Home construction in 2012 highest in 4 years

WASHINGTON (AP) – Jan. 17, 2013 – U.S. builders started work on homes in December at the fastest pace since the summer of 2008 and finished 2012 as their best year for residential construction since the early stages of the housing crisis.

The Commerce Department said Thursday that builders broke ground on houses and apartments at a seasonally adjusted annual rate of 954,000. That’s 12.1 percent higher than November’s annual rate and nearly double the recession low reached in April 2009.

For the year, builders started work on 780,000 homes. That’s still roughly half of the annual number of starts consistent with healthier markets. But it is an increase of 28.1 percent from 2011. And it is the most since 2008 – shortly after the housing market began to collapse in late 2006 and 2007.

Steady job gains, record-low mortgage rates and a tight supply of new and previously occupied homes available for sale have helped boost sales and prices in most markets. That has made builders more confident.

“The strong rise in single-family starts is a clear indication of builder confidence in the sales outlook,” said Pierre Ellis, an economist at Decision Economics, in a note to clients.

In December, the pace of single-family home construction, which makes up two-thirds of the market, increased 8 percent. It is now 75 percent higher than the recession low reached in March 2009.

Apartment construction, which is more volatile, surged 23 percent last month.

Applications for building permits, a sign of future construction, inched up to a rate of 903,000 – a 4 1/2-year high.

Confidence among homebuilders held steady in January at the highest level in nearly seven years. But builders are feeling slightly less optimistic about their prospects for sales over the next six months, according to a survey released Wednesday.

In November, sales of previously occupied homes rose to their highest level in three years, while new-home sales reached a 2 1/2-year high.

Those factors have helped make homebuilders more confident and spurred new home construction. But homebuilders’ are still warily watching the current standoff in Washington between President Barack Obama and Congress over several approaching budget deadlines, including the need to boost the nation’s $16.4 trillion borrowing limit.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the homebuilders association.
Copyright © 2013 The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved.

http://rodneywoodstock.kwrealty.com/listing/mlsid/82/propertyid/R3337610/

Kitchens Sell a House

http://realtytimes.com/rtpages/20120124_kitchens.htm

Kitchens Sell a House

by Carla Hill

It's a tool used by house flippers all across the nation. Stagers know its power. Real estate agents push its importance. What is this not-so-well-kept secret of real estate? A kitchen can sell a house.  

A kitchen is the heart of a home. This is true all across the globe. The old saying that the "stomach is the way to the heart" carries a lot of truth. Kitchens are where we spend much of our time and most of that is with our families. It's the room where we nourish our bodies and our spirits.  
Kitchens are integral to entertaining and in today's age of open floor plans, they're a focal piece of many family rooms. It's because of this that kitchens play such an important role in the buying and selling process.  
This one room is the showpiece of the house. You'll see it every day and your guests will see it during most visits. This means buyers want homes with up-to-date kitchens.  
Kitchens, however, can be one of the most expensive rooms to renovate. These projects can also be the most labor and time intensive of all home renovations. It's not just a new layer of paint.  
Instead you find a complicated array of flooring, tiling, cabinets, and counters. This means buyers may want a home with an up-to-date kitchen but they aren't willing to tackle this problem themselves. Most buyers want a kitchen that is ready to use the day they move in.  
What do buyers look for in up-to-date kitchens? A lot of this depends on what price range your home is in.  
The main thing to remember as a seller is to not price yourself out of your market. If homes in your neighborhood are selling for $100,000 with tidy, but not luxury kitchens, then this is no time to upgrade to granite, travertine, and marble at the price tag of $40,000+. You simply won't find a buyer.  
Scope out the competition. Use open houses in your area or MLS listings to find out what your competitions' kitchens look like.  
Do area homes have new solid wood cabinets and granite counters in today's designer colors? You'll be wise to consider making the same move. Are they including new stainless steel appliances and add-ons like dishwashers, wine-coolers, and trash compactors?  
Are you in a higher-end neighborhood? It's time to think high-end. Your older home may have a highly functional kitchen, but a buyer will take one look at your formica counters and white appliances and become lost in the stress of how much money and time it would take to remodel. If you don't want to put in the time yourself to make upgrades then you'll have to make concessions in the price.  
Don't become overwhelmed, though. Sometimes a kitchen update can mean doing just a few minor changes. Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save a bundle by doing much of the work yourself.  
The bottom line is a kitchen can sell a home. Do a little research and find out what your kitchen needs to make it competitive with area listings.
Published: January 24, 2012

Housing Trends eNewsletter- Rodney Woodstock

Housing Trends eNewsletter- Rodney Woodstock

Average rate on 30-year mortgage falls to 4 percent

WASHINGTON – Nov. 4, 2011 – The average rate on the 30-year fixed mortgage fell to 4 percent this week, nearly matching the all-time low hit just one month ago.

Freddie Mac said Thursday the rate on the 30-year loan dropped from 4.10 percent last week. Four weeks ago, it dropped to 3.94 percent - the lowest rate ever, according to the National Bureau of Economic Research.

The average rate on the 15-year fixed mortgage fell to 3.31 percent from 3.38 percent. Four weeks ago, it too hit a record low of 3.26 percent.

Mortgage rates tend to track the yield on the 10-year Treasury note. They yield fell this week after investors shifted money out of stocks and into the safety of Treasurys on fears that Europe's debt crisis could worsen.

The Federal Reserve is also shifting more money into longer-term Treasurys to try to force mortgage rates lower. Treasury yields fall when buying activity increases.

Federal Reserve Chairman Ben Bernanke said Wednesday that low rates have failed to spur the increase in homebuying or mortgage refinancing that government officials had expected.

High unemployment and declining wages have made it harder for many people to qualify for loans. Many Americans don't want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have.

The number of Americans who bought previously occupied homes fell in September and is on pace to match last year's dismal figures - the worst in 13 years.

Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices. And it followed a peak buying season that was the worst on records going back nearly 50 years.

The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.

Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent. Ten years ago, they were above 8 percent.

The average rate on the five-year adjustable loan fell to 2.96 percent from 3.08 percent. That matches a record low hit four weeks ago.

The average rate on the one-year adjustable loan declined to 2.88 percent from 2.90 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year fixed mortgage fell from 0.8 to 0.7. The average fee on the 15-year fixed loan was unchanged at 0.7. The average fees on the five-year adjustable loan one-year adjustable loan were also unchanged at 0.6.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
Copyright © 2011 The Associated Press, Derek Kravitz, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

5 homebuying myths

SEATTLE – Oct. 31, 2011 – Overall, today’s homebuyers tend to be fairly knowledgeable about the real estate market, but there are still a few points of confusion in the process, especially for buyers just entering the market. Here are the five main areas of confusion found in a survey by Zillow:

• Appreciation: About 42 percent of homebuyers believe home values will appreciate by 7 percent a year. Reality: Historically, home values in a normal market appreciate by 2 to 5 percent in a year.

• Appraisals: 56 percent of the buyers said the purpose of the appraisal was to determine if a home was in good condition. Reality: That’s the purpose of a home inspection; an appraisal estimates fair market value.

• Homeowner’s insurance: 37 percent of homebuyers think that buying homeowner’s insurance is optional. Reality: Lenders require homebuyers to purchase homeowner’s insurance if they carry a mortgage.

• Ownership: 47 percent of homebuyers said a prospective buyer owns a home after the purchase contract is signed by the seller – when the two parties reach agreement. Reality: The purchase and sales agreement is the beginning of the closing phase, but it can be a long process until they finally take ownership.

• Mortgage insurance: 41 percent of buyers think they must purchase private mortgage insurance, regardless of the amount of their downpayment. Reality: Buyers only need to purchase PMI if their downpayment is less than 20 percent of the home’s purchase price.

Source: Zillow Inc.

Rate on 30-year fixed mortgage falls to 4.10%

WASHINGTON – Oct. 28, 2011 – The average rate on the 30-year fixed mortgage was nearly unchanged for a second straight week after rising from a record low.

Freddie Mac said Thursday that the rate on the 30-year loan fell to 4.10 percent from 4.11 percent last week. Three weeks ago, it dropped to 3.94 percent. The National Bureau of Economic Research says that’s the lowest rate ever.

The average rate on the 15-year fixed mortgage was unchanged at 3.38 percent. Three weeks ago, it hit a record low of 3.26 percent.

Low rates have done little to jolt the struggling housing market. Sales remain depressed, and home prices are still dropping in many markets.

High unemployment and declining wages have made it harder for many people to qualify for loans. Most of those who can afford to refinance already have. The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures – the worst in 13 years.

Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices, and it followed a peak buying season that was the worst on records going back nearly 50 years.

Many borrowers are unable to take advantage of the low rates because they can’t meet banks’ restrictive lending standards, or are unable to scrape together a down payment.

The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.

The Federal Reserve has been helped push rates lower by buying longer-dated Treasurys, such as 10-year Treasury notes. Mortgage rates tend to track the yield on the 10-year note. Buying by the Fed pulls the yield lower.

Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount. The average fee for the 30-year fixed mortgage was unchanged at 0.8 point. The average fee for the 15-year loan fell to 0.7 point from 0.8 point.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average rate on the five-year adjustable loan rose to 3.08 percent from 3.01 percent. It hit a record low of 2.96 percent three weeks ago.

The average rate on the one-year adjustable loan fell to 2.90 percent from 2.94 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.

The average fee on the five-year adjustable loan fell to 0.5 point from 0.6 point. The average fee on the one-year adjustable loan was unchanged at 0.6 percent.
Copyright 2011 The Associated Press, Daniel Wagner (AP Business Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.