Category Archives: Katonah

Mortgage questions answered | Katonah Real Estate

The common questions many first-time buyers ask are now answered.

Purchasing a home and conquering financial responsibility is a goal for many people. But making this leap to homeownership is a big step, and it’s one that should be taken with careful consideration. Let’s face it, finding a home and securing a mortgage isn’t a walk in the park — and certainly nothing like signing a simple rental agreement. You’ve probably encountered confusing jargon such as “points,” “preapproval,” and “prequalification,” and funny names like Fannie Mae. Making sense of everything can leave you on the verge of frustration, but don’t worry — this is a completely normal feeling.

To help you demystify the process and get the most out of your first mortgage, we’ve asked some finance experts about things to consider before applying, some common points of confusion, and a few handy tips to help you understand the basics of mortgages.

What’s your best advice to a first-time homebuyer?

“Be prepared; do your homework. Check out reputable lenders in your area. Get prequalified so that you know the price range in which you should be shopping.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

“Talk to a local mortgage banker that you’re comfortable with! There are some great mortgage bankers willing to help, so you shouldn’t waste your time with someone who doesn’t make you feel comfortable with the process. Explain what you’re looking to do and what your ideal home-buying situation is. The right mortgage banker will customize your home loan to your specific scenario. Make sure they explain all the costs ahead of time, so that you know exactly what to expect once you get a purchase contract and start the mortgage process.” — Nick Magiera of Magiera Team of LeaderOne Financial

What should buyers be prepared for when applying for a loan?

“Every mortgage situation is different, so there’s really not a one-size-fits-all list of requirements. I recommend that you contact a mortgage banker that you know, like, and trust. If you don’t know any mortgage bankers, then I recommend that you choose a mortgage banker that your real estate agent suggests you work with. Your real estate agent wants you to have a smooth transaction, so they will only send you to mortgage bankers that they trust. A great mortgage banker will then walk you through the process and customize the mortgage around your specific scenario.” — Nick Magiera of Magiera Team of LeaderOne Financial

“There are a few things to get squared away before applying for a loan: 1. Cash for a down payment. Save money/acquire money for a down payment and closing costs. 2. A good working knowledge of your personal finances. Create a budget of your future expenses, as if you own the house, and make sure you can afford it. A good rule of thumb is that your mortgage should not exceed 30% of your take-home income. 3. A general idea of the price range of homes you are interested in. Research potential homes through a local Realtor or at Trulia.com. Compare by looking at real estate taxes, neighborhood statistics, and other criteria. Take your time! Your house may be the largest purchase in your life.” — Scott Bilker of DebtSmart

What is the value in getting preapproved or prequalified for a mortgage?

“It gives homebuyers an edge against competing offers. If a seller sees two offers and one has already been approved, then that is often the one that they go with, as there is less risk for them.” — Tracie Fobes, Penny Pinchin’ Mom

“First off, there is a difference between preapproved and prequalified. Prequalifying means you have done an initial lender screening. However, preapproval is the next step in the process. You have to give the bank many more documents like you’re applying for the mortgage. It’s worth doing because you will get a preapproval letter from the bank, and this will show sellers and real estate agents that you’re a serious buyer. It will also give you a better idea of which homes you can afford. Additionally, you will be able to act quickly once you find that perfect place without having to then seek out financing.” — Scott Bilker of DebtSmart

What range of rates should a first-time homebuyer expect with either a poor credit score or a strong credit score?

“On a conventional loan (Fannie Mae or Freddie Mac), the difference in price between a poor credit score (620) and a strong credit score (740-plus) could be as much as 3.0 points in fees, or 0.75 to 1.25% in interest rate. On an FHA or VA loan, the price difference may be up to 0.75 in points in fees or 0.125 to 0.250% in interest rate.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

“There is not a single universal standard. Lenders determine what kind of risk premium it will add to a loan based on your credit history and other information presented in a loan application. You can’t take a lender’s advertised interest rate for its best-qualified borrowers and tack on a set premium because you’re a C credit instead of an A credit (A credit being the least amount of risk).” — Nick Magiera of Magiera Team of LeaderOne Financial

What are some tips for paying off your mortgage faster?

“There are only two ways to pay off your mortgage fast: 1. Refinance at a lower rate. 2. Pay more toward the mortgage. That’s it. Don’t be fooled by biweekly mortgages because all they do is make you pay more. If you are not in a position to get a lower rate, then simply increase your monthly mortgage payment to an amount that is comfortable, keeping in mind that this is money you cannot easily get back. Conversely, if you pay more on your credit cards, you can always use the card again for cash or to buy things you need.” — Scott Bilker of DebtSmart

What does it mean when “the Fed raises the rates,” and how does it apply to mortgages?

“[The] Federal Reserve sets the interest rate that banks pay to borrow overnight funds from other banks holding deposits with the Federal Reserve. If the cost of overnight borrowing to a bank increases, this typically causes banks to increase the interest rates they charge on all other loans they make, to continue to earn their targeted return on assets. As banks increase their interest rates, other lenders or financial firms also tend to increase their rates. An increase in the federal funds rate does not directly correlate to a direct increase in mortgage rates but is viewed as a general signal to the market that the Federal Reserve views that the economy is growing and that interest rates will be increasing in the future.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

What are points?

“Points are fees the borrower pays the lender at the time the loan is closed, expressed as a percent of the loan. On a $200,000 loan, 2 points means a payment of $4,000 to the lender. Points are part of the cost of credit to the borrower, and in turn are part of the investment return to the lender. That said, points are not always required to obtain a home loan, but a ‘no point’ loan may have a higher interest rate.” — Nick Magiera of Magiera Team of LeaderOne Financial

“‘Discount points’ refers to a fee, usually expressed as a percentage of the loan amount, paid by the buyer or seller to lower the buyer’s interest rate.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

read more…

https://www.trulia.com/blog/mortgage-101-breaking-down-basics/?ecampaign=con_cnews_digest&eurl=www.trulia.com%2Fblog%2Fmortgage-101-breaking-down-basics%2F

Miami luxury condo prices plunge | Lewisboro Real Estate

According to a new report from Douglas Elliman and Miller Samuel, the average sale price for luxury condos in Miami and Miami Beach plunged 30 percent year over year in the third quarter, to $948,700 and $2.6 million respectively.

The number of luxury condo sales also plunged, by 25 percent in Miami and 17 percent in Miami Beach.

The declines mark another step down for high-end real estate in the area, which had experienced a boom after the financial crisis. It comes as buyers from Latin America are slowing to a trickle and uncertainty around the presidential election is causing wealthy Americans to pull back.

At the same time, luxury buildings that were started during the boom years of 2013 and 2014 are now starting to come online, creating a glut of high-priced homes and condos.

Miami’s results echo those from other cities in the U.S., where the highest priced real estate is faring the worst.

Luxury “is becoming a smaller part of the market due to the reduced emphasis at the top,” said Miller Samuel’s Jonathan Miller.

Inventory of luxury condos in Miami Beach jumped 30 percent in the quarter compared with a year ago, to 1,235. These properties are now sitting on the market for an average 126 days, more than double last year’s number.

In broader Miami, inventory rose 11 percent, resulting in a 40-month supply of luxury condos. Inventories for single-family homes in both areas are also higher.

Given these broad-based increases, Miller said the luxury real estate market in Miami is likely to get worse before it gets better.

 

read more…

 

http://www.cnbc.com/2016/10/19/miami-luxury-condo-prices-take-a-plunge.html?__source=newsletter%7Ceveningbrief

Key Building Materials Remain Stubbornly Expensive | Cross River Real Estate

Inflation in prices received for building materials (prior to sales to consumers) was mixed in September according to the latest Producer Price Index (PPI) release by the Bureau of Labor Statistics. Although their monthly changes were relatively modest, the prices of OSB and ready-mix concrete have been trending upward for quite some time and remain at historically high levels.

OSB prices climbed 2.5% in September, continuing a 7-month trend that has the commodity at its highest price since June 2013. Since February, monthly increases have averaged 3.2%, pushing prices up by a cumulative, eye-popping 25%.

2016-10-ppi-osb-prices1

In addition, although the price of ready-mix concrete fell marginally in September, the long-term trend remains concerning. Monthly increases have averaged 0.3% over the last five years as the price of ready-mix concrete has steadily risen by roughly 20%.  While gypsum prices picked up (+0.1%), the prices of softwood lumber and steel mill products fell by 1.4% and 0.5%, respectively.

2016-10-ppi-grmcsl

After holding steady in August, the economy-wide PPI rose 0.3% in September. Over three-quarters of the increase was the result of a 0.7% increase in prices for goods, while the rise in prices for services was a more modest 0.1%. Final demand prices for core goods (i.e. goods excluding food and energy) inched up 0.3%, and prices for core goods less trade services rose 1.5% over the 12 months ended in September. This represented the largest 12-month increase in two years.

 

read more…

 

http://eyeonhousing.org/2016/10/key-building-materials-remain-stubbornly-expensive/

More First-timers Than Expected Are Now Buying Homes | Katonah Real Estate

First-time buyers may be entering the U.S. home market in greater numbers than industry watchers had assumed.

Nearly half of sales in the past year went to people who were buying their first home, according to a survey released Tuesday by the real estate firm Zillow. That’s a much higher proportion of the market than some other industry estimates had indicated.

Zillow’s survey results suggest that this year’s growth in home sales has come largely from a wave of couples in their 30s, who are the most common first-time buyers. If that trend were to hold, it could raise hopes that today’s vast generation of 18-to-34-year-old millennials will help support the housing market as more of them move into their 30s.

That’s among the findings in a 168-page report by Seattle-based Zillow. Its survey also found that home ownership is increasingly the domain of the college-educated. And it indicated that older Americans who are seeking to downsize are paying premiums for smaller houses.

Here’s a breakdown of Zillow’s findings:

— First-time buyers make up a larger chunk of the housing market than the real estate industry has generally thought. Forty-seven percent of purchases in the past year went to first-time buyers. Their median age was 33. By contrast, surveys from the National Association of Realtors have indicated that first-timers account for only about 30 percent of all buyers.

The difference between the two surveys may stem from their methodologies. The NAR has used a mail-based survey for its annual figures, while Zillow used an online survey that might have generated more responses from younger buyers.

— No college? Dwindling chance of homeownership

It’s become harder to realize the dream of home ownership without a college degree. Sixty-two percent of buyers have at least a four-year college degree. Census figures show that just 33 percent of the U.S. adults graduated from college. The gap between the education levels of homebuyers and the broader U.S. population indicates that workers with only a high school degree are becoming less likely to own a home.

This is a major shift for the middle class. Just 12 percent of homeowners in 1986 were college graduates, according to government figures. The trend is driven in part by falling incomes for people with only a high school degree.

— Millennial home buyers are increasingly Hispanic

Out of the 74 million U.S. households that own their homes, a sizable majority — 77 percent — are white. But these demographics are changing fast. Only 66 percent of millennial homeowners are white. The big gains have come from Latinos, who make up 17 percent of millennial homeowners but just 9 percent of all homeowners.

Asians also make up a greater share of millennials. This means that as today’s millennial generation ages, the housing market may look considerably more diverse than it does now.

— Older Americans aren’t just downsizing; they’re also upgrading.

The so-called “silent generation” — those ages 65 to 75— bought homes in the past year with a median size of just 1,800 square feet, about 220 square feet smaller than the homes they sold. But that smaller new home still cost more. These retirement-age buyers paid a median of $250,000, nearly $30,000 more than the home they sold. In some cases, the higher purchase price likely reflects the profits from the sale of their previous home, in other cases a desire by upscale buyers for luxury finishes and amenities.

— Starter homes are no longer popular.

When millennials buy, they’re leapfrogging past the traditional, smaller starter home. This younger generation paid a median of $217,000 for a 1,800-square-foot house. That median is nearly identical to what older generations buy.

 

read more…

 

http://www.newsmax.com/Personal-Finance/zillow-housing-survey-homes-buyers/2016/10/18/id/753992/

Chinese real estate is ‘biggest bubble in history | Katonah Real Estate

Chinese billionaire Wang Jianlin made his fortune in the country’s real estate market — and now he’s warning that it’s spiraling out of control.

It’s the “biggest bubble in history,” he told CNNMoney in an exclusive interview Wednesday.

Bubble is a sensitive word in China after the dramatic rise and spectacular crash in the country’s stock market last year, which wiped out the savings of millions of small investors who thought Beijing wouldn’t allow the market to drop.

After struggling to contain the fallout from the stock market debacle, China’s leaders could face a similar headache in the real estate sector.

The big problem, according to Wang, is that prices keep rising in major Chinese metropolises like Shanghai but are falling in thousands of smaller cities where huge numbers of properties lie empty.

“I don’t see a good solution to this problem,” he said. “The government has come up with all sorts of measures — limiting purchase or credit — but none have worked.”

It’s a serious worry in China, where the economy is slowing at the same time as high debt levelscontinue to increase rapidly. There are massive sums at stake in the real estate market: direct loans to the sector stood at roughly 24 trillion yuan ($3.6 trillion) at the end of June, according to Capital Economics.

“The problem is the economy hasn’t bottomed out,” Wang said. “If we remove leverage too fast, the economy may suffer further. So we’ll have to wait until the economy is back on the track of rebounding — that’s when we gradually reduce leverage and debts.”

He says, though, that he’s not worried about the prospect of a “hard landing” — a sudden and catastrophic collapse in economic growth.

Wang’s comments carry weight. He is the richest man in China, according to Forbes and Hurun Report data from 2015, and his real estate and entertainment empire brought in revenue of about $44 billion last year.

Wang has been warning of trouble in the Chinese property market for a while. His Dalian Wanda Group, which has developed huge malls and office complexes across China, has been gradually cutting back on its real estate business.

Instead, it’s pouring resources into entertainment, sports and tourism — areas where it sees potential for growth.

Wang has been on an overseas shopping spree lately, with a particular focus on the U.S. movie industry. And he’s on the hunt for more juicy targets.

In January, he bought the Hollywood studio Legendary Entertainment, which made blockbuster movies like “Jurassic World” and “Godzilla.” Less than two months later, his movie theater business AMC snapped up Carmike Cinemas, forming the biggest cinema chain in the world. And Wanda’s in talks to buy Dick Clark Productions, which produces shows like the American Music Awards and the Golden Globe awards.

But the major prize he’s seeking is control of one of Hollywood’s “Big Six” movie studios: 20th Century Fox, Columbia, Paramount, Universal Pictures, Warner Brothers and Walt Disney.

“We are waiting for the opportunity,” he said. “It could come in a year or two, or longer, but we have patience.”

His relations with Disney (DIS) came into the spotlight in May when he said the U.S. company“really shouldn’t have come to China” with its giant new Shanghai resort. Wanda is also investing heavily in theme parks in the country.

 

read more…

http://money.cnn.com/2016/09/28/investing/china-wang-jianlin-real-estate-bubble/

The rich are being maddeningly frugal | Katonah Real Estate

The lonely $250,000 S-Class coupe at Mercedes-Benz of Greenwich says it all. For six months, it’s been sitting in the showroom, shimmering in vain while models priced at only $70,000 fly out the door.

“We haven’t had anyone come in and look at it,” says Joey Licari, a sales consultant at the dealership, looking over his shoulder at the silver beauty. “I feel like normally they would, maybe a few years ago.”

Such is the state of affairs in Greenwich, the leafy Connecticut town famous for its cluster of hedge funds and the titans of Wall Street who occupy many a gated mansion. The rich are being maddeningly frugal, as Barry Sternlicht complained when he assailed his former hometown as possibly the country’s worst housing market. “You can’t give away a house in Greenwich,” the head of Starwood Capital Group said, causing something of a ruckus.

The reality is that places like Sternlicht’s, a nearly 6-acre estate priced at $5.95 million before he gave up, aren’t moving. No such problem if it’s $2 million or less. That Benz is going nowhere, but sales are up at Cadillac of Greenwich, where $50,000 is pretty much the basement. Ten-carat diamonds that can cost in the six figures collect dust in stores on the main drag. On the other hand, a husband will still drop $10,000 on jewelry for a 10th anniversary.

The new Greenwich is like that. “We aren’t getting caviar and champagne,” says Edward Tricomi, co-owner of Warren Tricomi Salon on Greenwich Avenue, “but we’re still eating steak.”

Bonus Slump

The town was hit hard by the 2008 financial crisis, and never fully recovered: The median sales price for homes in the second quarter was $1.56 million, 17 percent below the peak back in 2006, according to data compiled by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Now, with the hedge-fund business struggling and investment-banker incentive pay in a slump, bonus-fueled purchases are cooling again. These days, in fact, not losing money can be cause for swagger.

“We talk to a lot of guys from hedge funds, and they’re like, ‘Look at our numbers, we haven’t gone down, we’re staying level,’” says Brad Walker, who moved from Boston two years ago to open a branch of his family’s shop, Shreve, Crump & Low. A newcomer, he finds it perplexing. “I don’t run a hedge fund, I work in a jewelry store, but I think you’d want to do a little bit better.”

$135,000 Median

Flat probably isn’t so bad, though, if you’re already in the neighborhood of the .001 percent. Anyway, many factors are at play in the scaling back. Tastes are changing. And with income inequality a talking point across America, and the finance industry the target of criticism and scrutiny in recent years, some might just want to keep low-spending profiles.

“The things being bought are less trophy items and, more likely, carefully bought quality,” says Terry Betteridge, who owns Betteridge, a jewelry store. “One doesn’t want to become the next episode of ‘Billions.’”

Just 35 miles from Manhattan in the heart of Connecticut’s famed Gold Coast, with about 60,000 residents and 32 miles of shoreline, Greenwich is among the most prosperous communities in America. One out of every $10 in hedge funds in the country is managed here, according to data compiled by Bloomberg, by firms such as Viking Global Investors and AQR Capital Management. It’s home to finance heavyweights including Steven Cohen of Point72 Asset Management and Dick Fuld. The median annual household income is $135,000 — compared with $56,516 nationally. Residents paid more state income taxes in 2014, the last year for which data are available, than in any other municipality in Connecticut.

Sore Point

The tax rate, by the way, is a sore point, and possible reason behind the departure of the likes of Paul Tudor Jones and Thomas Peterffy, who switched their permanent residences to Florida. The state income tax there is zero.

In 2015, Connecticut boosted the income tax for individuals making more than $500,000 and couples above $1 million to 6.99 percent from 6.7 percent. Levies on luxury goods rose to 7.75 percent from 7 percent on cars over $50,000, jewelry over $5,000 and clothing or footwear over $1,000.

Sternlicht said at a conference two weeks ago that this was why he relocated to the sunshine state. “We used to have no taxes,” he said wistfully, recalling Connecticut before it enacted its income tax in 1991.

Many continue to try to sell their real estate holdings. As of Sept. 14, there were 46 homes at $10 million or more on the market, some that have been lingering since 2014, according to data from Miller Samuel and Douglas Elliman.

3,000-Bottle Cellar

Among them: an 80-acre estate on Lower Cross Road for $49 million that until last month was asking $65 million, and a 19,773-square-foot manse once owned by Republican presidential candidate Donald Trump that has been looking for a buyer for nearly two years. It’s on the market now for $45 million, down from $54 million.

Former Trump property
Former Trump property
Source: Coldwell Banker

No takers yet for a seven-bedroom affair with a 3,000-bottle chilled wine cellar, a tennis court that converts to a hockey rink and a globe-shaped observatory with a retractable roof and high-powered telescope. That one recently returned to the market at $8.495 million, after an earlier effort at $8.95 million. Former Citigroup Chief Executive Officer Sandy Weill is trying to offload his 16,460-square-foot home at $9.9 million, down from $14 million more than two years ago.

One problem is that risk levels have gone through the wringer. Members of the younger Wall Street crowd are quite conservative, says Robin Kencel, a broker with Douglas Elliman. “They used to say Oh, I’ll stretch.’ Now they’re more practical. They’ll ask ‘What are the utility bills? Oh, wait — I don’t want it.’”

That could explain why, this year through Sept. 22, pending sales of homes priced up to $999,999 jumped 29 percent from the same period in 2015, according to brokerage Houlihan Lawrence, and those between $1 million and $1.99 million were up 69 percent. Contracts for homes between $5 million and $5.99 million, meanwhile, fell 80 percent.

 

read more…

 

http://www.bloomberg.com/news/articles/2016-09-26/in-greenwich-that-250-000-mercedes-isn-t-the-hit-it-used-to-be

Hottest U.S. Real Estate Markets for September | Katonah Real Estate

Hottest markets for September 2016

Mindy_Nicole_Photography/iStock; uschools/iStock
jjwithers/iStock; Aneese/iStock; Greg Chow

September would ordinarily be the end of the high season for residential real estate, with schools back in session across the U.S. and families reluctant to uproot. But hold on—this is no ordinary year, and a preliminary review of the month’s data on realtor.com®shows that September is shaping up to be the hottest fall in a decade.

Homes for sale in September are moving 4% more quickly than last year, and that’s even as prices hit record highs. The median home price maintained August’s level of $250,000, which is 9% higher than one year ago. That’s a new high for September.

“The fundamental trends we have been seeing all year remain solidly in place as we enter the slower time of the year,” says realtor.com’s chief economist, Jonathan Smoke. That means short supply and high demand, which results in high prices.

Granted, September saw a bit of the typical seasonal slowdown, with properties spending five more days on market (77) than last month—but that’s still three days faster than last year at this time. At the same time, fewer homes are coming on the market, further diminishing supply. Total inventory remains considerably lower than one year ago, leaving buyers with fewer options in a market that has already been pretty tight.

In gauging which real estate markets were seeing the most activity, our economic data team took into account the number of days that homes spend on the market (a measure of supply) and the number of views that listings on our site get (a measure of demand). The result is a list of the nation’s hottest real estate markets, where inventory moves 23 to 43 days more quickly than the national average, and listings get 1.4 to 3.7 more views than the national average.

New to the top 20 this month is Grand Rapids, MI. Like other cities on the list, “Grand Rapids” includes the greater metropolitan area, which in this case takes in Wyoming, MI. Similarly, our No. 1 market, “San Francisco,” also includes nearby Oakland and Hayward.

The hot list

Rank
(September)
20 Hottest Markets Rank
(August)
Rank Change
1 San Francisco, CA 4 3
2 Vallejo, CA 1 -1
3 Denver, CO 3 0
4 Dallas, TX 2 -2
5 San Diego, CA 6 1
6 Stockton, CA 5 -1
7 Fort Wayne, IN 11 4
8 Sacramento, CA 10 2
9 San Jose, CA 10 2
10 Waco, TX 14 5
11 Modesto, CA 13 2
12 Columbus, OH 7 -5
13 Yuba City, CA 12 -1
14 Detroit, MI 9 -5
15 Santa Rosa, CA 19 4
16 Colorado Springs, CO 16 0
17 Santa Cruz, CA 17 0
18 Kennewick, WA 18 0
19 Nashville, TN 20 1
20 Grand Rapids, MI 21 1

 

 

read more…

 

http://www.realtor.com/news/trends/the-hottest-u-s-real-estate-markets-for-september-2016/?is_wp_site=1

30-Year Fixed-Rate Mortgage Hits 10 Week Low | Katonah #RealEstate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the average 30-year fixed mortgage rate falling as the FOMC decided to leave short term rates unchanged.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.42 percent with an average 0.5 point for the week ending September 29, 2016, down from last week when it averaged 3.48 percent. A year ago at this time, the 30-year FRM averaged 3.85 percent.
  • 15-year FRM this week averaged 2.72 percent with an average 0.5 point, down from last week when it averaged 2.76 percent. A year ago at this time, the 15-year FRM averaged 3.07 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.81 percent this week with an average 0.4 point, up from last week when it averaged 2.80 percent. A year ago, the 5-year ARM averaged 2.91 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“Investors flocked to the safety of government bonds causing the 10-year Treasury yield to continue its descent following the FOMC’s decision to leave rates unchanged. The 30-year fixed-rate mortgage responded by dropping 6 basis points before landing at 3.42 percent — a ten-week low. The course of the economy is uncertain, yet consumers continue to be a bright spot. The September consumer confidence index is up 3 percent to 104.1, exceeding forecasts and reaching a new cycle high.”

Single family home sales fall 7.6% | Katonah Real Estate

United States New Home Sales  

Sales of new single-family houses in the United States fell 7.6 percent to a seasonally adjusted annual rate of 609,000 in August of 2016, better than market expectations of an 8.8 percent decline. Figures for the previous month were revised up by 5,000 to 659,000, the highest since 2007. New Home Sales in the United States averaged 652.45 Thousand from 1963 until 2016, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011. New Home Sales in the United States is reported by the U.S. Census Bureau.

United States New Home Sales
read more….
http://www.tradingeconomics.com/united-states/new-home-sales

 

How New Home Buyers Financed Their Homes in 2015 | Katonah Real Estate

NAHB analysis of the Census Bureau Survey of Construction (SOC) data shows that non-conventional forms of financing new single-family home purchases remained elevated in 2015, accounting for more than a third of the market.

Looking at new single-family homes started in 2015, the South Atlantic division was most dependent on non-conventional financing, with its share exceeding 40% of the market. The West South Central and New England divisions registered similarly high shares but relied on very different types of non-conventional financing. In New England, a third of all homes started in 2015 were cash purchases, while loans insured by the Federal Housing Administration (FHA) accounted for less than 3% of the market. In contrast, homebuyers in the South Atlantic and West South Central division relied more heavily on FHA- and VA-backed loans that together accounted for more than 26% and 21% of the market, respectively.

At the opposite end of the spectrum is the East South Central division where only 16% of new homes started in 2015 were financed using non-conventional methods. This share is less than half of the US average of 34.5%, making it the lowest share of non-conventional financing in the nation.

The Pacific and Mountain divisions registered shares of non-conventional financing methods close to the US average, 34% and 36%, respectively. In the middle Atlantic division, one in four single-family homes started in 2015 was financed by non-conventional means. While in the West North Central and East North Central divisions, only one in five new home buyers relied on non-conventional financing.
SOC_financing15
For homes started in 2015, the share of mortgages insured by the FHA bumped up, especially in the Pacific and South Atlantic divisions where FHA loans accounted for 19% and 18%, respectively. This was largely due to a reduction in FHA mortgage insurance premiums implemented at the start of 2015. As a result, FHA-backed loans regained their status as the most prevalent form of non-conventional financing of new home purchases – the status they temporarily lost to cash purchases a year earlier following the implemented decline in the 2014 FHA loan limits.

The share of VA-backed loans remained relatively stable in 2015, accounting for just over 6% of the market. However, their share was almost twice as high, approaching 12%, in the Mountain division, the only region in the nation where the share of VA-backed loans exceeded that of cash purchases and other types of financing combined.

The share of cash purchases declined in 2015, most dramatically in the Mountain division, where cash purchases lost half of its market share. Overall, cash purchases accounted for 10 percent of the market. New England registered the nation’s highest share, with one in three new homes started in 2015 purchased with cash. The Middle Atlantic and East North Central divisions registered the second and third highest shares – 15% and 14%, respectively. At the other end of the spectrum is the East South Central division where less than 7% of single-family starts were financed with cash.

The high prevalence of cash financing in the New England, East North Central and Middle Atlantic divisions can be partially explained by the popularity of custom homebuilding in these divisions, with all three claimingthe top three custom home market shares in 2015. Custom homes are more likely to be financed with cash, especially if built by the owner acting as the general contractor. In 2015, more than 36% of custom homes built by the owner were financed with cash, while less than 7 percent of spec homes were purchased with cash.
Financing
Other types of non-conventional financing methods – such as the Rural Housing Service, Habitat for Humanity, loans from individuals, state or local government mortgage-backed bonds and other – are particularly popular in the West South Central division (7.6%) and South Atlantic division (5.7%), both exceeding the national average of 4.5%.

 

read more…

 

http://eyeonhousing.org/2016/08/how-new-home-buyers-financed-their-homes-in-2015/