Archive for the 'Housing Market' Category
People Still Want To Own Homes, Even In A Down Economy
December 9th, 2011 categories: Chicago Real Estate News, Economic Recovery, Housing Market, Renting in Chicago
With so many homeowners owing more on their mortgage loans than what their condominiums or single-family homes are worth, and with all the bad press that the housing industry has received since 2008, you’d think that renters would be pretty happy. After all, they aren’t saddled with a home that’s value has plummeted in recent years.
But according to a story by the Wall Street Journal’s MarketWatch Web site, this isn’t the case. In fact, as the story points out, most renters today would rather own a home.
The MarketWatch story reports on a survey by Whirlpool Corporation and Habitat for Humanity, conducted by the National Association of Home Builders, that found that 68 percent of renters would rather own their own homes.
The survey also found that 60 percent of renters were concerned that their rents were too high. A total of 52 percent of renters said that they felt the money they were paying for electricity and gas was too high, too.
The survey shows the enduring strength of housing in the United States. Even during one of the most challenging times for the housing industry, U.S. residents, overwhelmingly, still believe in the American dream of owning their own homes.
There’s a reason for this: A house isn’t just an investment. It’s a place where families share memories, where children grow up. It’s a safe harbor in a sometimes stressful world.
And this is why housing remains so important to so many U.S. residents. It’s also why a down economy and a slumping housing market are not nearly powerful enough to derail the American Dream of homeownership.
It’s also why I advise my buyers to consider all the positives of owning a home. Yes, we want our homes to increase in value, something that, historically, they have, especially in strong markets such as Chicago. But buyers also need to consider the other benefits of owning a home. When they do, the majority of them recognize just how desirable owning their own home is.
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New Data Bring Hope To U.S. Housing Industry
November 22nd, 2011 categories: Chicago Real Estate News, Economic Recovery, Housing Market
Good news hasn’t exactly been plentiful when it comes to the nation’s housing market. But two key pieces of data released earlier this month offer at least the hope that better times are on the way.
According to a USA Today feature story, the percentage of consumers falling behind on their monthly mortgage loan payments fell during the third quarter. And in October, building permits for new single-family homes reached their highest level in 10 months.
According to numbers from the Mortgage Bankers Association, the share of mortgage holders who have missed at least one mortgage payment, but are not yet in the foreclosure process, dropped to 8 percent in the third quarter. In the second quarter of this year that figure stood at 8.4 percent.
At the same time, the share of mortgage holders more than 30 days behind but less than 60 days late on their mortgage loan payments fell to a four-year low of 3.2 percent, down from a figure of 3.5 percent one quarter earlier.
In even more good news for the struggling housing industry, permits for new home construction jumped 5.1 percent for single-family homes and 24 percent for multi-family units in October, according to data from the U.S. Commerce Department.
Of course, these two pieces of good news do not mean that the housing market is on the way back. As long as unemployment remains high across the country, the housing market will remain sluggish. And until we see fewer foreclosures across the country, don’t expect housing prices, in Chicago or across the country, to rise, either.
But the new numbers regarding permits and delinquencies do at least offer some hope. And when it comes to the U.S. housing market, hope has been in short supply these days.
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Zell: High-Quality Real Estate Still A Good Investment
September 22nd, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, Housing Market
It’s easy these days to get down on the U.S. economy. The recovery from the Great Recession hasn’t been strong enough to please anyone. The national unemployment rate is still too high. Housing values are stagnant. Home sales are down.
But, no less a financial guru than Sam Zell says that the U.S. economy is now on the right track. And that certainly qualifies as good news.
The Bloomberg news service covered Zell’s recent speech at a real estate conference in Chicago. According to the story, Zell told audience members that the U.S. economy will continue to improve and that high-quality real estate remains a wise investment.
I couldn’t agree with Zell more, especially when it comes to his thoughts on the value of real estate. I’ve argued during even the worst days of Chicago’s real estate slump that city housing remains a top investment. Yes, the value of Chicago condominiums and single-family homes is down now. But that just makes this an even better time to purchase local real estate.
Housing in Chicago’s top neighborhoods, places like Lincoln Square, Lincoln Park, Lakeview, Bucktown and Ravenswood, remains a solid investment. It’s true that no one can predict how home values will react over the years. But historically, home values have risen over time. The key is for owners to hold onto their homes for a long enough period of time – usually five years or more does the trick.
Buying a house was never meant to be a get-rich-quick investment. Remember, when you buy a condominium or single-family home, you get the benefits of living in that home. You also get tax advantages that you don’t get when you rent. You can’t say that about any other investment you can make.
During the days of the U.S. housing boom, buyers in Chicago were able to purchase condos or single-family homes in hot neighborhoods, fix them up and sell them for sometimes double what they initially paid, all in a few months’ time. That isn’t happening today.
But that doesn’t mean that owning a home is a bad financial investment. Though nothing is guaranteed, those homeowners who are patient will usually find that their homes are good investments.
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Do Record-Low Mortgage Rates Matter Today?
July 7th, 2010 categories: Chicago Info/News, Economic Recovery, Housing Market, Mortgage Info
Let’s talk about the good news first: The average interest rate on a 30-year fixed-rate mortgage fell to 4.58 percent for the week ended July 1. Freddie Mac says that this is the lowest since the mortgage financing company started tracking mortgage interest rates in 1971.
Amy Hoak, a columnist for MarketWatch, lays out the bad news in a recent column: Fewer U.S. consumers seem to care.
Hoak was reporting from the Kitchen & Bath Industry Show in Chicago. This is a fun show, one that showcases the latest trends in kitchen sinks, whirlpool tubs and cabinetry. It’s a place to go to dream of that ideal kitchen or bathroom. It’s hard to imagine, though, that too many of the vendors working the show were having fun this year. As the housing industry has struggled, so have the remodeling and do-it-yourself businesses.
As Hoak writes in her column, consumers aren’t comfortable spending large sums of money today, even if mortgage interest rates are at record lows. They’re worried about losing their jobs. And why not? The national unemployment rate remains stuck near 10 percent. That’s too high to allow people to feel comfortable financially.
At the same time, a large number of homeowners can’t even take advantage of the low rates to refinance their existing mortgage loans. That’s because their home values have dropped since they purchased their condominiums or single-family homes. They may no longer have the 20 percent equity that most traditional lenders require homeowners to have before approving them for a refinance.
Don’t get me wrong: It is good news for home buyers that interest rates are at such low levels. First-time buyers who don’t already own a home are especially fortunate: They can buy more home, even in Chicago neighborhoods such as Lincoln Park, Lincoln Square and Lakeview, while spending less money on a mortgage loan each month.
But until the other fundamentals of the economy improve – lower unemployment, higher housing values – don’t expect a rush of buyers to take advantage of these low interest rates.
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Foreclosures fall in Illinois
June 17th, 2010 categories: Chicago Real Estate News, Economic Recovery, Foreclosures, Housing Market
RealtyTrac.com has been the bearer of bad news lately. The online foreclosure data site has each month during the housing slump, it seems, provided us with the news that housing foreclosures are steadily rising.
This month, though, RealtyTrac actually brought some good news for Chicago: The number of housing foreclosures in Illinois fell in May, according to the company.
Residential foreclosures dropped more than 20 percent in May when compared with April, according to RealtyTrac. This means that slightly more than 15,000 state housing units, or one in every 350, received a foreclosure notice in the month.
A foreclosure notice, by the way, doesn’t have to be an actual foreclosure. It could be a bank notice, scheduled auction or bank repossession.
Granted, this is still far too many foreclosures. But Illinois saw a bigger drop in foreclosures than did the country as a whole. RealtyTrac.com reported that the United States in general saw a 3 percent drop in housing foreclosures in May.
Overall, though, Illinois housing foreclosures were still up 38 percent from where they stood in May of 2009. And across the country, one in every 400 homes – nearly 323,000 households – received foreclosure notices in May. That’s up 0.5 percent from the same month one year earlier.
I’m happy to see the foreclosure numbers go down. Few things hurt the overall economy of an area, whether it’s Chicago or the entire country, like housing foreclosures. Think about it: When a family loses its house that family is obviously devastated, both emotionally and financially. A housing foreclosure stays on the credit reports of former homeowners for seven years, making it extremely difficult for these consumers to borrow money at reasonable rates during this time.
But housing foreclosures also burden banks and lenders. These financial institutions don’t want to take back these homes. That’s not how they make their money. They don’t want to have to sell these homes at lower prices.
Finally, foreclosures hurt neighborhoods, too. It’s difficult for sellers to attract good offers for their residences when there’s a foreclosure two doors down going for $50,000 less.
So let’s hope that RealtyTrac’s latest bit of good news isn’t a blip. Let’s hope it’s a trend, one that will help the housing market and the economy recover at a faster pace.
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