Millennials Are the ‘Renovation Generation’

Millennials aren’t turned off by home improvement projects. They are more likely than any other generation to remodel any part of their home, according to a HomeAdvisor’s 2018 True Cost Survey. Millennials are twice as likely as baby boomers to complete bathroom and kitchen remodeling projects. They are also more likely to build a deck or porch and paint a home’s exterior than other generations too.
Millennials, those born between 1980 and 1994, have completed the most home projects in the past 12 months—more than baby boomers, Generation X, or the silent generation, according to the study. However, baby boomers tend to outspend all generations in home improvement projects.

Nevertheless, “the millennial generation is becoming increasingly important” in the home improvement industry, notes Brad Hunter, HomeAdvisor’s chief economist. “Most millennials have had to compromise on the size and condition of their starter homes—with many purchasing older homes in need of repair just to be able to afford homeownership. Many of the millennials who did buy a home in the last few years are seeking to upgrade. But a lack of housing inventory, coupled with inflated home prices and rising mortgage rates, has them renovating their existing homes instead of selling and moving. Luckily, many have built up the equity to afford the cost of some improvements.”
More than half of the millennials surveyed say they want to move to a home with more space or to upgrade to a nicer home. But a lack of homes for sale is keeping them stuck in place.
As such, they’ve got big plans for their current home: 82 percent of millennials surveyed—the highest compared to other generations surveyed—say they plan to spend as much as they did in the last 12 months on home improvement projects next year. More than half of millennials say they expect to spend more than they did last year.
“With rapidly rising home values spurring sudden equity, young homeowners are making improvements to beautify and personalize their spaces,” according to the report.

Daily Real Estate News | Wednesday, June 13, 2018
Source: “True Cost Report,” HomeAdvisor (June 2018)

Is Break in Rate Hikes Significant to Buyers?

For the second consecutive week, mortgage rates decreased as the 30-year fixed-rate mortgage fell two basis points to average 4.54 percent, Freddie Mac reports. Rates had been on a steady incline for weeks before breaking trend.
“Home buyers have taken advantage of the recent moderation in rates, which led to a 4 percent increase in purchase applications last week,” said Sam Khater, Freddie Mac’s chief economist. “Although demand has remained steadfast against the backdrop of this year’s higher borrowing costs, it’s important to note that the growth rate of purchase loan balances has moderated so far this year—and particularly since March. This slowdown indicates that buyers are having difficulty stretching to keep up with the pace of home price growth. … Listings for new and existing homes need to increase in the months ahead to moderate price growth and reignite sales activity.”
Freddie Mac reports the following national averages with mortgage rates for the week ending June 7:

1. 30-year fixed-rate mortgages: averaged 4.54 percent, with an average 0.5 point, dropping from last week’s 4.56 percent average. Last year at this time, 30-year rates averaged 3.89 percent.
2. 15-year fixed-rate mortgages: averaged 4.01 percent, with an average 0.4 point, falling from last week’s 4.06 percent average. A year ago, 15-year rates averaged 3.16 percent.
3. 5-year hybrid adjustable-rate mortgages: averaged 3.74 percent, with an average 0.4 point, falling from last week’s 3.80 percent average. A year ago, 5-year ARMs averaged 3.11 percent.

Source: Freddie Mac

Daily Real Estate News | Friday, June 08, 2018

507 Jones Avenue, Buhl – $149,900.00

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This is a truly remarkable home! Beautifully updated and carefully maintained! Includes: 4 bedrooms; 1.5 Bathrooms; very spacious living room, dining room, and kitchen; den/sun room; bonus room and large hallway closet on upper level; poured, dry basement; 2.5 stall insulated heated/cooled finished garage w/ workshop area; new 1 stall garage with yard and alley access; and a beautiful large empty lot next door! Other features include: new furnace, sidewalks, garage openers and steel roofs on both garages! A very special property!

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May Prices Reached Record Highs

U.S. prices surged to an all-time high and homes sold faster than they ever have in May, according to a new report released by realtor.com®. Home prices averaged $297,000 in May, and homes sold in just 55 days.
Despite recent upticks, however, the market is showing a few signs of slowing momentum, according to the report.
“We’re in the thick of the hottest homebuying season of all time,” says Javier Vivas, director of economic research at realtor.com®. “The pace of U.S. home sales has officially reached a seasonal and historical high, but we’re also beginning to see slight signs of deceleration.”
More listings are coming onto the market, which may offer some hope to frustrated home buyers who have faced limited choices, Vivas says. The inventory of homes for sale rose 6 percent in May compared to April.
“Even as inventory recovers, the mix of what’s available versus what shoppers are looking for could become an even more pronounced mismatch,” he says. “Total listing volume remains highly dependent on new construction, much of which is still out of the price range of first-time buyers—the largest segment of buyers.”
Rising home prices also show few signs of slowing. “Unfortunately for buyers, median list prices continue to show strong yearly growth and fail to hint that home values will stall any time soon,” Vivas says.

Source: Move Inc.

Daily Real Estate News | Thursday, May 31, 2018

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This is a truly remarkable home! Beautifully updated and carefully maintained! Includes: 4 bedrooms; 1.5 Bathrooms; very spacious living room, dining room, and kitchen; den/sun room; bonus room and large hallway closet on upper level; poured, dry basement; 2 stall insulated heated/cooled finished garage w/ workshop area; new 1 stall garage with yard and alley access; and a beautiful large empty lot next door! Other features include: new furnace, sidewalks, garage openers and steel roofs on both garages! A very special property!

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3 Questions Clients Should Ask Before Buying a Vacation Rental

If you have buyers interested in purchasing a vacation property as an investment and for extra cash flow, now is a great time, according to finance expert Rob Stephens, co-founder and general manager of Avalara MyLodgeTax, a tax solutions provider. Sites like Airbnb and HomeAway have contributed to the explosive growth in the number of travelers seeking to rent private homes for comfort, privacy, and sometimes lower costs.
“There’s no question that the vacation rental business is booming,” Stephens says. The short-term rental market in the United States alone is approaching $18 billion in revenue, with a projected annual growth rate of 6.6 percent, he says.
However, before your buyers decide to take on a short-term rental, Stephens advises that you pass on these three questions to help ensure their success:
1. Is a vacation rental a smart investment for you? Buying a vacation property can certainly be exciting, especially if it’s in a destination where the buyers love to spend time themselves. However, your clients need to be confident that they can cover all the costs involved. In addition to the transaction costs, make sure they understand what it will take to operate the rental. Do your clients plan to manage the property themselves or hire a professional (possibly you)? A vacation rental only generates income when it’s occupied, so your client needs to figure out how many renters they need each month and how much to charge to cover the cost of the property, and then decide whether it’s realistic or not.
Beyond the Mortgage: Explore Ownership Expenses With Investors
2. What are the laws governing short-term rentals in the community? Before you put in that offer on behalf of your investor clients, make sure the community or homeowners association allow short-term rentals. “Many communities prohibit owners from renting out their homes for fewer than 30 days,” Stephens says. Even some cities and states are starting to impose regulations on vacation rentals, he adds. Help your clients investigate short-term rental laws and regulations, including fines and other penalties if the property doesn’t comply. Call the HOA property management company, visit the city hall website, and have conversations with local agents who also handle vacation rentals.
3. Which taxes and fees are you required to collect from guests? “Many real estate investors overlook the fact that lodging or occupancy taxes need to be paid in order to rent the home in compliance with city and state tax agencies,” Stephens says. State and local lodging taxes vary widely, and can change with little notice, Stephens says. Your buyers need a lodging tax compliance tool or software if they’re planning to handle the rental themselves. “The right tool will offer a full range of solutions, including determining the vacation rental taxes and reporting requirements as well as calculating and filing returns on a monthly or quarterly basis,” Stephens says.

Source: Rob Stephens, Avalara MyLodgeTax

Daily Real Estate News | Friday, May 25, 2018

Spike in Rates Dampens Loan Applications

A rise in interest rates last week may have prompted would-be refinancers and home buyers to pause. Mortgage applications—for both refinancings and home purchases—dropped 2.6 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. Mortgage volume is now 10.5 percent lower than a year ago.
The 30-year fixed-rate mortgage rose to its highest level since April 2011 last week—a 4.86 percent average, MBA reports. The higher rates gave homeowners less incentive to refinance. Refinance volume dropped another 4 percent last week and is now at the lowest level since December 2000. Refinance applications are 27 percent lower than a year ago.

That’s caused lenders to put more weight behind their home-purchase business, but the higher rates—mixed with a severe shortage of homes for sale—appear to be limiting the buyer pool there, too. Mortgage applications to purchase a home dropped 2 percent for the week. However, volume is still 3 percent higher than a year ago.
“Purchase applications decreased over the week, while the average loan amount for purchase loans increased to over $320,000 after averaging around $317,000 for the past four weeks—likely a sign that inventory for lower-priced homes remains low and the mix is still skewed toward larger loan balances,” says Joel Kan, an MBA economist.

Source: “Weekly Mortgage Refinances Drop to an 18-Year Low as Rates Jump,” CNBC (May 23, 2018)

Daily Real Estate News | Wednesday, May 23, 2018