Homebuyers Have a Positive Outlook on the Ease of Home Searches

 According to the National Association of Home Builders, prospective buyers have a better outlook on the ease of home searches. The perspective rose from 17% to 22% between the first and second quarters of 2022. This is the first increase in the last five quarters. The rise in the positive outlook stems from the result of easing competition among buyers getting priced out of the market by recent increases in mortgage rates.  Last quarter 74% of potential homebuyers felt it was harder or stayed the same and this has decreased to 67% this quarter.

Another positive outlook that was measured was prospective buyers' perception of housing inventory. The second quarter of 2022 saw a rise from 23% last quarter to 28%. This is also the first decline seen for five straight quarters.

The Midwest was the only region that did not see any improvement in housing availability expectations declining from 15% to 14%. The West saw an increase from 18% the previous quarter to a whopping 31% while the Northeast rose from 22% to 28%, and the South from 17% to 18%.

This information comes from NAHB's Housing Trends Report (HTR). This is created by the NAHB Economics team and is produced quarterly. HTR records changes in buyers' perceptions over time of their perceptions about the availability and affordability of homes for sale in the buyer's markets.

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Federal Money Will Go to Louisiana Roads, Bridges and Other Needy Infrastructures

Louisiana has had its shares of tragedy and hard storms both on its residents and structures throughout its communities. Deputy Secretary of Transportation Polly Trottenberg along with Lousiana officials toured local road projects throughout the state.

"Through tragedy, Louisiana has become a leader," Deputy Secretary of Transportation Polly Trottenberg said at a brief news conference in July that included Louisiana Department of Transportation Secretary Shawn Wilson and U.S. Rep. Troy Carter.

The Department of Transportation's Federal Highway Administration will give the state $134 million in a span of the next five years. This money will come from $7.3 billion of federal money that has been set aside for transportation impacts due to climate change.

The federal project is called the PROTECT program and is part of Biden administration's Bipartisan Infrastructure Law. PROTECT's purpose is to help states and communities with being fully prepared during extreme weather conditions. Under the program, Louisiana will receive $134 million in total with $25 million coming in this fiscal year.

“We know the devastation hurricanes and coastal erosion can cause to our infrastructure,” Sen. Bill Cassidy, who co-authored the legislation, said Monday. “I worked on the Bipartisan Infrastructure Law specifically to ensure Louisiana has these resources to strengthen our roads and bridges, and keep our communities safe and resilient.”

Twenty-eight point eight million of the one hundred-thirty four million is set to be dedicated to two sets of bridges located on Interstate 10 between Michoud and the onramp to the US 11 bridge. Louisiana has a list of roads that need to be elevated so this program will help with the elevation.

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Shades & Curtains Are on Trend for 2022

There are so many reasons why today's homeowner uses curtains and shades as their window treatments. One of the reasons why is because of how they function. Shades and curtains are great for their function as well as their looks. They are so popular because they are stylish and function smoothly.

What Is the Difference Between Shades and Blinds?

Many times homeowners a referring to the same thing when using both shades and blinds, but they are technically two different window treatments.

Shades hang from the top of the window to the bottom. They are a solid continuous surface that covers the whole window. They have to be completely raised to let the sunshine in or completely down for privacy. Shades are made out of fabrics, bamboo or woven woods, lightweight cellular material and sheer fabrics.

Blinds also hang from the windows but they are not solid like shades. They have either horizontal or vertical slats that can be opened or closed. Blinds are usually made of wood, faux wood, aluminum or PVC. Blinds can be completely closed and down for complete privacy, the vertical or horizontal slates tilted for semi-privacy or pulled up like a blind for a complete view outdoors.

What Types of Shades and Curtains Are In Style?

Today there are many popular styles of shades and curtains. The roller shade is a casual modern farmhouse look. They come in many colors, textures and patterns. The cellular or honeycomb shades give off a cool, calm and quiet vibe and are energy-efficient. These are great for families with young children or families with pets because there are many cordless lift options. Roman shades are classic and more traditional in look. They are made of luxurious fabrics. Another popular look is the bamboo/woven wood shades which give a natural custom look. Dual or zebra shades make a bold statement that adds texture and dimension to the window. There are also sheer shades that are not completely private but are great for giving the window an elegant look.

Shades that not only look good but are for certain functions are also there to choose from. Solar shades can help reduce the harmful UV rays that are let into your home. Exterior solar shades keep your home, patio or decks cool. They are weather resistant and also a solar shade. Many homes have skylight windows which are a great feature. To showcase them, there are skylight shades that are custom and sun-blocking. Another feature is an arched window. There are arched window shades that can be light filtering or blackout.

Drapery and curtains are also a popular way to dress up the windows. They can also come in sheer to blackout depending on how much shade you need. Curtains can be used by themselves or to dress up a window that already has blinds or shades.

How Often Do You Need to Replace Your Window Treatments?

Just like anything else, your window treatments go a long way if they are installed correctly and maintained often. There are some homeowners who will want to change them out often while others will want to keep them as long as they last.

Remember using window treatments are not only energy efficient but makes a window look beautiful as well. Follow the manufacturer's directions to preserve your window treatments. Also, dust and wipe the treatments down at least two times a year or more. If made of fabric lauder them or dry clean them a couple of times a year.

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A Record Decline in Mortgage Rates

 Why did the mortgage rate have the biggest decline this month since 2008?

According to Sam Khater of Freddie Mac, "over the last two weeks, the 30-year fixed-rate mortgage dropped by half a percent, as concerns about a potential recession continue to rise."

"Over the last two weeks, the 30-year fixed-rate mortgage dropped by half a percent, as concerns about a potential recession continue to rise," reported Sam Khater, Freddie Mac's chief economist. The higher rates are also affecting the number of mortgage applications. According to the Mortgage Bankers Association, applications dropped 5.4% in one week.

According to CNN, this is the largest decline we have seen since December of 2008. The week ending on July 7th the 30-year fixed mortgage rate averaged 5.30% which was down from the previous week which was at 5.70%. Although this is the largest decline we have seen, the rate was still a good bit higher than it was in July 2021.

"Rates are still significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance."

The sharp decline stems from economic concerns about the high increases that came in May and June. Mortgage rates are at the highest levels along with listing prices. Listing prices have risen over 8.5% year-over-year for the last two years. The good news for buyers, more homes are being listed now according to Joel Berner, Realtor.com's senior economic research analyst.

Although there is more inventory, buyers are stills struggling with the inflation in home prices. This time last year, a buyer could purchase a home priced at $390,000 and put 20% down and still have a monthly payment of only $1,299. Freddie Mac reports that a buyer in today's market can purchase the same priced home with 20% down and the payment has jumped to $1,733 at the current rate of 5.30%.

"This inversion might sound ominous, especially in the midst of sustained inflation that both markets and the Fed agree will likely require more fed funds rate hikes to tame, but it remains to be seen whether these market conditions will lead to increases in the unemployment rate or decreases in production that characterize a recession," Joel Berner, Realtor.com's senior economic research analyst said.

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May Sees an Increase in New Home Sales

 May 2022 saw an increase in new home sales and many say it is due to the rush of buyers to buy before the June interest rate increase. May saw a 10.7% increase to a 696,000 seasonally adjusted annual rate from April in sales of newly built single-family homes. This is based on the number of

homes that would sell if the same pace continued over the next 12 months. New home sales though are down 10.6% in 2022 on a year-to-date basis.

For a sale to count, a new home sale only occurs when a sales contract is signed or a deposit is accepted. The new home can be in any stage of construction and does not have to be completed.

“Though new home sales registered a solid increase in May, we expect sales to decline in June following the Fed’s action to significantly raise interest rates in an effort to cool the economy and ease inflation,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “High construction costs and rising mortgage rates are pricing many buyers out of the market. Only 10% of new homes were priced below $300,000 in May, compared to 23% a year ago.”

“While sales were up in May, the 696,000 pace was 5.9% lower than a year ago and new home sales on a year-to-date basis are down 10.6% thus far in 2022,” said NAHB Chief Economist Robert Dietz. “Moreover, the months’ supply measure is elevated at 7.7, but existing home inventory remains very tight and this supports demand for new construction.”

The inventory of new single-family homes is still up at a 7.7 months’ supply which is up 42.6% over 2021. With the inventory up, the median sales price did go down to $449,000 in May from $454,700 in April. This decrease can be blamed on higher construction and development costs.

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Where To Find Price Cuts in Today’s Hot Housing Market

 

Today everyone hears of the hot housing market with home prices soaring, but this is not the case in some areas of the country. The regional housing market is being to see a big uptick in price cuts which means the housing market is beginning to slow down.

According to Redfin, in May 2022 there were more price cuts than compared in May 2021 among the 108 regional housing markets they measured. In fact, only six of the regions did not see price cuts. May 2022 saw 25.7% of the listings with price cuts whereas only 15.7% had price cuts in May 2021. Of the 108 regions, 29 of the regions saw over 30% of its home listings cut in price.

 

The regions that are seeing these price cuts first are the regions that shot up the most in prices during the pandemic. Provo, Utah was on top of the list with 47.8% of its home listings showing price cuts between May 2021 and May 2022. The top ten regions were Tacoma, WA with 47.7%, Denver, CO at 46.9%, Salt Lake City, UT at 45.8%, Sacramento, CA at 44.3%, Boise, ID with 44.2%, Ogden UT with 42.6%, Portland, OR with 42%, Indianapolis, IN with 41.9%, Philadelphia, PA with 41.2% and Seattle, WA with 40.6%. New Orleans made the top 20 with 36.4% of its home listings seeing price cuts.

Professionals in the industry say that this cooldown is by design. The Fed announced they were going into inflation-fighting mode. This can be seen with the mortgage rates rising. The average 30-year fixed mortgage rate went up from 3.2% to 6.7% over the past six months. This coupled with record home price appreciation has pushed many buyers out of the market. Those borrowers who must meet strict debt-to-income ratios have lost their mortgage eligibility. This has caused a shift in the U.S.housing market from a hot market to a cool-down market.

The cooling in the housing market is set to only intensify in the coming months. According to Freddie Mac’s deputy chief economist Len Kiefer the housing market has entered into the “most significant contraction in activity since 2006.”

“I’d say if you are a homebuyer…or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again,” Fed chair Jerome Powell told reporters last week.

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Tips for Purchasing a Home That Will Appreciate

 Most houses in the current housing market will appreciate no matter where they are. This is not always the case so it is a good idea to make sure you choose a house that will appreciate. When choosing a home, there are many factors to consider. Even though some are out of your control here are some tips to think about when choosing a home when it comes to a home’s appreciation.

 

Find a Valuable Property

Land value can determine some of the value of your home. Land appreciation is influenced by fewer factors than the house itself. Choosing a home that is on a valuable piece of land will help your home’s appreciation. Regardless of a home or structure, the land value can help value to remain consistent.

Location, Location, Location

In real estate, it is all about location.  This old saying hasn’t become a staple of real estate for no reason; location really does play a massive role in the desirability and, by extension, value of a home. There are a good amount of factors that make a piece of land valuable such as proximity to desirable features (parks, shopping, restaurants, etc.), the quality of the school district, a quick (or at least reasonable) commute to a city, and if it is considered an “up and coming” neighborhood.

Consider a “Fixer-Upper”

When a home needs some TLC, the current value is usually lower than what it could be fixed up. Many want a move-in-ready home that does not need any improvements and are willing to pay the premium for this convenience. If you are willing to renovate, then you can pay a low price, fix it up and sell for a premium. If location is very important to you, then you might be able to find a “fixer-upper” for a lower price in your desired neighborhood.

Be Smart About Upgrades

Renovations can add up in costs. When you are choosing what to update, be strategic in choosing what work needs to be done. You need to make sure the renovations you choose to do, will add value to your home.  Certain renovations are pricier than others and some are more valuable in others in terms of how they can contribute to your home’s appreciation.  Many renovations that will add the bucks to your home include garage door replacement, kitchen remodeling, siding replacement, and window replacements.

If you are ready to purchase a home, a Realtor can help you find the right home in the right neighborhood. A Realtor can help you decide on the best renovations and recommend contractors. If you want a move-in ready, they can help you find a home that will definitely appreciate in the future.

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