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Home > Mortgage Rate Insider 2018-9-17

Mortgage Rate Insider 2018-9-17

September 17, 2018 by Nevada County Properties, Recreation Realty

Weekly Market Preview is provided by West Coast Mortgage Group, a registered member of RateMastery.

West Coast Mortgage Dona Knapp and Melinda Napel

 

Realtor Report:

New homes under $300K increasingly disappearing

“Even as interest rates rise, and affordability conditions tighten, a lack of for-sale, single-family inventory remains the defining characteristic of most of the nation’s housing markets.” says Robert Dietz, Ph.D., chief economist and senior vice president for Economics and Housing Policy for National Association of Homebuilders (NAHB) in an article in Builderonline.com, website for BUILDER Magazine. “It is this lack of inventory that continues to cause home prices to rise faster than income growth,” he says. “The solution, from both market and policy perspectives, is to add additional housing supply via new-home construction. That is easier said than done given rising costs and pressures to acquire and develop land, purchase building materials, contract with workers and subcontractors, and comply with government regulatory requirements.”

He goes on to say that none of this is surprising, noting that over the past two decades there has been a dramatic shift in sales for both the total count and market share of newly built single-family homes at lower price tiers. 2002 was a year that somewhat established baseline conditions in a relatively normal market, when there were 782,000 new homes sold priced at $300,000 or lower. “This is a striking total given NAHB’s 2018 forecast for total single-family starts (at all price points) is just over 900,000,” says Dietz. “For the past four quarters (ending with the first quarter of 2018), there were only 268,000 single–family homes sold at a price equal to or less than $300,000.”

Even the market share itself has declined. “At the start of 2002, 81% of new-home sales were priced in the below-$300,000 range. Compare that percentage to recent data. For the start of 2018, this market share was just 43%,” says Dietz.

The nation’s homebuilders are finding it increasingly challenging to provide entry-level price homes, making it a significant obstacle for prospective home buyers. “While in recent decades it has not been the case that new construction was a major source of first-time buyer inventory, the shift away from starter homes will nonetheless limit the ability of today’s renters to become homeowners,” he says.

Dietz cites rising costs exacerbated by deliberate and inefficient policy choices as having increased the cost of land development and home building, with the natural consequence being fewer entry-level homes built. “Communities that can break this cycle by enabling higher density, single-family development will in turn offer affordable housing conditions for younger workers, thus fostering long-term economic growth. This is the reason why on-the-ground advocacy by the industry through local and state home builder associations is key to future growth.”

This Week’s Mortgage Rate Summary and Forecast

Click for complete report …


About Dona Knapp and Melinda Napel

Dona Knapp, Melinda Napel and Renee Janda have over 45 years of collective experience, evidenced by their extensive knowledge of the lending industry, making them a great source of information for their clients. Their commitment to excellence has earned them a reputation of customer satisfaction and building relationships that last far beyond the original transaction. This team was strategically designed to provide superior service, uninterrupted accessibility and extraordinary products to meet all your lending needs. Don’t settle for less, when you can work with the best!

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor the tbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

Filed Under: Market Reports, Real Estate News Tagged With: Dona Knapp, Melinda Napel, RateMastery, Renee Janda, thetbwsgroup, Weekly Market Preview, West Coast Mortgage Group

John & Sandra Brown Hensley

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