MORTGAGE RATES FALL
Rates on 30-year mortgages dropped sharply this week, falling to the lowest level in five weeks.
Mortgage giant Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.04 percent this week, down from 6.46 percent last week. The decline pushed 30-year rates down to the lowest level since they stood at 5.78 percent the week of Sept. 18.
Analysts attributed the decrease to an easing of inflation concerns, which now have been replaced with rising worries that the country could be headed for a prolonged recession.
Source: Austin American-Statesman
Read MoreNEW HOME SALES UP, PRICES DOWN
Sales of new homes were up last month according to the latest report from the Commerce Department.
Sales rose by 2.4 percent last month to a seasonally adjusted annual rate of 515,000 units, the most since April. Even with the over-the-month increase, new-home sales are down 35.3 percent from last July.
The average price of a new home sold in July was $294,600, down 4.1 percent from a year ago. The median home price was $230,700, down 6.3 percent from last year.
Source: Associated Press
Read MoreNEW 1031 EXCHANGE GUIDELINES FOR VACATION HOMEOWNERS
The IRS has provided guidance regarding whether vacation homes qualify for a 1031 exchange, and not a moment too soon — vacation homes are becoming the trend in Texas among baby boomers.
According to a new IRS ruling, the property must first be held by the taxpayer for 24 months to qualify for a 1031 exchange.
In addition, during each 12-month block of this holding period, the owner must have rented the vacation home for at least 14 days at a fair market rent. Also during each 12-month block, the owner is only allowed to use the property for the greater of 14 days or 10 percent of the days rented.
Owners are also allowed a reasonable number of “maintenance days” to care for the unit.
Source: realtytimes.com
Read MoreFANNIE, FREDDIE OVERHAULING APPRAISAL PROCEDURES
Fannie Mae and Freddie Mac, the biggest sources of financing for U.S. home loans, have reached an agreement with New York Attorney General Andrew Cuomo to buy mortgages only from lenders that adopt new standards intended to ensure independent home appraisals.
The new rules announced yesterday prohibit mortgage brokers from using in-house staff to do valuations for any home loans the government-chartered companies purchase. Lenders will also be barred from using appraisal management firms they own or control.
“We believe the appraisals were often fraudulent because there were conflicts of interest and pressure on the appraisers,” Cuomo said.
Mortgage lenders that own appraisal companies include Countrywide Financial Corp., the nation’s largest home-loan originator.
Source: Bloomberg
Read MoreNOT YOUR PARENTS’ HOME
“Generation X homebuyers consider themselves deserving of luxury items, and they are not afraid to spend money on them,” said Mark Delaney of The NPD Group at this year’s IBS.
When you consider that there are more than 120 million homebuyers in the 20- through 40-year-old age bracket, and that bracket has a spending volume totaling more than $700 billion, Delaney’s statement is not to be taken lightly.
Clearly, being aware of what the typical Generation Xer looks for in a home can work to a builder’s advantage.
Dawn Michelle Evans with The Evans Group and Ashley Jennings with Kay Green Design Inc. offered a few insites into what homebuyers in this age bracket are looking for. Jennings said that with the emphasis on color and self-expression, this is not your parents’ home.
• Fun colors are in. Taupe and gray no longer appeal to this demographic.
• Good design means clean lines and the use of primary shapes.
• This generation is all about style, so allow for options and upgrades that will allow your buyers to express themselves.
• Style is important, but so is warmth. Design rooms that the buyer will want to curl up in (for example, plush beds and garden bathtubs).
• This generation is having kids, so “family-centric” areas that include lots of seating and “stop-and-drop” centers are important.
• Kids’ rooms should serve as a memory point for both the children and the parents. Select themes that are geographically appropriate (for example, a surf theme for a house on the coast).
• Gen Xers are becoming more environmentally aware, so green is good.
WHAT THE AVERAGE HOMEBUYER WANTS
Two recent consumer surveys shed light on what housing features are important to today’s homeowners. The bottom line? An inviting space that can adapt to rapidly changing lifestyles.
According to an NAHB consumer preference survey conducted last year, consumers still want larger houses, but not as large as before. The typical American would like to have around 2,300 sf, said Gopal Ahluwalia, vice president of economic research for NAHB.
Items that would most influence a consumer’s decision to purchase a house are living space (79 percent), energy efficient features (72 percent) and better insulated and sealed homes (66 percent). Specialty areas that were deemed either “desirable” or “essential/must have” were laundry room (92 percent), dining room (81 percent) and home office (71 percent).
Exterior lighting (86 percent), rear patios and front porches (80 percent) and rear decks (77 percent) rated most highly among consumers.
Gayle Butler, editor in chief of Better Homes and Gardens, said people want a home that supports their busy lifestyles.
“The house needs to be part of the solution in successfully handling that active lifestyle,” she said.
That need makes specialty areas key in home design. When asked what specialty space they would prefer, respondents to a Better Homes and Gardens consumer survey listed sunroom (36 percent), extra large front porch (35 percent), oversized laundry room (34 percent) and mudroom (26 percent).
Butler said consumers also want an inviting space that allows them to gather with family and friends. And that space now includes the outdoors.
“Outdoor spaces have gone beyond the barbeque to include dining rooms, entertaining areas and full cooking and refrigeration capabilities,” she said.
Finally, consumers want homes that cannot only manage a busy lifestyle, but also adapt with it. According to the Better Homes and Gardens study, about one in three people expects an aging parent to move in within the next five to ten years. Many are planning for an adult child or relative to move in (23 percent). Most demand guest accommodations in their home for grown kids and grandkids (66 percent).
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