RE/MAX 440
John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

How Will Interest Rate Increases Affect Your Home Sale?

April 19, 2017 12:24 am

As the Fed began nudging up interest rates in March, I wondered what it might mean for the housing market. So we turned to  K.C. Sanjay, Senior Real Estate Economist at Axiometrics.com, who recently blogged about the subject.

When examining the potential impact on the single family housing market, Sanjay makes the following points:

- About 5.5 million existing homes were sold in 2016, according to the National Association of REALTORS, and the annual pace of new homes sold averaged more than 563,000, according to the U.S. Census. We expect the pace of home sales to pick up moderately this year and next. First-time home buyers remain on the sidelines, and other structural issues surrounding the single-family market prevent robust growth. Existing home sales are expected to average 5.76 million per year over the next five years, the NAR said.

- Housing months of supply remained low in 2016 at 4.5 months. So Axiometerics expects this rate to pick up during the next three years.

- The pace of housing starts during the past few years has been dominated by multifamily. So Axiometrics expects this to change during the next three years, as the pace of single-family permits picks up.

- Mortgage rates are expected to gradually increase over the next three years, yet remain low.

- The increase in rates is a sign of increases in general economic conditions. Though there will be less savings and higher risk to consumers because of rising rates, higher income growth will mitigate some of the hurdle in the short-run.

- Having said that, buyers today may be more sensitive to increased rates than in the past, because of higher requirements to qualify, sluggish income growth and rapid acceleration in prices over the past three years. Low interest rates helped offset these drags.

When examining how Americans are going to pay for their new homes, Sanjay points to the 4.7 percent unemployment rate – which is below the “natural rate” of 5 percent. He added that increasing wage-growth numbers added sufficient evidence of the U.S. economy’s strength to move the rates higher.

Axiometrics forecasts an average jobs gain of over 200,000 per month from 2017-2021.

Published with permission from RISMedia.


Tags:

What to Buy (and Not Buy) in May

April 19, 2017 12:24 am

The month of May brings us Mother’s Day and Memorial Day, both traditionally heavy shopping periods for spring clothing, cosmetics, and a wide variety of spring and summer outdoor goods.

While some retailers will tempt us with early summer sales, spring apparel will see the deepest discounts closer to Memorial Day weekend, according to consumer watchdog dealnews.com. Look for coupons in print and online to get the best prices on your favorite stores and brands.

The best deals anytime in May, says deal-news, will be on certain home goods, with a few surprises thrown in:

Buy a mattress – Memorial Day historically offers a chance to buy mattresses at 40 to 50 percent off regular prices. Check local sales and coupons.

Buy patio furniture – Sales on backyard furnishings, as well as camping gear,  begin in time for Memorial Day and may not be this good again until after July 4.

Check out big-screen TVs – But not too big. While spring is not the best time to buy a TV, you should find really good prices on 42- and 55-inch screen models.

Satisfy your Stars Wars fans – Believe it or not, May 4 is Star Wars Day. (“May the Fourth be with you! Get it?) Look for deals on Stars Wars-related toys, gear, and accessories on Amazon.com, the Disney Store and other retailers.

What about Jewelry? – If you’re looking for some bling for Mom or yourself, shop early. Strangely, jewelry prices tend to go up the closer you get to Mother’s Day. Or wait until just after Mom’s Day, when many retailers are anxious to unload unsold inventory.

Hold off on laptops – The best deals on Apple and PC laptops are found just before graduation in June or in time for back-to-school sales in September.

Stay out of the water – Swimsuits are just hitting the stores in May, and sales are not the norm. Hold off until July 4, if you can. That’s when the sales kick in.

Published with permission from RISMedia.


Tags: