TWiRP – December 5, 2015

This week in rental property, mortgage rates slipped for the third straight week. While the Fed is signalling to raise interest rates later this month, the Wall Street Journal gave a talk on how the U.S. housing fundamentals will withstand the interest increase. The New York Times analyzed the trend in Chinese investments on U.S. housing market. Many economists have predicted the housing market to continue its modest growth into the year 2016. Lastly, released a list of hottest U.S. housing markets in November and what markets to look for in 2016.


Average rate on 30-year mortgages slips to 3.93%

Average long-term U.S. mortgage rates edged lower this week for a third straight week.

Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage slipped to 3.93 percent from 3.95 percent a week earlier. The average rate on 15-year fixed-rate mortgages eased to 3.16 percent from 3.18 percent.

The key 30-year rate was above its level of a year ago, 3.89 percent. Despite the recent declines, the rate has increased significantly overall since the end of October, when it stood at 3.76 percent.


U.S. housing can withstand interest-rate rise

The U.S. Federal Reserve isn’t exactly poised to crash the house party.

Low interest rates, steady job gains and improving household finances have helped bolster the housing recovery. And even as 2015’s strong first half has given way to some wobbly months of late, housing fundamentals appear primed to withstand a looming U.S. rate increase.


Chinese Cash Floods U.S. Real Estate Market

In the United States, the home-buying spree began on the coasts, where Chinese buyers snapped up luxury condos in Manhattan and McMansions in Silicon Valley, pushing up home values in big cities. It is now spreading to the middle of the country, where prices are more modest and have room to run.

This year, Chinese families represented for the first time the largest group of overseas home buyers in the United States. Big spenders on new homes are helping prop up local economies in the Midwest. But in dense areas like San Francisco and Manhattan, they are also affecting the affordability and availability of housing, as demand outpaces supply and bidding wars ensue.

The Roots of China’s Real Estate Rush


Modest U.S. housing recovery to prevail in 2016: poll

Sales of existing homes in the United States are expected to pick up next year, although house price inflation probably will not, according to a Reuters poll of economists who predicted the nation’s housing market will extend its modest recovery.

Weak wage growth, higher interest rates and a lack of available credit will continue to keep some buyers – particularly younger and first-time buyers – out of the market. These remain the biggest risks, according to poll respondents.

Of 22 economists surveyed Nov 17-Dec 1, 19 said they would describe the U.S. housing market recovery as “modest,” with only three calling it “robust.” None said it was fragile.


The Hottest U.S. Markets in November 2015

Listing inventory for November looks like it will end down 2% compared with October. Homes are also taking a longer time to sell, which is typical as winter rolls through most markets, but at a pace that’s still faster than this time last year. The median age of inventory is now 84 days, which is 3% slower than October 2015 but 9% faster than November 2014.

The median listing price is expected to remain fairly constant, down just 1% from October to $230,000 in November, but that would still represent an increase of 7% year over year.


These Will Be the Hottest Real Estate Markets in 2016

Many of the markets that have consistently made our “hot list” because of high demand from buyers and quick sales didn’t make the cut for 2016, because they are predicted to see slower price appreciation and even declining sales. Notably, they include the greater metro areas of San Francisco, Denver, and Dallas.

In addition, each of the markets on the list is in high demand, with 60% more listing page views than the U.S. overall and inventory that sells 16 days faster than the U.S. average. Surging demand in each market can be attributed to growing household formation, a prosperous job market, and low unemployment rates as well as large populations of key demographics. Older millennials (25 to 34 years old), younger Gen Xers (35 to 44 years old), and retirees (65 to 74 years old) will be driving home sales in 2016.