Think Twice When You Hear...

The number of homes in some stage of foreclosure was down 35 percent year-to-year in April 2014, according to CoreLogic.  The number of completed foreclosures dropped 18 percent year-to-year.


Ninety percent of people under 35 prefer owning a home to renting, according to a Fannie Mae survey, but the home ownership rate for these millennials is just 36 percent - the lowest level since the Census Bureau started tracking home ownership by age group in 1982.

Why?  Ballooning student loan debt, for one thing.  Two out of three students graduate with debt, and the average student loan debt is now over $33,000, according to the Census Bureau and NerdWallet.  (See a startling interactive infographic called "Exploring the Student Loan Debt Crisis" by clicking here. 


Approximately 61 percent of first-time home buyers have a down payment of 6 percent or less, according to the April REALTORS® Confidence Index.  While 60 percent might seem high, it's down from 74 percent in 2009.


The refinance boom is over and banks are hungry for your home purchase business.  Some lenders have reduced their minimum credit score and down payment requirements, and a few are even offering incentives such as waiving private mortgage insurance (PMI) if borrowers will take a home buyer class.  Second mortgages, which virtually disappeared during the recession, are making a comeback.

Note:  Tighter guidelines that came into effect earlier this year are still creating challenges for home buyers with high debt-to-income ratios and those whose income is harder to document.


Who was responsible for the 32 percent of all-cash home sales in April 2014?  According to the National Association of Realtors®, 70 percent of investors and 90 percent of international buyers paid cash for homes, compared to 13 percent of first-time home buyers.



First-time home buyers accounted for 29 percent of sales in April 2014.  Investors accounted for 18 percent, 12 percent were to second home and relocation buyers, and 2 percent of sales were to international buyers.

These demographics are very similar to what they were a year ago, except that the number of sales to international buyers has dropped by a rate of 13 percent.


Home prices are expected to increase, just at a slower pace.  National year-to-year price increase forecasts through April 2015 vary widely, including 2.2 percent predicted by Zillow, 4 percent by the National Association of Realtors®, and 6.3 percent by CoreLogic.

Interest rates are also expected to rise gradually.  Many experts are calling for a .5 to 1 percent increase over the next year.  That being said, interest rates have so far defied predictions in 2014 by dropping to the low 4 percent range.

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- U.S. home prices rose 12.4 percent year-to-year in March, according to a recent S&P/Case-Shiller report.  They rose 10.5 percent year-to-year in April, according to CoreLogic, a data and analytics company.  

   

- The national average 30-year fixed mortgage rate stayed in the low 4-percent range. 

 

The Pending Home Sales Index dropped 9.2 percent year-to-year in April, according to the National Association of Realtors®.

 

Note:  Housing statistics based on closed sales typically reflect market conditions of two or three months ago.  To find out what's going on right now in our local market, please call us directly.