Cool Tools News Spool

Month: June 2015

  • Cash sales down; Will 1st-time homebuyers return?

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    Although the information is a little dated, I found it interesting that Apr Realtor data confirmed what many of us felt this spring. The economy and housing market in particular seem to have shaken off the winter chill and point to a strengthening housing recovery. For the 3rd month in a row, more Realtors viewed the market as strong as opposed to weak across all property types.

    Two other interesting results were:

    – Homes continue to sell quickly, typically within 39 days; and

    – Investor sales are declining, mirrored by a decline in cash sales, which accounted for 24% of sales.

    Moving forward, this could be good news for first-time homebuyers as they tend to lose out to cash offers.

    Finally, Realtors identified several areas of concern, including:

    – Limited inventories of move-in ready, affordable homes – I think move-in ready is a key point here;

    – Financing issues, including a difficult, slow qualifying process, continued problems with appraisals, and concern about upcoming regulatory changes;

    – Slowing demand from international buyers because of a strong US dollar;

    – The adverse impact of lower oil prices and the effects of higher flood insurance rates; and

    – The potential impact of rising interest rates.

    If you want to see the full report, click on the link at the end of my blog.

    Click here to see the full report.

  • Fannie survey provides reason for optimism

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    I think the most positive news from the May Fannie Mae Housing Survey is the percentage of respondents reporting a significant increase in their household income in the last year. This statistic climbed to a near survey-high of 28%. Those expecting improvement in their personal finances also rose. These results are consistent with the recent jobs and personal income reports showing on average consumers are earning more. While this hasn’t translated yet into increased consumer spending, if the trend continues, it should be positive for homebuying.

    Unfortunately, respondents are increasingly negative about the overall economy. Only 38% of respondents think the economy is on the right track, the lowest percentage in almost a year. So while consumers may be earning more, it may be challenging to get them to step up to a big financial commitment, like buying a new home.

    But the resistance may be softening. An increasing percentage believes now is both a good time to buy and to sell a home. The latter reached an all-time survey high of 49% and is particularly important given the current dearth of housing inventory. Further, an increasing share says if they were going to move, they would buy rather than rent.

    Fannie Mae chief economist Doug Duncan says the “good time to sell” and “income growth” questions are key indicators for the housing market, and their increases suggest moderate improvement in the market this year.

    Note that Fannie completed this survey prior to the recent mortgage rate increases. Assuming rates don’t reverse, it will be interesting to see if the Jun survey continues to show optimism or if the higher rates sap momentum as they did last year.

    Click here for a link to the survey results.