Homeownership Rate Continues to Rise in 2020

Homeownership Rate Continues to Rise in 2020 | MyKCM

So far, it’s been quite a ride this year, and our nation has truly seen its fair share of hurdles. From COVID-19 to record unemployment and then the resulting recession, just to name a few, the second quarter of 2020 has had more than a few challenges. Amidst the many roadblocks, however, the U.S. homeownership rate rose again, signaling great strength in the recovery of the housing market and an indication that even in a time of crisis, Americans still feel confident about buying a home.

Yesterday, the U.S. Census Bureau announced:

“The homeownership rate of 67.9 percent was 3.8 percentage points higher than the rate in the second quarter 2019 (64.1 percent) and 2.6 percentage points higher than the rate in the first quarter 2020 (65.3 percent).”

Homeownership Rate Continues to Rise in 2020 | MyKCMThe increase is also represented by race and ethnicity of the householder:Homeownership Rate Continues to Rise in 2020 | MyKCMThere are many reasons why the homeownership rate in this country is rising, and one of the key factors is historically-low mortgage rates. Rates hovering at all-time lows are helping to drive affordability and enabling more potential homeowners to enter the market today. According to Ralph McLaughlinChief Economist for Haus:

“Mortgage rates are the icing on the cake for households that were thinking about buying…They found an unexpected opportunity during the worst economic downturn America has seen since the Great Depression.”

In addition, many potential homebuyers have been using their time this year to search for homes that offer more space than their current rental apartments. Many of these homebuyers are younger and, as noted by Odeta Kushi, Deputy Chief Economist at First American, are the buyers driving the homeownership rate in an upward direction:

“Big jump in the homeownership rate today, mostly driven by younger households. We saw a spike in the number of owners, and a decline in the number of renters. This is the highest rate of homeownership since 2008.”

This growth is outstanding news for the housing market and for those who have recently found their new homes. If homeownership is on your shortlist this year, maybe now is a great time to meet with a real estate professional to evaluate your current situation. Perhaps historically low mortgage rates can help you to become a homeowner too.

Bottom Line

If you’re thinking of buying a home this year, let’s connect today to take your dream one step closer to reality.

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Announcement from the census: As a result of the coronavirus pandemic (COVID-19), data collection operations for the CPS/HVS were affected during the second quarter of 2020. In-person interviews were suspended for the duration of the second quarter and replaced with telephone interview attempts when contact information was available. If the Field Representative was unable to get information on the sample unit, the unit was made a Type A no interview (no one home, refusal, etc.). See the FAQ for more information.

Will We See a Surge of Homebuyers Moving to the Suburbs?

Will We See a Surge of Homebuyers Moving to the Suburbs? | MyKCM

As remote work continues on for many businesses and Americans weigh the risks of being in densely populated areas, will more people start to move out of bigger cities? Spending extra time at home and dreaming of more indoor and outdoor space is certainly sparking some interest among homebuyers. Early data shows an initial trend in this direction of moving from urban to suburban communities, but the question is: will the trend continue?

According to recent data from Zillow, there is a current surge in urban high-end listings in some larger metro areas. The month-over-month increase in these homes going on the market indicates more urban homeowners may be ready to make a move out of the city, particularly at the upper end of the market (See graph below):Will We See a Surge of Homebuyers Moving to the Suburbs? | MyKCM

Why are people starting to move out of larger cities?

With the ongoing health crisis, it’s no surprise that many people are starting to consider this shift. A July survey from HomeLight notes the top reasons people are actually moving today:

  1. More interior space
  2. Desire to own
  3. Move from city to suburbs
  4. More outdoor space

More space, proximity to fewer people, and a desire to own at a more affordable price point are highly desirable features in this new era, so the list makes sense.

John Burns Consulting notes:

“The trend is accelerating faster than anyone could have predicted. The need for more space is driving suburban migration.”

In addition, Sheryl Palmer, CEO of Taylor Morrison, a home building company, indicates:

“Most recently, we’re really seeing a pickup in folks saying they want more rural or suburban locations. Initially, there was a lot of talk about that, but it’s really coming through our buyers today.”

The National Association of Home Builders (NAHB) also shares:

“New home demand is improving in lower density markets, including small metro areas, rural markets and large metro exurbs, as people seek out larger homes and anticipate more flexibility for telework in the years ahead. Flight to the suburbs is real.” 

Will the shift pick up speed and continue on?

The question remains, will this interest in suburban and rural living continue? Some, like Lawrence Yun, Chief Economist at the National Association of Realtors (NAR) think the possibility is there, but it is still quite early to tell for sure. Yun notes:

“Homebuyers considering a move to the suburbs is a growing possibility after a decade of urban downtown revival…Greater work-from-home options and flexibility will likely remain beyond the virus and any forthcoming vaccine.”

While much of the energy behind this trend has largely been accelerated by the current health crisis, monitoring the momentum over time is critically important. Businesses are discovering new and innovative ways to function in remote environments, so the shift has the potential to stick. Much like the economic recovery, however, the long-term impact may hinge largely on the health situation throughout this country.

Bottom Line

Early data is showing a shift from urban to suburban markets, but keeping an eye on this trend will help us understand how it will ultimately play out. It may just be a temporary swing in a new direction until Americans once again feel a sense of comfort in the cities they’ve grown to love.

Home Sales Surging This Summer

 

Climbing home sales and #homevalues are strong signs that the #housingmarket is recovering, nationwide.
Here in #SouthernNevada, the #resalehome market experienced greater sales activity but a sharp decrease in the number of listings from May 2020 to June 2020. #Values are up but #Sales are down. Our Single-family median prices increased 6.9% on the year to a new record high of $325,000 for June 2020, marking the second consecutive month in which a new high was reported for the month. 

The month-to-month sales increase likely reflects a shift in demand from the traditionally strong spring months due to the impacts sourced to the COVID-19 health crisis.
Although values are up, we are experiencing a decrease in sales activity which is not that surprising given the issues of this time. Despite an increase from the preceding month, overall sales volumes fell short of the same period of the prior year. In June 2020, combined closing volumes were down 19% from a year ago (single-family and condominium/townhouse), and the total number of units available was down 31% to 6,695 units.

In the single-family market, a total of 2,464 units were sold (-15% on the year) with 5,079 units available (-35% on the year), equating to an effective inventory of 2.1 months (down from 2.7 months a year ago).

#Letsconnect to plan the best way for you to move forward in your #realestate goals this year.

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Why You Should Buy a Home in 2020

The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.3% from April 2020 to May 2020, and decline 1.3% on a year-over-year basic from April 2020 to April 2021. 2021 will mark the first year home prices are expected to decline in more than nine years.

Why You Should Buy a Home in 2020

“The very low inventory of homes for sale, coupled with homebuyers’ spur of record-low mortgage rates, will likely continue to support home price growth during the spring. If unemployment remains elevated in early 2021, then we can expect home prices to soften. Our forecast has home prices down in 12 months across 41 states.”

– Dr. Frank Nothaft
Chief Economist for CoreLogic

The home price acceleration in the April HPI was supported by increased homes sales in the first quarter of the year. Home price growth is expected to decelerate somewhat in May, with the CoreLogic HPI Forecast calling for a month-over-month increase of 0.3% compared with April 2020. Looking ahead, the CoreLogic HPI Forecast predicts an annual price decline of 1.3% from April 2020 to April 2021. In 2021, home prices are expected to decline for the first time in more than nine years.

Home-purchase activity slowed over March and April compared to last year as shelter-in-place orders, and an unprecedented spike in unemployment, dented home-buying activity fueled by millennials. Nationally, the for-sale inventory of entry-level homes plummeted on average 25% in April. Should this trend continue, we may see an adverse effect on home sales in the near term.

Why You Should Buy a Home in 2020

“Tight supply and pent-up demand, particularly among millennials, provides optimism for a bounce-back in the housing market purchase activity and home prices over the medium term. The next 12 to 18 months are going to be very tough times for the broader economy. As employment and economic activity begin to pick up, as it will surely do, we expect housing to be a driver in a national recovery.”

-Frank Martell
President and CEO of CoreLogic

 

Nationally, the year-over-year home price changed by 5.4%. No states posted an annual decline in home prices in April 2020.  The states with the highest increases year-over-year were Idaho (12%, Arizona (8.3%), Indiana (8%) and Missouri (8%).
Nationally, the year-over-year home price changed by 5.4%. No states posted an annual decline in home prices in April 2020.
The states with the highest increases year-over-year were Idaho (12%, Arizona (8.3%), Indiana (8%) and Missouri (8%).

 

05-hpi-top-us-metros-2006

Top 10 Metros Change

These large cities continue to experience price increases, with Washington D.C. leading the way at 5.7% year over year.

 Why You Should Buy a Home in 2020?   Let’s connect and so that you have the information you need to make the best decision for you and your family.

 

The Expert Economic Recovery Forecast

According to the WSJ, 85.3% of economists believe an economic recovery will begin in the second half of 2020.

DESPITE IMMENSE CHALLENGES facing many sectors of the economy, some encouraging signs suggest “green shoots” of a recovery that could begin as early as this summer, says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. As all 50 states begin to take steps toward reopening after months of coronavirus-related lockdowns and consumer spending and unemployment slowly start to stabilize, “We fully expect the economy could begin to pick up in late June and July with a strong recovery in the fourth quarter,” he notes. Let’s connect to discuss how the expert forecast may influence your plans in the housing market this year.

 

Among the encouraging signs: The Dow surged more than 900 points on Monday, in response to preliminary results from human trials of a vaccine that could potentially help the body’s immune system fight the coronavirus.1 Even after trillions of dollars in economic stimulus, in an appearance before Congress on Tuesday, Federal Reserve (Fed) chair Jerome Powell emphasized the Fed’s ongoing commitment to supporting economic recovery.

 

There’s no doubt that many obstacles remain and economic recovery could still face setbacks, especially if coronavirus rates spike and certain states are delayed on the road to fully reopening. “Everything depends on solutions to what is, first and foremost, a devastating global health crisis,” Hyzy notes. But the following data points are evidence of economic resilience. The Chief Investment Office will be watching them closely in the weeks to come.

 

Unemployment. Weekly jobless claims released May 21 totaled nearly 2.4 million.2 Yet continuing claims—workers already unemployed and receiving ongoing benefits—have leveled off, Hyzy says. “That means workers coming back into the economy, whether temporary or full-time, are at the same levels as those going out. We’ll be watching this closely as economic re-openings continue.”

 

Consumer spending. “Those employment trends match up well, in our view, with the fact that the consumer has begun to stabilize,” Hyzy says. Despite the April sales numbers and ongoing weakness in battered areas such as travel, leisure and entertainment, “spending in the last couple of weeks hasn’t just evened out, it has risen. Even airlines have shown a modest increase in bookings recently.”

 

Capital spending. Companies will have to adjust and accommodate to new ways of doing business, Hyzy believes. Remote work, social distancing and other changes call for new capital investments. “This could be one of the more robust economic catalysts as we head towards the middle part of 2021 and beyond,” he says.

 

What can investors consider doing?

To help position themselves for the recovery, investors may want to consider stocks of large, well-established U.S. companies, Hyzy says. Promising areas include technology, healthcare and communications services, as well as companies focused on innovations for consumers, among others. With low interest rates likely to persist even during the recovery, investors may want to compensate for low yields from Treasury bonds with high-quality corporate bonds or dividend-paying stocks, he adds.

Let’s connect to discuss how the expert forecast may influence your plans in the housing market this year.

Mortgage Rates

Mortgage Rates

Mortgage rates drop to another record low — here’s why Americans may not want to wait too much longer before locking rates in

Mortgage rates have fallen to a new all-time low for the fourth time this year. But there’s significant upside risk to the low rate environment, and Americans may not want to wait too much longer before locking rates in.

The 30-year fixed-rate mortgage averaged 3.13% for the week ending June 18, down eight basis points from a week earlier, Freddie Mac FMCC, -0.60% reported Thursday. The previous record low was 3.15% back at the end of May. A year ago, the 30-year home loan averaged 3.84%.

The 15-year fixed-rate mortgage dropped four basis points to an average rate of 2.58%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage dipped one basis point to 3.09%.

“Mortgage rates have hit another record low due to declining inflationary pressures, putting many home buyers in the buying mood,” Freddie Mac’s chief economist Sam Khater said in the report.

 The interest rates on home loans roughly track the direction of long-term bond yields, including the 10-year Treasury note. The 10-year Treasury yield TMUBMUSD10Y, 0.699% has seesawed over the past week in response to weakness in the stock market driven by concerns about the rise in coronavirus infections across many parts of the country.

“Upticks in coronavirus cases across the country left market participants skeptical of the economic recovery’s sustainability,” said Matthew Speakman, an economist with Zillow ZG, +1.09% . “This sparked a sell-off in stocks and a flight to the safe haven of bonds — something that normally pushes mortgage rates lower.”

But now the mortgage market is at a turning point, Speakman said. And it all depends on what happens with the spread of COVID-19 from here on out.

“More bad news regarding the uptick in coronavirus cases would likely send rates back downward, possibly to new lows,” Speakman said. “However, rates could just as easily begin to trend upward again, particularly if key economic data or measures to contain or treat the virus show meaningful improvements.”

Rates going up could spell trouble for the broader housing market. Eager to lock in the cheap financing, buyers have flocked to apply for home loans to purchase property. There’s evidence that the low rates, coupled with pent-up demand caused by the coronavirus stay-at-home orders, is driving a significant recovery across the housing market.

An increase in rates would hamper the housing market’s ability to rebound. But it’s not the only headwind the market is facing. “It would be difficult to sustain the momentum in demand as unsold inventory was at near record lows coming into the pandemic and it has only dropped since then,” Khater said.

In other words, with very few homes for sale, there’s a rather low ceiling on how high sales activity can go for the foreseeable future.

ARTICLE Published: June 19, 2020 at 9:03 a.m. ET, MARKETWATCH

2020 Homeowner Wish List

2020 Homeowner Wish List

2020 Homeowner Wish List [INFOGRAPHIC] | MyKCM

Some Highlights

  • In a recent study by realtor.com, homeowners noted some of the main things they would change about their homes to make them more livable.
  • Not surprisingly, more space, an updated kitchen, and a home gym rose to the top of the list.
  • If you’re thinking of selling this year, having these items in your listing might make your house more desirable than ever to potential buyers.

Selling Your Home

 

Every day that passes, people have a need to buy and sell homes. That doesn’t stop during the current pandemic. If you’ve had a major life change recently, whether with your job or your family situation, selling your home may be needed, and fast.

While you probably feel like timing with the current pandemic isn’t on your side, making a move is still possible. Rest assured, with technology at your side and fewer sellers on the market in most areas, you can list your house and make it happen safely and effectively, especially when following the current COVID-19 guidelines set forth by the National Association of Realtors (NAR) and the Centers for Disease Control and Prevention (CDC). You may have a new baby, a new employment situation, a parent who moved in with you, you just built a home that’s finally ready to move into, or some other major part of your life that has changed in recent weeks.  Selling your home may be a strong necessity!

Buyers have those needs too, so rest assured that someone is likely looking for a home just like yours. According to the NAR Flash Survey: Economic Pulse taken April 5 – 6, real estate agents indicate, not surprisingly, that there’s a noticeable decline in current homebuyer interest. That said, 10% of agents said in the same survey that they saw no change or even an increase in buyer activity. So, while buyer interest is low compared to normal spring markets, there are still buyers in the market. Don’t forget, you only need one buyer – the right one for your home.  Selling your home may be THE home for that buyer!

Here’s the other thing – people are spending a lot of time on the Internet right now, given the stay-at-home orders implemented across the country. Buyers are actively looking at homes for sale online. Some of them are reaching out to real estate professionals for virtual tours and getting ready to make offers too. Homes are being sold in many markets.

Whenever you decide to sell your home, whether now or later, there will always be do’s and don’ts to navigate throughout the process. Contact me so we can get ahead of some common mistakes and set you up with some mission-critical best practices.

Buying a Home Right Now

Buying a Home Right Now: Easy? No. Smart? Yes.

Through all the volatility in the economy right now, some have put their search for a home on hold, yet others have not. According to ShowingTime, the real estate industry’s leading showing management technology provider, buyers have started to reappear over the last several weeks. In the latest report, they revealed:

“The March ShowingTime Showing Index® recorded the first nationwide drop in showing traffic in eight months as communities responded to COVID-19. Early April data show signs of an upswing, however.”

2020-05-05 Showing Time

https://www.showingtime.com/impact-of-covid-19/

Buying a Home Right Now: Easy? No. Smart? Yes!!!

Why would people be setting appointments to look at prospective homes when the process of purchasing a home has become more difficult with shelter-in-place orders throughout the country? Here are three reasons for this uptick in activity: 1. Some people need to move. Whether because of a death in the family, a new birth, divorce, financial hardship, or a job transfer, some families need to make a move as quickly as possible. 2. Real estate agents across the country have become very innovative, utilizing technology that allows purchasers to virtually:

  • View homes
  • Meet with mortgage professionals
  • Consult with their agent throughout the process

All of this can happen within the required safety protocols, so real estate professionals are continuing to help families make important moves. 3. Buyers understand that mortgage rates are a key component when determining their monthly mortgage payments. Mortgage interest rates are very close to all-time lows and afford today’s purchaser the opportunity to save tens of thousands of dollars over the lifetime of the loan. Looking closely at the third reason, we can see that there’s a big difference between purchasing a house last year and purchasing one now (see chart below):Buying a Home Right Now: Easy? No. Smart? Yes. | MyKCM

Bottom Line:  Buying a Home Right Now: Easy? No. Smart? Yes.

Many families have decided not to postpone their plans to purchase a home, even in these difficult times. If you need to make a move, let’s connect today so you have a trusted advisor to safely and professionally guide you through the process.