More Inventory on the Horizon?
For the first time in several years, the real estate market is a lagging part of the economy. For some time, the real estate market has led the economy forward, but in the past year or so, the economy has outshined the real estate sector. In most times a stronger economy helps real estate, but this market is a bit different than most. Real estate’s recovery from the recession was fueled by record low interest rates.
And though it is not unusual for rates to rise as the economy gets better, today’s rates seem higher than they are in reality. Rates are lower now than they have been for most of the past three decades, but consumers have become used to unbelievably low rates. On the other side of the equation, home prices have risen even with slower home sales because there has been a lack of inventory. Together with rising rates, higher home prices have increased homeownership costs. Now it appears as though inventory levels are rising in certain sections of the country, while at least stabilizing in other areas.
What will more inventory mean? With higher rates and more inventory available, this should mean that the rise of home prices might slow down. Consumer rents also have risen steadily for the past several years. Higher interest rates will continue to contribute to the higher cost of renting, even if home price growth slows. After all, rent money goes to pay the landlord’s loan. What could halt the rise in rates? If higher rates also cause the broader economy to slow, in addition to the real estate sector, that could do the trick. Stocks have been very volatile lately and that could be a warning sign that the cooling is about to begin.
It hopefully just got a little more difficult for scammers to abuse someone’s credit information, because consumers can now freeze their credit at all three of the major credit reporting agencies, for free. Last year, in the wake of the massive data breach at Equifax, which exposed the personal information of more than 145 million consumers to hackers, a push began to stop allowing the credit reporting agencies to charge to freeze someone’s credit. Each state has different rules around credit freezes, but in some states, it costs $10 to place a credit freeze on their account and another $10 if they want to lift the freeze. Not anymore though. Going forward, consumers can freeze their credit for free at Equifax, TransUnion, and Experian. A credit freeze prevents lenders or other credit providers from opening a new account without a consumer unfreezing their credit. The change was actually put in place by the Economic Growth, Regulatory Relief, and Consumer Protection Act signed into law earlier this year. According to the Federal Trade Commission, consumers can now freeze and unfreeze their credit for free. The law also allows parents to freeze their children’s credit for free (applies to children under 16), and guardians, conservators, and those with a valid power of attorney can also get a free freeze for their dependents. Additionally, fraud alerts placed on a consumer’s credit file will be extended from 90 days to one year. A fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account. Consumers must contact each of the three major credit agencies independently to place a credit freeze on their accounts. Source: HousingWireSeventy-seven percent of consumers say they believe now is a good time to sell a house—a record high. That’s according to new findings from the National Association of Realtors®’ latest quarterly Housing Opportunities and Market Experience survey. Fifty-three percent of survey respondents say they believe home prices will continue to increase in their communities over the next six months. “Though the vast majority of consumers believe home prices will continue to increase or hold steady, they understand the days of easy, fast gains could be coming to an end,” says Lawrence Yun, NAR’s chief economist. “Therefore, more are indicating that it is a good time to sell, which is a healthy shift in the market.” Consumers are also upbeat about the direction of the economy, which may be making them feel wealthier and more willing to sell. But optimism seems in higher supply for Americans who are already relatively well-off. Households with incomes of more than $100,000 are more likely to view the economy as improving (67 percent) than those with an income of $50,000 to $100,000 (64 percent) and under $50,000 (49 percent), the survey showed. Source: National Association of Realtors®
More new homes are coming equipped with front porches. Sixty-five percent of new single-family homes started in 2016 included a porch, according to a Census data analysis from the National Association of Home Builders. It’s only the second time since tracking began that new single-family homes with porches have moved back above 65 percent. For comparison, in 2005, 54 percent of new homes had porches. The Annual Builder Practices Survey, conducted by Home Innovation Research Labs, shows that front porches on new homes tend to be more common than side porches. Also, most new home porches are open rather than screened. The average size of a front porch on a new home is about 60 square feet, according to the report. The materials used often tend to be concrete and treated wood. Source: The National Association of Home Builders