Numbers Count: Weekly mortgage data highlights

Posted By In Your Home | 1 Comment

Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

The numbers: “Honey, I shrunk the house”

Small home for sale with wooded area behind showing fall colors. [1]The typical size of a newly built American house shrank in 2014 [2]. The median single-family square-foot floor area decreased from 2,414 in the third quarter to 2,385 square feet at the end of 2014, according to data from the Census and an analysis posted Feb. 18 by the National Association of Home Builders (NAHB). The fourth quarter was a noticeable decline — almost 4% — from the first-quarter median size of 2,478 square feet.

What counts: This may be welcome news for millennials and first-time homebuyers. Smaller floor plans should be more affordable. As NAHB said, “As more first-time buyers return to the market, typical home size will continue to post slight quarterly declines.” Indications are that millennials want smaller houses [3]. The data is a reminder for homebuyers to evaluate their needs and wants early in their home shopping. A recent NAHB survey of millennials found some of their top wants:

  • A laundry room
  • Linen closets
  • A walk-in pantry
  • Garage storage
  • Energy Star certification of energy efficiency

It sounds like homebuilders will have their hands full satisfying this next generation of first-time buyers.

The numbers: “Honey, I shrunk the inventory”

illustration from Remax (reprinted with permission) showing decline in inventory [4]For all homes sold in January, the median sales price was $189,000, slightly lower than in December and 11% above the median sale price in January 2014, according to the latest Remax Housing Report released Feb. 17 [5]. The median sales price has risen on a year-over-year basis for 36 straight months, according to Remax. Price appreciation is the result of year-over-year inventory declines, Remax said. Inventory has dropped by roughly 10% for the last three months. Among the 53 metro areas surveyed by Remax, 48 had higher sales prices than a year ago.

What counts: Tight inventory and rising prices — deja vu! If that’s the story going into the 2015 homebuying season, home shoppers may want to find ways to potentially up their odds of actually getting a house if they find one they want to make an offer on. Here are three tips to consider:

1) Get pre-approved. As noted in previous articles [6], if you are truly in the market for a home and prepared to make an offer if you find the right place, then carefully consider getting a preapproval letter from a lender. Making an offer with a preapproval letter may reassure a seller that you have funds for the down payment and that you have a lender willing to provide the mortgage you need to buy a home.

2) Pay the taxman. File income taxes early so you will have current returns available when you apply for a mortgage — especially if your income rose in 2014 from 2013.

3) Check your credit report. To help ensure there are no errors, it’s a good idea to review your credit report regularly, and ideally at least once a year. If there are errors it can be a lengthy process to make corrections. A free report (but not necessarily your credit score) is available on a number of websites, including AnnualCreditReport.com [7].

 


Article printed from Bank of the West: https://changematters.bankofthewest.com

URL to article: https://changematters.bankofthewest.com/2015/02/20/numbers-count-weekly-mortgage-data-highlights-40/

URLs in this post:

[1] Image: http://blog.bankofthewest.com/wp-content/uploads/2015/02/small_house_sale_crop.jpg

[2] American house shrank in 2014: http://eyeonhousing.org/2015/02/new-single-family-home-size-declined-in-2014/

[3] millennials want smaller houses: http://www.nahb.org/news_details.aspx?newsID=17094

[4] Image: http://blog.bankofthewest.com/wp-content/uploads/2015/02/remax_graph_022015_text.jpg

[5] Remax Housing Report released Feb. 17: http://www.remax.com/newsroom/press-releases/february-2015-remax-national-housing-report.htm

[6] As noted in previous articles: http://blog.bankofthewest.com/numbers-count-weekly-mortgage-data-highlights-33/

[7] AnnualCreditReport.com: https://www.annualcreditreport.com/index.action

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