Homeownership Vacancy Decreases in First Quarter 2014

The U.S. Census Bureau released its Residential Vacancies and Homeownership report today, revealing that homeowner vacancy rates have decreased since last year. The vacancy rate is now at 2 percent, about 0.1 percent lower than the first quarter of 2013. CF Funding is happy to see the economy recover as more homebuyers are able to fulfill their dreams of homeownership.

Although rental vacancy increased slightly (about 10 basis points to reach 8.3 percent), the vacancy rates are still relatively low in comparison to the past few years, and are now at levels last seen in 2001. The rental vacancy rate in the third quarter of 2009 reached as high as 11.1 percent. The homeowner vacancy rate in 2008 reached 2.9 percent. As CF Funding has mentioned on the Daily News Feed before, the housing industry is experiencing large improvements that show signs of economic recovery, which has led to rising house prices and interest rates.

In regards to prices, the first quarter of 2014’s median asking price for rent in vacant units was $766, and the median asking sales price for vacant for sale units was $139,200. Rental prices have been steadily rising since 1999 as seen in the chart. Home prices were rising steadily until the recession (2007-2009) where a visible decrease shows home values sinking. As the economy improves, home prices are now rising again, which has put equity back into the homes of many, allowing homeowners to refinance in recent years. Read more about refinance options on the CF Funding website here.

The U.S. Census Bureau also divided vacancy rates by region: Northeast, Midwest, South, and West, as well as Metropolitan Areas, suburbs, and others. The vacancy rate for rentals in cities was at 8.5 percent, versus the suburbs’ 7.7 percent, and other areas (outside Metropolitan Statistical Areas – or MSA’s) at 9.7 percent. The homeowner vacancy rate in cities was 2.3 percent, versus the suburbs’ 1.8 percent, and the rate outside MSA’s of 2.3 percent. Rental vacancy was highest in the South at 10.3 percent. Midwest rental vacancy was 8.5 percent, in comparison to the first quarter of 2014 where the Midwest vacancy was 9.5 percent. Northeast rental vacancy was 7.0 percent, not statistically different from the West at 6.4 percent.

Homeowner vacancy rates in the south were also the highest at 2.2 percent in the first quarter, followed by the Midwest (2.0 percent), Northeast (1.8 percent), and the West (1.7 percent). The age group with highest homeownership vacancy was age 35 or younger at 36.2 percent. The age group with the lowest home vacancies was age 65 plus at 79.9 percent. For more detailed information, visit www.census.gov.

Today, most home payments are similar to the cost of renting. CF Funding has been helping renters achieve their dreams of homeownership for over 10 years. The lender has programs available with as low as 3 percent down (or no money down for veterans!). Renters who are looking to buy and gain valuable equity should contact CF Funding today by calling 888-344-4080 or visiting www.cffunding.com .

NAHB Compares Energy Savings to Age of Homes

In a recent blog post by the National Association of Home Builders, homes which are 4 years old or less were compared with older homes in regards to energy and routine maintenance costs. Of course, it is generally expected that older homes will have more maintenance costs. However, CF Funding was surprised to learn that 73 percent of new homeowners spend only $25 per month or less on routine maintenance. This is compared to the 26 percent of all homeowners who spend over $100 on maintenance costs.

The study compared information from the American Housing Survey (AHS) dating back to 2009. As seen in the chart on the left, the majority of homeowners in new homes pay much less on average for routine maintenance than the average homeowner.

Homeowners who are stuck in a decision between a higher-priced new home (less than 4 years old) and a less expensive older home should consider the facts. Not only do most new homeowners spend less than 25 dollars per month on routine maintenance, but the AHS also reported that new homeowners saw major savings in energy costs. Electricity costs for the average homeowner totaled about 81 cents per square foot per year, while newer homes averaged about 68 cents per square foot. Even lower electricity costs were seen in homes with piped gas, where homeowners spent about 50 cents per square foot per year.

Other utilities were reported similar results: while water bills averaged 28 cents per square foot per year, new homeowners saw average costs of 22 cents. The median trash bill for homeowners was 15 cents per square foot per year, and newer homes had a medium price of 13 cents. Not only do homeowners with properties less than 4 years old save on energy costs, but insurance costs can also be reduced, as the median property insurance for newer homes was 31 cents per square foot as opposed to the national average of 39 cents per square foot. According to the NAHB, “These reduced expenditures represent one of the many reasons that the current system of appraisals needs updating to reflect the flow of benefits that come from features in a new home.” Many of the benefits the NAHB is referring to may be seen in Green homes. As CF Funding reported in February, green homes have significantly contributed to the home construction market over the past few years and green homeowners frequently reported lower utility costs and better insulation. The lender is happy to see reduced energy costs for new homeowners as the quality of green home building continues to improve.

Both new and old homebuyers will need financing to support home purchases in 2014. Those who are home shopping this spring should contact CF Funding Corporation for a free preapproval and competitive interest rates on mortgage loans. CF Funding loan specialists are rated 5 stars on Facebook at www.facebook.com/cffundingcorp and on Yelp at http://www.yelp.com/biz/cf-funding-naperville

Consumer Attitudes are Positive in March 2014 Housing Survey

Last month, CF Funding reported positive results from the February Fannie Mae National Housing Survey, sharing that home price expectations rose 7 points and 68 percent of respondents said it is a good time to buy a home. This month the lender is happy to share more good news, as 69 percent of respondents now believe it is a good time to buy a home, and 68 percent said they would buy if they were going to move (up 2 points from February). The percent of respondents who believe it would be easy to get a home mortgage has increased by 7 points to a score of 52, an all-time survey high that has only been matched in January of this year.

CF Funding is happy to share that the average 12-month home price change expectation decreased from 3.2 percent to 2.7 percent. Those who expected home prices to stay the same increased by 4 points to 42 percent. The lender agrees with Mortgage News Daily’s prediction of a “pickup in home buying and selling activity this spring” due to positive consumer attitudes in the survey. As Jann Swanson reported in today’s article “Fannie Survey Hints at Warmer Spring for Housing,” over 50 percent of respondents expect mortgage rates to increase over the next year, yet most believe it will be easy to get a mortgage.

The survey also revealed an improvement in personal finances, as 40 percent of respondents said their financial situation improved during the past year, and those who expect their finances to worsen in the next 12 months decreased from 15 to 12 percent. Unfortunately, the number of respondents who believe the economy is on the right track decreased slightly from 35 percent in February to 33 percent in March.  The share of respondents who said their household expenses are significantly higher than 12 months ago decreased from 36 to 33 percent, and most respondents (58 percent) said their household expenses are about the same.

CF Funding would like to remind readers that although home prices are expected to rise, rental prices are also expected to rise. In regards to home rental attitudes, the expected 12 month rental price change was 4.2 percent, a slight decrease from last month’s 4.3 percent. The percent of respondents who believe home rental prices will increase over the next year was 52, up slightly from 51 in February. 41 percent believe rental prices will stay the same, and 4 percent believe they will go down.

According to Fannie Mae, the Monthly National Housing Survey polled a nationally representative sample of 1005 respondents between March 1 and March 23 for the results of this survey.

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