Columbia SC real estate news trends seem to indicate an increasing number of Americans in search of the proverbial American Dream of home ownership may not be able to experience it. In a nutshell, they either can’t afford the prices of new homes or are unable to save money for a down payment.

Recent statistical models show prospective home buyers at various household income levels are likely to experience sticker shock when shopping for a home this spring. Finding a home in their affordable price range is expected to be a challenging task for many.

Home prices throughout much of the nation have risen by as much as 40% during the past five years. Conversely, incomes have increased roughly half that pace, therefore, creating a chasm between price and affordability. First-time buyers and those in the lower-tiered household income range will face significant competition for the listings they may be able to afford. In addition, higher interest rates may also dampen their ability to afford many homes on the market. If interest rates continue to rise, potential home buyers and borrowers on the qualification borderline may be unable to qualify for mortgage financing.

An even more disheartening twist in the Columbia SC real estate news trends is the feeling among some housing experts that lack of available credit is a bigger problem than what interest rates do or don’t do. In the words of one housing economist, there appears to be two completely separate housing markets today: One for higher-income purchasers that seems to be brisk and successful, and one for affordable housing units that’s stagnant and struggling.

Lack of growth in the category of starter homes is cited as one reason first-time home buyers, such as millennials, have been slower then previous generations to buy their first home. Incomes just haven’t kept pace with home price increases, making it difficult for middle-class income borrowers from attaining home ownership.

As has been mentioned numerous times in Columbia SC real estate news trends, the inventory of available – and affordable – homes is in short supply. Due to this tight supply, those homes that are on the market are likely priced higher than they ordinarily would be, creating a seller’s market – what typically occurs when the supply doesn't equal demand. In this case, even the lesser priced homes may be out of reach for many prospective purchasers.

The Down Payment Dilemma
To make matters worse for some, saving money for a sufficient down payment is also a challenge that’s a direct result of two factors: 1) Not earning enough money to be able to save and, 2) As home prices continue to rise, so do rents for the first-time homeowners waiting for the right time to buy.

A 20% down payment on the median-priced home of $192,500 in the U.S. currently is roughly $38,500 based on a recent Zillow report. Compounding the problem, in parts of the country where incomes are higher and prospective homeowners are able to save money, the real estate prices in those areas are more expensive, too – making it the typical "catch 22" scenario when it comes to affording a home.

Despite mortgage loan programs requiring considerably less than the widely-accepted 20% down payment – some as little as 3.5% – first-time borrowers are finding those loans are available at higher interest rates and they require the addition of private mortgage insurance (PMI.) PMI insurance is a type of mortgage protection insurance insuring the lending institution against the borrower defaulting on the mortgage payments. The premiums on PMI can be rather steep – especially on top of an already-high loan amount and resulting monthly mortgage payment.

To combat against the higher cost of financing more and putting less of a down payment, many first-time home buyers are tapping into other assets to make the American Dream a reality. Columbia SC real estate news trends are seeing some prospective first-timers withdrawing money from their 401(k) accounts, while others are relying on loans or gifts from parents to provide the necessary 20% to avoid PMI – and the monthly escrow of taxes and insurance payments required for loans with higher loan-to-value (LTV) ratios such as these. Typically, lending institutions who finance more than 80% of the appraised value of a home will require the borrowers to pay the monthly pro-rated portion of the real estate property taxes and the homeowners insurance premium into an escrow account. When the taxes and insurance premiums are due and payable, the lending institution then pays those amounts out of the borrower’s escrow funds and the process starts all over again for the next year.

While the short-term solution may be to increase the number of affordable homes on the market, unfortunately that process takes a while. New home construction, while brisk in some markets, still lags behind demand. In addition, home builders are commanding top dollar for new homes, forcing purchasers to sell their existing ones for as much equity as possible.

It’s a cycle worth continuing to follow as part of the Columbia SC real estate news trends – not only here in Columbia SC , but throughout the nation in coming months.

See more articles pertaining to the most current Columbia SC real estate news trends in the section of articles on Columbia SC Real Estate News just below Columbia SC Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.

Making the Columbia SC real estate news outlook is the recent policy from the Trump administration that it had reversed one of the eleventh hour decisions made by the outgoing Secretary of Housing and Urban Development (HUD). The reversal involved the reinstatement of a cut in the Federal Housing Administration (FHA) annual insurance premium. The new administration stated the need to take a closer look at the premium reduction, saying the cut will increase the risk that U.S. taxpayers take on should there be a housing crisis like the one we saw nearly a decade ago. Detractors against the administration’s move say the FHA’s insurance fund is substantial and is positioned to provided mortgage borrowers a benefit by way of the premium reduction.

FHA borrowers usually are those who are the least flush with cash. As a result, the FHA program is tailor-made for homebuyers who are unable to afford more than a modest down payment – requiring the FHA’s mortgage insurance. With a qualifying FHA loan, a borrower can put down as little as 3.5%. Conventional lenders also offer low down payment lending programs requiring private mortgage insurance (PMI) and generally higher FICO credit scores than their FHA counterparts.

The reversal of the premium reduction is expected to impact borrowers who already may be on the borderline of being able to qualify. The higher monthly payments created by not having the insurance premium cut will equate to approximately a .375% rate increase for prospective borrowers seeking FHA loans. That, coupled with the recent rise in interest rates after the presidential election will mean that the cost of buying a house – for many people – will increase slightly during the early spring of 2017.

In the Columbia SC real estate news outlook, while interest rates spiked as a result of the stock market’s rise post-election, they seem to have settled somewhat during the holidays – only to slightly rise again in recent weeks. While economists are split on whether rates will continue to rise throughout 2017 and by how much, most seem to agree that mortgage interest rates will not exceed 4.25% during the year. If that happens, although it will signal rates of slightly more than 1.25% higher than the all-time record lows experienced in much of the previous 12-18 months, the rate will still represent a relatively low interest rate for which to pay to purchase a home.

Of more concern than interest rates is the cost of the price of a newly-constructed home. In December, the Columbia SC real estate news outlook showed that the average price of a new home increased by over 7% compared to the same month last year. The prices reflect – for the most part – increased costs builders face in two key areas: the cost of land and the availability of labor. The cost of labor and the availability of labor are items which are less likely to improve during the new administration, as much of the homebuilder workforce is comprised of immigrants. In a recent survey by the National Association of Home Builders (NAHB) 78% of builders cited labor as their most pressing problem – and 82% felt it would be worse in 2017.

In addition, the other factors affecting the housing market as mentioned in the Columbia SC real estate news outlook recently has been the real estate market’s continued lack of sufficient inventory. The number of homes on the market for sale will likely mean the supply won't meet the demand again this year, making for another seller’s market in many of the more popular real estate markets throughout the U.S.

Lastly, as home values continue to appreciate – possibly not as rapidly as they did during 2016 – that means the number of homes on the market for sale will be priced at a premium. Real estate experts say the average appreciation rate of homes in the nation is expected to be in the 5% range, with some markets being higher and some lower. That’s slightly lower than what occurred in the 2015-2016 real estate markets, when housing values are at rates nearing 6% in some hotbeds, while averaging nearly 5.5% nationwide.

While the jury may still be out on factors such as interest rates, it does appear that the prevalent Columbia SC real estate news outlook for 2017 is that if you’re in the market to purchase a home, it’ll cost you more this year than in the past. However, the market appears to be poised and ready for what will probably be a good year for the real estate industry. The spring selling season will soon be here, giving buyers and sellers a much better idea of what to expect for the remainder of the year.

See more articles pertaining to the most current Columbia SC real estate news outlook in the section of articles on Columbia SC Real Estate News just below Columbia SC Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.  

The latest Columbia SC real estate news recently included the U.S. Department of Housing and Urban Development (HUD) issuance of new regulatory guidelines to the Fair Housing Act. The new guidelines more closely quantify and qualify “those actions or policies by landlords, property managers, real estate agents or lenders that could be classified as discrimination” against people protected under the Fair Housing Act. Under the new regulations, HUD is able to charge those in violation of the act and have the U.S. Department of Justice (DOJ) represent the complaining party. Violations carry with them the possibility of damages paid to the complainant in addition to potential civil penalties and applicable punitive damages as determined by the court.

This past April, HUD added a codicil to the Fair Housing Act regarding the assessment of criminal records in certain real estate transactions. HUD contends that refusing housing to people based on their criminal background or arrest record is discriminatory. Their reasoning? Because a disproportionate number of people with criminal pasts are comprised of racial minorities. In addition, this past September, HUD further opined that language-related housing restrictions or caveats violated the Fair Housing Act. Their reasoning? They contend the language barrier between the national origin of those seeking housing closely corresponds to their limited proficiency in speaking English.

So, what’s behind the new regulatory guidelines and why are they in the latest Columbia SC real estate news? Experts say clarification is an important addition to the Fair Housing Act because such measures help to better define discrimination in housing, and to close potential loopholes to provide equal housing opportunities to all U.S. residents. Furthermore, with home ownership at its lowest rate in over 50 years, more and more people are renting. HUD wants to make sure property managers are well-versed in the guidelines and their ramifications. With more people renting now than owning, HUD is aware that the ongoing relationship between the housing provider – the landlord – and the property manager extends longer than that of a real estate agent or mortgage lender. In comparison, while an agent’s or lender’s involvement with a person protected under Fair Housing ends upon completion of the transaction, the landlord and property manager interaction continues throughout the term of a lease. In addition, according to experts, many housing providers and landlords are not "up to speed" on the Fair Housing Act regulations and are not complying as a result. Enter HUD to start better policing the industry.

HUD’s ruling regarding limited proficiency of the English language was designed to clear up existing grey areas or implied loopholes. The new regulatory additions say the refusal on the part of property managers or landlords to rent to people who can’t speak fluent English is discriminatory, based on their national origin. In addition, the law encompasses all areas of housing – including lenders. What this means is that lenders must be able to translate forms and allow for interpreters to be present during the loan application process and the loan closing. HUD has identified this shortcoming as a hindrance that, until now, has prevented prospective borrowers who don't speak English from getting mortgage financing.

Experts say as trends in housing tend to grow and change, more regulatory guidelines will ultimately be added to eliminate the loopholes and grey areas which still exist – especially regarding the responsibilities and limitations on housing providers. Most property managers expect HUD as well as state legislatures to provide additional guidelines to further clarify what's expected from the rental housing industry. Better regulation within the industry, on both the federal and state level, would allow for educational opportunities for housing providers and landlords, therefore minimizing the number of occurrences of violations of the Fair Housing Act.

Property management insiders say their hope is the states recognize there is an information breakdown, and awareness is needed to educate people working in what is a specialized niche within the real estate market. They cite training for landlords, housing providers and property managers as the most important factor to help them understand the regulations and their obligations under the Fair Housing Act guidelines.

One property manager summed up a critical issue affecting the rental industry and the impact some decisions make with respect to the regulations. Their expectation is that additional regulations will eliminate the subjectivity of opinions in the process of leasing rental units to minorities and others. The property manager went on to say that he usually suggests property managers distance or remove the landlord from the decision-making process when it comes to the rental properties. After all, he contends, that’s what property managers are for. They are the experts. “You take out any sort of human judgment… because even if it’s well-intended, there could be something that would have ramifications… counter to the HUD guidelines,” he said.

HUD normally tailors their new guidelines and clarifications based on previous Fair Housing Act violations of which they are made aware.

The prognosis seems to be clear. Fair Housing Act regulations will likely continue to be part of the latest Columbia SC real estate news. The government, it appears, will add more layers to the Fair Housing Act in an effort to ensure those protected under the Act will not be subject to discrimination. While it’s a noble, admirable end – nobody should be a party to discrimination – the means to that end remain bureaucratic, arbitrary and borderline overkill.

As long as the home ownership rates continue to be as high as they are, more people will be forced to rent – including a large number of people protected under the Fair Housing Act. Those people include substantial numbers of minorities as well as non-English speaking tenants who’ve migrated into the United States.

The latest Columbia SC real estate news is that we can expect Fair Housing Act regulations to get broader to encompass more aspects of rental real estate and housing.

See more articles pertaining to the latest Columbia SC real estate news in the section of articles on Columbia SC Real Estate News just below Columbia SC Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.

The latest Columbia SC real estate news indicates recent employment gains could improve the price recovery of luxury homes on the market. During the first quarter of 2016, unexpected stock market volatility caused a decrease in luxury home values. Prices were able to recover slightly during the second quarter with an increase of nearly 1%, according to a nationally recognized real estate data firm. Luxury homes are typically defined as being in the top 5% of the highest-priced homes sold in each American city. Let’s look at the impact the recent job market improvement may have on luxury home prices.

Help For Luxury Homes? Columbia SC Real Estate News

The U.S. stock market took quite a tumble in June with the Brexit vote and the resulting repercussions throughout world markets. However, it’s rebounded considerably since that time and recent employment numbers are likely to boost the stock market even more. Economists expect the employment growth to aid the recovery in luxury home prices.

With this recent Columbia SC real estate news, analysts say the higher, luxury end of the housing spectrum is more sensitive to changes in the stock market. The reason is that homebuyers with higher net worths and incomes are likely to have more money invested in various equities than middle America. Some economists say the housing market, in general, can adjust and adapt to even large spikes or dips in the stock market. However, they say, there are some markets – especially those in high-value real estate areas – where volatility in the stock market has a very direct correlation to the luxury housing market. In those markets, what happens in the stock market is more closely tied to real estate transactions because homebuyers in that income segment rely heavily on market activity to produce down payments and other liquid investments. Plus, there’s often a resulting sensitivity from foreign buyers who would otherwise invest in high-end real estate. Global volatility and its effects on the U.S. stock market curb – at least temporarily – their interest in purchasing luxury homes in some major cities.

The improvement in the jobs report, some analysts believe, will make it more likely the Federal Reserve will raise interest rates during the year. While not directly tied to mortgage interest rates, a hike in the fed funds rate may signal an end to record-low mortgage rates. Despite the seemingly negative impact such an increase may have on most homebuyers, a mortgage rate increase will probably not affect buyers in the luxury home market. In the words of one real estate professional, “Luxury (home) buyers aren’t motivated by mortgage rates. As evidence, luxury home prices were sluggish in the second quarter even though rates were near rock bottom levels.” Real estate agents and economists alike say what matters the most to buyers in the luxury market is a solid investment opportunity that is likely to pay higher returns in the future – much like their investment philosophy in the stock market. So, if the employment results do spur growth in the economy, there could likely be an improvement in the luxury housing market, regardless of what happens to interest rates.

Regarding the Federal Reserve, some economists maintain there will be no increase in interest rates for the remainder of 2016. In addition, some feel that bond yields – to which mortgage interest rates are more closely tied – may move downward as a result of several other global market factors. One respected economist said, “Rate hike odds by year-end shifted from 32% to 40% after (the recent) jobs number.” That would mean the likelihood of the Fed increasing short-term rates would still lean in favor of that not happening.

Of course, the luxury housing market – like its counterpart at other points in the buying spectrum – still suffers from a lower than normal inventory. However, if higher prices return, investors and homeowners are more likely to put their homes on the market – especially if the stock market continues its return to normal levels – allowing them the opportunity to use those additional earnings to purchase newer or larger homes.

The unknown factor that could affect luxury prices is the upcoming presidential election. With that event occurring in the fall – coinciding with the normal housing market shift that post-spring and summer bring – there could be a leveling off of luxury home prices. Interestingly, however, politics overseas may increase luxury prices in some U.S. markets traditionally popular to foreign investors. Real estate analysts point to Miami Beach, Florida, for example, where luxury home prices rose roughly 22% during the spring quarter.

Economists and political pundits alike continue to debate what effect the U.S. presidential election results will have on the housing market in general. If history is any indication, little impact is expected for several months after the presidential election. Either candidate, including those that may be reelected or replaced in upcoming Congressional races, will individually or collectively need time to assess and change economic policies. While we will all likely keep an eye on Columbia SC real estate news on a regular basis, most analysts say the greatest likelihood for the real estate markets to be affected will lie in the hands of the American public and the perception that a win by either party will make a difference in their financial future. In short, human nature takes over and prospective home purchasers who are optimistic about the country’s economy will likely be bullish on home ownership – if the price is right – while those with a more pessimistic opinion will likely be more cautious until economic conditions improve.

The bottom line is the real Columbia SC real estate news is that it remains to be seen how the recent job gains and the November election will affect the housing market.

See more articles pertaining to real estate news in the section of articles on Columbia SC Real Estate News just below Columbia SC Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

Columbia SC real estate news includes one recurring question:  “Where are all the houses?” It’s a question real estate professionals, economists and prospective homebuyers have been asking for some time now. While home buying demand is high and home prices have been on the rise, the real estate market has still not completely recovered. In addition, home ownership today is a better financial move than paying rent – especially because mortgage interest rates are near all-time lows. Despite these favorable market conditions one thing is missing – home inventory. Let’s take a look at some of the reasons inventory is scarce and why it’s so important and how it affects Columbia SC real estate news.

Columbia SC Real Estate News – What the Future Holds

An economist from real estate data firm, Trulia,  said, “At a time when rising prices should be inducing inventory, exactly the opposite is happening.” He went on to say that the lack of inventory has been the biggest story so far in 2016 and will continue through the end of the year.

According to another real estate data firm, Zillow, inventory in the month of May for low-tier and single family residences fell nearly 9% compared to May 2015. Middle-tier home inventory dropped 9.7% compared to the same period last year. Top-tier home inventory decreased .5%. With over half the year behind us, what does the future hold? Here are a few predictions most all analysts agree on.

Interest rates may reach record lows.

Some U.S. economists predict mortgage interest rates to dip to record lows. This is due in part to the recent Brexit controversy, which pushed the Treasury rates to new lows. Treasury bonds have long been the benchmark for mortgage interest rates. Experts say the low rates may increase home demand, and mortgage lenders are already reporting a spike in refinancing. Naturally, if rates stay low or go lower, refinancing will likely continue.

New home construction is still lagging.

New home starts during May nearly reached 1.14 million, falling short of the 1.5 million expected and required to help supply to match demand. To make matters worse, the majority of the single family homes built recently have been on the higher end of the price spectrum. Lower-priced, starter homes for young families and first-time borrowers continue to be lacking.

Another often-asked question making Columbia SC real estate news these days is “Will Millennials ever begin buying homes?” Experts ask an even more telling question – “Will builders ever start building homes Millennials can afford?” The answer is a resounding “possibly.” In recent months, growth in new home sales prices has cooled slightly to about 4% on the top-tier home market. However, on the lower end it’s risen to 8%. Median home prices have gone up roughly 5.4%. Most economists argue that raising starter home prices would spur additional new construction in that market segment.

Homeowners aren’t selling their homes.

In today’s market, for a variety of reasons people aren’t selling their homes and moving as often as they once did. That means there are fewer homes being put on the market – contributing to the inventory problems. While home prices have risen, signaling a great time for homeowners to sell, they’re finding prices on their next home are higher, too. They simply can’t afford to move out and move up.

Demand remains strong.

Historically, home values appreciate at an average annual rate of 3%-3.5%. Currently, home values are appreciating at a higher rate – 5% or more in some markets. Experts cite low home inventory, low mortgage interest rates and a strengthening job market. In addition, as mentioned earlier, buying a home is a more attractive financial decision than renting. According to Zillow, the current breakeven point for home ownership – the length of time a homeowner would need to live in a home before buying would be monetarily advantageous over renting – is 1.8 years.  In addition, Trulia estimates in order for that situation to change, mortgage interest rates would have to reach 7% or better. In this economy, that's doubtful.

Be prepared to pay more – and faster.

Columbia SC real estate news sources say it’s not unusual for homes to sell well within the typical average of 45 days – sometimes considerably less. According to industry insiders, that’s the shortest length of time homes have been on the market since 2009. On average, it’s a week faster than a year ago. Analysts expect that will continue at least for the near future.

In addition to the short period of time homes are on the market, they’re also commanding prices that are very near the asking prices. National surveys say homebuyers are paying 95.3% of the asking price – again, the highest in a decade or more. Sources say that in some markets the sale-to-list percentage is more than 100%. The reason? In a hot market with high demand and low inventory, people need to move fast to get the house they want. The more quickly they move, the more likely they are to overpay. Speed leaves little time or desire to negotiate price.

There are other factors on the radar.

As a result of the housing conditions and their collective affect on the market, it’s unlikely the Federal Reserve will raise short term interest rates again this year. The probability that mortgage rates will remain low is pretty good. Of course, anything could happened in a volatile world economy, but most economists say any marked ripple affect would be minimal, at best.

Lastly, since this is a presidential election year, there’s always an unknown factor that hovers above real estate activity. Columbia SC real estate news sources say some brokers are experiencing hesitation from clients to list or buy due to the election’s uncertainty. Expert opinions vary as to if and how the real estate market would be affected – regardless of which candidate wins.

See more articles pertaining to real estate news in the section of articles on Columbia SC Real Estate News just below Columbia SC Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.