Mortgage Rates Hold Steady – Based on recent Freddie Mac reports, mortgage rates have mostly stabilized this month and are now essentially at the same point they were last spring, but that hasn’t yet given a boost to home sales. “Given that the economy remains on solid footing and weekly mortgage purchase application activity has been strong so far in 2019, we expect the decline in home sales to moderate or even reverse over the next couple of months,” says Sam Khater, Freddie Mac’s chief economist.
Non-Owners Dream of Ownership – According to a new analysis released by the National Association of REALTORS®, about 75 percent of non-homeowners believe homeownership is still part of their American dream. However, the biggest barrier for non-owners is that they are currently unable to afford a mortgage, according to the fourth-quarter 2018 Homeownership Opportunities and Market Experience (HOME) survey, based on more than 8,000 consumer responses. During the last quarter of 2018, 43 percent of non-owners said they did not own a home because they were not in a position to purchase one, which is down from 49 percent who said the same in the third quarter. So what could encourage them to buy? Thirty-one percent of non-owners said an improvement in their financial situation would be the biggest motivator to encourage them to buy a home. Thirty-percent also said a change in their lifestyle, such as getting married, starting a family, or retiring, would also be a big motivator to buy. “The lack of affordable and moderately priced homes has forced non-homeowners to delay achieving that part of the American dream,” says Lawrence Yun, NAR’s chief economist.
Good Outlook for Spring Sales – Based on the National Association of REALTORS®’ existing-home sales report following two consecutive months of increases, existing-home sales dialed back at the end of 2018. However, they’re optimistic a turnaround will be in sight for home sales in the spring season. Higher mortgage rates during much of 2018 are partially to blame for the decrease in home sales at the end of the year, says Lawrence Yun, NAR’s chief economist. “The housing market is obviously very sensitive to mortgage rates,” Yun says. “Softer sales in December reflected consumer search processes and contract signings activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
Why First-Time Buyers Chose Their Homes –Based on a recent Porch.com survey, aesthetic appeal, affordability, commute time, and neighborhood character were the top draws. Sixty-seven percent of baby boomers and 61 percent of Gen Xers say affordability was the most important factor when searching for their first home. Millennials also placed a high priority on finding a home within their budget, as well as renovated bathrooms. Whether the home was move-in ready also was a powerful influencer, respondents say. “We know home renovations can get pricey, and one thing that appeals to potential first-time home buyers is finding a home where the kitchen and bathrooms are fresh and up to date,” according to Porch.com’s study.