Tag Archives: Waccabuc NY Real Estate

Schiller: Always reason to worry about housing prices | Waccabuc Real Estate

US home price gains slowed slighting in July, as many on Wall Street are speculating that the Federal Reserve will raise rates before the end of the year. The S&P/Case-Shiller 20-City Composite Index rose 5.0% year-over-year, missing analysts’ expectations of a 5.1% increase but still above the 4.8% pace of the prior two years.

The recent surge in real estate demand has pushed home prices near their pre-crisis peak in 2006, which is making it increasingly difficult for new home buyers to enter the market. Home sales fell 0.9% in August from the previous month, according to the National Association of Realtors. That’s the second straight month of declines.

Higher home prices have begged the question by many as to whether the current pace is sustainable, or if there’s reason to fear another massive collapse in real estate.

“There’s always reason to worry [about a coming collapse],” Robert Shiller, Nobel Prize–winning economist and co-creator of the S&P/Case Shiller Index, told Yahoo Finance’s Seana Smith in the video above. But he is quick to point out one stark difference between today’s housing market and that of 2006. “We’re in a holding pattern right now … People are less excited about buying because they themselves don’t believe [home prices] will be going up a lot. Back in 2006, when the homeownership rate was setting records, people had extravagant expectations.”

His comments on Americans’ hesitation to buy echo the findings of a recent study byPulsenomics, which found that just 38% of renters surveyed think now is a good time to buy. Today, home values have reached or surpassed peak levels in about a quarter of US markets.

How rising rates could impact the housing market

While prospective buyers continue to benefit from relatively low borrowing costs, the big question is whether a series of rate hikes will increase mortgage rates and prompt a fallout in the housing sector. Fed funds futures suggests a roughly 57% chance of higher US interest rates by December, according to data from CME Group.

Shiller says it’s very difficult to forecast how the housing market will react to rising rates but is quick to point out that even in an uncertain environment, rate hikes shouldn’t be a factor for potential buyers.

“The Fed raised [rates] in December just a quarter of one percent, and plausibly they’ll raise [rates] by another quarter or a half percent, and it may not be a big deal,” said Shiller. “On the other hand, it might be a big deal because we’re in this strange period of near zero interest rates, and if people see it as a major turning point, it could affect home prices … My opinion is if you want a house, go out and buy it. It’s not an extremely unusual time. There are always risks.

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http://finance.yahoo.com/news/robert-shiller-theres-always-reason-to-worry-about-a-coming-collapse-in-housing-124331739.html

Home prices rise slightly less than forecast | Waccabuc Real Estate

U.S. single-family home prices rose slightly less than expected on an annual basis in July, and the year-over-year gain was smaller than in the prior month, a survey showed on Tuesday.

The S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas rose 5 percent in July on a year-over-year basis, retreating from the 5.1 percent climb in June and short of the estimate calling for a 5.1 percent increase from a Reuters poll of economists.

“Both the housing sector and the economy continue to expand with home prices continuing to rise at about a 5 percent annual rate,” said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.

“There is no reason to fear that another massive collapse is around the corner.”

Prices in the 20 cities were flat in July from June on a seasonally adjusted basis, the survey showed, matching expectations.

On a non-seasonally adjusted basis, prices increased 0.6 percent from June.

Home prices in three U.S. cities, Denver, Seattle and Portland, Oregon, showed the highest year-over-year gains, the survey showed.

 

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http://www.marketbeat.com/stories.aspx?story=http%3a%2f%2ffeeds.reuters.com%2f~r%2freuters%2fbusinessNews%2f~3%2fKc7Pyl6Zl3o%2fus-usa-economy-homes-index-idUSKCN11X1FO

Pending Sales Decline | Waccabuc Real Estate

The Pending Home Sales Index decreased 2.4% in August, declining for the third time in four months, and falling 0.2% below its level for the same month a year ago. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR),decreased to 108.5 in August from a downwardly revised 111.2 in July.

pending-home-sales-august-2016

The PHSI increased 1.3% in the Northeast in August, consistent with the 6.1% increase in existing sales in the Northeast reported last week. But the PHSI decreased in the remaining regions, ranging from 0.9% in the Midwest to 3.2% in the South and 5.3% in the West. Year-over-year, the PHSI was up 5.9% in the Northeast, but fell 0.6% in the West. 1.5% in the South and 1.7% in the Midwest.

NAR attributed the PHSI decline to a lack of inventory. However, builder confidence surged in September along with consumer confidence. Also, August new home sales recorded their second strongest month since the Great Recession. These reports suggest good news for new construction as the housing recovery continues to address demand among first-time buyers and broaden across a wider range of markets during the balance of 2016.

 

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http://eyeonhousing.org/2016/09/pending-sales-decline/

#Mortgage rates down slightly | Waccabuc Real Estate

Like the rest of us suffering through August’s oppressive heat, mortgage rates have been disinclined to move much.

There just hasn’t been enough positive or negative economic data recently to have an effect on rates. Even the Federal Reserve minutes, which were released Wednesday, provided no clear signal. They showed the central bank remains divided on when to raise interest rates again.

Without much guidance, home loan rates have been listless. Since late June, the 30-year fixed-rate average — the most popular mortgage product — has been stuck between a high of 3.48 percent and a low of 3.41 percent.

In its most recent monthly outlook, which was released earlier this week, Freddie Mac projected mortgage rates would remain below 4 percent not only for the rest of this year but also next year. The government-backed mortgage-backer revised its 2017 forecast for the 30-year fixed rate to 3.7 percent.

Bankrate.com, which puts out a weekly mortgage rates trend index, found that three-quarters of the experts it surveyed believe rates will remain relatively unchanged in the next week, moving no more than plus or minus two basis points (a basis point is 0.01 percentage point) in the next week.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 3.43 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.45 percent a week ago and 3.93 percent a year ago. The 30-year fixed rate has remained below 3.5 percent the past two months.

The 15-year fixed-rate average fell to 2.74 percent with an average 0.5 point. It was 2.76 percent a week ago and 3.15 percent a year ago.

The five-year adjustable rate average crept up to 2.76 percent with an average 0.4 point. It was 2.74 percent a week ago and 2.94 percent a year ago.

“For eight consecutive weeks mortgage rates have ranged between 3.41 and 3.48 percent,” Sean Becketti, Freddie Mac chief economist, said in a statement. “Inflation is not adding any upward pressure on interest rates as the Bureau of Labor Statistics reported that the Consumer Price Index was unchanged in July.”

Meanwhile, mortgage applications were lower this week, according to the latest data from the Mortgage Bankers Association.

The market composite index — a measure of total loan application volume — fell 4 percent from the previous week. The refinance index decreased 4 percent, while the purchase index dropped 4 percent.
The refinance share of mortgage activity accounted for 62.6 percent of all applications.

“Application volume dropped across the board for both refinance and purchase loans last week, despite little change in rates,” said Mike Fratantoni, MBA chief economist. “Refinance volume continues to tail off its recent highs as markets return to normal post Brexit. As for home purchases, the strong job market and still very low rates continue to support volume almost 10 percent higher than this time last year, despite last week’s dip.”

 

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https://www.washingtonpost.com/news/

Credit for Millennials | Waccabuc Real Estate

Millenials are the largest portion of the US population and range between the ages of 19 and 34. From a psychographic perspective, millenials tend to look at the big picture and measure their success based on their ability to make meaningful decisions that will have a positive impact on the world.
But what about their finances?
The average debt for a millennial is $26,485 (excluding the price of a mortgage). From a distance, millenials appear to be in a slightly better financial position than Generation X (age 35 – 49), holding an average debt of $26,670. However, when we dissect the spending and credit habits of each generation, it is apparent that millenials are far more likely to open new accounts to purchase material goods that do not contribute to their financial growth (37% of new accounts opened by millenials go to car loans and retail cards). Further, millenials have a minimal education of the credit industry and often make poor credit choices.
According to an Experian survey conducted earlier this year, nearly 30% of active credit holding millenials admitted to maxing out at least one of their credit cards and 50% of millenials didn’t even know what interest rate was being charged on their credit cards/loans.
Below is a list of suggestions and notable information for millenials that are not familiar with the credit industry:
  • Find out what your credit card limits are and try to keep balances under 50%.  If applying for financing or other credit related tools keep balances under 10% of credit card limits a few months prior to loan application.  This will ensure better credit scores when credit is pulled by lenders.
  • Learn what interest rates are being charged on existing and potential credit cards.  Once credit scores are improved use better score thresholds to apply for cards that offer better terms.
  • When you open a new line of credit, be aware that your scores will drop due to a decrease in your average age of credit.  Having the right timing when you are opening a new line of credit is important.
  • Late Payments on accounts cause dramatic decreases in credit scores and can remain on credit for 7 years.  In order to display a healthy credit profile, it is crucial that you make timely payments.  If you have delinquencies on credit reach out to us for a free credit analysis and we will give you feedback on how your credit profile can be improved.
  • If there is a late payment on an account, expect a late fee charge (usually around $30).  If the creditor agrees to waive this charge it does not mean the delinquency mark on credit will be removed.
It is important to expose millenials to the affects of poor credit choices, educate them on the industry, and show them how they can use credit as a tool to leverage and secure their finances. Getting into the habit of thinking about their future and making good choices will help develop better credit.  Having excellent credit can lead to greater savings on financing down the road and more opportunity.
Tracy A. Becker, President
FICO Certified Professional
Expert Credit Witness Certified
Author “Credit Score Power”
North Shore Advisory Credit Repair
See What Our Clients Are Saying
North Shore Advisory In the Media
Tracy A. Becker, President
FICO Certified Professional
Author “Credit Score Power”
Expert Credit Witness Certified
North Shore Advisory, Inc.
5 West Main Street. Suite 207
Elmsford, NY 10523
P: 914-524-8300
F: 914-524-5014
info@northshoreadvisory.com
www.northshoreadvisory.com
“Great Credit Brings Great Opportunity!”

US home construction jumps | Waccabuc Real Estate

Construction of new homes rose in February to the highest level in five months, but applications for new construction were weak for a third month.

Housing starts rose 5.2 percent last month to a seasonally adjusted annual rate of 1.18 million units, the Commerce Department reported Wednesday. Construction had fallen in January in December, declines that had been blamed in part on winter weather.

Applications for building permits, a gauge of future activity, fell 3.1 percent to an annual rate of 1.17 million units after a flat reading in January and a drop in December.

The decline in building permits, unless reversed, could signal future trouble in an industry that was a bright spot for the economy last year.

But Bricklin Dwyer, an economist with BNP Paribas, said the slump in building permit applications should only translate into a brief construction slowdown given the solid fundamentals supporting housing.

“We see a resilient labor market as supportive of a continued slow and steady housing recovery and low housing inventory should continue to bolster residential construction ahead,” Dwyer said.

For February, construction of single-family homes rose 7.2 percent to an annual rate of 822,000 units. Construction in the smaller apartment sector edged up a slight 0.8 percent to a rate of 356,000 units.

Regionally, construction activity plunged 51.3 percent in the Northeast but showed strength in all other regions. Construction rose 19.9 percent in the Midwest, 7.1 percent in the South and 26.1 percent in the West.

The National Association of Homebuilders/Wells Fargo builder sentiment index held steady at 58 for March. Readings above 50 indicate more builders view sales conditions as good rather than poor.

Sales of new homes surged 14.5 percent last year to 501,000, marking the strongest year for this segment of the housing market since 2007.

 

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http://www.seattletimes.com/business/us-home-construction-jumps-in-february/

Why Millennials Can’t Buy | Waccabuc Real Estate

Though 2015 was dubbed the Year of the Millennial, though the final sales data are not yet in, actual purchases by young first-time buyers disappointed many real estate observers.

Between July 2014 and June 2015. first–time buyers declined to 32 percent (33 percent a year ago), which is the second–lowest share since the survey’s inception (1981) and the lowest since 1987 (30 percent), according to the National Association of Realtors’ 2015 Home Buyer and Seller profile, Through October, NAR’s Realtor Confidence Index reported sales to first-time buyers had fallen even more, to only a 30 percent share.

Though the current data is bad, Millennial purchase levels have actually improved.  In mid-December, the Census Bureau’s American Community Survey reported that the number of homeowners aged 25-34 fell by more than 250,000 in each year between 2007 and 2012, but has declined to a level of less than 100,000 annually through 2014.

Yet expectations are much higher than results to date.  For example, a December NAR survey found that 94 percent of renters under the age of 34 aspire to be homeowners “someday”, a finding that echoes similar research by Fannie Mae, Zillow, the Pew Center and others.

Among the many hurdles facing young buyers—lending standards, rising prices, slim to no affordable inventory, income that is still not age-appropriate, crippling levels student loan debt consumer debt—perhaps the greatest is simply cash.  Like most generations before them, Millennials are struggling to raise the cash requirements for down payments and closing costs.

One reason is a phenomenon I called the Rent Trap in an article for Inman News Service last year and re-published on Real Estate Economy Watch.  (See How the Rent Trap is Killing off First-time Buyers.) Simply put, rather than driving first-timers to buy, soaring rents are sucking up a substantial portion of their disposable income, keeping them trapped in rentals longer than they planned.  The longer they wait, the higher rents rise, extending their waiting period.  The Rent Trap which may be one of the most pervasive but least understood reasons that Millennials are aging in place in rental housing.

 

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http://www.realestateeconomywatch.com/2016/01/the-rent-trap-redux-why-millennials-cant-buy/

October Gains for Residential Construction Spending | Waccabuc Real Estate

NAHB analysis of Census construction spending data shows that total private residential construction spending for October increased to a seasonally adjusted annual rate of $399 billion. On a month-over-month basis, private single-family spending was $226 billion, up by 1.6% over the revised September estimate. Private multifamily spending increased to $58 billion, up by 1.4%.

Annually, the pace of multifamily spending rose 28% from the October 2014 estimate, and spending on single-family construction was 11% higher.

The NAHB-constructed spending index, which is shown in the graph below (the base is January 2000), indicates that recent gains have been driven by the steady increase in multifamily construction spending. The pace of the multifamily spending is gradually slowing. The monthly growth rate of multifamily construction fell to 1.4% in October from relatively higher rates in August (8%) and September (6%). NAHB anticipates accelerating growth for single-family spending in 2015.Slide1

The pace of total nonresidential construction spending increased by 1% monthly in October, and the annual increase from the revised September 2014 estimate was 11%. The largest contribution to this year-over-year nonresidential spending gain was made by the class of manufacturing-related construction (41% increase), followed by lodging (30% increase) and amusement/recreation (24% increase).

Slide2

 

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http://eyeonhousing.org/2015/12/october-gains-for-residential-construction-spending/

New Single-Family Home Size: Flat Trends | Waccabuc Real Estate

The typical size of newly built single-family homes was effectively unchanged from the second to third quarter of 2015, posting a small quarterly decline. The current data is consistent with the general trend of flat growth for the size of typical newly-built homes, a pattern that took hold during 2014. As first-time buyers return to the market, typical home size is expected to trend somewhat lower.

According to third quarter 2015 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area fell from 2,478 in the second quarter to 2,445 square feet. Average (mean) square footage for new single-family homes fell from 2,704 to 2,653 for the third quarter.

SF size_3q15

On a less volatile one-year moving average, the recent trend of leveling home size can be see on the graph above, although current sizes remain elevated. Since cycle lows and on a one-year moving average basis, the average size of new single-family homes has increased 13% to 2,693 square feet, while the median size has increased 17% to 2,472 square feet.

 

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http://eyeonhousing.org/2015/11/

U.S. new homes sales near one-year low | Waccabuc Real Estate

New U.S. single-family home sales fell to near a one-year low in September after two straight months of gains, but a jump in prices suggested that housing remained on solid ground.

The Commerce Department said on Monday sales dropped 11.5percent to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August’s sales pace was revised down to 529,000 units from the previously reported 552,000 units.

The moderation in new home sales is at odds with other housing reports that have painted a bullish picture of the sector. New home sales, which account for 7.8 percent of the housing market, tend to be volatile on a month-to-month basis because they are drawn from a small sample.

“The September report does little to alter our view that the housing market is continuing to recover. We view the new home sales data as unreliable and many other more reliable housing indicators have been sending upbeat signals lately,” said Daniel Silver, an economist at JPMorgan.

September data on existing home sales, homebuilder confidence and housing starts have been fairly strong.

 

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http://www.reuters.com/article/2015/10/26/us-usa-economy-idUSKCN0SK1PW20151026