Another interesting analysis report released by Fannie mae couple of weeks ago gives an important fact about how people are thinking about the housing market and their confidence level.

The gap between those who say it’s a good time to buy a home and those who say it’s a good time to sell is growing larger. Sixty-eight percent of Americans say now is the time to buy, a month-over-month rise of 3 percentage points, according to Fannie Mae’s November 2014 National Housing Survey of 1,000 respondents. On the other hand, the number of Americans who say it’s a good time to sell fell 5 percentage points to 39 percent. Still, 44 percent of Americans remain optimistic that home prices will rise in the next 12 months, while the share who say home prices will drop is down to 6 percent, the survey found.

Here’s one of the most encouraging signs for the housing market’s future: Consumers’ personal financial outlook is improving. “We expect consumer attitudes toward housing to improve as the pickup in the overall economy lifts employment and income prospects,” Duncan says.

Forty-six percent of Americans say they expect their personal financial situation to improve over the next 12 months. That’s close to the survey’s all-time high.
45 percent of respondents say they believe mortgage rates will rise in the next 12 months (a drop of 3 percentage points from the previous month);
53 percent say they expect rental prices to rise in the next 12 months (a rise of 4 percentage points from last month);
62 percent say they would buy a home if they were going to move, while the share who say they’d rent rose to 31 percent;
25 percent say their household income is significantly higher than it was 12 months ago (the same as last month);
36 percent say their household expenses are significantly higher than they were 12 months ago (the same as last month).

Being exposed to the outlook of the report and current economic condition, housing has come a long way and this year is not steady growth compared to last year. It’s going to be rocky ride next year with oil price plummeting and job market might be shrinking in different sectors. It’s going to be another interesting year.

Source: Fannie Mae

Freddie Mac released U.S. Economic and Housing Market Outlook for 2015 last month and they expect the home-purchase market to strengthen along with the economy in 2015.
As per Frank Nothaft, Freddie Mac’s chief economist, “The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better”. Read the 5 predictions for 2015 from them.

Mortgage rates: Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.

Home prices: By the time 2014 wraps up, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015. “Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers,” according to Freddie economists. “Historically speaking, that’s moving from ‘very high’ levels of affordability to ‘high’ levels of affordability.”

Housing starts: Homebuilding is expected to ramp up in the new year, projected to rise by 20 percent from this year. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.

Single-family originations: Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.

Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.

It all looks rosy and hope the economy continues its stride next even with the expectation of nothing expected to pass in the new House. If the economy strengthens, housing will continue to get strong and it will increase interest rates and all cascade happens. So just look out for positive 2015.

Source: Freddie Mac.

As a realtor, I love the aroma of the new home but it doesn’t mean I don’t like older homes. New homes come with lot of perks which older homes lacks these days even with upgrades made by the owners. One of the virtues of a newly constructed home is the savings that come from reduced energy and maintenance expenses. Here is analysis from National Association Home builders released few months ago.

As per NAHB analysis, for routine maintenance expenses, 26% of all homeowners spent $100 or more a month on various upkeep costs. However, only 11% of owners of newly constructed homes spent this amount. In fact, 73% of new homeowners spent less than $25 a month on routine maintenance costs. They used data from the 2009 American Housing Survey (AHS) to offer proof. The AHS classifies new construction as homes no more than four years old.

Similar findings are available for energy expenses. According to the 2011 AHS, on a median per square foot basis, homeowners spent 81 cents per square foot per year on electricity. Owners of new homes spent less: 68 cents per square foot per year. For homes with piped gas, homeowners spent on average 50 cents per square foot per year. Owners of new homes spent just 34 cents per square foot per year.

The 2011 data show similar results for various other utilities. For water bills, homeowners averaged 28 cents per square foot per year, while owners of new homes averaged 22 cents. For trash bills, the median for all homeowners was 15 cents per square foot per year, while for new construction the median was 13 cents per square foot per year.

These data highlight that a new home offers savings over the life of ownership due to reduced operating costs. And in fact, these reduced costs result in lower insurance bills as well. The median cost for all homeowners of property insurance is 39 cents per square foot, while it is only 31 cents per square foot for owners of new homes.

These reduced expenditures represent one of the many reasons that the current system of appraisals needs updating to reflect the flow of benefits that come from features in a new home.

May be, these home builders are trying to propagate these numbers to create more advantage in favor of new home to bring more buyers to the model homes. I would think so but what they are quoting doesn’t seem to be abnormal or out of normal. I do see these advantages except water bill since it depends on the MUD district and if you are new community it can be higher than older neighborhoods which eventually can go down. Keeping all facts aside, obviously new homes are better due to lot new upgrades happened in construction industry but that shouldn’t turn down the older homes with good price. You can always upgrade to energy efficient windows, techshield roofs, better lighting etc.,

Source: eyehousing.org

That’s absolutely true in many of the buyers case including myself. We bought our new home last year and moved to Sugar land, one of major factor was my kids education. We want to move before my elder son gets older to go to 3rd grade and we want to move to area with good schools. We also don’t want to move after my son is settled in area and got good friends circle and had to leave them behind. That’s the reason quoted by many parents around nation.

Seventy-nine percent of Millennial parents (between the ages of 18 and 34) and 70 percent of Generation X parents (between the ages of 35 and 49) make major purchasing decisions around their children, according to a survey of 2,000 parents by Coldwell Banker Real Estate. Sixty-seven percent of Millennial parents and 64 percent of Gen X parents say they are more concerned about the immediate impact of a move on the emotional well-being of their children than whether moving is a good decision in the long run.

“Thirty years ago, if a parent had a job opportunity that was positive and was in sync with their job goals, there was a move that was happening, and the kids needed to adjust,” says Robi Ludwig, psychotherapist and lifestyle correspondent for Coldwell Banker. But parents today are less inclined to move their children if they’re already thriving where they’re at. “We hear stories about bullying in school, and kids being vulnerable,” and that has prompted more parents to want to stay put, she says.

But just because parents consider their children in the move doesn’t mean children are “chief purchasing officers,” says Eileen Kennedy-Moore, a Princeton, N.J.-based psychologist and co-author of “Smart Parenting for Smart Kids.”

Parents surveyed by Coldwell Banker say they are still willing to move — even if it’s unpopular with their children — if they believe it’s better in the long run for the family.

Many parents base their decision on where to move on the quality of the school districts. About 75% of the families he has worked with put school districts first when looking for a home. Also, 62 percent of Millennial parents and 57 percent of Gen X parents surveyed say it’s important for them to live near their parents or their spouse’s parents.

Parents are also more apt to move with younger children since they are less set in their relationships and tend to be more open to change. Kennedy-Moore says it tends to be easier for children younger than six to move as well as children who are facing a transition time, such as starting grade school or high school.

In fact, a recent Redfin analysis found that people pay $50 more per square foot, on average, for homes in the best school districts, compared with those located in average-ranked districts.

Even though You may think you’re the one calling the shots about where and when you move next. You’re wrong, it’s the kids who indirectly drives your decision. Be aware of it and make the wise decision.

See the original article at marketwatch.com