Long Island NY Real Estate News – September 2014

Long Island NY Real Estate News - Septermber 2014

In our Long Island NY Real Estate News for September 2014:

Long Island NY Home Sales Outlook Stronger

Economists are more optimistic about the outlook for Long Island NY home sales over the next two years due to stronger job creation.

The annual pace of existing home sales nationwide will likely rise to 5.25 million units in the first three months of 2015 from 5.09 million in the current quarter, according to the Reuter's poll median forecast.

In May, economists expected much slower gains, with 5.1 million resales expected in the first quarter of next year.

Long Island NY home sales outlook is looking stronger due to stronger job creation

Americans signed more contracts in July to buy previously-owned homes than in any month in almost a year, suggesting the housing market was pulling out of its slump more quickly than expected.

The National Association of Realtors (NAR) said last week that its Pending Home Sales Index, based on contracts signed last month, rose 3.3 percent to 105.9, the highest level since August 2013.

Low mortgage rates and improving labor market dynamics should remain conducive to gradual growth in the Long Island NY home sales sector.

A sharp increase in mortgage rates pushed sales of existing homes lower in the second half of 2013 but borrowing costs have been more stable in recent months and Long Island NY home sales have recovered some of the lost ground.

Investors and economists polled by Reuters generally expect the Federal Reserve will begin to slowly increase its benchmark interest rate around the middle of next year after holding it near zero since 2008.

The median forecast put the 30-year mortgage rate at 5.25 percent in 2016, down from 5.68 percent in the May poll. Last week, the 30-year rate averaged 4.28 percent, according to the Mortgage Bankers Association.

Economists don't believe a slow rise in mortgage rates will hurt Long Island NY home sales, as slow increases in rates are generally considered a symptom of an improving economy. At the same time, slowly rising rates may also help to bring home price appreciation back down to more sustainable levels.

Speaking of mortgage rates and how they may affect Long Island NY home sales…


Long Island NY Mortgage Rates Remain Low

Long Island NY mortgage rates remain much lower than anyone expected they would be by this time when the Fed announced it would start cutting back on its purchases of mortgage bonds.

Mortgage News Daily reports that average 30-year fixed mortgage rates are down to around 4.11 percent. One year ago those same rates were 4.61 percent, down about 50 basis points year-over-year.

Mortgage refinancing tends to pick up anytime mortgage rates drop by 50 bps from recent levels, however most homeowners who were looking to refinance did so when rates were below 4 percent in 2012 and 2013.

We would not be surprised to see rates drift even lower in the coming few days or weeks as they pull lower due to global events, European debt, etc. These are the largest rate indicators right now that are affecting Long Island NY mortgage rates.

Long Island NY mortgage rates were well above 6 percent during the housing market's 2006-2007 peak. Freddie Mac data going back more than four decades shows 30-year rates hit an all-time low of just 3.31 percent in November 2012.

Trying to decide whether to lock in current Long Island NY mortgage rates or let them float a while longer? Seems odd to say floating is an option when we're near the best pricing of the year, but it might be a consideration for aggressive borrowers. If you're close to closing, or have tight debt ratios/cash to close, lock 'em up, and don't look back!


Ideal Time to Buy a Long Island NY Home?

If you've been waiting to buy a Long Island NY home when the time was just right, that time may be now.

Potential homebuyers who have been willing to wait for better deals are starting to be rewarded for their patience, as sellers drop listing prices to meet buyers' more value-focused expectations.

Redfin Chief Economist Nela Richardson says, "Two market developments in July are spurring this change in housing activity as the market transitions from the summer to the fall buying season.”

1 – Long Island NY Home Price Slowdown

Home price growth was mostly flat in July for the first time in five months.

As Senior Financial Reporter Trey Garrison said last week, home price growth has slowed across the board, and Capital Economics says the slowdown will likely meet the company's forecast for inflation to slow to 4% in 2015.

Just about everyone was a little surprised by the consecutive month-on-month declines in house prices during April, May and June on the new monthly Case-Shiller national measure. Echoing that message, the Case-Shiller 20-City measure of house prices fell during the latest two months.

2 – End of Seller's Market?

The second market development is a shift in pricing power from sellers to a more balanced market. That shift has been nearly nine months in the making from when sales began to first decline last November.  

Back in October, sellers were starting to lose their dominance in the market, with 72% of surveyed agents describing now as a good time to sell compared to 86% in the second quarter of 2013.

Look for these two trends to drive an unusual surge in home sales this fall. We also look for prices to continue to flatten, and to potentially decline month over month in September or October. If that happens, it will be the first three-month price decline since the fall 2012. Stay plugged in right here and we'll keep you posted on trends as we move through the fall Long Island NY home buying season and into the holidays.

Long Island NY Real Estate News – August 2014

Long Island NY Real Estate News - August 2014

In our Long Island NY Real Estate News for August 2014:

Long Island NY Housing is Faced With Cautious Optimism

Long Island NY housing is facing cautious optimism after several reports and surveys were released recently

Long Island NY housing is facing cautious optimism with mixed signals coming in from several economic reports and surveys.

According to the July 2014 U.S. Economic Housing Outlook released recently by Freddie Mac, residential fixed investment fell 4 percent in the first quarter. Housing starts for June fell by 9.3 percent from the May pace. After adding to economic growth in 2012 through mid-2013, housing activity has slowed and is no longer driving the economic recovery. The American public seems less sure that the economy is headed in the right direction.

"Although the economic news for the first half of 2014 has been bittersweet, there is good news to share as we head into the latter half of summer," according to Frank Nothaft, Freddie Mac vice president and chief economist. "In particular, employment was up by nearly 1.4 million during the first six months and this will bolster household formations, resulting in positive gains most immediately for the rental housing market and then, longer term, for single-family home sales."

Pending home sales dipped in June following three months of increases. The National Association of Realtors Pending Home Sales index, which is based on contract signings, fell 1.1 points to 102.7 last month. That’s 7.3 points below June 2013’s level, but it’s still above 100, the indicator for average contract activity.

"The multifamily rental market has led the rest of the housing sector into recovery, and about one-third of housing starts in the first quarter were for multifamily rental apartments. There's no question the single-family recovery is moving slowly, but it continues to doggedly press forward and we are cautiously optimistic."

Cautious optimism is probably the correct position to take when evaluating the current state of the economic climate. But for the American people, the mixture is much more caution than optimism.

A survey recently conducted by Rasmussen Reports found that only 19 percent of consumers rate the U.S. economy positively, including four percent (4%) who rate it as excellent. Forty percent (40%) rate it as poor. Additionally, consumer sentiment is also down to its lowest point in months.

The June 2014 REALTORS® Confidence Index (RCI) Report indicates that REALTORS® had a slight dip in confidence about current and future market conditions in June across all markets, not just the Long Island NY housing market. Low supply of homes relative to demand, the challenging credit environment, and the continued slow pace of income and job growth were cited as the major factors constraining sales. Given the demand-supply imbalance, home prices generally continued to increase, and properties were on the market for fewer days for the sixth straight month.

A strong third quarter could do much to improve the psyche of the consumer as well as Long Island NY housing. Stay tuned… we'll keep you updated.


Home Improvement Spending Expected to Slow

The home improvement component of the housing market, measured by the dollars consumers spend to update their homes, is expected to peak during the second half of 2014, and then begin to ease heading into next year.

Revised estimates from the U.S. Census Bureau show the home improvement market grew 5.6 percent in 2013. For 2014, the Leading Indicator of Remodeling Activity (LIRA) projects annual gains in home improvement spending of 9.9 percent, with annual growth slowing to 7.0 percent in the first quarter of 2015.

"With the economy improving slower than expected and home sales struggling to keep up with last year’s pace, the recent strong gains in remodeling spending will likely moderate later this year," says Chris Herbert, Research Director at the Joint Center. "Although this presents a challenge for the remodeling industry, the LIRA continues to project significant growth going into 2015."

The rest of the housing market is giving mixed signals, including low inventories, prices out of reach for some and tight credit for others.

Existing home sales climbed 2.6 percent to a seasonally-adjusted annual rate of 5.04 million in June, the highest pace since October 2013. But the Commerce Department reported recently that new home sales for June plummeted by 8 percent.


Long Island NY Mortgage Rates Hover Near Low for the Year

Average Long Island NY mortgage rates declined slightly this past week, and are hovering near their lows for the year.

Mortgage company Freddie Mac said the nationwide average for a 30-year loan slipped to 4.12 percent from 4.13 percent last week. The average for the 15-year mortgage, a popular choice for people who are refinancing, declined to 3.23 percent from 3.26 percent last week.

Long Island NY mortgage rates are below the levels of a year ago. They have fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term borrowing rates low.

The Fed issued a statement this week after a two-day policy meeting suggesting that it wants to see further improvement in the economy before it starts raising its key short-term interest rate. The central bank offered no clearer hint of when it will raise that rate, which is at a record low near zero.

Home prices rose in May from a year earlier at the weakest pace in 15 months, data released this past week showed, as sales remain modest.

At 4.12 percent, the rate on 30-year Long Island NY mortgage rates is down from 4.53 percent at the start of the year. Rates have fallen even though the Fed has been trimming its monthly bond purchases. The Fed said this week that it will slow the pace of its purchases by another $10 billion to $25 billion a month. The purchases are set to end in October.

To calculate average Long Island NY mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

  • The average fee for a 30-year mortgage was 0.6 point, unchanged from last week. The fee for a 15-year mortgage rose to 0.7 point from 0.6 point last week.
  • The average rate on a five-year adjustable-rate mortgage increased to 3.01 percent from 2.99 percent. The fee remained at 0.5 point.
  • For a one-year ARM, the average rate edged down to 2.38 point from 2.39 percent. The fee held at 0.4 point.

Long Island NY Real Estate News – July 2014

Long Island NY Real Estate News - July 2014

In our Long Island NY Real Estate News for July 2014:

Are We Facing Another Long Island NY Housing Bubble?

Here is why we believe another Long Island NY housing bubble will not happen now...By most accounts, Long Island NY housing is on the rebound – sales are up, prices are up, building permits and starts are up, and confidence is also up. (See our next article about "Housing Coming Out of its Recent Slump")

But should we all be getting ready for the next round of the sky falling when it comes to Long Island NY housing?

Trulia doesn't think so. In fact, their Chief Economist, Dr. Jed Kolko says that Long Island NY housing is, on average, actually undervalued by around 3 percent. This means that in conjunction with a variety of other factors, the Long Island NY housing sector isn't so hot that it's facing a bubble. If homes were selling for well over their worth, we'd have a worry, but Dr. Kolko says we're leveling out and are not on the verge of another Long Island NY housing bubble.

More good news from Trulia is the fact that builders are not overbuilding, meaning there won't be another glut of Long Island NY housing that just sits there, dragging down the market. In addition, lenders are not over-lending, meaning the era of no-doc loans is officially over. To the contrary, the difficulty for some people to get approved who should actually qualify is another reason to feel safe that we're not on the verge of another bubble, despite rising home prices.

If you're on the fence about buying a home now and concerned about pricing, sooner is probably better for your wallet than later. Prices are rising, albeit slowly. That's a good thing, for buyers AND sellers. It means no bubble is in our future for Long Island NY housing.


Is Housing Coming Out of its Recent Slump?

Home resales rose more than expected in May and the inventory of properties for sale was the highest in more than 1-1/2 years, according to the National Association of Realtors.

The NAR reports that toal home resales, which are completed transactions of single-family homes, townhomes, condominiums and co-ops, rose 4.9 percent to a seasonally adjusted annual rate of 4.89 million in May. That's from an upwardly-revised 4.66 million in April, but remain 5.0 percent below the 5.15 million-unit level in May 2013.

The 4.9 percent month-over-month gain in May was the highest monthly rise since August 2011 (5.5 percent).

Total housing inventory at the end of May climbed 2.2 percent to 2.28 million existing homes available for sale, which represents a 5.6-month supply at the current sales pace, down slightly from 5.7 months in April.

Unsold inventory is 6.0 percent higher than a year ago, when there were 2.15 million existing homes available for sale.

The median existing-home price for all housing types in May was $213,400, which is 5.1 percent above May 2013.

In June, NAR reported new home construction activity is currently insufficient in most of the U.S., and some states could face persistent housing shortages and affordability issues unless housing starts increase to match up with local job creation.


Long Island NY Mortgage Rates Lower Than a Year Ago

Long Island NY mortgage rates are now lower than a year ago when rates jumped in the initial anticipation of the Federal Reserve's tapering of bond purchases.

What does this mean for the average consumer looking to buy a home? Rates are holding near the 4 percent mark, a still historically low range. The all-time low for the 30-year fixed was set in November 2012 at 3.31 percent, according to Freddie Mac.

This week, the 30-year fixed rate mortgage slipped to 4.14 percent, from 4.17 percent the previous week. But more telling is the comparison to a year ago, when the benchmark home loan stood at 4.46 percent and re-financing slowed considerably from its heady days of 2011-2012.

Here is Freddie Mac's overview of rates for the week:

30-year fixed-rate mortgage (FRM) averaged 4.14 percent, with an average 0.5 point for the week ending June 26, 2014, down from last week when it averaged 4.17 percent. A year ago at this time, the 30-year FRM averaged 4.46 percent.

15-year fixed-rate mortgage (FRM) this week averaged 3.22 percent, with an average 0.5 point, down from last week when it averaged 3.30 percent. A year ago at this time, the 15-year FRM averaged 3.50 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.98 percent this week, with an average 0.3 point, down from last week when it averaged 3.00 percent. A year ago, the 5-year ARM averaged 3.08 percent.

1-year Treasury-indexed ARM averaged 2.40 percent this week, with an average 0.4 point, down from last week when it averaged 2.41 percent. At this time last year, the 1-year ARM averaged 2.66 percent.

Long Island NY Real Estate News – June 2014

Long Island NY Real Estate News - June 2014

In our Long Island NY Real Estate News for June 2014:

Long Island NY Mortgage Rates Continue to Slide

Long Island NY mortgage rates fell again last week for the fifth week in a rowLong Island NY mortgage rates continue to fall. Nationwide, for the fifth week in a row, 30-year fixed mortgage rates dropped and now are at an average 4.12 percent, according to a national survey. That was down from the previous week's average of 4.14 percent.

Despite an announcement by the Federal Reserve that it would begin to taper its stimulus, which brought the expectation that mortgage rates would increase gradually, rates have remained near all-time lows. The Fed has announced four declines in its monthly bond purchases since December because the economy appears to be steadily healing. But the Fed has no plans to raise its benchmark short-term rate from record lows.

According to Bankrate, a number of factors have played into rates remaining low, including slow overall growth in the U.S. economy. Without strong growth in investments, mortgage rates tend to stay low because they are related to yields on long-term government debt.

Warmer weather has yet to boost home buying as it normally does. Rising prices and higher interest rates beginning in mid-2013 have made homes less affordable for would-be buyers. At the same time, a limited supply of homes is available to buy. New construction has focused increasingly on rental apartments, instead of single-family homes.

Fed Chair Janet Yellen has told Congress that the economy is improving but noted that the job market remains "far from satisfactory" and that inflation is still below the Fed's target rate. She said she expects the Fed's near-zero target for short-term rates to remain appropriate for a "considerable time" after the bond purchases end.

Stay plugged in here with our website and we'll keep you up to date on the latest Long Island NY mortgage rates, and news that affects those rates.


Pending Home Sales Rise in April

The National Association of Realtors said this past week that its seasonally adjusted pending home sales index rose 0.4 percent to 97.8 last month. The index remains 9.2 percent below its level a year ago.

More people signed contracts to purchase homes in April than the prior month. But the pace of buying is still weaker than last year, as higher prices and relatively tight supplies have limited sales.

Pending sales are a barometer of future purchases. A one to two month lag usually exists between a signed contract and a completed sale. The index indicates that home buying has barely increased in May.

Would-be buyers have gotten some help in recent weeks from falling mortgage rates that we just talked about in our first story. Average rates for 30-year, fixed mortgages declined for the fifth straight week to 4.12 percent.

Still, rates remain above their lows of 3.51 percent a year ago. The rising rates in the second half of 2013 and higher home prices appear to have reduced the pool of potential homebuyers.

The Realtors group said last week that sales rose 1.3 percent in April from March to a seasonally adjusted annual rate of 4.65 million. Purchases of homes over the past 12 months have dropped 6.8 percent.


5 Best Things to Buy in June

Tools are one of the best things to buy in the month of JuneShifting gears a bit away from "all things related to Long Island NY real estate", we thought we'd bring you a little buying advice in something besides Long Island NY real estate, and give you some tips on some other things you might find a good deal on in June.

Tools: Father's Day is June 15th, and retailers are discounting prices on tools and other home improvement equipment. Even if you're not buying tools for Dad, you may want to assess your own supply, since tools rarely go on sale. Check out coupons and newspaper ads for home improvement stores to compare prices.

Designer Clothes: If you're in the market for some hip summer clothes, June is an excellent month to hit the sales racks. All the big fashion houses are making way for their fall collection, so now is a great time to scoop up those latest trends you've been eyeing.

Gym Memberships and Equipment: Anyone working on their beach body, or those simply trying to maintain a healthy one, will benefit from slashed prices on gym memberships, fitness apparel and workout equipment in June. With new year's resolutions long forgotten and more people getting outdoors to take advantage of the nice weather, there's less of a demand for indoor gym equipment and gym memberships. Lack of demand equals a decrease in prices.

Grills and Grilling Supplies: If you delayed buying a new grill for the summer, June and July are the best months for deals on grills. Also shop for grilling supplies, including utensils and grill baskets.

Dishes: Due in large part to June being such a popular month for weddings, dishware companies offer discounts on their products to try to win spots on registries. That's good news for everyone in need of new place settings, soon-to-be-married or not. Expect discounts to start around 25 percent off and to go as high as half off, or more.

See you next month for another issue of our Long Island NY real estate newsletter!


Long Island NY Real Estate News – May 2014

Long Island NY Real Estate News - May 2014

In our Long Island NY Real Estate News for May 2014:

Long Island NY Housing Market Happy to See Spring Arrive

The Long Island NY housing market is glad to finally see spring arriveThe term "Spring Thaw" means different things to different people, depending on where in the world they may live. But a thaw in the Long Island NY housing market is the same no matter where you may live.

After a weather-weakened winter for Long Island NY housing sales, as well as most everywhere else in the country, more potential buyers signed contracts to buy a Long Island NY home in March.

The National Association of Realtors says pending sales of existing homes rose 3.4 percent from the previous month, the first monthly increase in nine months.

Lawrence Yun, chief economist for the National Association, said, “After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers.”

Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy. The increase in contracts for Long Island NY homes was welcome news because actual sales of existing homes were flat in March. Contract signings in March were still 7.9 percent below March 2013.

A slow start to the year will likely mean fewer overall sales throughout this year compared with 2013. The NAR forecasts total existing home sales of 4.9 million this year, compared with 5.1 million last year. The association forecasts housing prices will rise another 6 percent to 7 percent this year.


Case-Shiller Thoughts on Home Pricing

The latest Case-Shiller Home Price Indices report, "Going forward, if home prices continue to rise, there are a limited number of options to offset the rising cost of purchasing a home: 1) an equally sizable increase in wages or 2) a marked reduction in credit restrictions. Given the significant slack in the labor market, the latter option of easing lending standards appears to be the most probable and fast-acting solution."

Despite continued price gains, most other housing statistics are weak.

Sales of both new and existing homes are flat to down. The recovery in housing starts, now less than one million units at annual rates, is faltering. Moreover, home prices nationally have not made it back to 2005. Mortgage interest rates, which jumped in May last year and are steady since then, are blamed by some analysts for the weakness. Others cite difficulties in qualifying for loans and concerns about consumer confidence. The result is less demand and fewer homes being built.


Long Island NY Homeownership at Lowest Level Since 1995

The Long Island NY homeownership rate in the first quarter of 2014 stands at the lowest since June 1995.

The rate of homeownership at the end of the first quarter of 2014 was 64.8%, which is 0.2 percentage points lower than the first quarter 2013 rate of 65%, according to the U.S. Census Bureau.


Mortgage Applications Dive

Long Island NY mortgage applications fell recently to the lowest level since 2000.Applications for Long Island NY home mortgages fell last week to their lowest level since December 2000 as both refinancing and purchase applications declined.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 5.9 percent to 333.2 in the week ended April 25. That was the lowest level since December 2000.

The combination of higher rates, new regulation and tight inventory in the Long Island NY housing market are all leading to a weaker spring market than we have seen in years.

The MBA's seasonally adjusted index of refinancing applications declined 6.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.4 percent.

Fixed 30-year mortgage rates averaged 4.49 percent this past week, unchanged from the week before.

Call us today or use the contact link at our website to take advantage of the spring thaw in Long Island NY housing, and let us know how we can help you find the perfect Long Island NY home for your needs and your budget.