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.

Property Setback an Important Building Restriction a Homeowner Should Know

 It is very important to understand what a property setback and how it can affect the home building process. This article will establish all you need to know about property setbacks.

What is a property setback?

A property setback is the distance required between your house and your property line. There are many things that will define the setbacks on your property such as the type of building, the property's shape, the reason you are using the lot, its height and its size.

“Property setbacks are the building and land use restrictions placed on parcels of property long before you bought it,” says Mike Powell, an engineer and certified home inspector in Tampa, FL. “These setbacks are put in place by city engineers when designing the parcels and common elements needed to subdivide the larger piece of land into smaller, more divisible units.”

Why setbacks are important

Setbacks are great for a homeowner and their neighbors allowing all parties to live comfortably. Setbacks can give ample space to replace or repair utilities and allow for first responders to have enough acess for emergencies. Other advantages are natural lighting, venilation, noise pollution and improved aesthetics.

“Setbacks ensure the functionality of the residence,” says Greg Covell, a Realtor with Re/Max Select Realty in Vancouver, British Columbia.

How to find out your home's setbacks

This is crucial when it comes to purchasing a piece of property to build on. Before you put in an offer, find out what the governing setbacks are for the property. Do your due diligence by contacting your town orr municipality or your local planning department.

“I had a sale pending the zoning approval of placing a barn outside the setback lines,” Denise Supplee, a real estate agent and founder of SparkRental.com says. “The zoning board gave a big no, and the property deal ended without a sale.”

Can a homeowner challenge setbacks?

Setbacks are not supposed to be a burden but rather a benefit for the community. These rules and regulations allow everyone to live comfortably with privacy. There are exepctions to the rules when it comes to setbacks. A homeowner can request an exception but it will more than likely involve a public hearing where neighbors can support it or oppose it.

“Obviously, engineers are incapable of fully anticipating future use, so setbacks may change over time,” says Powell. “For instance, a railroad line that has been abandoned for over 40 years may have been given a setback. The municipality may allow a variance to allow construction of your shed in the former setback location.”

What happens if you build on a property setback?

Just like any other law or ordinance it is against the law to ingore them. A homeowner that builds a structure on a setback will result in removing the structure at the homeowner's expense.

“If it happens to be a fence or a light structure, it may not be a huge problem,” Powell says. “If that building happens to be a reinforced concrete structure, the owner will have to swallow the expense of demolition and likely face additional fees or fines.”

Click Here For the Source of the Information.

2021 Saw A Huge Increase in Single-Family Starts

 

According to the NAHB's Eye on Housing New single-family starts grew exponentially in 2021. In fact this is the fist time since 2013 there has been such a fast pace in single-family new home starts. NAHB's Survey of Construction (SOC) reported 1,133,145 new single-family were started in 2021. This is 14% higher than reported in 2020.

The South Atlantic, West South Centeral and Mountain Divisions saw the most new single-family units starts which represented 20 states plus Washington DC. This accounted for 41% of the country and over two-thirds of the total new single-family housing starts in 2021. The Pacific Division increased to 106,240 accounting for 9% and the East North Central Division went to 93,693 accounting for 8%.

The other divisions including East South Central, West North Central, Middle Atlantic and New England made up the remaining 16%. Four of the division grew faster than the national level which were the Middle Atlantic with a 26% increase, the East South Central Division with a 23% increas ehte West South Central Division with a 19% increase.

Click Here For the Source of the Information.