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US homes values growing faster than expected, latest data shows
Home values in the United States are appreciating faster than experts expected, rising almost 5% over the past year, according to the latest index report. The April real estate market report from Zillow also shows that there are 3.4% fewer homes for sale than there were 12 months ago and home values are currently appreciating at 4.9%, almost 3% faster than Zillow predicted a year ago. The real estate report suggest that a smaller number of homes on the market will make it harder for first time buyers. The number of entry level homes for sale is down almost 8% over the past 12 months. Stiff competition and high demand, in addition to low inventory, stronger wage growth and low mortgage rates, are driving up home prices across the country, especially for entry level homes, which is forcing many aspiring home owners into bidding wars. Markets with the tightest inventory have some of the fastest rising home values. Over the past two years Portland has seen an almost 405 decrease in the number of homes for sale, with home values up 15% over the past 12 months. Similar patterns hold true in hot markets like Dallas, Seattle, and Denver, where inventory is down more than 20% and home value growth is in the double digits. In addition to low inventory, home values are rising in response to a strong job market, higher than expected wage growth and persistently low mortgage rates, the report also points out. Those looking to purchase a home will find more homes to choose from in the condo and luxury markets. Inventory is improving in these two markets due to high end construction, with the number of homes for sale close to hitting positive growth. Buyers searching for a single family home, or in the bottom or middle of the market, will have less to choose from. ‘New construction has been sluggish over the past year. We're building about half as many homes as we should be in a normal market. There still aren't enough homes on the market to keep up with the high demand from every type of home buyer,’ said Zillow chief economist Svenja Gudell. ‘In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer's selling season's borders will most likely be blurred again as many buyers are left without homes and will need to keep searching,’ she explained. Homes in the top third of the housing market have more frequent price cuts than homes in the bottom and middle of the market and some 16% of top tier homes had a price cut over the past year compared to 11% of bottom tier homes and 13% of middle tier properties. Almost 125 of condos had a price cut over the past year, driven by more availability in the luxury condo… Continue reading
Remortgaging in UK hits seven year high of £6.4 billion in April
The value of remortgage lending in the UK has increased 48% year on year and is the largest amount recorded since November 2008, the latest data shows. The figures from LMS also show that the number of borrowers remortgaging exceeded 39,300 and is the highest since July 2009 while affordably improved markedly with typical remortgage repayments falling to a record low. This represents a 36% increase from the £4.7 billion n recorded in March and a 48% uplift from April 2015’s figure of £4.3 billion. The number of remortgage loans also increased by 41% from 28,000 in March to 39,353 in April. This is 47% more than April 2015 when 26,700 borrowers remortgaged. This is the greatest number since July 2009 when 39,500 remortgaged. Low interest rate has resulted in mortgage affordability improving sharply. Now remortgage payments as a percentage of income are at 16.79%, a record low, down from 18.4% the previous month. Andy Knee, chief executive of LMS, pointed out that March saw the market overwhelmed by second home owners and buy to let investors looking to push through transactions before changes to stamp duty came in, but as April arrived, existing home owners were able to remortgage and capitalise on the great rates currently available. ‘The average amount people are withdrawing through remortgaging fell to a 13 month low, suggesting household budgets are not as constrained as previously. Home owners can also celebrate that as a result of such low mortgage rates and rising incomes repayments as a percentage of income have fallen to a record low, boosting family finances,’ he said. But he also pointed out that the forthcoming referendum on the UK’s place in the European Union will continue to dominate headlines until the vote on 23 June which could have an impact on the mortgage rates that banks offer as well as household finances if the result is to leave. The data also shows that mortgage interest rates fell to 2.49% in March, down from 2.51% in February and the sum of annual remortgage repayments fell from £8,593 in February to £8,344 in March as a result of lower interest rates, while average household income rose by 7% from £46,605 to £50,000 in the same period. This meant that annual remortgage repayments as a percentage of income fell from 18.4% to 16.7% month on month, a record low. Average mortgage payments as a percentage of income also fell, from 21.2% to 19.7% between February and March, but this remains 3% more than remortgage costs. Continue reading
New research reveals lack of affordable homes in London
With the average price for a property in London now exceeding £500,000 new research shows that just 46% of home listed matches this price or less. The analysis from fixed fee estate agent eMoov examined current stock levels across all of the major portals, recording the total levels listed for each London borough, before comparing this to the level of stock listed for £550,000 or less. The research then took the total stock under £550,000 and recorded it as a percentage of the total level of stock across the capital. The worst location for affordability was Kensington and Chelsea with just 6% of properties for sale at £550,000 or less, followed by Westminster at 7%, Hammersmith and Fulham at 14%, Camden also at 14%, Wandsworth at 22% and Islington at 25%. A further 13 of London’s boroughs had just 50% or less of its stock listed for the average price of £550,000 or under. The boroughs that did offer more for those with a budget of half a million were Hounslow at 57%, Bromley at 61%, Waltham Forest at 64%, Enfield at 65%, Hillingdon at 65%, Lewisham at 66%, Redbridge at 72%, Greenwich at 72%, Newham at 78%, Croydon and Sutton both at 79%, Havering at 84%, Bexley at 91% and Barking and Dagenham at 97%. ‘It’s no surprise to anyone that the majority of London is unobtainable to many from a property point of view. However, this research highlights just how out of reach the capital actually is for UK home buyers, even for those with the sizable budget of £550,000,’ said eMoov chief executive officer Russell Quirk. ‘For many the average house price is a benchmark, a mile stone, on just what they need to have in the bank to live in a certain area. But this average price masks the true cost of living in the capital or even where in the capital you can live for that matter,’ he pointed out. ‘When you consider that even with that sort of healthy budget, you would have to restrict your property search by removing more than half of the properties currently for sale in the capital, it really highlights how little £550,000 can get you in the London market,’ he added. Continue reading
