in so many cities, the idea of purchasing a home is becoming a more tenable reality for many people. If you’re interested in what is out there and are curious about your own possibilities for home ownership, you may want to contact one of our local real estate professionals for more information.

What’s Ahead For Mortgage Rates This Week – August 1, 2022

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What's Ahead For Mortgage Rates This Week - August 1, 2022Last week’s economic news included readings on home price growth, new and pending home sales, and inflation. Weekly reports on mortgage rates and jobless claims were also released.

S&P Case-Shiller: Home Price Growth Slows in May

Home prices rose at a slower pace in May according to the S&P Case-Shiller National Home Price Index. Year-over-year home prices rose by 19.70 percent in May as compared to April’s year-over-year reading of 20.60 percent in home price appreciation. Tampa, Florida led S&P Case-Shiller’s 20-City Home Price Index with 36.10 percent year-over-year home price growth. Miami, Florida followed with 34.00 percent home price appreciation. Dallas, Texas reported a 30.80 percent growth rate in home prices.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported 1.40 percent growth in home prices month-to-month and 18.30 percent growth year-over-year for May. FHFA data covers purchase-only transactions associated with home loans owned or backed by Fannie Mae and Freddie Mac. Analysts said that slower growth in home prices signaled a cooling market after years of rapidly rising home prices.

The Commerce Department reported the lowest number of new home sales since the pandemic. New homes sold at a seasonally-adjusted annual pace of 590,000 sales in June as compared to May’s reading of 642,000 sales. Rising mortgage rates and high home prices eroded affordability for first-time and moderate-income home buyers.

Mortgage Rates and Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week as rates for 30-year fixed-rate mortgages fell by 24 basis points to 5.30 percent; rates for 15-year fixed-rate mortgages averaged 4.58 percent and 17 basis points lower than for the previous week. Rates for 5/1 adjustable rate mortgages averaged 4.29 percent and were two basis points lower on average. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Fewer first-time jobless claims were filed last week with 256,000 claims filed as compared to the previous week’s reading of 261,000 initial claims filed. Analysts expected 249,000 first-time jobless claims to be filed last week.

The Federal Reserve moved to slow inflation by raising its target interest rate range from 1.50 percent to 1.75 percent to 2.25 to 2.50 percent. Interest rates are expected to rise for consumer loans, credit cards, and variable-rate education loans. The Commerce Department’s personal consumption price index rose by one percent in June, which was the fastest month-to-month growth rate in 40 years. Analysts expected inflation to increase by 0.90 percent.  

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending and job growth; weekly readings on mortgage rates and jobless claims will also be released. 

Buying A Home That’s Not For Sale

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Buying A Home That’s Not For SaleYou’re ready to purchase a home, but you’ve looked at everything on the market and can’t find the perfect place. You’ve researched the school districts, neighborhoods and nearby amenities, and you know exactly in which area you want to live.

However, anything that comes on the market in that part of town gets snapped up immediately.

It’s time to get creative when it comes to buying a home. Start looking at places that are not currently for sale. You might have driven past your dream home, but you never thought of going the unconventional buying route.

Well, take a look at the tips below to see how you can close on a home without any other buyers knowing.

Look At Previously Listed Homes

Search homes that were on the market, but the owners took them off. Many homeowners let their listing expire and are waiting until the market improves. This is fortunate for you, because you know they are already interested in selling.

Research Online County Records

If you see your perfect home, but you don’t want to just walk up to the door and demand they sell their house, you can find their contact information online. Property records include the owners’ name, address, and, sometimes, their contact information. This will allow you to go through the proper channels of proposing an offer.

Consider A Real Estate Agent

A seller is more likely to take you seriously if a real estate agent brings the offer to them. Agents deal with sellers all the time and will be able to gage if the homeowners are interested.

They’ll also be able to tell you the right price to offer and how you should go about it. You’ll also have piece of mind that all the paperwork that comes with buying a home is completed correctly.

Write A Personal Letter

While all the guidelines say to keep personal feelings out of the home selling process, it’s practically impossible. A home is the place where you raise your children and make memories.

So write the homeowners a heartfelt letter about how you’d like to build a life in their current house. If they think you’ll care for their place as much as they do, they might entertain an offer.

Offer A Fair Price

Many homeowners are ready to upgrade, but hate the idea of getting their current residence ready to sell. They’d have to clean, clear clutter, stage and keep everything looking spotless until they close the deal — which can be quite a hassle.

So, make it convenient. Offer a price that won’t offend and will have them thinking how this could be a stress-free transition.

Maximize Your Investment: When To Sell Your House

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Maximize Your Investment: When To Sell Your HouseYour house is an investment, and it is important for you to treat it as such. Therefore, when is the best time to sell your house? You need to figure out how you can get the most money for your home while also lining up the sale of your house with the timeline of your life. What do you need to know?

Sell Your Home When The Market Is Hot

First, you should sell your home when the market is hot. This means that there are more people looking for houses than there are houses on the market. This is basic supply and demand. If there is a lot of demand for houses, but there are not a lot of houses for sale, you should be able to get more money for your house. Typically, there are more buyers interested in purchasing a house when mortgage rates drop. Keep an eye on mortgage rates to figure out when to sell your home.

Sell Your Home When You Need The Money

You should also consider selling your house when you need the money. This means that if you have a major life event, you might need to tap into your source of reserves. For example, if there is a major medical bill, a death in the family, the arrival of a new baby, or a major move coming up, you should consider selling your house. That way, you have cash on hand to cover these expenses. 

Sell Your Home When You Have Other Sources Of Passive Income

Finally, if you feel like you have other sources of passive income, you may want to free up some cash by selling your house. Other ways you might generate passive income include stock dividends or the sale of a business. If you think you have enough other sources of passive income, it might be time for you to sell your investment property. 

Time The Sale Right To Maximize The Return On Your Investment

These are a few of the most important factors you should keep in mind if you are thinking about selling an investment property. Consider working with a professional who can help you maximize the return on your real estate investment. 

 

Case-Shiller: Home Price Growth Slows in April

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Case-Shiller: Home Price Growth Slows in April

U.S. home price growth continued but slowed in April according to the S&P Case-Shiller Home Price Indices. The national home price index posted year-over-year home price growth of 20.4 percent in April as compared to the corresponding home price growth rate of 20.6 percent in March. Analysts said that diminishing affordability was slowing rapid gains in home prices seen during the pandemic.

20-City Home Price Index: Florida and Arizona Report Top Home Price Growth Rates

The top three cities for year-over-year home price growth in April’s 20-City Home Price Index were Tampa, Florida with a reading of 35.8 percent; Miami, Florida reported 33.3 percent growth and Phoenix, Arizona reported a year-over-year home price growth rate of 31.3 percent.

Nine of the 20 cities included in the index reported higher price gains in April as compared to March. All 20 cities reported higher home prices in April than in March. While analysts noted the slower pace of home price growth, they cautioned against expecting falling home prices any time soon. Craig J. Lazzara, managing director of S&P Dow Jones Indices said that April’s increase in home prices ranked in the top 20 percent of historical experience for every city, and in the top 10 percent for 19 of the cities included in the 20-City Home Price Index.

FHFA House Price Index: Home Prices Rise in April

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported a year-over-year home price growth rate of 18.8 percent for single-family homes owned or financed by Fannie Mae or Freddie Mac. Home prices of homes owned or financed by Fannie Mae and Freddie Mac rose at a month-to-month pace of 1.6 percent in April.

The FHFA Home Price Index reports on home prices across the nine Census divisions; month-to-month home price growth ranged from 0.3 percent in the East South-Central division to 14.1 percent in the Mid-Atlantic division to 23.5 percent in the South Atlantic division. The FHFA Home Price Index is based on single-family home sales data from more than 400 cities in all 50 states.