2013-09-10





It’s Tuesday News Day and these are this weeks hot topics concerning the real estate market, the financial market, general market conditions, and interest rates.

REALTOR® Mag – The Growth of Single Households: Singles Make Up Quarter of All Buyers

Since more Americans are marrying later, divorcing frequently, and living longer, greater numbers of people are living alone. In fact, single buyers comprised a quarter of all home purchases last year, according to the NATIONAL ASSOCIATION OF REALTORS®. The living solo trend is evident in the country’s 33 million one-person households. Young adults ages 18 to 34 are the fastest-growing group of people living alone.

Solo households are also mostly women: 18 million women live alone versus 14 million men. Twice as many single women bought homes as did single men in 2012.

In 1970, one-person households represented just 17 percent of all households. The growth in this number is a historic change in human society.

A single buyer can face challenges in this post-recession market, especially when it comes to qualifying for a mortgage because a single buyer cannot rely on the advantages of dual incomes or shared responsibly that a two-person household does. That being said, single buyers are not dragged down by a partner’s credit score, loans, or credit card debt.

Single households are prominent in other countries as well, with Sweden having the largest proportion of solos (47 percent). The United Kingdom has a rate of 34 percent, Japan’s is 30 percent, and Norway’s is 40 percent.

Around 11 million Americans living alone are elderly, and the majority of solo households are in cities and metro areas.

Purchasing a home can be a means of self-expression for singles, and they can express their lifestyles and values while focusing on the exact communities, home styles, and features that cater to their individuality with much less compromise.

In other news…

USA Today – Higher lot prices may boost new home prices

Higher prices for construction-ready lots are driving up builders’ costs, which could translate to higher prices for home buyers. According to John Burns Real Estate Consulting, the average price of a finished lot ready for building was up 40 percent in the second quarter from a year ago in 27 major markets.

HousingWire – Higher-income student debt holders skip homeownership

A new study on personal finance has found that higher income student debt holders are more likely to delay homeownership than lower income people with the same levels of student debt. These results may suggest a return of higher-income young graduates to the housing market could be further off than anticipated.

Columbia University’s Business School – Why Did the Home Affordable Modification Program Underperform?

Four years after the Home Affordable Modification Program (HAMP) was implemented, only about one third of the 4 million homeowners estimated to potentially benefit from HAMP during its initial lifespan (through December 2012) have received modifications through the program. New research suggests differences in servicer quality may be a strong reason for its underperformance, specifically loan servicer’s low capacity to negotiate modifications.

The Wall Street Journal – Home Construction Spending at Highest Level Since 2008

The Commerce Department reported this week that private residential construction spending rose 0.6 percent to a seasonally adjusted annual rate of $334.58 billion, rising to its highest level in nearly five years. The spending levels may be an indication that builders are unconcerned with the impact of higher interest rates.

CNBC – As renters move in, some homeowners fret

William M. Rohe, a professor at the University of North Carolina at Chapel Hill, just completed a review of current research on homeownership’s effects and found that with fewer homeowners, there is less ‘self-help,’ like park and neighborhood cleanup, neighborhood watch, etc. Reduced home values, lower voter turnout and political influence, less social stability and higher crime have also been attributed to declines in homeownership.

Time – 5 Tips for Getting a Mortgage in Today’s Housing Market

The rate for a 30-year mortgage has increased more than a percentage point in the past three months and is now around 4.5 percent, which has led many potential home buyers to consider whether they can qualify for a mortgage to beat the rising cost of homes and increasing interest rates. TIME shares five tips to improve one’s chances.

The Hill – US Chamber economist says rising interest rates won’t derail housing recovery

The housing market’s gradual recovery won’t be held back by rising interest rates, according to Martin Regalia, the U.S. Chamber of Commerce’s chief economist. Regalia noted that borrower’s income, his or her ability to make a down payment, and the availability of credit are a broader combination of forces that will drive purchases.

Talking Points…

Adjustable-rate mortgages (ARMs) now represent 6.5 percent of mortgage applications nationwide, which shows they are becoming more appealing to borrowers. A year ago, only 4.2 percent of mortgage applications nationwide were for ARMs, according to the Mortgage Bankers Association.

These types of loans can carry more risk for the borrower, but initial rates are lower than those on fixed-rate loans. Rates may rise after an initial period of fixed interest. That being said, there is a lifetime cap that limits ups and downs.

A 30-year fixed-rate mortgage averaged 4.51 percent as of August 29, while a five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.24 percent, according to Freddie Mac’s Primary Mortgage Market Survey.

If you have any questions about the current real estate market give me a call at (408) 840-3852 or shoot me an email at Thomas.Feng@gmail.com to discuss your situation and how to get the most out of the current real estate housing market.

Because of the many legal and tax situations that can arise through the sale and purchase of real estate ALWAYS consult with your ATTORNEY or ACCOUNTANT before making ANY decisions in ANY transaction

Copyright 2010-2013 by Thomas Feng, All Rights Reserved. You may reblog or republish.

* THIS ARTICLE WAS POSTED AT Thomas Feng’s Bay Area Connect *

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