According to a release from CoreLogic This Week in Real Estate, home prices realized the biggest annual jump in four years in May. Below are a few highlights from the first week of July that influence our business:
* Home Prices Make The Biggest Jump in Four Years. Home prices jumped 7.1 percent annually in May, according to a new report from CoreLogic. That’s the biggest jump in four years. Annual price gains had been shrinking slightly, as mortgage rates rose, but apparently higher rates are not hurting demand. They are, however, exacerbating the already critical supply shortage. “During the first quarter, we found that about 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less,” said Frank Nothaft, chief economist for CoreLogic. “May’s mortgage rates averaged a seven-year high of 4.6 percent, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate.” The median price of an existing home sold in May was $264,800, according to the National Association of Realtors. Of course, all real estate is local, and certain markets are hotter than others. Seattle, Denver, and San Francisco continue to see some of the biggest price gains, as they also have the leanest supply. The supply of homes for sale has been dropping on an annual basis for the past 36 months, according to the National Association of Realtors. Full Story… https://www.cnbc.com/2018/07/02/housing-is-getting-more-expensive-as-home-sellers-retreat.html
* American City Growth Rate Catching Up to Suburbia. For the first time in decades, U.S. cities are catching up to the population growth of suburban America, according to the latest report from the Urban Land Institute. ULI discovered that between 2010-2015, denser urban locations grew significantly faster than residential neighborhoods, suggesting that new urban residents are demonstrating a preference for mixed-use environments. Urban residents now account for more than 29 million Americans, which is 17% of the total population in just 1% of the land area in the 50 largest metropolitan statistical areas, according to ULI. The report also attributes urban population growth to rental apartment development. In the years between 2010 and 2017, the rate of rental apartment inventory in urban places grew 32%, while inventory in the suburbs only grew 16%. Employment is also an indication of population growth, notably between 2005 and 2015, suburban areas accounted for 30% of existing jobs and 36% of new job growth. Economic centers, which are established urban employment cores, in downtown areas increased at a faster rate than the number of jobs in any other type of neighborhood during this time. Although urban population growth is catching up to suburbia, affordability is still hindering the growth of the urban market. The average monthly rent of a multifamily apartment in an urban area is $1,650, which exceeds the $1,275 suburban residents typically pay. Full Story… https://www.housingwire.com/articles/43846-american-city-growth-rate-catching-up-to-suburbia
* Cost Across Time. Even with the projection that interest rates will climb to 5.1% by this time next year, we are still well below historic numbers. The average interest rate and mortgage payment in the 1970s was 8.86% and $1,986, compared to the 1980s 12.7% and $2,707, the 1990s 8.12% and $1,855, the 2000s 6.29% and $1,546 and today 4.55% and $1,274. The impact your interest rate makes on your monthly mortgage cost is significant. Full Story… https://www.keepingcurrentmatters.com/2018/07/06/cost-across-time-infographic-4/
Have a productive week.