Nov 21, 2022 | Financial Reports
Last week’s economic reporting included readings on U.S housing markets, housing starts, and building permits issued. Data on sales of previously-owned homes were released along with weekly reports on mortgage rates and jobless claims.
Builder Sentiment on Housing Markets Declines in November
November’s National Association of Home Builders Housing Market Index fell five points to an index reading of 33; analysts expected a reading of 36. November’s reading was the lowest since June 2012 except during the pandemic.
All three indices contributing to the Housing Market Index were lower in November than in October. Homebuilder sentiment regarding current sales conditions fell six points to an index reading of 39; by comparison, this reading was 83 in November 2021. Builder confidence in home sales conditions over the next six months fell four points to 31. Homebuilder confidence in prospective buyer traffic in new single-family developments fell five points to an index reading of 20.
Homebuilders were less confident about housing market conditions in the four regions tracked by the NAHB. Builder sentiment in the Northeast fell six points to an index reading of 41. Builder sentiment in the Midwest fell two points to 38. Builder confidence in the South fell seven points to 42. Builder sentiment was five points lower in the West at 29. Index readings of less than 50 indicate that most builders lack confidence in housing market conditions.
Builders continue to experience rising materials costs and regulatory expenses associated with developing land and home construction. Rising home prices and resulting affordability concerns compelled builders to ask lawmakers to reduce regulatory costs connected with developing land and building homes.
Mortgage Rates, Jobless Claims
Freddie Mac changed the format of its Primary Mortgage Market Survey to include only average rates for 30 and 15-year fixed-rate mortgages and the survey no longer reports average discount points. The average rate for 30-year mortgages fell 47 basis points to 6.61 percent. Rates for 15-year mortgages averaged 5.98 percent and four basis points lower than in the previous week. 222,000 initial jobless claims were filed last week. Analysts expected 225,000 new claims filed as compared to the previous week’s reading of 226,000 first-time claims filed.
What’s Ahead
This week’s scheduled economic reporting includes readings on new home sales, minutes of the most recent meeting of the Fed’s Federal Open Market Committee, and weekly readings on mortgage rates and jobless claims. Financial markets will be closed on Thursday and Friday for the Thanksgiving holiday.
Nov 21, 2022 | Financial Reports
Last week’s economic reporting included readings on U.S housing markets, housing starts, and building permits issued. Data on sales of previously-owned homes were released along with weekly reports on mortgage rates and jobless claims.
Builder Sentiment on Housing Markets Declines in November
November’s National Association of Home Builders Housing Market Index fell five points to an index reading of 33; analysts expected a reading of 36. November’s reading was the lowest since June 2012 except during the pandemic.
All three indices contributing to the Housing Market Index were lower in November than in October. Homebuilder sentiment regarding current sales conditions fell six points to an index reading of 39; by comparison, this reading was 83 in November 2021. Builder confidence in home sales conditions over the next six months fell four points to 31. Homebuilder confidence in prospective buyer traffic in new single-family developments fell five points to an index reading of 20.
Homebuilders were less confident about housing market conditions in the four regions tracked by the NAHB. Builder sentiment in the Northeast fell six points to an index reading of 41. Builder sentiment in the Midwest fell two points to 38. Builder confidence in the South fell seven points to 42. Builder sentiment was five points lower in the West at 29. Index readings of less than 50 indicate that most builders lack confidence in housing market conditions.
Builders continue to experience rising materials costs and regulatory expenses associated with developing land and home construction. Rising home prices and resulting affordability concerns compelled builders to ask lawmakers to reduce regulatory costs connected with developing land and building homes.
Mortgage Rates, Jobless Claims
Freddie Mac changed the format of its Primary Mortgage Market Survey to include only average rates for 30 and 15-year fixed-rate mortgages and the survey no longer reports average discount points. The average rate for 30-year mortgages fell 47 basis points to 6.61 percent. Rates for 15-year mortgages averaged 5.98 percent and four basis points lower than in the previous week. 222,000 initial jobless claims were filed last week. Analysts expected 225,000 new claims filed as compared to the previous week’s reading of 226,000 first-time claims filed.
What’s Ahead
This week’s scheduled economic reporting includes readings on new home sales, minutes of the most recent meeting of the Fed’s Federal Open Market Committee, and weekly readings on mortgage rates and jobless claims. Financial markets will be closed on Thursday and Friday for the Thanksgiving holiday.
Nov 18, 2022 | Home Buyer Tips
Are you starting to tire of paying your monthly rent to someone and never building any equity? Renting forever can be a significant pain, especially as you’re contributing to someone else’s financial well-being. The good news is that there are affordable real estate options out there for those investing in their first home. Below we will share a few excellent reasons why an apartment or condo might be the best choice for a first-time home buyer.
A Manageable Monthly Payment
In most markets across the country, condos and apartments are available at a significantly lower cost than a full-sized house. Buying a less-expensive home means that your monthly mortgage payments will, in turn, be lower. If you are single or a young professional trying to start a family, that extra money can be a massive boost to your monthly budget.
Note that while your monthly mortgage payment may be lower, you are still responsible for other maintenance and upkeep fees. The most common is known as a homeowners’ association fee, to which all condo owners in the same development contribute. These funds are used to upkeep the building or property as well as things like landscaping, a pool or gym, and other amenities.
A Smaller Down Payment
In the same vein, buying a less-expensive home also means that you can put a smaller down payment on it when you close the sale. In many cases you are required to place a certain percentage – typically 20 percent – down to avoid having to purchase private mortgage insurance. Having to commit less in your down payment leaves more money in the bank for other purposes.
An Excellent Future Investment Property
Don’t forget that when you are ready to upgrade and move into a larger house, you can keep a condo as a rental or investment property. Once your mortgage is paid off, you are only responsible for the monthly maintenance fees and taxes. So if you can rent the condo out to a tenant, you will have an excellent source of cash flow that can help to pay for your new home or fund other activities.
The above are just a few of the many reasons why a condo can be a great starter home for first-time buyers. To learn more about your mortgage options, contact us today. We are happy to help.
Nov 17, 2022 | Financial Reports
The National Association of Home Builders’ Housing Market Index for November showed builders’ growing concerns over U.S. housing market conditions. November’s index reading dropped five points to 33 as compared to October’s reading of 38 and the November 2021 reading of 83. November’s home builder index reading was the lowest reading since June 2012 except during the pandemic. Readings over 50 indicate that most home builders were positive about housing market conditions.
All three index readings that contribute to the HMI reading were also lower. Builder confidence in current housing market conditions fell six points to an index reading of 39. Home builder sentiment over housing markets in the next six months fell four points to an index reading of 31. Home builder expectations for prospective buyer traffic in new housing developments fell five points to November’s reading of 20.
Home Builders Face Multiple Challenges
Home builders continued to face obstacles including rising materials costs and falling demand for homes. Rising mortgage rates and home prices sidelined potential buyers. The Federal Reserve’s decision to raise its target interest rate range to slow inflation caused mortgage rates to rise; home builders asked lawmakers to lower costs related to land development and home construction to offset the impact of rising mortgage rates.
NAHB chairman Jerry Konter said: “Higher interest rates have significantly weakened demand for new homes as buyer traffic is becoming increasingly scarce. With the housing sector in a recession, the administration and new Congress must turn their focus to policies that lower the cost of building and allow the nation’s home builders to expand housing production.”
Builders reported offering buyer incentives including mortgage rate buydowns, paying discount points for buyers, and reducing home prices. 37 percent of home builders cut prices in November as compared to 26 percent in September. Price reductions averaged 6 percent. Current home price reductions were lower than reductions of 10 to 12 percent seen during the Great Recession in 2008.
NAHB Chief Economist Robert Dietz said, “To ease the worsening housing affordability crisis, policymakers must seek solutions that create more affordable and attainable housing.” Regional readings for home builder confidence were also lower. Builder sentiment in the Midwest fell 2 points to 38; Builder sentiment in the Northeast fell 6 points to 41, and builder sentiment in the South fell 7 points to 42. Home builder sentiment in the West fell 5 points to an index reading of 29.
Nov 16, 2022 | Real Estate
As you get closer to your retirement age, you should try to discharge as much of your debt as possible. Unfortunately, many people close to the age of retirement still have a significant mortgage balance they need to pay off. What are some of the top reasons why you should pay off your mortgage before you retire?
Your Portfolio Might Not Generate As Much Interest
You may have a very low rate on your mortgage, which means that your money is better served in the stock market; however, as you approach the age of retirement, your portfolio might not generate as much interest because you are shifting more of your assets into less risky investments. As a result, you might want to pay down your mortgage faster, as the interest rate between your mortgage and your portfolio is no longer as large.
Free Up More Cash
You should also try to pay off your mortgage because you will free up more cash. You want to enjoy your golden years, but if you are still spending thousands of dollars every month paying off your mortgage, your money will not go as far. You may not be ready to tap into those retirement accounts just yet, so you can generate more cash by paying off your mortgage now. Try to pay off your mortgage before you retire to maximize your golden years.
Tap Into Your Home Equity Later
Do not forget that your house can also be a very important retirement asset. If you are concerned about running out of money and your retirement account, you can tap into your home equity as an extra source of cash; however, what if you still have a mortgage on your house? You might not have as much equity to use. While you are still making money now, you should try to pay off your mortgage.
Pay Off Your Mortgage Before You Retire
Clearly, there are a lot of reasons why you should try to pay off your mortgage before you retire. When you retire, your income may drop significantly, so you should try to pay off your mortgage while you still have the flexibility to do so right now.
