First-time buyers facing increased pressure
It’s becoming harder for first-time buyers to enter the housing market due to constrained inventory pushing up prices. Entry level homes are increasing in value faster than other housing types according to analysis by Zillow which found that supply of ‘first homes’ is down 10 per cent so far this year compared with 2015.
Denver saw the sharpest rise in median value of entry-level homes, up 20.3 per cent year-over-year; followed by Portland (16.2 per cent), Dallas (14.7 per cent), Sacramento (13 per cent) and Seattle (12.6 per cent.)
Portland saw the largest decrease in available entry-level homes (down 39.5 per cent) followed by Charlotte, NC (down 34.7 per cent) and Seattle (down 32.4 per cent.)
"It's going to be a tough home-buying market this spring, especially for first-time buyers or even people looking to move up into a slightly more expensive home," said Zillow Chief Economist Dr. Svenja Gudell. "In order to stand out in a competitive market, buyers should get pre-approved for a loan, find an agent who has experience with bidding wars, and consider coming in at the asking price, so the seller knows they're serious."
Mortgage originations will be higher this year says Freddie
Freddie Mac believes that 1-4 family mortgage originations for 2016 will be higher than previously estimated as low mortgage rates fuel refinance loans. The additional $50 billion will make a total of $1.7 trillion for the year. Freddie also says that mortgage rates will average 4 per cent for this year, following an average 3.7 per cent for the first quarter.
House prices are expected to rise by 4.8 per cent in 2016 before slowing to 3.5 per cent in 2017 and rising home prices will build homeowner equity. The overall economic outlook has been lowered though due to first-quarter data. Freddie expects Q1 to show a 1.1 per cent rise in real GDP rather than the 1.8 per cent previously forecast.
"We've revised down our forecast for economic growth to reflect the recent data for the first quarter, but our outlook for the balance of the year remains modestly optimistic for the economy. However, we maintain our positive view on housing. In fact, the declines in long-term interest rates that accompanied much of the recent news should increase mortgage market activity, particularly refinance,” commented Sean Becketti, Freddie Mac’s chief economist.
Biggest Loser trainer hopes to win big with $10 million home sale
Personal trainer Jillian Michaels, known for TV’s “The Biggest Loser” is hoping to tone up her bank balance with the sale of a Malibu beach house. Michaels bought the 3-bed, 4-bath home on the Pacific Highway in 2010 for $6.62 million and has now listed it with Bruce Mibach of Coldwell Banker for $9.75 million.