Check out the latest hot topics in the real estate and mortgage industries, from new home prices to this week’s mortgage rates.
Higher Lot Prices = Higher New Home Prices
Newly constructed homes could be pricier in the coming months as a shortage of suitable lots drive up builders’ costs. According to recent information from John Burns Real Estate Consulting, in 27 leading markets, the average price of a finished lot ready for building was up 40 percent in the second quarter from a year ago. There have been even more significant increases in other markets that have seen strong gains in home values and higher levels of demand. In San Francisco, finished lot values were up a whopping 87 percent from a year ago. Atlanta and Las Vegas also saw the numbers go up, 75 and 70 percent, respectively.
The big jumps are “making up for lost ground” during the housing downturn when lot prices plummeted, says David Crowe, chief economist for the National Association of Home Builders. Higher lot prices may indicate higher home prices in the coming months due to these market changes, but homeowners looking for a bargain shouldn’t worry. Prices aren’t expected to get anywhere near the market’s last peak anytime soon and there are still quite a few places out there where you can find a newly built home for a reasonable price. On top of that, mortgage rates are remaining fairly low which could make now the perfect time to begin the home financing process and lock in a good mortgage rate.
Mortgage Rates Forecast
Currently Trending: Neutral
Speaking of mortgage rates, mortgage backed securities (MBS) were under pressure all last week, causing mortgage rates to rise. Thanks to the reduced “fear factor” in the bond market and stronger than expected employment data, rates hit their highest level in three years last week. However, once the much anticipated Non-Farm Payroll (NFP) data hit on Friday, MBS reversed course from the week-long sell off and regained some of their losses. This helped mortgage rates improve.
Now it seems that rates have neutralized, neither trending higher or lower. This week should give us a break from the extreme volatility of last week. The bottom line: If you’re thinking of locking in a mortgage rate, now’s the time to do it while they aren’t trending higher. As we saw last week, day-to-day rate changes can be dramatic. If you can qualify for a low mortgage rate today, why wait?
Looking for affordable home financing in Texas? Contact Kelly Decker and his team of highly trained mortgage professionals for your free Texas mortgage rate quote: (972) 591-3097