US sales of existing homes jump 20% after a 3-month slump

BALTIMORE (AP) — Americans stepped up their home purchases in June by a robust 20.7% after the pandemic had caused sales to crater in the prior three months. But the housing market could struggle to rebound further in the face of the resurgent viral outbreak and a shrinking supply of homes for sale.

Sales of existing homes rose last month to a seasonally adjusted annual rate of 4.72 million, the National Association of Realtors said Wednesday. Despite the sharp gain, purchases are still down 11.3% from a year ago, when homes had sold at an annual pace of 5.32 million. And Lawerence Yun, the Realtors’ chief economist, noted that sales remain roughly 20% below their pre-pandemic levels.

At the same time, housing has managed to avoid a deeper slump from the severe recession caused by the coronavirus. Demand has remained strong among buyers who have managed to weather the downturn, while record-low mortgage rates have helped sustain affordability.

“Buyers are out in force, but new listings remain the key to housing’s recovery,” said Danielle Hale, chief economist at Realtor.com. “More sellers are needed before we’ll see year over year gains in home sales.”

The number of property listings has plunged 18.2% from a year ago to 1.57 million. It’s the 13th straight month of shrinking supply on an annual basis. The shortage of homes makes it unlikely that the housing industry can significantly boost the overall economy.

Home buyers typically purchase new furniture and fix up older properties. Their ability to deliver such a spending boost is constrained if they can’t find an available house. The limited supply is also forcing up prices just when many Americans are struggling with financial uncertainty because of the recession.

The combination of steady demand and falling mortgage rates has helped fuel a 3.5% rise in the median price of an existing home over the past year to $295,300.

Home sales rose in the Northeast, Midwest, South and West last month. But the increases were most dramatic in the West, with a 32% gain and the South with a 26% gain.

Associated Press

Hard-hit Vallejo, Calif. property market now on an upswing

VALLEJO, California — The housing market in this city with a large Filipino American community is on the upswing, a sharp contrast to the market’s slide in 2008.

There are more buyers than available homes. Demand exceeds supply. So prices are increasing – considerably. Prices are currently 28 percent higher than this time last year. But buyers are still willing to buy.

Rod Nubla, a Filipino-American realtor, explains: “Buyers are offering to pay more than the asking price, and that drives prices up. If a house goes on the market on a Friday, there are eighteen offers by Monday.”

This is a complete turn-around for the Vallejo housing market, which went into decline three times in succession: when the Naval Shipyard closed in 1996; when the recession hit; and when the City declared bankruptcy in 2008.

The bankruptcy led to a brief upswing in the housing market, because it caused house prices to plummet, and the new very low prices attracted people to move to Vallejo from San Francisco, Oakland and Berkeley.

But the market soon went back into decline -– until late 2012, when demand and prices began their continuing increase.

Nubla explains the reasons for the new increase in demand: “One factor is that ‘wealthy millennials’ are driving up prices in San Francisco and other nearby communities, and this is forcing other people to look further afield for more affordable homes.”

He added, “There are also people who grew up in Vallejo, or have other connections here, and so want to settle here.”

An additional very important factor is the new low lending rates, which are benefiting the housing market just as much in Vallejo as in other cities.

Nubla gives the reasons for the decrease in available homes in Vallejo (which also pushes up the demand): “A lot of homes were foreclosed in recent years, and people bought them all up at discount prices, creating a scarcity. Investors have been buying up homes, leaving fewer available for individuals who want homes to live in. Right now there are 107 homes for sale in Vallejo. That is not many considering the size of the population (120,000). That scarcity is pushing up prices.”

Vallejo’s well-known problems with crime and school performance are apparently not deterring homebuyers.

Nubla says that “buyers realize that high crime is in certain pockets of the city, and they steer away from those areas, choosing the neighborhoods with better reputations.”

There is a particular downside to the price-increases and home scarcity for people who are economically less advantaged. Filipino-American Vallejo City Council Member Jess Malgapo, sees one of the results of this situation from another angle.

Malgapo, who is on the City’s Housing Committee, reports that their 2,600 “housing vouchers” for subsidized rental properties (formerly known as ‘Section 8’) are “maxed-out…we have a waiting list in the thousands.”

How do Filipino-Americans fit into the picture? Nubla says that some Fil-Ams have had an especially hard time with foreclosures in recent years. “Filipinos tend to be investors, and some have bought multiple homes as investments. When the recession hit, each had to foreclose several homes.”

But the current upswing in Vallejo’s housing market should impact Filipino-Americans in the same way that it does all citizens, whether buying or selling.

source: business.inquirer.net

Achieve Positive Cash Flow Properties with Rent to Buy Houses

Have you thought of buying a house but just don't have enough money for the down payment? Are you interested in investing with rental houses but then again your finances are not enough to purchase even one? Rent to Buy Houses might be the chance that you have been waiting for. Recently, the values of houses are getting higher and because of the crisis our economy faces, it can be hard for an individual to own a home or for an investor to purchase a house for his business. Banks do not give everyone a fair chance to make a loan and not all investors were given a second chance once they have rendered a bad credit history. Rent to Buy Houses gives a good opportunity that other options cannot provide.

Rent to Buy Houses has specific yet different way of letting you own such a house. Based on what you and your provider would agree, with this, you have usually the option to change your mind in the next few years if you decided not to purchase the property anymore. The rental rate is higher because of the fact that there is no deposit needed for you pay initially. It is well calculated that you will have an even pay each month depending on the number of months you want to pay such mortgage. On the other hand, you are in a way renting the property yet your money is not wasted because in time, it will be yours totally. This option is quite more favorable to those medium to low earners or investors.

Many people in the community do not have a permanent home. Not because they do not want to but they just can afford it. Just like, Buy House No Deposit, those who aims to own a house can choose to purchase thru Rent to Buy Houses. When you do that math, in renting, you do not earn anything at all. The property owner can simply shoo you away anytime they want or when you have failed to pay your rent. With Rent to Buy Houses, you will apparently become the owner and no landlord can shoo you off. Owning a home means security and confidence in your future. If you are indeed concerned about that and your family, you will find ways to own a home.

Investors can also achieve positive cash flow properties thru Rent to Buy Houses. When you have it for rent, your monthly payment and costs will be compensated by the rental fee you get from it. The remaining is yours. There is indeed a positive cash flow. It does not take a genius to make it happen. It just needs your hardwork and perseverance with the right approach and advises from experts you can rely on. Again, just like Buy House No Deposit, you will definitely own a house and achieve positive cash flow properties in Rent to Buy Houses.

Read about Rent to Buy Houses and read about Buy House No Deposit and also read about Positive Cash Flow Properties

Article Source: http://www.ArticleBiz.com

Some Mortgage Failures Homebuyers Need to Avoid

Applying for a mortgage for your real estate investment plans is really a daunting and complicated process. It involves too much paper works and too much technical concepts to learn. However, no matter how complex this process can be, you do not have a choice but to learn this process because this is a crucial part of the home investing process, more particularly if you do not own enough cash to pay for the property, let us suppose a Destin real estate. Before you experience the most interesting stage of the entire investing process, which is visiting and viewing Destin homes for sale, learning the proper procedures of the home loan application is a must. This is to separate you from other homebuyers who go into this crucial financial process without having the full grasp of the process first. The mortgage application can be tiresome and it can give you a lot of confusion. There are possibilities that you make some errors during the process but it is best that you know the common mistakes home buyers do so you can avoid them, yourself.

Error # 1: Not fixing your credit report before applying for a loan
Most homebuyers, especially the inexperienced ones, tend to go into the application process for the mortgage while not going through and checking their credits and other financial deficiencies first. Because of this mistake, many homebuyers receive got rejected with their mortgage application. If you have a low FICO credit score, expect that there are high chances for your application not to be approved. The FICO score is represented by three digit number and it shows how credible you are to have a credit. Seventy five percent of the decisions in mortgage application use FICO score for basis. Try to check your credit score six months before you apply for a loan so you will have ample time to fix whatever wrong information stated in your credit report and improve your score if you get a bad one.

Error # 2: Not researching about mortgage programs available for first time buyers
National and local government are sponsoring various mortgage programs for first time home buyers or people who do not own a main residence for the last two years. Most of the loan programs of the government and non-profit agencies give better interest rates. Try calling local housing agencies and ask about the available home loan programs.

Error # 3: Applying for too much loan
Many of the homebuyers tend to miscalculate the amount of money they borrow, most of the time, overestimating them, because they think that their income will increase after several years and that will make the mortgage payment be more comfortable for them as the time goes by. They will try to apply for the largest amount possible, but actually, this kind of decision can only result to headaches, more expenses and possible foreclosure. Aside from the monthly payment for your home loan, you also need to consider allocating portions of your income for household expenses such as bills, maintenance and repair fees, among others. You have to make a long-term financing plan first before you set the amount you will borrow so it would be easier for you to keep up with the monthly payments.

Joseph Brooks is a writer with expertise in real estate business and investments. To know more info about Destin Homes for Sale and Destin Real Estate, visit the listings on our website.

Article Source:
http://www.articlebiz.com/article/1051513047-1-some-mortgage-failures-homebuyers-need-to-avoid/