Federal Funds Rate Holds while Homeowner Tenure Slips.
The Federal Reserve decided to keep the federal funds rate steady This Week in Real Estate, with no expectation of a rate increase until the end of the year, at the earliest. Below are a few highlights from the last few days of April that influence our business:
Federal Reserve: Patience Continues.
At the conclusion of its May meeting, the Federal Reserve held the key, short-term federal funds rate steady, with a top rate of 2.5%. The decision was unanimous and widely expected, with members of the Federal Open Market Committee agreeing that while economic growth conditions remain “solid,” inflation pressures remain anchored. We do not expect another federal funds rate increase until, at the earliest, the end of 2019. For housing, the more dovish perspective of the Federal Reserve is an important reason why mortgage interest rates have declined from late-2018 cycle highs. Given that the housing market faced a 10-year low for housing affordability last Fall, the Fed’s approach is a net positive for future housing market activity and offers an offset (but only a partial one) for rising construction costs. These costs are limiting housing inventory, particularly at the entry-level market. Moreover, higher production costs have caused housing affordability to decline in recent years and are the primary driver for NAHB’s call for generally flat conditions for new home sales and starts in 2019. Full Story…
Homeowners Are Staying Put, Just Not For As Long As Before.
At the end of last year, the length of time that a homeowner stayed put hit a record high at an average of 8.17 years. But the latest data from the first quarter of 2019 reveals that the average tenure has begun to backslide as more Americans opt to relocate. Homeowners who sold their home in Q1 2019 had owned their property for an average of 8.05 years, according to the latest from ATTOM Data Solutions. While this is down slightly from the previous quarter, ATTOM points out that it is up from the 7.75-year average seen in Q1 2017. It’s also significantly longer than the average tenure seen in the years leading up to the housing bubble. Between 2000 and 2007, homeowners moved an average of just 4.21 years, ATTOM revealed. Full Story…
Top Home Technology Features.
According to the latest edition of NAHB’s study, What Home Buyers Really Want, 46 percent of recent and prospective home buyers want a security camera in their home, more than any other home technology feature listed in the survey. Three of the four most wanted features are security-related: along with a security camera, a video doorbell and a wireless home security system are wanted by at least 40 percent of home buyers. However, at most 21 percent of home buyer currently have any one of these technology features installed, indicating that there is market growth potential for these items. In contrast, about the same share of home buyers who want a programmable thermostat (44 percent) have one already installed (41 percent). Four other home technology features are desired by at least a third of buyers: a multi-zone HVAC system (39 percent), a lighting control system (36 percent), and a wireless home audio system and central vacuum system (both wanted by 33 percent of home buyers). An energy management system/display and a smart washer/dryer (controlled remotely) are wanted by 31 percent of home buyers each. Few home buyers currently have any of these items (14 percent of home buyers at most), which also indicates that there is room for growth in these product areas. Full Story…
Originally compiled & posted by Jason Waugh on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.
