Top 6 Places to Live in America This Year

Top 6 Places to Live in America This Year
money.com | realtor.com | September 18, 2018

The suburbs dominated this year’s list of top places to live in the country. Money magazine teamed with realtor.com® to identify its top picks of towns with populations of 50,000 or more. They factored in more than 135,000 data points, including economic health, public school performance, local amenities, housing, cost of living, and more.

“For someone who’s starting from scratch, this is a list of areas with great quality of life, healthy housing markets where affordability is important, and great overall community,” says Danielle Hale, realtor.com’s chief economist.

This year, Frisco, Texas, topped the list. The Dallas suburb also topped the U.S. Census Bureau list as America’s fastest-growing big city. The city has added an average of 37 new residents every day from 2016 to 2017. Its population has climbed 8.2 percent in one year and now totals 177,000.

Here are the cities that ranked top on this year’s list:

Frisco, Texas
Median home price: $449,900
Median household income : $117,642

Ashburn, Virginia
Median home price: $519,990
Median household income: $120,862

Carmel, Indiana
Median home price: $374,000
Median household income: $106,546

Elliott City, Maryland
Median home price: $558,950
Median household income: $121,019

Cary, North Carolina
Median home price: $389,000
Median household income: $94,617

Franklin, Tennessee
Median home price: $549,900
Median household income: $88,961

View the full list of top 50 at time.com.

Source: “The Best Places to Live in America, 2018: Revenge of the Burbs!” realtor.com® (Sept. 17, 2018) and “The Best Places to Live in America,” TIME (September 2018); REALTOR® Magazine, 091718

Labor Shortages Push New Construction Costs Higher

Labor Shortages Push New Construction Costs Higher
National Association of Home Builders | September 17, 2018

Builders are being forced to raise home prices and are having a more difficult time meeting project deadlines because of the ongoing labor shortage in the construction industry, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index. Eighty-four percent of builders say they have had to pay higher wages to subcontractor bids, 83 percent say they have had to raise home prices, and 73 percent say they can’t complete projects on time without more manpower. The number of single-family builders reporting labor and subcontractor shortages reached a record high in July.

House 1065“The steepest upward trend has been in the share of builders saying the labor/subcontractor shortages are causing higher home prices, which increased by 22 percentage points between 2015 and 2018—to the point where it is now nearly tied with higher wages/sub bids as the most widespread effect of the shortages,” NAHB reports on its Eye on Housing blog.

The survey also shows other effects of the labor shortage, such as builders saying that, in some cases, they’ve been forced to turn down projects. The share of builders who have slowed down on accepting incoming orders has doubled between 2015 and 2018, from 16 percent to 32 percent. The share of lost or canceled sales due to labor shortages also has been on the rise, up to 26 percent in July. “Shortages are having a significant impact on production levels,” according to the report.

Source: “Housing Market Index (HMI),” National Association of Home Builders/Eye on Housing (September 2018); REALTOR® Magazine 091718

Mortgage Rates Jump to 6-Week High

Mortgage Rates Jump to 6-Week High
Freddie Mac | September 14, 2018

A strong job market and consumer credit are driving up mortgage rates for the third consecutive week and now to their highest level in six weeks. Mortgage rates are 0.82 percent higher than a year ago—the largest year-over-year increase since May 2014, Freddie Mac reports.

1809_rates-091318

Despite the higher rates, Sam Khater, Freddie Mac’s chief economist, expects buyer demand to remain high. “This spectacular stretch of solid job gains and low unemployment should help keep home buyer interest elevated,” Khater says. “However, mortgage rates will likely also move up, as the Federal Reserve considers short-term rate hikes this month and at future meetings.”

Freddie Mac reports the following national averages with mortgages rates for the week ending Sept. 13:

30-year fixed-rate mortgages: averaged 4.60 percent, with an average 0.5 point, up from last week’s 4.54 percent average. Last year at this time, 30-year rates averaged 3.78 percent.

15-year fixed-rate mortgages: averaged 4.06 percent, with an average 0.5 point, climbing from last week’s 3.99 percent average. A year ago, 15-year rates averaged 3.08 percent.

5-year hybrid adjustable-rate mortgages: averaged 3.93 percent, with an average 0.3 point, unchanged from last week. A year ago, 5-year ARMs averaged 3.13 percent.

Source: Freddie Mac; REALTOR® Magazine 091418

Mortgage Rates Inch Up

Mortgage Rates Inch Up
Freddie Mac | September 7, 2018

Mortgage rates rose slightly for the second consecutive week, and economists warn that more rises are likely to come.

09_07_18_Rates

“Borrowing costs may be slowly on the rise again in coming weeks, as investors remain optimistic about the underlying strength of the economy,” says Sam Khater, Freddie Mac’s chief economist.

Mortgage rates are now up three-quarters of a percentage point from last year. Home prices have been rising too—although at a slower pace recently—but are still “outrunning rising inflation and incomes,” Khater notes. “The weakening in affordability is hindering many interested buyers this fall, even as the robust economy brings them into the market.”

Freddie Mac reports the following averages with mortgage rates for the week ending Sept. 6:

30-year fixed-rate mortgages: averaged 4.54 percent, with an average 0.5 point for the week, increasing from last week’s 4.52 percent average. Last year at this time, 30-year rates averaged 3.78 percent.

15-year fixed-rate mortgages: averaged 3.99 percent, with an average 0.4 point, increasing from last week’s 3.97 percent average. A year ago, 15-year rates averaged 3.08 percent.

5-year hybrid adjustable-rate mortgages: averaged 3.93 percent, with an average 0.3 point, increasing from last week’s 3.85 percent average. A year ago, 5-year ARMs averaged 3.15 percent.

Source: Freddie Mac; REALTOR® Magazine 090818

Lots Are Costing Buyers More

Lots Are Costing Buyers More
National Association of Home Builders | September 7, 2018

Lots may be getting smaller, but they’re also getting more expensive, according to analyzed data taken from the U.S. Census Bureau’s Survey of Construction. Single-family lot prices reached a new record high in 2017—half of the lots were priced at or above $47,400.

While this is a new nominal record, when adjusted for inflation, lot values have still not reached their peaks from the housing boom days, the National Association of Home Builders reports. During the housing boom, half of lots were priced at more than $43,000—this is more than $50,000 when converted to 2017 values.

However, some regions within the U.S. have seen their lot prices surpass their former peaks, even when adjusted for inflation. Rising lot values are the most pronounced in the West South Central and West North Central divisions, where lot values have climbed to new historical records.

The West South Central division—which includes Texas, Oklahoma, Arkansas, and Louisiana—tended to have values below the national median historically but started to catch up in 2015 to national numbers. Half of the lots in the region are selling for more than $56,000, which is a significant increase from the housing boom years when half of lots were priced under $30,000.

The West North Central division—which includes Iowa, Minnesota, and North and South Dakota—also saw lot prices reach a record high. Half of the lots in the region were priced above $64,000 in 2017, which also exceeded values from the housing boom days.

NAHB lot prices

“Given that the nation’s lots are getting smaller and home production is still significantly below the historically normal levels, it might seem surprising that lot values keep going up,” the NAHB notes on its blog, Eye On Housing. “However, the rising values are consistent with persistent record lot shortages. They are also consistent with significant and rising regulatory costs that ultimately increase development costs and boost lot values.”

Source: “Lot Values Climb Higher,” National Association of Home Builders’ Eye On Housing blog (Sept. 5, 2018); REALTOR® Magazine 090818

Yards for New Homes Are Smaller Than Ever

Yards for New Homes Are Smaller Than Ever
National Association of Home Builders | REALTOR® Magazine
September 4, 2018

Home buyers will have a harder time finding a big yard, as lot sizes remain near record lows, according to the U.S. Census Bureau. Among sold properties in 2017, the median lot size for a new, detached single-family home was one-fifth of an acre, or 8,560 square feet. Median lot sizes fell below 8,600 square feet in 2015 for the first time since the bureau started recording such data.

Lot sizes vary regionally, and the nation’s largest tend to be in New England. More than half of single-family spec homes in the area are built on lots exceeding 0.4 acres. New England is known for having stricter zoning regulations than other parts of the nation, which requires builders to keep lower densities for construction.

On the other hand, the Pacific region, including California, Washington, Oregon, Hawaii, and Alaska, has some of the tiniest lots in the nation—half of which are smaller than 0.15 acres.

1809_NAHB-lot-sizes

Source: “Lot Size Remains Record Low,” National Association of Home Builders’ Eye on Housing (Aug. 31, 2018); REALTOR® Magazine Online 090418

Mortgage Rates Ease for Second Consecutive Week

Mortgage Rates Ease for Second Consecutive Week
Freddie Mac | August 17, 2018

Borrowers had slightly more relief with mortgage rates again this week. The 30-year fixed-rate mortgage rate dipped again, averaging 4.53 percent, Freddie Mac reports.

“The stability in borrowing costs comes despite the highest core inflation rates since 2008 and turbulence in the currency markets,” says Sam Khater, Freddie Mac’s chief economist. “Unfortunately, this pause in rates is not leading to increasing home sales.”

Last week, mortgage applications for home purchases once again trailed levels from last year. “It’s clear that in some markets the combination of ascending home prices, limited affordable inventory, and this year’s higher rates are curtailing home buyer demand,” Khater says.

08_17_18_Rates

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 16:

  • 30-year fixed-rate mortgages: averaged 4.53 percent, with an average 0.5 point, falling from last week’s 4.59 percent average. Last year at this time, 30-year rates averaged 3.89 percent.
  • 15-year fixed-rate mortgages: averaged 4.01 percent, with an average 0.5 point, dropping from last week’s 4.05 percent average. A year ago, 15-year rates averaged 3.16 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.87 percent, with an average 0.4 point, down from last week’s 3.90 percent average. A year ago, 5-year ARMs averaged 3.16 percent.

Source: “Mortgage Rates Step Back,” Freddie Mac (Aug. 16, 2018); REALTOR® Magazine Online 081718