Majority of Millennial Homeowners Express Buyer’s Remorse – According to a recent Bankrate survey, as home buyers purchase under intense competition, they may be prone to some regrets afterward. About 43% of all homeowners have at least one regret about their current home. The most common regret is feeling unprepared for home maintenance and other costs associated with homeownership, the survey finds. Young adults seem to have the most regrets about their home. Broken out by age, nearly two-thirds or 64% of millennials, ages 25 to 40, say they have at least one regret about purchasing their current home. About 45% of Gen X, ages 41 to 56, have reported buyer’s remorse with their current home, while only 33% of baby boomers, 57 to 75, have housing regrets. With sight-unseen offers growing or purchases being made during bidding wars and waived contingencies, buyers may feel some regrets following their purchase. The Bankrate survey found the most common regrets are the following:
Source and link to the full article: “Nearly Two-Thirds of Millennials Have New Homebuyer Regrets, Survey Finds,” Bankrate.com (May 17, 2021)
Builders Reset Expectations Under Crushing Demand – Based on a National Association of Home Builders survey, more buyers are turning to the new-home market for greater inventory options, but builders are struggling to keep pace. Some smaller firms have temporarily stopped signing new contracts in order to catch up with existing orders, according to reports. Larger home builders are experimenting with blind auctions and shifting away from fixed prices, and they’re increasingly accepting bids on contracts and putting customers on waiting lists. Rising construction costs and delays for items such as appliances, cabinets, and Sheetrock are causing longer timelines to complete projects. To deal with the market pressure, about 19% of builders say they are delaying sales and home starts, and 47% are adding escalation clauses to contracts to recoup higher material costs. “We’ve shut off sales until homes are nearly completed,” Greg Yakim, a partner at Texas builder CastleRock Communities, told Bloomberg. “We have huge waiting lists.”
Source and link to the full article: “Housing Is So Hot That U.S. Builders Have to Stop Taking Orders,” Bloomberg (May 20, 2021)
Buyers Seek Larger Mortgages as Home Prices Surge – According to the Mortgage Bankers Association, home prices have significantly jumped over the past year, forcing home buyers to borrow more to keep up. The average mortgage purchase application reached $411,400, the highest since February. The average loan for a new home rose to $377,000 last month, a record high. Home prices are climbing at their fastest pace in more than 15 years. While low mortgage rates are helping to offset some of those higher prices for successful buyers, mortgage rates are predicted to head up soon. The 30-year fixed-rate mortgage averaged 3% recently, up from 2.94% previously, according to Freddie Mac. “We’ve seen very red-hot house-price appreciation across the country with double digits nationally,” says Len Kiefer, deputy chief economist at Freddie Mac. “That puts pressure on loan sizes because, to purchase a home at a higher price, you’re going to need to borrow more money.” Also, more homeowners have been upsizing since the beginning of the pandemic.
Source and link to the full article: “Homebuyers Are Applying for Ever Bigger Mortgages as Home Prices Soar,” CNBC (May 19, 2021) and “As Home Prices Rise, So Does Mortgage Debt,” MarketPlace (May 20, 2021)
NAR: Sales Dip in April – Based on the National Association of REALTORS® reports, existing-home sales posted their third consecutive month of declines despite soaring home buyer demand nationwide. Despite record-high home prices, buyers remain active in the market, but the lack of homes for sale is constraining activity. However, a turnaround to ongoing inventory woes could be on the horizon, said Lawrence Yun, chief economist of the National Association of REALTORS®. Existing-home sales of completed transactions that include single-family homes, townhomes, condos, and co-ops fell 2.7% in April compared to March, reaching a seasonally adjusted annual rate of 5.85 million, NAR reported. Despite the drop, home sales remain nearly 34% higher than a year ago. All four major regions posted a double-digit year-over-year increase in April. “Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” said Yun. “We’ll see more inventory come to the market later this year as further COVID-19 vaccines are administered and potential home sellers become more comfortable listing and showing their homes.”
Source and link to the full article: National Association of REALTORS®