6 Stellar Reasons to Buy A Home in 2016

Is it really 2016 already?  For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a whole lot to celebrate. Why? A variety of financial vectors have dovetailed to make this the perfect storm for home buyers to get out there and make an (winning) offer. Here are six home-buying reasons to be thankful while ringing in the new year:

Reason No. 1: Interest rates are still at record lows

Even though they may creep up at any moment, it’s nonetheless a fact that interest rates on home loans are at historic lows, with a 30-year fixed-rate home loan still hovering around 4%.

“Remember 18.5% in the ’80s?” asks Tom Postilio, a real estate broker with Douglas Elliman Real Estate and a star of HGTV’s “Selling New York.”“It is likely that we’ll never see interest rates this low again. So while prices are high in some markets, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.”

Reason No. 2: Rents have skyrocketed

Another reason home buyers are lucky is that rents are going up, up, up! (This, on the other hand, is a reason not to be thankful if you’re a renter.) In fact, rents outpaced home values in 20 of the 35 biggest housing markets in 2015. What’s more, according to the 2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016.

“In most metropolitan cities, monthly rent is comparable to that of a monthly mortgage payment, sometimes more,” says Heather Garriock, mortgage agent for The Mortgage Group. “Doesn’t it make more sense to put those monthly chunks of money into your own appreciating asset rather than handing it over to your landlord and saying goodbye to it forever?”

Reason No. 3: Home prices are stabilizing

For the first time in years, prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, even in heated markets.

“Local markets vary, but generally we are experiencing a cooling period,” says Postilio. “At this moment, buyers have the opportunity to capitalize on this.”

Reason No. 4: Down payments don’t need to break the bank

Probably the biggest obstacle that prevents renters from becoming homeowners is pulling together a down payment. But today, that chunk of change can be smaller, thanks to a variety of programs to help home buyers. For instance, the new Fannie Mae and Freddie Mac Home Possible Advantage Program allows for a 3% down payment for credit scores as low as 620.

Reason No. 5: Mortgage insurance is a deal, too

If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). A workaround to handle this, however, is to take out a loan from the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580. The fees are way down from 1.35% to 0.85% of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way. In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them?

Reason No. 6: You’ll reap major tax breaks

Tax laws continue to favor homeowners, so you’re not just buying a place to live—you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.

 

Plansource, Inc., http://www.plansonline.com, remains a portal of information for homebuilders and the homebuilding industry

Reprinted from Realtor.com

 

New Home Design Trends

Nick Lehnert, executive director at Irvine, Calif.–based KTGY, and Mollie Carmichael, principal at John Burns Real Estate Consulting in Irvine, assembled for BIG BUILDER 14 ethnographically informed design trends. All 14 of these trends fall within three primary assertions in today’s new-home market: scale trumps size; livability trumps salability; technology can solve for both scale and livability. Below are this year’s top design trends in the new-home market.

1. Scale and Function

The latest American Institute of Architects’ Design Trends Survey notes that households have a “growing interest in going smaller due to an effort to contain energy costs, and a significant higher number of architects report demand for smaller homes.” Scale and function are the solution here, not sheer square footage.

2. ”Private” Space

Boomers, empty nesters, and Gen Y cohorts express a desire for less maintenance and more privatized outdoor space, breaking away from the traditional “public” backyard. This design trend can be achieved by creating spaces that are private from the neighboring house by either positioning architecture around the outdoor space or by allowing the outdoor space to pierce architecture, affording more interior living spaces to be exposed to the outdoor area.

3. Indoor/Outdoor Connectivity

Bring the outdoors into the home experience. These thresholds to the outdoors offer more light and exciting access to “private” outdoor space. The result makes the interior feel like it extends beyond walls.

4. Covered Outdoor Rooms

Outdoor rooms expand the utility of the adjoining interior rooms and become outdoor retreats, still covered and protected but open to the outdoors.

5. Personal Touches

Whether it is a resale or a new home, the consumer is looking for and purchasing feature elements—such as kitchen products, bath fixtures, and custom flooring—that reflect their lifestyle and aesthetic preferences. Now take this trend to the architecture/structure of the house. Each consumer will “live” the interior space of a home differently.

6. Super Kitchens

The kitchen is viewed as the “hub” of the house. While providing the main function of a place for food preparation, the kitchen also serves as an entertainment/conversation area. Kitchens are now open to other rooms, visible and exposed. An island offers additional seating capacity along with prep space, and pantries need to be able to store more packaged foods, which often are purchased in bulk at stores like Costco. As the hub, it becomes a consumer’s dream to design these elements together with function, practicality, and flair.

7. Spalike Master Baths

The bathtub is not dead—rather, it has become an afterthought in most designs. However, trends reveal that women tend to take more baths than men as they’re more apt to dedicate the time. It is an experience and offers an opportunity for relaxation, so why not design the setting to enhance the experience?

8. Larger Media Areas

Many households these days possess at least one large flat-screen TV. The new, larger sizes of these televisions create a design need for more wall space and more seating capability.

9. More Garage Space

Garages are more than “housing” for vehicles. In fact, the garage is one of the only places within a “programmed” house that will offer the consumer what we call idea space. Creating a larger garage to accommodate more functions becomes a value to the consumer.

10. Smarter Storage

Always an important factor, storage rarely gets designed into a home, leaving the consumer to create their own space. Smarter, well-designed storage is especially useful within smaller spaces.

11. Office Space

The office/den is trending to a higher need and the “want” issue dictates the best location within the home. Who uses it and where it is located becomes critical to the consumer and how they value the space. As a “utilized” office space, the front of the home off the entry is not considered an intelligent and practical location. The better location is closer to the “living” area of the house—the kitchen hub and family room.

12. Entry and Exits

Buyers are looking for entry drama and home announcement when greeting guests. As such, the entry and exits become important for impact. Over the past 10 to 15 years, we have stacked living over the entries. To be able to create some level of volume increases demand.

13. Dual-Use Homes

Multigenerational living has become part of the “next” culture. Families are staying together longer and the coupling of families becomes economic as well as cultural.

14. Technological Advances

Technology products create a need for a new lifestyle that revolves around the constant use handheld electronic devices. We will be designing small “server” rooms as smart technology continues to enter the home.

 

Reprinted from Builder Magazine

Plansource, Inc., remains a portal of information for homebuilders and the homebuilding industry. http://www.plansonline.com

15 Fastest Growing Metros

Reprinted from Builder Magazine

 

Metrostudy does a 100% count within markets across the country of move-ins into newly-built homes.  This is a powerful and reliable measure of end-user demand.  The top two markets have outsized percentage changes because they are starting from a low base number.  In terms of the large markets, Central Florida has seen a 24.3% increase in new home demand in the past year, and Charlotte, NC, has seen a 23.4%.  Atlanta, which was savaged by the downturn, has seen a 22.9% increase.  New home construction is picking up in all of these markets, as builders scramble to meet increased demand.

Here are the top 15 markets by change in move-ins:

Rank	Market	2Q13 Move-Ins	2Q14 Move-Ins	% Change
1	Reno	233	464	99.1%
2	Rio Grande Valley	336	466	38.7%
3	Central Florida	3,104	3,859	24.3%
4	Charlotte	1,643	2,027	23.4%
5	Atlanta	2,508	3,082	22.9%
6	Northern Virginia	865	1,037	19.9%
7	Jacksonville	1,119	1,303	16.4%
8	Sarasota/Bradenton	647	739	14.2%
9	St.George/Mesquite	296	336	13.5%
10	Austin	2,216	2,497	12.7%
11	Houston	6,072	6,797	11.9%
12	Nashville	1,101	1,217	10.5%
13	Dallas/Ft.Worth	4,775	5,249	9.9%
14	Central California	1,496	1,627	8.8%
15	South Florida	938	1,020	8.7%

Top Ten States For New Homes Sales-Florida is #2

New home sales data from the Census Bureau showed a drop of 8.1 percent on a seasonally-adjusted basis.  The decline since the beginning of the year comes to 11 percent.

The northeastern U.S. markets slowed sharply.

In June, and so far in July, we are back to a situation where home shoppers are shopping but a relatively small proportion of them are actually buying.  This is explained in some cases by a long lead time (people taking longer to make a decision), and in other cases by a complete reluctance to buy.

Here is a look at the last year in New Home Sales by region showing sales have decreased slightly over the past few months.

In Southern California in particular, conversion rates are slipping, and traffic is still high.

According to our weekly data in Southern California, traffic is still running high relative to last year’s levels, but conversion rates are sub-par, and still slipping.

A related story is last week’s surprisingly weak read on housing starts.  The real explanation seems to have been lost in the shuffle: icy weather conditions in the Deep South last winter slowed the pace of development (paving, infrastructure), exacerbating the shortage of lots in places like Raleigh-Durham.

Despite low conversion rates nationwide, hot markets are keeping sales up in some states. The strong Texas markets and active adult magnets in Florida have pushed the two to the top of the list for new home sales in 2014. Here is a look at the year-to-date top 10 states.

Top 10 States for New Home Sales in 2014

1. Texas: 33,177 closings
2. Florida: 19,416 closings
3. California: 14,280 closings
4. North Carolina: 10,249 closings
5. Georgia: 7,280 closings
6. Colorado: 5,602 closings
7. Washington: 5,337 closings
8. Arizona: 5,309 closings
9. Virginia: 4,836 closings
10. South Carolina: 4,345 closings

Plansource, Inc., is a Tampa-based full service residential design firm that remains a portal of information for homebuilders and the homebuilding industry.  http://www.plansonline.com

 

Reprinted from Builder Magazine

What Ethnic Home Buyers Really Want

Findings from the latest NAHB study on housing preferences, What Home Buyers Really Want: Ethnic Preferences, show there are both similarities and differences in what home buyers of different racial/ethnic backgrounds most want to have in their homes.

Based on an extensive list of more than 120 home and community features that buyers rated as essential, desirable, indifferent, or ‘do not want’, the table below shows the top 10 most wanted features for White, African-American, Hispanic, and Asian buyers.

The four features that are common to all four lists, i.e., they are really wanted by buyers of all racial/ethnic backgrounds:
 A laundry room 
 Energy-star rated appliances
 Energy-star rating for the whole home
 Exterior lighting

Three features that are relatively more important to minority buyers than to White buyers, since they appear on the top 10 list for the minority groups but not for White buyers:
 Living room
 Dining room
 Patio

Two features that make it into White buyers’ top 10 most wanted list, but are ranked lower by the three minority groups:
 Garage storage
 Insulation higher than required by code

When building homes, it is as critical to understand which features home buyers really want, as it is to know which ones they do not want and will probably not pay for.

Interestingly, there are quite a few similarities in what home buyers reject across the different groups: 7 of the 10 most unwanted features are common across the four rejection lists:
An elevator – the single-most unwanted feature across all four groups
 Golf course community – second most unwanted feature across the board
 High density community
 Only a shower stall in the master bath (no tub)
 Gated community (with a monthly fee of $100 to $200)
 Wine cooler
 Wet bar

Plansource, Inc., www.planonline.com, remains a portal of information for homebuilders and the homebuilding industry.

 

Reprinted from Builder Magazine/NAHB

 

 

Hot Outdoor Design Trends

Outdoor living spaces for entertaining and relaxing will be in high demand during 2014, according to the Residential Landscape Architecture Trends Survey conducted by the American Society of Landscape Architects in January-February 2014. The survey gathered responses from 179 landscape architecture professionals across the country who specialize in residential design, and asked them to rate the expected popularity of outdoor design elements as well as popular features for each. Check out the breakdown:

Plansource, Inc., www.plansonline.com, remains a portal of information for hombuilders and the homebuilding industry.

Reprinted from Builder Magazine

Tampa Forecasted One Of 2014 Hottest Markets

Median home price : $177,000
Forecast gain through Sept. 2014: 8%
Once one of the nation’s leading foreclosure hotspots, things are starting to turn around in Tampa.

The area has been working through its foreclosure problem and the local economy is gaining steam with new employers, including Bristol Myers, opening offices, according to Bob Rohrlack, CEO of the Greater Tampa Chamber of Commerce.

In the 12 months ended September, home prices climbed 14.6% and they are expected to keep climbing in the new year. CoreLogic forecasts that they will rise 8% in the 12 months ending this September.

Despite the gains, buyers will still get a bargain. The median home price in the metro area is around $177,000, well below the national median of $207,000

Plansource, Inc., www.plansonline.com, is a Tampa-based residential design firm that is a portal of information for homebuilders and the homebuilding industry.

Reprinted from Builder Magazine

3 Florida Metros Get High 3 Year Investment Forecast

10 Housing Markets for Investment in 2014

Forbes‘ list of the top 20 markets for housing investment uses a mix of home price, and local economic data in more than 300 housing markets from Local Market Monitor. Forbes‘ choices were ranked primarily on four factors: population, home prices, and the local jobs economy to compile the list of Best Buy Cities.

Each market on the list breaks out the following data: population, actual home price, equilibrium home price, percent difference, and 3-year growth forecast. We combed each market’s growth forecast and broke out the top 10 markets for expected growth out of Forbes’ top 20.

 

Plansource, Inc., www.plansonline.com, remains a portal for information for hombuilders and the homebuilding industry

Reprinted from Builder Magazine and Forbes

Summary of Great News for 2014

If all you wanted for Christmas was good news about where housing is headed, then you should have a very merry Christmas and a happy new year. What follows is a quick recap of the latest good news on housing activity:

Construction spending on single-family housing is up almost 90% since hitting its market low in June 2009.

According to the NAHB/First American Leading Markets Index, the overall housing market is operating at about 86% of normal conditions.

Almost 30% of builders report that the Aquisition, Development & Construction lending market is improving.

There’s still a near shortage of completed, unsold inventory of new single-family homes, and after dipping early this fall new home sales have rebounded nicely.

NAHB’s Housing Market Index, which measures builder sentiment, jumped to 58 in November, which is up 23% year-over-year; it had hit a low of less than 10 at the bottom of the market.

NAHB also reported that its index that measures the pace of current new home sales was up 26% year-over-year, and that builders overall said buyer traffic is up 22% year-over-year.

A 124,000, the number of unfilled jobs in construction is at a 5-year high.

While mortgage rates have increased over the last 12 months, they’ve actually declined 20 basis points since hitting a peak in September.

November housing starts, at an annual rate of 1.1 million, rose 30% year-over-year.

November single-family building permits, at an annual rate of 634,000, were up 11% year-over-year.

I could go on with the glad tidings but most of you are probably busy with last minute shopping for…building materials.

Plansource, Inc., www.plansonline.com, remains a portal of information for homebuilders and the homebuilding industry.

Reprinted from Builder Magazine

US Builder’s Confidence Back Up for December 2013

U.S. homebuilders’ confidence bounced back strongly this month, a sign that construction and industry hiring may pick up in coming months.

The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday climbed to 58. That was up from 54 in November and matched an eight-year high reached in August. Readings above 50 indicate that more builders view sales conditions as good than poor.

In addition, builders’ view of current sales conditions jumped this month to the highest level in eight years. And their outlook for sales heading into next year’s spring home-selling season also improved.

The index has stayed above 50 now for seven straight months after being below that level since May 2006. This month’s reading is 11 points higher than a year ago. It reflects a U.S. housing market fueled by steady job growth and still-low mortgage rates.

The latest index suggests that builders remain optimistic that the housing recovery will endure even though mortgage rates have risen in recent months.

“The recent spike in mortgage interest rates has not deterred consumers as rates are still near historically low levels,” said David Crowe, the NAHB’s chief economist. “We continue to look for a gradual improvement in the housing recovery in the year ahead.”

Mortgage rates peaked at 4.6 percent in August and have stabilized since September, when the Federal Reserve surprised markets by taking no action on starting to reduce its bond purchases. Its bond purchases are intended to keep long-term interest rates low, including mortgage rates.

The Fed ends a two-day policy meeting Wednesday, after which it will release a statement and projections for the economy.

Mortgage buyer Freddie Mac said last week that the average rate on the 30-year loan declined to 4.42 percent from 4.46 percent a week earlier. In November last year, the average had dipped as low as 3.31 percent, the lowest on records dating to 1971.

Sales of new homes slowed over the summer after mortgage rates rose sharply and a tight supply of homes for sale boosted prices. The combination made home-buying less affordable.

But Americans ramped up purchases of new homes in October 25.4 percent to a seasonally adjusted annual rate of 444,000, according to the Commerce Department.

All told, sales of newly built homes have risen 21.6 percent for the 12 months ending in October. Still, the pace remains well below the 700,000 consistent with a healthy market.

And there are signs that builders are preparing for less growth. Approved permits to build single-family houses began to flat line in the spring, while spending on home construction spending fell 0.5 percent in October from September.

Still, the latest NAHB survey, which included responses from 346 builders, shows builders’ outlook is rising again after dimming during the 16-day partial shutdown in October.

A measure of current sales conditions for single-family homes climbed six points to 64, the highest level since December 2005. Builders’ outlook for single-family home sales over the next six months rose two points from November to 62, while a gauge of traffic by prospective buyers increased three points from last month to 44.

Though new homes represent only a fraction of the housing 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.

Plansource, Inc., http://www.plansonline.com, remains a portal of information for hombuilders and the homebuilding industry.

Reprinted from AP