TWiRP – July 25, 2015

This week in rental property, a Novel laureate, Robert J. Shiller cited that the housing market isn’t rational on the New York Times. Due to the uncertainty in the world economy, 30-year fixed mortgage rate fell 0.05 percent from last week. According to Freddie Mac report, West Coast states provides the lowest mortgage rates. U.S. home resales rose in June to the highest level in 8 and 1/2 years but still the lack of supply in constraining the market and pushing the price up. Thus, the bidding wars have made a comeback in a number of metro areas. Washington Post has posted an advice on how to buy a home in a seller’s market. Wall Street Journal has expressed a concern on the rental housing market.


The Housing Market Still Isn’t Rational

The housing market is far less rational than even the often irrational stock market, for a couple of important reasons. First, most investors find it difficult to understand how housing supply responds to changes in demand. Only a small minority of people think carefully about such things. Second, it is very hard for the minority of smart-money investors who do understand such matters to bet against bubble-level prices in real estate markets. In housing, the smart money has relatively little voice:

Average Rate on 30-year Mortgage Falls

Average long-term U.S. mortgage rates fell this week, retreating from highs for the year and amplifying the incentive for prospective home buyers. Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage declined to 4.04 percent from 4.09 percent a week earlier. The rate on 15-year fixed-rate mortgages slipped to 3.21 percent from 3.25 percent:

Freddie Mac Report Shows Where Mortgage Rates Are Highest, Lowest

Mortgage rates are down nationwide but, regionally, they’re falling at different speeds. What kind of rate quote you get from your bank will depend on your property’s location. Today’s best states for low interest rates are West Coast:

U.S. Home Sales Approach Eight-and-a-Half-Year High, Prices Surge

U.S. home resales rose in June to their highest level in nearly 8-1/2 years, a sign of pent-up demand that should buoy the housing market recovery and likely keep the Federal Reserve on track to raise interest rates later this year. The National Association of Realtors said on Wednesday existing home sales increased 3.2 percent to an annual rate of 5.49 million units, the highest level since February 2007:

Bidding Wars Return to Home Market

Bidding wars, a hallmark of last decade’s housing boom, are making a comeback in a number of metro areas across the U.S. But while the earlier wars reflected enthusiasm fueled by easy-money mortgages, the current froth stems from a market short of homes for sale. The reasons for the scant supply are myriad, including a much-slower-than-expected recovery in home construction. Yet an equally significant problem is that millions of people aren’t listing their homes for sale because they suspect they can’t qualify for a new mortgage, can’t afford the costs associated with a sale or fear that they won’t prevail in the scrum for the few houses available:

How to Buy a Home in a Seller’s Market

So what should home buyers do in such a tight market? Here are a few steps people should take to increase their chances of landing the winning bid — and to protect themselves from paying more than they should:

Signs of Overheating in the Single-Family Rental Market

The single-family rental market has grown dramatically after around seven million families lost their homes during the foreclosure crisis and its aftermath. But there are signs that rents in some markets may be unsustainable, a new report finds:

About the author

Jiwon Park

Add comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

By Jiwon Park