Americans Recover Home Equity at Record Pace
Low inventory may ease as more owners are able to sell, as the number of Americans who owe more on their mortgages than their homes are worth fell at the fastest pace on record in the third quarter with prices increasing. Owners are finding it easier to list properties and buy a new place because the share of owners with at least 20 percent equity climbed to 60.8 percent from 58.1 percent.
Making sense of the story
As more people gain the equity they need to sell their house and have a down payment for the next one, home sales are expected to pick up.
The pent-up demand created by the low inventory is evident in the fact that the number of homes for sale reached a low of 1.8 million in early 2013, which was the fewest in more than a decade.
As the real estate market recovers, furniture sales and renovations will add to consumer spending, as homeowners build equity and opt to sell their homes.
According to Zillow, 10.8 million homeowners were underwater on their mortgages in the third quarter, down from 12.2 million in the second quarter.
There are about 20 million people who had negative equity or less than 20 percent equity, down from 21.5 million in the prior three months.
The median price of an existing home rose 12.8 percent last month. In August, it increased 13.4 percent, which was the fastest rate since the height of the real estate boom in 2005.
In other news …
Foreclosure Inventory Plunges Nearly 30%
The industry’s foreclosure inventory rate is down 29.61 percent from last year, according to Lender Processing Services (LPS). Overall, foreclosure inventory has contracted for 18 consecutive months and is now at its lowest point since the end of 2008, totaling 1.28 million loans, or just 2.54 percent of today’s active mortgages.
Senate rule change bolsters Watt’s chances to become top housing regulato
Source: The Hill
The Senate recently voted to prevent the minority party (i.e. Republicans) from filibustering nominations, which means Rep. Mel Watt now could be confirmed to lead the Federal Housing Finance Agency (FHFA) during the week of Dec. 9. Watt lost his first bid to win Senate confirmation due to Republican opposition.
Weak October Sales Have Home Builders Fretting About Spring
Source: The Wall Street Journal
Builders are concerned that political acrimony over the federal budget and debt, as well as the fragility of the economic recovery, will hamper the spring selling season early next year. A monthly survey of builders across the nation by John Burns Real Estate Consulting reveals concern about a decline in home sales by 8 percent in October from the September level and by 6 percent from a year earlier.
Three professors have created the American Dream Composite Index as a way to measure what makes people feel happy, successful, and productive. The quality of life index ranks the extent to which people feel they are reaching their goals, including homeownership.
Americans Are Very Confused About What They Want Out of a Community
Source: The Atlantic
The NATIONAL ASSOCIATION OF REALTORS® has released the results of its latest national community preference survey and among the priorities listed by participants was the following: Improving the availability of affordable housing (59 percent list it as either “extremely high” or “high” priority), protecting the environment (57 percent), and preserving farms and open spaces from development (54 percent). But Americans also still prefer conventional suburban development with large lots.
Pending Home Sales Take a Quick Turn South
Source: The Wall Street Journal
For the fifth consecutive month, the pending home sales index declined, and is now at its lowest reading since December 2012. In June, pending home sales were up 11 percent from their year-ago levels, but by October, pending sales were down 1.6 percent on a year-over-year basis.
Talking Points …
According to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2013 Renter Survey,” renters continue to hold homeownership in high esteem, and it remains a goal for the majority of them. Nearly three-quarters of renters rated homeownership as “important,” and more than half of renters (52 percent) said they plan to buy a home in the future.
Most renters (44 percent) who expressed the desire to own instead of rent were only renting out of financial necessity and the majority plan to buy in the next three years or longer.
More than four out of every 10 renters (41 percent) indicated they plan to purchase in the same county where they currently reside, and 14 percent plan to buy in the same neighborhood. Currently, about half (51 percent) of all renters live in an apartment, with the remainder residing in a single-family home, a townhouse, or a condominium.
Hope this helps!
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com