Benefits of Homeownership

 Even with the rising mortgage rates, inflation and the slowing housing market there are benefits to homeownership. The secret is how you gain equity and wealth due to home values rising over time.

“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments,” stated the National Association of Realtors (NAR).

The Federal Housing Finance Agency (FHFA) released data showing the gains over the last five years. Home prices grew around 64% on average across the country during that period.
Meaning, the home’s value can increase a lot during a short time period.

Think that is good? They also revealed that over a thirty-year span home prices went up over 290% (on average)! Even with the price increases coming in different by state and local areas, a homeowner who purchased a home thirty years ago saw their equity triple.

The cooling house market will still see home price appreciation in 2023. If you purchase a home, it will still grow in value over the next year. It will just grow over a slower pace than we have seen the last couple of years.

The cooling market should not detour you from owning a home. Rental prices have also been climbing and there are no benefits to throwing your money away to rent. Home buying is an investment that will set you up for long-term gains. Contact a local real estate agent to start your homeownership journey.

Click Here For the Source of the Information.

A New Family Entertainment Venue Is Coming to Covington

 The building that once used to be Rouses will now be redeveloped as a fun, family entertainment venue.   The center will be two venues including a trampoline park and a swim school.  The businesses are expected to draw in patrons from a sixty-mile radius.

The Rouses, which closed last month, is a 58,000-square-foot building located at 50 Park Place and sits next to Home Depot.  Gulf State Real Estate and Construction Services purchased the building making it a multi-million-dollar acquisition.  The company will handle the construction of the two venues that have been in the works for five years.  Rouses came to the company and asked them if they would like to do a project in one of the sites that they wanted to exit.  Gulf State Real Estate and Construction Services built several of the Louisiana grocery store chain’s locations.

Mike Saucier of Gulf State Real Estate and Construction Services, says the plan is to start the redevelopment project at the beginning of 2023.  They will break up the space into two spaces, one for Urban Air which will be 48,000 square feet and one for Goldfish Swim School which will be 10,000 square feet.

Goldfish Swim School teaches swimming and water safety for infants to 12-year-olds and this will be their first Louisiana location.  The goal is to open the swim school in the summer.  This location will hold a 3 to 4-foot deep indoor pool explains franchise owners Rachelle Nurse and her husband Joe Goodly who also owns Urban Air Adventure Park.

Urban Air Adventure Park will be the second Louisiana location and will open in November.  The first Urban Air Adventure Park is located in Denham Springs.  The trampoline park not only includes trampolines, but also a zip line, climbing walls, virtual reality and much more.  The franchise is particular when it comes to choosing a location for one of their franchises.  They take into consideration how many children live in the area and if a site can provide a regional draw.

Saucier is excited about the new projects and believes it will only enhance the desire for corporate relocations to St. Tammany.  “This checks the entertainment box,” Saucier said. “It fills a gap and brings us up to the level of other cities.”

Click Here For the Source of the Information.

James Hardie® Siding Backed By Custom Builders

 Living in the Southeast is wonderful with its four seasons. Having all four seasons can be challenging with humidity, moisture, and storms that can wreak havoc on a home’s exterior. Six top builders throughout the Southeast agree that James Hardie® has the solution to the Southeast’s climate and geography.

1. Todd Wilson

Todd Wilson, the owner of Wilson Design & Construction, Inc. in Valdosta, Georgia, shared with Southern Living his low country cottage project. He used Hardie® plank on the home’s exterior walls, Hardie® trim on the exterior casings, column wraps and beam wraps, and Hardie® soffit for the sheets that make up the cornice and porch ceilings. Hardie® is the best material to use on the exterior of homes in the Southeast because of the moisture, humidity, pests, heat and storms. The products can resist the harsh climate over time. He loves using the product because it is architecturally flexible and ascetically pleasing to the eye.

2. Mary-Dolph Simpson

Mary-Dolph Simpson of Simpson Builders, Inc. talks to Southern Living about Simpson’s Coastal Cottage build in Bay Creek, Virginia. Simpson’s custom builds are all located close to the Atlantic Ocean and the Chesapeake Bay. James Hardie® excels in making exterior siding and products that can replicate natural materials used to build here in the past, such as wood. Their products withstand our coastal Virginia environment and ensure that we can warranty the exterior envelope of a custom home.”

3. Chris Hoffman

Chris Hoffman with Southern Cottage Corporation in Davidson, North Carolina has a perfect example Hardie® siding on their Modern Cottage. The custom-build features Hardie® Plank Select Cedarmills siding along with Hardie’s Artisan Shiplap. “We also showcased classic mitered outside corners using a unique install method from James Hardie®. Busy families appreciate these high-quality, low-maintenance exteriors,” says Hoffman.

4. Chris Brooks

“We chose this product for its durability, ease of installation, overall curb appeal, and to carry out the architect’s vision in keeping with the historic nature of the surrounding area. The size and finish options available work well in the hot, humid climates where we build,” Brooks explains. Chris Brooks owns Structures by Chris Brooks in Moultrie, Georgia.

5. Mike Stevens

Mike Stevens Homes in Knoxville, Tennessee shares his Hardie® example with Southern Living. ” Our client for this build was a busy neurosurgeon who wanted a log maintenance home. We wanted to make a bold statement with the exterior color and this siding was perfect-it stands out against the natural backdrop yet blends in with the existing streetscape. We had lots of rain and red clay mud during the build; the protective film on James Hardie’s ColorPlus Technology finishes helped us overcome this challenge,” reveals Stevens.

6. Jamison Howard

Howard shares about a home in Awendaw, South Carolina that his company Max Crosby Construction built. The coastal environment is harsh on everything with the salty air and extreme weather patterns. It is critical to choose the right exterior building materials that will withstand hurricanes. Hardie® siding and materials are perfect for this environment. Hardie® is known for their durability in coastal areas as their products can endure extreme temperature swings.

If you are planning to have a home built, then choose Hardie® products to ensure your dream home is built with the top product.

Click Here For the Source of the Information.

Ways A Barn Door Can Transform A Space

 The pandemic changed the way we lived and used the spaces in our homes. Homeowners across the board wanted to add privacy and space to their homes. A great and practical piece that will do both is a stylish barn door. Here are three ways you can transform any room with a barn door.

1. Add Privacy

During the pandemic, the stay-at-home orders meant that we were all in our homes 24/7. Privacy and concealing unattractive space became very important. A barn door can add a good-looking feature to your space that can keep clutter out of view. A great example is concealing a children’s playroom. A barn door can hide the jumble of toys, games and books that can create chaos. A barn door can cover an open shelved kitchen pantry or create a door to an en-suite bathroom.

2. Refresh Your Style

Barn doors are a great look and are more design-forward than you might think. “Homeowners often consider barn doors a solution only in rustic homes,” Michael Truelove, senior product manager for interior doors at Masonite says, “but today’s styles can be anything from modern to industrial to classic and more. The great thing about barn doors is they cover a cross-section of design trends. I wouldn’t say one style is more versatile than the rest, since it depends on style preference and use case.”

3. Save Space

Even if you have a big home, a barn door can help with space issues. For example, if you have an area where a conventional door will not work like a narrow hallway. If you want to give a guest bath, a closet or even a small mudroom privacy and they flow out to a narrow hallway then a barn door will fix the issue. In the past, pocket doors have been our only option but they are not as easy to install or maintain. “Like pocket doors, barn doors take up less space than hinged doors, but in this case, all of the hardware, including the track, is outside of the wall and easy to access,” Truelove says.

Masonite is the perfect company for the job. “We make a few recommendations to ensure the best and safest installation of our doors,” Truelove says. “First, measure the width of your opening and available horizontal and vertical wall space to be sure you purchase the right size door, and read the instructions carefully before you begin.” Keep in mind the kits are designed to work as a total system and any modifications will void the warranty and may cause the unit to work improperly. Truelove recommends that, due to the weight of the doors, you don’t try to go it alone. “And don’t forget to wear appropriate personal protective equipment like gloves and safety goggles,” he says.

Click Here For the Source of the Information.

Covington's Southern Hotel to Expand

 The place residents and tourists go in downtown Covington is North New Hampshire Street where the Southern Hotel is located.  The Southern Hotel not only is a place for visitors but also holds several movie houses that show all genres of films.  Within the next couple of years, The Southern Hotel will see another expansion. The project will take The Southern Hotel and expand it to cover the entire block.

Along with the expansion, there will be a new restaurant by BRG Hospitality and a renovated Star Theater. The Star Theater will offer a boutique bowling alley, upscale lounge and music stages.  The expansion has around $17 million in new investments and will be considered the largest transformation of the historic district since the renovation of The Southern Hotel in 2014.

The Southern Hotel boasts 48 rooms and is a boutique-style hotel in the heart of downtown Covington.  With the expansion, it is planned to add additional rooms, condos and retail space.  The retail space will be modeled after the 1940s-era storefronts and there will be an additional 43,000 square-foot Mission-style building built on land.  The new building will be named the Summer House and have retail space on the first floor,  hotel rooms on the second floor, a full-service spa on the third floor and four condos on the fourth floor.  The total new building will cost around $11 million.

The Star Theater, a 1942 movie house, will be renovated and will be the largest of the downtown Covington Theaters.  The theater has been vacant since Katrina and before was split into two theaters in the 1970s. The $3 million to $5 million project will include a six-lane boutique bowling alley, and an upscale lounge.  Eventually there will be plans for a roof-top lounge with stages for small acoustic bands.

“We had gone past it so many times, I tried for six months to negotiate a purchase,” said Warren Salles referring to the Star.

The new restaurant by BRG Hospitality will be called TAVI and will be housed in a former barbershop and law office.  TAVI will be under Fariz Choumali, who has been leading the kitchen at Shaya, and will offer a Israeli-Lebanese inspired menu.

“Downtown is becoming a night-time destination, and we have to embrace that,” says Covington Mayor Mark Johnson.  The area has already begun to see an increase in activity since the restrictions from the pandemic were lifted.  “We’re not Mayberry anymore. We’re Mayberry on steroids,” says Johnson.

Click Here For the Source of the Information.

Is Downsizing in Your Best Interest?

 

Everyone thinks of downsizing once they are empty nesters or many homeowners just might want a change.  Downsizing your home does have many financial advantages as well as less upkeep but is it the best way to go when it comes to taxes?  When you downsize more than likely you will end up with cash from the sale of your larger home which could end up adding to a big tax bill.  

 

Currently if you sell your home (principal residence) for a profit, you could qualify to  knock off $250,000 ($500,000 for married filing jointly) of your capital gain.  In order for you to benefit from the maximum exclusion you will need to pass the ownership and use test by the IRS.  The IRS will want to make sure you have owned the home for the last two years and that you have lived in the home as your principal residence for the past two years (ending on the date of the sale).

 

The IRS does have exceptions to the rules when it comes to the ownership and use test.  For example, if you are moving before owning the home for two years because of a job change (seen as unforeseen circumstances) it is exempt.  Other unforeseen circumstances the IRS has are divorce or natural disaster.  In circumstances such as these, the IRS will allow the homeowner to prorate the exclusion.

 

A homeowner does not have to live in the home for two consecutive years just as long as a homeowner has lived in the home 24 months out of the five years prior to the sale of the home.  Also, you can only claim and exclusion once every two years.

 

Before you decide to sell your home, you will want to calculate your cost basis.  Do this by figuring out the capital gains on the sale of your home then subtract your cost basis from the selling price.  Your cost basis includes the purchase price along with settlement fees, closing costs and commissions associated with both the purchase and the sale. Take these and add to the cost of all the improvements you have

done to the home which will be your cost basis.

 

Determining if something is a capital improvement or repair is also important because capital improvement can be added to your cost basis but repair cost cannot.  Why?  A capital improvement will increase the value of your home, while a repair will just restore your home to its original condition.  For example, a new deck is a capital improvement while fixing your plumbing is considered a repair.  A new roof would be a capital improvement however, just replacing a  few shingles is just a repair.

 

If you are looking to downsize, you may want to consider whether to buy or rent.  Renting will release you from all the obligations of owning a home but you will not be building equity and you will have to answer to a landlord.  There is no right or wrong answer, it is a personal preference which is right for you.

 

Click Here For the Source of the Information. 

A Bright Future Might Be In Store For Single-Housing Home Construction

According to the Federal Reserve Bank of Kansas City single-family home construction is in store for a bright future.  A new study found that the years of underbuilding will come to an end.  This has left us in a deficit estimated at more than one million homes according to the National Association of Home Builders.

Jordan Rappaport, a senior economist at the Federal Reserve Bank of Kansas City, points out several points that align with the NAHB’s Home Building Geography Index data.  The key findings are on commute times, telework and home construction.  Those that work in a large metropolitan area, say that the largest concern about the suburbs is the commute.  The benefit is hybrid working which reduces commute time and expense.

The reduction in commuting will encourage more single-family permits but it will be a slow increase.  There are many headwinds that the National Association of Home Builders has reported that will prevent a quick boost in permits.  For example, when single-family construction begins to rebound, supply constraints are likely to slow its climb to its predicted long-term rate.  Moreover, shortages of workers, construction materials, and ready-to-build lots are all likely to constrain the growth of single-family construction in the short term.

Even with pushback, the jump in the construction of single-family homes will provide a long-term growth period for home building.  Once single-family home construction begins to ramp up, it is predicted to remain high for years to come.

Click Here For the Source of the Information. 

Are Building Material Prices Still Up?

The overall building material prices are down from summer prices except for the prices of ready-mix concrete.  In fact, the price of ready-mix concrete is rapidly rising.  The largest decline seen was in softwood lumber and steel mill prices.  Gypsum prices are still high over 20% from the same time last year.

Prices of building materials saw a 0.3% decrease in September according to the Producer Price Index (PPI). There was also a decline in the PPI for goods input to residential construction (including energy) for the third consecutive month in September.

Gypsum, which is used in drywall, is also an ingredient used in ready-mix concrete.  High demand for cement combined with lower imports of aggregate due to a large quarry shutdown in Mexico have spread thin the supply of domestically produced ready-mix concrete as well as gypsum.   Even though single-family house building is has slowed a little, concrete prices are still rising because it is used for many other applications outside of residential construction. Ready-mix saw a PPI increase of 1.4% this fall which marks the sixth consecutive increase.  This is the largest year-to-date increase in the index’s 34-year history.

Softwood lumber’s  PPI declined 2.9% this fall but the prices are still 14.5% higher than a year ago.  Steel Mill products saw a decrease of 6.7% this fall and have dropped 16.1% over the past four months.  In fact, the index is the lowest it has been since June 2021 which is still double the price that the steel mill was before COVID-19.

Home prices have decreased since last June 2021 2.3% which was reported to be the largest three-month drop since April 2020.  The small decline has happened during high prices on materials though.  In the South, there is a 2.6% increase, a 0.7% decrease in the Northeast, a 0.3% increase in the West and prices stayed the same in the Midwest.

Click Here For the Source of the Information.

IS THE HOUSING MARKET HEADING FOR A CRASH

The housing crash of 2008 was a devastation to the U.S. housing market.  Currently, the economy is slightly taking a negative turn.  The slowdown in the U.S. economy is having many homeowners concerned with the state of the market.  Fortunately, data reveals that today’s slowdown is nothing like the crash in 2008. One of the biggest factors for it not to crash down is the low inventory supply which comes from current homeowners putting their homes on the market, newly built homes being listed and short sales or foreclosures. 

Even with the uptick in housing supply, resales are still low.  Data shows that inventory is up 27.8%  which was the same time last year but compared to 2019 it is down by 42.6%.  This means that the current inventory is still super low because current homeowners are still hesitant to put their homes on the market.  This does not mean however that there are not enough houses on the market to cause a crash or prices to drop.  This would take a flood of current homeowners that would want to put their house on the market at the same time for this to happen.

Ironically even with such low inventory, homebuilders are slowing down their production currently.  “It has become a very competitive market for builders where they are trying to offload any standing inventory,” says Ali Wolf, Chief Economist at Zonda.

The slow down is a reaction to the higher mortgage rates and softening buyer demand. Builder’s do not want to overbuild like they did before the 2008 crash occurred.  Those in the industry say it is a sign that builders are being intentional about not overbuilding homes like what happened during the bubble before the 2008 crash.  The latest report from the U.S. Census states that at today’s current pace, we’re headed to build a seasonally adjusted annual rate of about 1.4 million homes this year. This is the perfect mix to make a stable market.  This will add more inventory at a pace that does not create an oversupply of inventory that the housing market can not absorb.  This is due to the builders being cautious about how much and how fast they are producing.

Distressed properties which are both foreclosures and short sales are another place inventory is pushed out in the market from.  In the 2008 housing crisis, there was an influx of short sales and foreclosures to flood the market in a short period of time.  This crisis was mainly due to the lenders allowing people to secure a loan they really could not afford the home.  Today’s market does not have to worry about this as much because lending standards are much stricter today than they were back then.  These tighter standards are pushing out more qualified buyers and fewer foreclosures.

Around the time of the 2008 crash, there were well over a million foreclosures per year.  When the lender’s tightened their reigns on lending standards the amount of distressed homes started to decline.  Also the introduction of the forbearance program in 2020 and 2021 has also aided in preventing a repeat crash.  This program gave homeowners the option for loan deferrals and modifications that were not there in the past.  And data on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure.

These three factors are the biggest reasons we will not see another big crash like we had in 2008.  Even though our housing supply is growing in 2022, it will not even touch the number of homes that would need to hit the market to saturate it and make home prices drop.  If you are in the market for a new home, contact a local real estate agent who can help you with the purchase of a new home.

Click Here For the Source of the Information.

SINGLE-NEW FAMILY HOMES ARE BUILDING IN THE SMALLER MARKETS

 According to the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) we are seeing a change in the locations of single-family home builds. The building activity in the last 30 months shows a decrease in building in metro areas, largely due to COVID, housing affordability and highly regulated markets.

“The geography of home building has shifted over the last two and a half years, with more single-family and multifamily construction occurring in lower-density markets.  This shift was first caused by the initial impact of COVID shift continued in recent months due to housing affordability conditions that are causing both prospective renters and buyers to expand their geographic search for housing, aided by hybrid work patterns that allow for a combination of remote office work,” said NAHB Chief Economist Robert Dietz.

Another wrench in the system is the problem with getting building materials, construction labor shortages and and the Federal Reserve’s stingent monetary policy.  “Looking at the last 12 months, single-family production has slowed in all regional submarkets, both large and small, due to ongoing building material production bottlenecks, construction labor shortages, and the Federal Reserve’s tigtening monetary policy,” said NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Georgia.

The National Association of Home Builders Home Buidling Geography Index (HGBI)  is a quartley measurement of building conditions across the country and uses county-level information about single-and-multifamily permits to gauge housing construction growth in various urban and rural geographies.  The National Association of Home Builders tracks single-family and multifamily grow rates and market shares in all seven regions of the U.S. The HGBI takes the place of the of the Leading Market Index (LMI).  The LMI would base their findings off single-family housing permits, employment, and home prices.

Currently it is report that the market share for single-family home builiding in large metro core and inner suburbs too a dive from 44.5% to 41.6% from the fourth quarter of 2019 to the second quarter of 2022.  This shows the precovid vs postcovid figures, accounting for the results due to COVID. In the outer suburbs of large and medium metro areas has jumped up from 17.4% to 19% during the same time period as the decrease in the larger areas. The share also increased from 28.8% to 29% in the small metro core counties and in rural areas it rose from 9.4% to 10.4% This is mainly due to homebuyers wanting to move away from the dense areas during COVID.

Click Here For the Source of the Information.

MAKING SURE YOU ARE IN GOOD STANDING BEFORE PREAPPROVAL

 Preapproval for a home mortgage can be confusing, especially if you are a first-time homebuyer.  Many homebuyers want to know if they are preapproval ready.  In order to know, here are some things that lenders look for when preapproving someone for a home loan.

Mortgage pre-approval is not a mortgage pre-qualification.  A preapproval is more in-depth than just answering a few questions from your lender.  There is a lot of paperwork involved which includes employment verification, checking records, savings records and investment records.  Lenders nationwide will like for the same elements when pre-approving for a loan. These include a minimum of two-year employment history in the same job or field, a credit score of 620 or higher, a savings track record, financial asses records, proof of down payment  (3% to 20% of home price), and an all-in debt to income ratio fo 43% or less.  The majority of lenders nationwide will not charge for a pre-approval, however, there are some out there that will ask for reimbursement to pull your credit report.

Your job and credit history play a big part in the pre-approval process.  The two year employment rule is very strict.  If you are a current graduate and can prove future income from your employer this will suffice, but if you change from W-2 pay stubs to self-employment this is a no go.

A credit score of at least 620 is also the rule of thumb.  Before you go to a lender to get pre-approved, you can check your credit score for free through the credit unions.  In today’s market, the loan approval for credit scores is every strict.  For a mortgage, the middle score is what counts and is derived from all three of the provideers, TransUnion, Equifax, and Experian.  If you and your partner are purchasing the home together, the worst middle score of the two will be used to determine preapproval.

Another important factor is your assests and downpayments.  “The ability to budget and save shows financial discipline,” says Staci Titsworth, a regional manager for PNC Mortgage in Pittsburgh.  If you received a big bonus, or an intertance, the lender will also have to show the underwriter where the money came from and that it is not borrowed.  Lenders know that life is not perfect and there will be bumps in the road.  Examples include job loss, job changes, and unexpected expenses.  For many of these reasons, people have to dip into their savings to cover these unexpected expenses. In a nutshell you want to be able to have enough info for the lender to explain to the underwriter your financial ability to repay a loan.

Your debt and income ratio is also very important aspect of the process. Lenders desire to see a debt-to-income rati of 43% or less.  If you make $10,000 a month gross before takes, and $4,300 of it goes towards your debt you are okay. This needs to include you future house payment, monthly property taxes and homeowners’ insurance. There is some room to negotiate when it comes to this. Let’s say your DTI is 46% but you have a great credit score and 5% in the bank for a downpayment.  More than likely most lenders would approve you.

Starting the process early is a good idea in case you need to work on some areas to help with your credit, this will give you time to do so.  If you are going to purchase within the next year, then you will want to start looking at getting preapproved now. Note that preapprovals usually are only valid for 60 to 90 days but can be extended if you keep updating with your current financial situation.

If you are in the market to purchase a home, remember to use both a real estate agent and a lender who can help you with all your homebuying needs.  Going to see a home with a preapproval in hand will show that you are a serious buyer.

Click Here For the Source of the Information.

THE HOMEWOOD SUITES IN COVINGTON WILL BE CONVERTED TO AN APARTMENT COMPLEX

 The former Hilton Homewood Suites located in Covington will be turned into an apartment complex called the Fairlane and the rent at the Fairlane will start around $900 a month.  This is according to Zachary Kupperman who along with his partners purchased the property and plans to turn it into an 86-unit apartment complex.

Zachary Kupperman is no stranger to a project like this.  He is responsible for developments such as The Hotel St. Vincent and the Drifter Motel in New Orleans.  Covington is a perfect area for a project like this because so many works remotely and can rent or purchase farther away from New Orleans.  “In bedroom communities like Covington something like (the Fairlane project) can solve all three problems at once,” said Kupperman.

The closing of the hotel was mainly due to the COVID-19 pandemic and the shortage of travelers during the stay-at-home orders. This has been seen all around the country and not just locally.  Renovating closed-down hotels due to COVID has become a trend.  This coupled with the strong growing need for affordable housing has piqued many developers’ interest in such ventures.

The Homewood suite is a type of lodging that is becoming rare to find these days with not only a place to sleep but a kitchen and living area as well.  This kind of accommodation came around for the business traveler who might need a place to stay for weeks at a time.  Although in the past Hilton has offered this type of room, they are now moving away from this sector and refocusing on a more boutique hotel.

The former Covington Homewood Suites is located at 101 Holiday Square close to the Interstate 12 junction with Frontage Road.  It is a perfect spot because it sits between a Honda dealership and The Collins (an apartment community that rents from $ 1,300 plus).  As mentioned earlier, The Fairlane will start one-bedrooms out at $900 a month which is very affordable in this area.

“There is no heavy construction and the conversion is a fairly light touch, with some painting, carpeting, adding some appliances,” he said. “So spending has been much less.”

The total acquisition and renovation will cost around $9 million which is less than half of what a comparable complex would cost to build from the ground up.  Many of the rooms in the hotel were already being used as long-stay accommodations.  The apartment complex will be able to use the existing pool, hot tub and gym area for the amenities.  The unties will be designed by Covington-based Crown Designs and New Orleans-based Key Real Estate will be managing the complex.

Click Here For the Source of the Information.

The Competive Buyer’s Market Is Slowing Down

In the second quarter of 2022 there was a increase to 49% in the share of prospective home buyers who are actively seeking a home to purchase. This comes after a decline for three straight quarters in a row. Rising interest rates have pushed many prospective home buyers righ tout of the market.

According to the NAHB's Housing Trends Report each region saw a different share of prospective home buyers who are actively searching for a home to purchase. The South was the only region that did not see a rise. As for the remaining three, the Northeast went from 50% in the first quarter to 54% in the second quarter, the Midwest went from 40% in the first quarter to 51% in the second quarter and the West saw an increase of 57% in the second quarter from the 46% that was reported in Quarter one.

The housing market has also seen a rise in availability expextations. We have seen a fall for the last five consecutive quarters so this is good news as it grew from 17% to 22% between the first and second quarter of this year. Along with availability expectations affordability expectations also increased. This has been the first increase since 2020 going from 19% to 23% from the first quarter to the second quarter.

Click Here For the Source of the Information.

Inflation Concerns Are Down Causing a Drop in Mortgage Rates

According to Freddie Mac the mortgage rates have dropped due to the ease in inflation conerns. For the weekly period that ended August 18th, the 30-year fixed-rate mortgage came it at 5.13% which was a decline of 9 basis points.

Good news as this stops the 23 basis points jump that occured just one week prior. This year has seen rates have change rapidly and unpredictably. Since April, the 30-year rates have gone between 4399% and 5.81%. This is up from just a year ago when the 30-year average was 2.86%.

The rate drop also was seen through the average 15-year fixed rate. Currently it dropped to 4.55% from 4.59%. A year ago, the average for the 15-year fixed-rate was 2.16%. In fact, the average of the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell 4 basis points to 4.39% from 4.43% week over week. At the same time last year, the 5-year ARM sat at 2.43%.  The catalyst to the decrease was due to the inflation not rising so much in July as economist predicted according to the Consumer Price Index.

"While both consumer and producer prices showed increases in July, the rate of increase slowed substantially," said Paul Thomas, vice president of capital markets at Zillow, in a research statement.

"Inflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates that the housing market was experiencing earlier this year," Freddie Mac Chief Economist Sam Khater said in a press release.

"The market continues to absorb the cumulative impact of the large price and rate increases that led to a plunge in affordability," Khater said, noting current levels are unlikely to change substantially.

"As a result, over the rest of the year purchase demand likely will continue to drag, supply will modestly increase and home price growth will decelerate," he said.

Click Here For the Source of the Information.