U.S. homebuilders are feeling slightly less confident in their sales prospects heading into next year, even as their overall sales outlook remains favorable.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday slipped this month to 57, down one point from 58 in November.
Readings above 50 indicate more builders view sales conditions as good, rather than poor.
Builders’ view of current sales conditions and their outlook for sales over the next six months also declined slightly. A measure of traffic by prospective buyers held steady.
The index also found sentiment had improved in the West and Northeast, but took a step back in the Midwest and South, which accounts for half of the new-home market.
The latest reading reflects a housing market that is slowly recovering, said David Crowe, the NAHB’s chief economist.
“As we head into 2015, the housing market should continue to recover at a steady, gradual pace,” Crowe said.
Housing, while still a long way from the boom of several years ago, has been recovering over the past two years.
New home sales reached a seasonally adjusted annual rate of 458,000 homes in October, the highest point since May. Still, sales remain sharply below the annual rate of 700,000 seen during the 1990s.
At the same time, home prices continue to climb.
The median price of a home sold in October was $305,000, up 16.5 percent from a year ago. November data on new-home sales are due out next week.
The steady rise in home prices has held back many potential buyers, particularly first-time buyers. Many lack the savings and strong credit history needed to afford a home, causing them to rent or remain in their existing homes instead of upgrading.
As rent soars across the US, Zillow found that renting a home is half as affordable as buying one. In the third quarter of 2014, U.S. renters could expect to spend about 30 percent of their incomes on rent, while those buying homes could expect to spend just 15 percent of their monthly incomes on their mortgage payment.
The report reveals a big shift from the years before the real estate bubble, between 1985 and 2000, when rent was typically more affordable in major metros than buying. Now, in most metros, those who can come up with a down payment are better off buying, in terms of affordability.
Even in the least affordable metros — like San Francisco, Los Angeles, Seattle and Boston — renting was a more affordable option before the real estate market crash. But since then, rent has increased while the cost of buying a home has fallen in many places, so that renting is now the less affordable option — sometimes by a large margin.
Younger buyers making smaller down payments spend slightly more than other buyers on mortgage payments — a median of 17 percent of their incomes — but buying is still more affordable for them on a monthly basis.
“Despite rising home values, homeownership remains very accessible for buyers that can scrape together a down payment — even a relatively modest one — find a home to buy and secure financing,” said Zillow Chief Economist Dr. Stan Humphries.
Humphries has said he expects 2015 to be a breakthrough year for younger buyers to enter the market, and many of those buyers will decide to buy because rent is so unaffordable. At the same time, some renters are spending so much on rent they will struggle to save for a down payment, even if they want to buy.
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates down from the previous week. At 3.89 percent, the average 30-year fixed-rate mortgage is at its lowest level since the week of May 30, 2013.
News Facts
30-year fixed-rate mortgage (FRM) averaged 3.89 percent with an average 0.5 point for the week ending December 4, 2014, down from last week when it averaged 3.97 percent. A year ago at this time, the 30-year FRM averaged 4.46 percent.
15-year FRM this week averaged 3.10 percent with an average 0.5 point, down from last week when it averaged 3.17 percent. A year ago at this time, the 15-year FRM averaged 3.47 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.94 percent this week with an average 0.5 point, down from last week when it averaged 3.01 percent. A year ago, the 5-year ARM averaged 2.99 percent.
1-year Treasury-indexed ARM averaged 2.41 percent this week with an average 0.4 point, down from last from last week when it averaged 2.44 percent. At this time last year, the 1-year ARM averaged 2.59 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for the Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.
Quotes Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
“Mortgage rates were down across the board on a week of underwhelming economic releases. New home sales missed consensus expectations by selling at an annual pace of 458,000 units in October and the National Association of Realtors reported that pending home sales dipped in October by 1.1 percent. The ADP’s estimate for payroll growth in November was 208,000 jobs, under expectations of 225,000.”
Sales of new homes in the United States printed at an annual rate of 458,000 for the month of October, up 0.7% from September.
This tepid gain was saved from being a decline by a surprising jump in sales in the Midwest, which saw 15.8% gains, and better than usual gains in the northeast of 7.7% month-over-month.
“The slight rise in new home sales in October is somewhat disappointing, as it is more of the same of what we’ve seen throughout 2014 – tepid growth in housing constrained by a slowly recovering economy,” said Quicken Loans vice president Bill Banfield.
October’s gain is 1.8% above the October 2013 estimate of 450,000.
But that month-over-month gain was only achieved because September’s new home sales figure was dramatically revised downward from 467,000 to 453,000.
Dragging down new home sales was the West and South, which saw a -2.7% decline and -1.9% decline, respectively.
The imbalance there is due to the fact that the West and the South are vastly larger housing markets compared to the Midwest and Northeast.
The median sales price of new houses sold in October 2014 was $305,000, while the average sales price was $401,100.
The seasonally adjusted estimate of new houses for sale at the end of October was 212,000. This represents a supply of 5.6 months at the current sales rate.
Advanced Registration is required for all programs. Unless noted, all programs meet in the Nature Center and are $7 per person or FREE for members. Please register by calling (914) 762-2912 ext. 110.
Preparing for Winter
Saturday, November 29
1 pm – 2:30 pm
How do wildlife prepare for winter? Who migrates? Who hibernates? Who is active throughout the season? Join us for this animal program where we will answer these questions, meet a couple of Teatown’s animal ambassadors, take a short walk outside, and make a craft to take home.
After the Turkey Hike
Member’s Only
Sunday, November 30
10 am – 12 pm
It’s time to hike off those extra pounds gained from the Thanksgiving feast. The Overlook Trail will give us a good workout and some views too! Moderate hike with some steep sections. Wear hiking boots, bring water and a snack.
Visit Teatown
Teatown Discovers
a Cure
Are you ready for GivingTuesday?
________
Holiday Birthday
Party Special
Book a party and invite a friend to book a party and each save $25 on the booking fee. Parties may be scheduled for any date but must be booked before December 15.
mission is to inspire our community to lifelong environmental stewardship.
Nature Center hours:
9 am – 5 pm daily
Trails are open 365 days a year from dawn to dusk.
Click here for Teatown membership benefits, details,
and to purchase or renew
your membership online.
Your donation can make
an immediate impact and help
support our environmental education programs and the stewardship of our 1,000 acre preserve.
Upcoming Events and Workshops:
Island in the River – Hike with Club Fit
Saturday, December 6
10 am – 2 pm
Join us for a pleasant stroll through Croton Point Park a picturesque riverside park that’s almost an island in the Hudson River.
Hike Length is 4 miles / 3 hours. Rain cancels. Bring lunch and a warm drink. Comfortable shoes a must! Meet in the Club Fit – Jefferson Valley parking lot located on Bank Road at 10am or at Croton Point Park at 10:30 am.
Feathers, Scales & Fur
Sunday, December 7
10 am – 11:30 am
December is upon us and animals have a strategy to make it through the winter. How does an animal’s wardrobe determine
what it does when the weather turns cold?
Join us to find out!
In the Nature Center Gallery:
Ceramic Plates & Sculpture
by Barbara Krohn
On exhibit November & December 2014
Ms. Krohn and her family have long standing connections to Teatown and we are very pleased to be hosting an exhibit of her recent works.
The holidays are coming: when school is out and nature is in! Come for a day, or two or more of fun in the outdoors. There will be hiking, crafts, and enough adventure to keep your child busy and active throughout the holiday season.
Teatown is helping Open Door Family Medical Centers collect new toys for children from families of less fortunate means this holiday season. Please donate new, unwrapped toys for their young patients ages newborn to 14 years old. Every toy counts!
Please bring your new, unwrapped toys for children newborn to 14 years old to Teatown’s Nature Center between November 22 and December 10. Suggested Value: $10 – $20
As the city’s known more nowadays for its inflated, six-zero asks, it might be hard to believe that apartments still exist within its confines under the $300,000 threshold. Okay, they may be small and not quite where all the action’s happening, but that doesn’t have to be a negative. Example: this slim studio on 87th Street between York and First avenues on the Upper East Side is south-facing and looks onto the block’s courtyards. It comes with two closets and a renovated bathroom all for $249,000.
↑ At $299,000, this plain jane of an East Village studio just barely makes the cut. The unit, which has two closets and a separate, windowed kitchen with room for two stools at a breakfast bar, is on the sixth floor of a prewar elevator building on 12th Street between Second and Third avenues. The photos don’t show a bed in the living area, though, so be warned that it looks larger than it probably is! (Which is, according to the listing, 350 square feet.)
5 images
↑ In Chelsea, there’s a townhouse co-op with a fun purple stripe on the wall asking $285K. It’s a walk-up, but there are hardwood floors. The location is central, on West 18th Street near Eighth Avenue, and the two windows have a bright westward view, plus there’s built-in storage above the kitchen and bathroom doors.
4 images
↑ The kitchen in this Park Slope apartment is divided from the living room by a partial wall with a pass-through window that also has shades, making it easier to divide up a small space into even smaller ones. There’s also a separate lofted area for sleeping, though that’s not pictured, with a walk-in closet underneath. The location is hard to beat: half a block away from Prospect Park West on Union Street, right near Grand Army Plaza. Asking price: $299,000.
4 images
↑ This Brighton Beach studio comes with a lovely oceanfront view for a discounted $214,000. Sure, the apartment is small tiny, but packs a punch in its nearly 500 square feet: the kitchen has all new stainless steel appliances (dishwasher included), there’s a terrace, and oceanfront and Manhattan views. And in those steamy summer months, the boardwalk and beach are but steps away.
6 images
↑ In Brooklyn Heights, $299,000 buys this shady studio in classy prewar co-op building The Remsen, off of Remsen and Henry streets. The apartment’s been recently renovated and has new floors, cabinets (installed post-picture taking), countertop, sink and backsplash, as well as two walk-in closets. The building also has a 24-hour doorman. Water, heat, electricity, and gas are all included.
7 images
↑ There’s no floorplan for this seventh-floor prewar co-op on Broadway between 102nd and 103rd Streets, but the listing promises “plenty of closet space, pre-war molding and original hardwood flooring throughout.” The main room of this $275,000 unit does look spacious, and the building (called the Broadmoor) has a nicely furnished shared roof deck with views of the Hudson.
5 images
↑ This studio in a 1939 Art Deco building in Washington Heights has a windowed kitchen and bath, deep closets, 9-foot ceilings, and hardwood floors throughout (although not a whole lot of windows in the living area). The studio is asking$249,000, and is close to neighborhood amenities like Fort Tryon Park. A negative?’ it’ll cost buyers an extra $240 per year to use the building’s gym.
3 images
↑ Near the Midtown Tunnel entrance, Murray Hill offers up this petite pad in a doorman building on 36th Street between Second and Third avenues. It’s basically one big room, but there’s an “entry hall” and a separate galley kitchen, as well as two “large and deep closets.” For $299,000 you’ll get a communal outdoor space on the roof here, too, in the event of claustrophobia.
9 images
↑ At the top of a building that towers over low-lying Forest Hills is this $268,000 studio. The 25th-floor digs have a recently enlarged and updated bathroom, and a renovated kitchen with Moen and Kohler fixtures, a wine refrigerator, and Caeserstone countertops. Gerard Tower has a 24-hour doorman, a seasonal pool, gym, in-building laundry, and underground parking.
Mortgage rates-and applications-barely moved last week.
Total application volume fell 0.9 percent from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association.
Applications to refinance, which saw a brief surge on lower rates in October and then a precipitous drop when rates rose again this month, fell 2 percent from the previous week. Mortgage applications to purchase a home rose 1 percent from the previous week but are still 11 percent below year-ago levels.
A bright spot in the mortgage market today appears to be for veterans. Loans guaranteed by the Department of Veterans Affairs rose to 11 percent of total applications. Usually loans backed by the government mortgage insurer, the FHA, are more popular, but its share came in at 9.6 percent last week. Higher fees and insurance premiums have kept many borrowers away from even this low down-payment loan option.
VA loans require no down payment in most cases, and do not require mortgage insurance. This may be why they’ve gained popularity as home prices continue to rise.
“Apropos of Veteran’s Day, the VA share of the market reached a new high,” said Michael Fratantoni, chief economist for the Mortgage Bankers Association. “VA’s share has exceeded FHA’s share of loan applications for the last three weeks.”
The economy continues to produce jobs at a modest pace, although wages gains remain weak according to the most recent labor market reports from the Bureau of Labor Statistics. Improvements in both areas should help support growth in both owner-occupied and rental housing demand in the coming year.
In October, home builders and remodelers added 8,000 jobs to the residential construction sector on a seasonal adjusted basis according to NAHB analysis of BLS data. Over the last 12 months, the industry has created 131,000 jobs. Since the low point of industry employment following the Great Recession, the residential construction industry has gained 333,700 positions, although employment remains 1.132 million lower than the peak level seen in early 2006. Employment growth for the sector has been steady recently, adding on average just a little more than 10,000 jobs per month over the last six months.
Of course, national employment conditions are a key factor driving housing demand. According to the most recent BLS data, total nonfarm payroll employment grew by 214,000 on a seasonal adjusted basis in October. After upward revisions for September and August, the economy added 673,000 positions over the last three months. In the separate household survey, the national unemployment rate fell from 5.9% to 5.8% in October. Real wage growth continues to lag, posting only a 0.1% pickup in October after a 0.2% decline in September.
After living for six years in his downtown Edmonton loft, in the Canadian province of Alberta, this homeowner was ready for a change. He liked the industrial nature of the space — soaring ceilings, raw redbrick walls, exposed ducting and conduit — but didn’t like its low-grade cabinetry. Plus, he was flat-out tired of his furniture.While he didn’t mind getting his hands dirty doing some of the work of refreshing the space, he knew he needed professional help when it came to the layout and choosing colors and furniture styles. He found designer Brenda Brix of AMR Design while searching for local professionals on Houzz and enlisted her help through a design consultation. She wrote up a detailed plan, and he implemented it himself, finding materials and furnishings and even teaching himself how to build and modify pieces.
For example, he bought mirror tiles and antiqued them. He took a basic pine cabinet from Ikea and distressed it. He even located his own stainless steel and installed it himself as a backsplash. “I wanted to add personal touches and cool things that people would come in and we could talk about them for five minutes,” he says.
Photos by Ryan Patrick Kelly PhotographsBrix’s plan divided up the long, narrow space without interior walls into a TV room with a sectional near the farthest window, a reading area with a single chaise in the middle and a conversation grouping with four chairs, seen here in the foreground. The sleeping area is to the right (not shown), separated by bookshelves.
Each chair in the conversation area is from a different supplier, because Brix and the homeowner felt that four of the same club chair would have made the space feel too heavy.
Breaking up the three walls of brick with artwork also kept things from feeling too heavy. The homeowner made the bus stop–style signs himself on canvas. “It brings a little script into the space and flows with the brick, so it feels like you’re outside,” says Brix.
Red chair: Costco; leather chair with metal: Wayfair; metal chair with sheepskin: Restoration Hardware
BEFORE: The low-grade kitchen cabinets and lack of a backsplash played a big part in the homeowner’s decision for a new look.
AFTER: The homeowner removed the cabinets and countertop himself and found a contractor to weld the sink and integrated countertop from stainless steel. He then had the steel cut for the counter-to-ceiling backsplash and enlisted the help of his neighbor to install it.He created the live-edge floating shelf from a piece of wood he picked out at a local supplier and attached it himself. He bought the range hood from Costco and took it to a local powder-coating shop.
now sits at 1.83 adults in 2012, up from 1.75 in 2000.
However, this phenomenon is concentrated in markets where rent has most outpaced income, notably in California and Florida.
For example, the share of Los Angeles adults in doubled up households in 2000 was 41.2%. It now is at 47.9% in 2012. This is compared to places like Columbus, Ohio, that while it did report an increase, it only increased from 19.1% to 25.8%.
“But there is a silver lining behind this data. Like a coiled spring, all of these doubled-up households represent tremendous potential energy for the market. If and when these compressed households begin to unwind and these millions of Americans do start to create their own households, demand will bounce back, possibly even causing household growth to outpace population growth,” Humphries added.
A recent report from TheDemandInstitute found that millennials are finally moving out of their parents’ homes. Although, they are still opting to rent rather than buy their own house.
“One important difference between millennials and young adults in previous decades is the unique financial challenges of home ownership today, resulting from graduating into a weak job market with growing student loan debt,” said Jeremy Burbank, a vice president at The Demand Institute and Nielsen. “Many millennials are open to alternative approaches to housing finance, including single-family rentals and rent/own hybrid contracts such as lease-to-own.”
“There is no magic bullet, but continued home affordability, an increasing supply of both for-rent and for-sale homes and the potential for incomes to grow more quickly as the economy recovers will all help the market to realize this potential,” Humphries added.
