1. Alejandro Lazo reported (yesterday, actually) that US housing starts edged up in August, yet “fell short of expectations.”
2. Andrew Khouri writes today that “sales of previously owned homes rose in August, reaching the highest level in more than six years.” He adds, “the median sale price for resale homes rose 14.7% from last year.”
3. Khouri also reports that “the financial advantage Southern California home buyers hold over renters has rapidly shrunk in recent months as home prices and mortgage rates have risen.” This according to a new report by the real estate website Trulia.
4. Finally, E. Scott Reckard tells us that 30-year mortgage rates have just dropped to 4.5%, due in no small part to the Fed’s decision to continue their stimulus program. That means that “for now, the central bank will continue buying $85 billion a month in Treasury and mortgage-backed securities, pumping money into the economy and pushing down interest rates.”
It’s a mixed bag of news and can be taken as either great, good, or not-so-good, depending of course on where you’re sitting. Sellers sure are happy, with both prices and sales volume on the rise. On the other hand, the data about the cost of ownership vs. the cost of renting is a bit of a concern for some, understandably so. Now consider the following: for the vast majority of our clients, the intangibles of home ownership cannot be weighed in financial terms alone. Owning might not be for everyone. However our personal experience — reinforced by a number of surveys out there — tells us that the dream of homeownership is alive and well.
So what about buyers, how does todays news play for them? The drop in interest rates is a big positive; you’ll pay less for every dollar you borrow toward the purchase of your home. The flipside is the slowdown in housing starts, a negative given that there’s so little inventory out there and not nearly enough choice. That’s why Tracy Do Real Estate is so excited to present NELA Union, a community of 52 modern, energy-efficient homes that are currently being built in Glassell Park (architects rendering below). Anyone looking for a home to buy now has this cool new option to consider, where 2, 3 and 4 bedroom layouts range from 1,100 to nearly 2,000 square feet. There’s a community garden, a dog run, and available FHA financing. You can learn more and sign-up on our interest list at nelaunion.com.
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