This Week in Real Estate, Feb. 9, 2015

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Good Morning!

This Week in Real Estate….more jobs added than expected and mortgage rates back to 2013 levels….are you prepared to seize all the opportunities in front of you?

Below are a few of the highlights from the first week in February that influence our business:

* New Study Finds Price Premium for Solar Homes. A study conducted by a team of researchers, led by the U.S. Department of Energy’s Berkeley Laboratory, found that homebuyers are willing to pay more for homes that have installed solar photovoltaic (PV) energy systems. The research estimates a price premium of approximately $4 per watt of PV installed. For a typical PV system, the research team found that this translates into a price premium of $15,000. The research also examined the difference in price premium between newly built and existing homes. The estimates indicate a small, but statistically insignificant, difference between new and existing residences with PV systems. For new homes, the estimated premium was $3.58/watt, while for existing homes the premium was $4.51/watt. Full Story… http://eyeonhousing.org/2015/02/new-study-finds-price-premium-for-solar-homes/

* Experts got a pleasant surprise Friday morning as the Bureau of Labor Statistics reported the U.S. economy added 257,000 jobs in January beating estimates. The strong start to 2015 in the labor market will be received as encouraging news at the Federal Reserve which has signaled that the economic recovery may be strong enough to begin raising interest rates as early as its scheduled June meeting. Below target inflation and economic developments overseas have opened the door to the possibility of a later liftoff but today’s employment report will be a positive note in the deliberations. Many experts believe this job report does not put enough pressure on Fed rates for it to raise them. “The Fed wants to see much more wage growth,” Diane Swonk, chief economist at Mesirow Financial, told CNBC on Friday. “We’re still well below that…This keeps the Fed patient in terms of how they do lift off going forward.” Full Story… http://www.cnbc.com/id/102405104?__source=mnd|news|&par=mnd

* Homebuilding: The Job Revival That Will Surprise in 2015. Housing-related employment got a jolt in January. The number of residential construction workers rose 12,500, a gain of 1.8 percent, the biggest one-month jump in percentage terms since 2002. Other trade categories related to housing jobs also showed strength. Specialty trade contractors, who’ve been in short supply, increased by 7,600 to the highest level since 2009. Wood products manufacturers added 4,100 employees, building materials stores another 3,700. Architectural and engineering employment, which includes home designers, increased by 7,800 to the highest level since 2008. Full Story… http://www.bloomberg.com/news/articles/2015-02-06/home-building-the-jobs-revival-that-will-surprise-in-2015

* Falling Mortgage Rates Fuel Buying Activity. Mortgage interest rates rolled back to 2013 levels this week. The 30-year fixed-mortgage averaged 3.59% this week, down from 3.66% last week. A year ago this time, it was as high as 4.32%, according to the Freddie Mac Primary Mortgage Market Survey. Mortgage applications for FHA loans spiked last week in the midst of lower FHA mortgage insurance premiums, according to the Mortgage Bankers Association. Both purchase and refinance activity are up, signaling a higher demand for housing. Buyers are refinancing, and they’re choosing FHA loans to do so. Refinance applications using FHA loans increased 76.5% after the drop in mortgage insurance premiums. FHA purchase applications increased 12.4%, according to the MBA. Full Story… http://www.realtor.com/news/falling-mortgage-rates-fuel-buying-activity/​

Have a productive week!
Jason


This Week in Real Estate

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Happy February!

As we close out the first 31 days of the new year more positive news with respect to the two key drivers of the real estate business: unemployment and interest rates headline This Week in Real Estate. Below are a few of the highlights that influence our business from the fourth week of 2015:

* U.S. unemployment benefit applications plunge to 15-year low. Weekly applications dropped 43,000 to a seasonally adjusted 265,000. That is the lowest level since April 2000. It is also the biggest decline in two years. Employers added almost 3 million jobs last year, the most since 1999. Most economists forecast growth will top 3 percent in 2015 for the first time in a decade. Full story…
http://finance.yahoo.com/news/us-unemployment-benefit-applications-plunge-133114403.html

* A more robust year for housing in 2015. A strengthening labor market, low interest rates, improving mortgage availability and growing pent-up demand will help to significantly boost single-family housing production in the year ahead and move the housing recovery to higher ground, according to economists speaking at the International Builders’ Show in Las Vegas. Accelerating economic growth and employment gains are the primary factors that have helped consumer confidence jump back to pre-recession levels, according to NAHB Chief Economist David Crowe. Full Story… http://eyeonhousing.org/2015/01/a-more-robust-year-for-housing-in-2015/

* Mortgage rates shoot past recent lows; 3.5% getting more prevalent. Rate sheets moved well past recent lows and back to levels not seen since May 10th, 2013. For the knife-catchers out there, today is the best day in more than 20 months. The specific result today is the greatly-increased prevalence of 3.5% as a conforming 30-year fixed quote for top tier scenarios. Full Story… http://www.mortgagenewsdaily.com/consumer_rates/430712.aspx

* Boomerang home buyers are coming back. RealtyTrac estimates 7.3 million so-called “boomerang buyers” will return to the U.S. housing market over the next eight years. With the economy gaining momentum and hiring picking up, many foreclosed on homeowners are in a position to buy again. Homeowners can recover from foreclosure in as little as three years, but seven years in the “conservative” amount of time it takes to rebuild a credit score. That means many homeowners who lost their homes in 2007 should be able to qualify for a new home loan this year. More than 500,000 people will fit this description in 2015. The number jumps to 1 million next year, peaks at 1.3 million in 2018. Full Story… http://money.cnn.com/2015/01/27/real_estate/boomerang-homebuyers-foreclosed-return/index.html

Have a productive week!
Jason


This Week in Real Estate

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Good Afternoon!

Refinancing activity, positive news for housing starts, and builder confidence dominate the headlines in This Week in Real Estate. Below are a few of the highlights from the third week of 2015:

* Mortgage applications rise on refinancing surge. Applications to refinance increased 22 percent from the previous week, and are now up 63 percent from a year ago. “This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57 percent last week,” said Mike Fratantoni, MBA chief economist. Full story… http://www.cnbc.com/id/102353506

* Confidence among U.S. home builders held steady in January, giving back very little following a sizeable jump toward the end of 2014. A monthly index of builder sentiment from the National Association of Home Builders fell one point in January to 57 from December. Anything above 50 is considered positive sentiment, and this marks seven straight months above 50. “Steady economic growth, rising consumer confidence and a growing labor market will help the housing market continue to move forward in 2015,” said the association’s Chief Economist David Crowe. On a three-month moving average, builder confidence in the West rose by four points to 66. Full Story… http://www.cnbc.com/id/102350914

* Builders broke ground in December on the most single-family homes in almost seven years, propelling an unexpectedly large gain in U.S. housing starts that signals construction will contribute to economic growth in 2015. ​For all of 2014, groundbreaking increased 8.8 percent to 1.01 million units, the highest since 2007. Single-family home starts, the largest part of the market, jumped 7.2 percent to a 728,000-unit pace, the highest level since March 2008. Single-family permits rose 4.5 percent to their highest level since January 2008. Full Story… http://www.cnbc.com/id/102352190

* Fannie Mae’s economists expect the economy to strengthen in 2015 and that will “drag” housing into a better cycle this year. ​The company’s forecast for the year includes a moderate acceleration of economic growth, “driven by strengthening private domestic demand, especially consumer spending, amid continued low gasoline prices, firming labor market conditions, rising household net worth through both financial and housing wealth, improving consumer and business confidence, and reduced fiscal headwinds.” The collapse in oil prices was one of the big surprises of 2014. Along with the strengthening of the dollar to decades-high levels and the softening of other commodity prices, disinflationary pressures seem to have contributed to the bond rally and the resulting drop in interest rates. Full Story… http://www.mortgagenewsdaily.com/01222015_fannie_mae_forecast.asp

* Seattle home receives Remodel of the Year honors in National Design Competition. The Book House in Seattle has been selected as the Remodel of the Year in the 2014 Best in American Living Awards (BALA) by the National Association of Home Builders. In its 31st year, BALA recognizes outstanding achievement by builders and design professionals in all sectors of the residential industry including single-family production, custom, rental, affordable, interiors, remodeling, community and international. Full Story… http://www.nahb.org/news_details.aspx?newsID=17085

Have a productive week!
Jason


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