Rising confidence and home prices adds to the belief that the first-quarter slowdown will be temporary.
While consumers were less optimistic about the short-term outlook, they had greater confidence in the labor market, with the share of those anticipating more jobs in the months ahead increasing significantly. The proportion of consumers expecting income growth also rose solidly, which should help to strengthen Consumer spending.
Follow me @SandyFloresRE
There are several factors beyond economics that drive this decision, and there is not a specific answer for it. Buying a new home or resale home is more of a life style. It is to decide best what fits your needs, comfort and personality.
So how do you decide?
For once keep in mind that for every qualifier, there is a disqualifier.
You will find good arguments for buying a new home; however you will find also great arguments to buy a resale home.
The truth is that every house has its own unique attributes that will match your personality and needs. On the other hand, builders can never fully re-create the nation’s quaint old neighborhoods, where every house was built architecturally distinct from the neighbor’s. And home buyers will never be able to fully assemble their dream homes the way they want unless they customize the home starting from scratch. So the choice between the two is always a relative call.
First of all, the well-known phrase in real estate: Location, Location, Location should continue at the top of our list. Older homes usually are located in the town’s center of well stablished neighborhoods, which can be good or bad depending on the vitality of your urban area.
Existing homes are usually less expensive per square foot. In new homes although Prices can be more negotiable than an existing homes, there may be also additional cost under these new subdivisions and homeowner’s association, with mandatory fees and other assessments for architectural controls.
A new development usually offers an opportunity for you to help create your own neighborhood lifestyle. In older communities, people have moved in and out over the years and tend to get more diversity in the neighborhood.
Older homes mean more houses for your money; they may have additional space you can eventually add to the current building structure. On the other hand, new-construction homes often employ more efficient, innovative uses of square footage and property, and may have limited space for future additions.
While new homes are built expressing a modern style, older homes on the other hand can maintain more of classic look, such as Victorian Style Homes for example.
New homes builders have to follow very strict regulations, and are usually more fire-safe structured, and are built with building materials that promote energy efficiency benefits, such as thicker insulation, Energy Star windows, and more efficient energy-saving appliances as well. Older homes, unless they have already undergone an energy retrofit, it will add additional cost to upgrade it. The cost of maintenance goes hand to hand with older homes, especially if the previous owner did not keep up with proper maintenance of the home. Building materials may be harder to replace or match in an expansion or remodeling.
Newer homes tend to impose higher taxes on you because these are new subdivisions, because the community will still need fire and police coverage, sidewalks, sewers and probably a new school, where a more established home in a built-out area has a little more predictable tax structure.
With new and old construction homes, is always recommended to perform a professional home inspection. This is the only way you may be able to find the actual condition of the property; regardless if is a brand new home. It is known that buyers that have purchased brand new homes have discovered defects after purchasing these homes. Inspect the property before you settle!
Consumer confidence declined in September, rebounded in October and jumped more than two points in a preliminary November estimate, beating economic forecasts and hitting a more than seven-year high.
The Thomson Reuters/University of Michigan Index of Consumer Sentiment registered 89.4 in a mid-month reading, the best showing since July 2007. Economists had forecast the measure would hit 87.5, with some predicting as high as 89.
What factor have contributed to this improvement? The declining of oil prices and an improving job market were probably the main factors that led to this surge in consumer sentiment. A more favorable business conditions perhaps also helped the consumers’ view of the present situation. This solid increase suggests consumers have largely dismissed concerns about slowing global growth and have ignored the sharp swings in financial markets earlier this month
US consumers expect better economic growth and rising incomes in the coming months and overall positive growth in our economy, leading to a stronger dollar and making other investments more attractive. Consumers regained confidence and are more optimistic now about their future earnings potential, and with the holiday season getting closer and closer, we may see ever higher numbers in consumer’s confidence.
What about the Housing Market? Considering that the Federal Financing Housing Agency has recently opened more doors for eligibility criteria in the purchase of homes, we expect to continue with good news about the economic outlook in general.
Federal Housing Finance Agency has been working towards a plan to open what many we see as underwriting standards that are too restrictive.
Mortgage giants Fannie Mae and Freddie Mac, their regulator and lenders are close to an agreement that could greatly expand mortgage credit while helping lenders protect themselves from charges of making bad loans, according to people familiar with the matter.
If the agreement is completed, lenders may be more willing to lend to borrowers with lower credit scores and smaller down payments.
Now that lenders are starting to remove some of the credit overlays, it is time to improve the growth of homeownership in the country
We expect FHFA to report the steps to further move and clarify lender liability and support the return of the 97% LTV product at the GSEs, Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac have recouped tens of billions of dollars in penalties from lenders in recent years over claims that the lenders made underwriting mistakes on loans they sold to the mortgage giants.
However, Lenders have blamed those penalties for tight credit conditions and for prompting them to make loans only to borrowers with near-pristine credit.
We hope these initiatives will have a meaningful impact on the mortgage market, and we can see positive changes in the direction of the mortgages industry after years of tightening credit issues.
Next Tuesday will see the existing home sales report for September, on Thursday the FHFA purchase-only house price index for August, and Friday the new home sales report.
Existing home sales, excluding distressed sales, are the most encouraging stats at the moment. These, according to Trulia and the National Association of Realtors, were 80 percent back to normal in August.
Trulia’s Bubble Watch also showed that prices were 3.4 percent undervalued in the third quarter, which is a marked improvement over the 13.5 percent undervaluation at the worst of the housing bust. That means prices are three-fourths of the way back to normal.
Delinquency and foreclosure rates also were much improved. According to Trulia and Black Knight, the national delinquency and foreclosure rate was 74 percent back to normal in August, the same as one quarter ago and up from 56 percent one year ago. The decline in defaults and foreclosures has helped stabilize the financial system and hard-hit neighborhoods.
Prices should stabilize this year. Lender’s regulation, consumer confidence, investors tapering purchases, local economics, and rising home prices have forced participants to continually adjust to a market that has been anything but stable.
Generally speaking, we see price growth, which should help boost the confidence and purchase activity from buyers on the fence. Looking at home price trends by tier, it’s apparent the impact of investor activity has been concentrated in the low price tier segment. There is a good price growth potential and could motivate enough buyers to sustain an overall rate of home price growth consistent with historical norms.
Credit and affordability issues remain. Mortgage rates have dropped across all loan types including FHA loans, USDA loans, VA loans, and conventional loans backed by Fannie Mae and Freddie Mac, and 30-year rates are at their best levels of 2014.