Cool Tools News Spool

Month: July 2015

  • Latest Fannie housing survey points to improving market

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

    by G. Steven Bray

    The latest Fannie Mae housing survey contains a few nuggets for the housing market. Perhaps the most exciting is consumers’ attitudes about the selling climate. The percentage who thinks now is a good time to sell a home climbed to a survey high of 52%, the first time this statistic has exceeded 50% in the survey. Given the lean inventory numbers of late, this is a welcome result.

    The other nuggets are the percentage of respondents who think rents will rise in the next year increased 4 points to 59% while a decreasing percentage, 47%, think home prices will rise. Further, the average expected rent increase is 4.2%, while the average home price increase is 2.6%. Moreover, an increasing percentage believes that mortgage rates will rise in the next year. Thus, more renters may be motivated to consider buying a home and buying soon.

    On the negative side, a declining percentage think now is a good time to buy. This correlates with consumers’ overall view of the economy. A majority say the economy is on the wrong track even though they view their personal situation more positively. This may represent a headwind for the market, but for those consumers who are less concerned or less cautious, it sounds like there’s plenty to motivate them to act.

    Fannie’s housing survey reflects the attitudes of 1000 consumers about the housing market and the economy. Fannie has conducted the survey each month since June 2010. Click here for the full survey results.

  • More reasons for renters to become homebuyers

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

    by G. Steven Bray

    A recent Harvard study gives you more reasons to target renters as potential homebuyers. The study reported that rents are rising at twice the rate of overall inflation and, more importantly, rising faster than paychecks, especially for the middle class.

    The homeownership rate has fallen to a 25-year low as more folks choose to or are forced to rent. Apartment vacancies are disappearing, and that is keeping upward pressure on rents.

    In 2013, nearly half of renter households were “cost burdened”, meaning their rent ate up more than 30% of their income. Given that rents continue to rise and wages remain stagnant, it’s likely the percentage has grown in the last two years.

    Homeownership still seems to be a better financial choice in many US cities. Despite rising home prices, NAR’s first quarter home affordability index shows that Texas homes remain very affordable for median-income folks. The obvious marketing angle is to encourage renters to buy now before rising home prices and interest rates degrade affordability.

    A more creative marketing angle might be to focus on rent prices rather than home prices. Rents change, and right now they’re rising more than 5% annually. The Labor Dept reports that incomes are rising at less than 2% annually, so rent is going to eat up an ever-larger share of a family’s income. Buying a home now allows a family to control their housing cost more effectively with a fixed mortgage payment at a low interest rate.