April 30, 2019

Pending home sales were back on track last month, reversing course after last month’s drop. Three of the four major regions saw an uptick in contract signs in March, the National Association of REALTORS® reported Tuesday.

NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.8 percent last month over February, and contract signings reached a reading of 105.8. Still, contract signings are down 1.2 percent year over year, marking the 15th consecutive month of annual decreases.

Pending home sales have been volatile in recent months. However, NAR’s Chief Economist Lawrence Yun predicts the numbers to begin climbing more consistently.

“We are seeing a positive sentiment from consumers about homebuying, as mortgage applications have been steadily increasing and mortgage rates are extremely favorable,” Yun says.

Sales activity in the West has risen at a relatively stable rate for the past five consecutive months. The region saw a “significant spike” in activity in March, Yun notes. “Despite some affordability issues in the West, the numbers indicate that there is a reason for optimism,” he says. “Inventory has increased too. These are great conditions for the region.”

But overall, sales activity continues to “underperform” across the country, says Yun.

“In the year 2000, we had 5 million home sales,” he says. “Today, we are close to that same number, but there are 50 million more people in the country. There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years.”

March 2019 Pending Home Sales - Content reflects article text.

© National Association of REALTORS®

April 30, 2019

Newbie home buyers are more likely to shop around for a better mortgage loan term than repeat buyers, a new study from LendingTree shows. Studies have shown that shopping around for a mortgage can be a smart move, too: Home buyers could see a median lifetime savings of $40,959 in interest on a $300,000 loan by comparison shopping.
LendingTree researchers recently compared first-time buyers with repeat mortgage borrowers to see who is the more savvy shopper.

First-time buyers may be new to the real estate world, but they are entering the loan process prepared, the study confirmed. Fifty-two percent of first-time buyers consider more than one lender when choosing a mortgage, slightly more than 48 percent of repeat borrowers who do the same. Further, 29 percent of first-time buyers apply for a mortgage with more than one lender compared to just 20 percent of repeat buyers.
Researchers also note that first-time buyers may be more likely to shop around because they are concerned about qualifying for a loan. Only 24 percent of home buyers said they were very familiar with the different types of mortgages available, compared with 52 percent of repeat borrowers who said they were. Not surprising, first-time buyers also were less familiar with all aspects of the mortgage process, given it’s the first time they’re going through it.

Source: Lending Tree

April 16, 2019
An “electrical livable yacht” from Arkup

© Craig Denis

An “electrical livable yacht” from Arkup

As sea levels rise, architects are brainstorming ways to make homes more resilient to flooding. A floating unit is being singled out as a living solution for coastal areas.

Oceanix, a nonprofit that designs and builds floating cities, and the MIT Center for Ocean Engineering are showing off a futuristic concept of a floating city. The floating communities can expand, contract, and combine to form cities in prefabricated hexagonal islands of 4.5 acres that are able to house up to 300 people. Combine six of these islands and you could have a small city of 10,000, they estimate.

Modular floating villages could be clustered around a central port that offers shopping, health care, and other businesses. The islands would be designed to be self-sufficient, growing their own food and purifying their own water.

Researchers estimate that 90 percent of the world’s largest cities could be exposed to rising sea waters over the next few decades. Up to 2.4 million homes and more than 100,000 commercial properties are at risk of chronic flooding over the next 30 years, warns a 2018 report from the Union of Concerned Scientists.

Arkup home dining room and deck

© Craig Denis

Arkup home dining room and deck

Architects are responding to the warnings, and are even making disaster-proof homes available now—for a hefty price. The Florida company Arkup recently touted the houseboat of the future—an “electrical livable yacht,” which combines a luxury yacht, waterfront villa, and a floating motor home, all incorporating self-sustainability. It boasts 2,300 square feet of rooftop solar panels to power it at shore. But it’s getting lots of buzz for its apparent ability to withstand a Category 4 hurricane.

Arkup home living room

© Craig Denis

Arkup’s floating home living room.

The Arkup, divided between the main and upper decks, boasts 4,350 square feet of indoor and outdoor living space. It’ll be costly to buy; the purchase price starts at $5.5 million and goes up to $12 million.

Adding Resilience to Homebuilding

Prices remain high for disaster-proof homes, but as disasters mount, will buyers be willing to pay more for resilient architecture?

“Resilient buildings provide value for our stakeholders because they withstand extreme weather and natural disasters more effectively, and they reduce the cost and waste associated with damage and reconstruction,” according to “A Culture of Resilience,” a sustainability report from Prologis, a warehouse firm that has about 3,200 facilities across 19 countries.

Prologis has outfitted its Japanese warehouses with seismic isolation systems that are capable of absorbing earthquake shocks and also have back-up energy and water supplies, Forbes.com reports.

“When hurricanes and earthquakes hit North America and typhoons struck Japan last year, our buildings stood strong while our teams mobilized immediately—keeping our customers in business or putting them back in business quickly,” Prologis CEO Hamid Moghadam told Forbes.com.

More reports are calling for global real estate to do more to protect itself from natural-disaster threats. “Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century,” according to the 2018 U.S. National Climate Assessment report, issued by the U.S. Global Change Research Program, a program mandated by the U.S. Congress comprising 13 federal agencies.


April 17, 2019

This week’s fire at Paris’ Cathedral of Notre Dame is bringing a realization that historic buildings may be prone to such tragedies. The fire spread through the wooden attic, bringing down its 300-foot spire and engulfing two-thirds of the roof, and occurred over just an hour.

Notre Dame's interior from below

lauramusikanski – Morguefile

Building the cathedral attic required the wood of more than 1,300 trees. Attics tend to be dry spaces and, when dust and debris accumulate, they can be even more flammable, fire experts say.

“Once these massive timber structures start to burn, they almost never can be stopped,” Jonathan Barnett, an international fire safety authority at Basic Expert in Australia, told The New York Times. “We focus on their masonry walls and forget all the massive timber within.”

Firefighters were able to save the Norte Dame’s two massive bell towers and at least one of the stained glass windows, but the quickness of the fire is testament that more may need to be done to protect historic buildings, which may be among the most vulnerable to fires. The cause of the Notre Dame fire is still under investigation.

In 1979, the Trinity Congregational Church, a 19th-century church in Gloucester, Mass., caught fire and burned to the ground within minutes. Renovators were using a blowtorch to melt old lead paint in the building, instead of scraping it off, when the fire first broke out. Three years ago, the Serbian Orthodox church in Manhattan was also destroyed by a fire.

“When you combine ancient webs of timber and a large volume of open space, you have the ideal situation for a raging inferno,” Forbes.com reports.

The National Fire Protection Association says that about 31 American congregations burned from 2007 to 2011.

Fire safety experts say historic cathedrals’ wooden roofs are made of flammable materials and can be difficult to reach when fires break out.

“These cathedrals and houses of worship are built to burn,” Vincent Dunn, a fire consultant and former New York City fire chief, told The New York Times. “If they weren’t houses of worship, they’d be condemned.”

But a big question remains: How do you retrofit historic buildings to meet fire safety codes without destroying part of the history? The U.S. Department of Interior’s Advisory Council on Historic Preservation and the General Services Administration published “Fire Safety Retrofitting in Historic Buildings” in 1989.

“Fire safety improvements support historic preservation objectives, as such improvements ultimately will protect the property from extensive damage in a fire incident,” the report states. “In most cases these improvements can be accomplished without significantly altering the historic features of the property.”

Notre Dame Fire Shows Just How Vulnerable to Disaster Historic Churches Are,” Forbes.com (April 16, 2019) and “How the Notre-Dame Cathedral Fire Spread,” The New York Times (April 16, 2019)

March 29, 2019

The U.S. Department of Housing and Urban Development is suing Facebook over allegations that it violated the Fair Housing Act by allegedly restricting certain protected classes from viewing housing-related ads online. HUD alleges in the lawsuit that housing-related ads and services were “severely biased” by limiting views of housing-related ads to tens of thousands of users based on gender, ethnicity, religion, and other factors.

The Facebook.com login screen

Con Karampelas – Unsplash

“Facebook is discriminating against people based upon who they are and where they live,” says HUD Secretary Ben Carson. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”

On March 19, Facebook announced several changes to remove features on its ad targeting features that had been under fire for claims over apparent discrimination. In that announcement, Facebook’s Chief Operating Officer Sheryl Sandberg said, “Advertisers offering housing, employment, and credit opportunities will have a much smaller set of targeting categories to use in their campaigns overall. Multicultural affinity targeting will continue to be unavailable for these ads. Additionally, any detailed targeting options describing or appearing to relate to protected classes will also be unavailable.” (Read more: Facebook DIsables Targeting Options for Housing Ads)

Since its move, Facebook has required advertisers in the areas of housing, employment, and credit to use a separate portal to serve up their ads. The portal does not include gender, age, race, ethnicity, or religion as ad targeting options.

But HUD moved forward in its lawsuit against Facebook this week. In the lawsuit, HUD alleges Facebook allowed advertisers to exclude certain classes from seeing some housing-related Facebook ads, such as by allowing ads to classify groups as parents; non-American born; non-Christian; interested in Hispanic culture; or other protected groups under the Fair Housing Act. HUD also says Facebook permitted advertisers to exclude certain groups of people by drawing a red line around neighborhoods on a map.

Facebook uses prediction analytics that also causes it to exclude protected classes from seeing certain ads, HUD alleges in the lawsuit. Facebook combines data it collects on user attributes and behavior with data about user behavior on other websites to target its ads to certain groups, the lawsuit states.

“Even as we confront new technologies, the fair housing laws enacted over half a century ago remain clear—discrimination in housing-related advertising is against the law,” says HUD General Counsel Paul Compton. “Just because a process to deliver advertising is opaque and complex doesn’t mean that it exempts Facebook and others from our scrutiny and the law of the land. Fashioning appropriate remedies and the rules of the road for today’s technology as it impacts housing are a priority for HUD.” Read more: Housing Discrimination Via Algorithms: An Alarming Trend

Housing Department Charges Facebook With Discrimination,” Forbes.com (March 28, 2019) and “HUD Sues Facebook Over Housing Discrimination,” Mortgage News Daily (March 28, 2019)

March 29, 2019

Thursday is the best day of the week to list a house, according to a new study released by the brokerage Redfin. Homes listed on Thursday statistically fetch more money at sale and spend less time on the market than homes first listed on other days of the week.

Money on top of calendar pages

jppi – Morguefile

Homes listed on Thursday sold, on average, for $3,015 more than homes listed on Monday (the worst day of the week to list, the study showed). Redfin analyzed more than 2 million home sales across 148 metro areas that were listed and sold in 2018 to pinpoint the best day of the week to list.

Homes listed on Thursday sold, on average, 0.74 percent more than homes sold on Monday. A home listed for $500,000, for example, could see a $3,700 increase in its final sales price by listing on Thursday rather than Monday, the study shows.

Also, homes listed on Thursday tended to go under contract six days faster than homes listed on Sunday (the slowest day of the week for listings), the study found. Homes listed on Sunday typically take longest to find a buyer, spending an average of 47 days on the market, compared to properties listed on Thursday, which tend to spend 41 total days on the market.

Homes listed on Thursday may perform slightly better because they allow potential buyers to get a head start on their weekend plans, real estate pros say. Also, “psychologists have found that people tend to remember the last information they saw the best,” says Redfin Chief Economist Daryl Fairweather. “If you list on a Thursday, buyers will be more likely to see your listing as a ‘new home for you’ right before they go out and tour over the weekend.” Listing on Friday may be too late, and listing earlier in the week may have the home pushed aside by newer listings that surface closer to the weekend, the study notes.

Chart displaying sales peak for homes listed on Thursdays.

Thursday Is the Best Day to List Your Home for Sale,” Redfin Blog (March 28, 2019)

Parents are increasingly helping their adult children buy their first home. In fact, a new study suggests that if families were considered a financial institution, the “Bank of Mom and Dad” would be the seventh largest mortgage lender in the country.

Parents and grandparents supported the nationwide purchase of $317 billion worth of property—1.2 million homes—last year, according to a newly released study from the Legal & General Group, a multinational financial services institution.

Many wallets lined up on their edges

Julius Drost – Unsplash

One in five of buyers received gifts or interest-free loans from family members, the study shows. The average amount buyers received from them was $39,000. The Pacific region saw the greatest share of young adults receiving financial help in buying; the Rocky Mountain region saw the lowest.

More than half—51 percent—of prospective home buyers under the age of 35 say they expect to have help from their family or friends when buying a home. And young adults who already have purchased a home say that without the gift from the “Bank of Mom and Dad,” they would have had to delay their home purchase for at least three years.

“For many, perhaps most, young adults, buying a house without help is an increasingly unattainable goal,” says Nigel Wilson, chief executive at Legal & General Group. But Wilson calls it a worrisome trend that so many young adults are relying on help from family and friends to buy a home.

For example, family and friends who provide financial assistance may be putting their own finances in jeopardy to do so. For example, they reported taking out a loan (15 percent), raiding their 401(k) savings (8 percent), downsizing their own home (6 percent), or coming out of retirement (3 percent), the study showed. The study authors warn that too many of the younger generation may be dependent on their parents and grandparents to buy a home, even if it comes at a financial strain to the gift giver.

The Bank of Mom and Dad “reflects, first and foremost, a housing market where significant problems remain in matching the supply and demand of different types of housing, most notably starter homes and affordable housing of all kinds,” Wilson says. “As the population changes and the millennial generation strives to join the homeowning democracy, new thinking is due on meeting the needs and aspirations of Americans.”

Legal & General Group

Nine out of 10 millennial renters say they want to purchase a home, but few are planning to do so in the near term, according to a new survey by rental website Apartment List. The chief reasons keeping them from homeownership are affordability (72 percent) and lack of savings for a down payment (62 percent), the survey of 6,400 young adult renters shows. Nearly 50 percent of respondents say they have zero savings, while only 11 percent have saved $10,000 or more.

Student debt is a main culprit, the survey finds. Twenty-three percent of college graduates without student debt could save enough for a down payment within the next five years compared to 12 percent of college graduates who do have student debt, according to the survey. However, down payment aid from family members is helping to make homeownership more attainable. Such help usually occurs among the highest millennial earners, the survey finds. Millennial renters who expect to receive assistance with a down payment tended to have incomes over $100,000 per year. They expect to receive $51,172 in financial aid from family toward a down payment. That is 10 times more than the average expected assistance of $4,358 from millennials who earn less than $25,000.

Apartment List chart

© Apartment List

Apartment List chart

© Apartment List

“Several long-term macroeconomic trends have made homeownership a difficult goal for millennials to attain,” Apartment List says in the survey results. “Much of the generation came of age during or in the aftermath of the Great Recession, resulting in limited opportunities and stagnant wage growth in the crucial early stages of millennials’ careers.”

Further, researchers found that two-thirds of millennial renters surveyed would need more than two decades to save for a 20 percent down payment based on their current savings rates. However, there are loan options for home buyers who don’t have enough savings for a 20 percent down payment.

January 29, 2019

Many parts of the U.S. have been struck with a snap of subzero temperatures. While keeping themselves warm during the bitter cold, homeowners also need to take precautions to keep their home safe, too.

In Wisconsin’s capital, the Madison Water Utility posted a photo on Twitter to show homeowners how a burst pipe can damage a home. The photo was taken at a vacant home in Madison. “They shut the heat off, so then the water burst up in the top level, maybe a toilet or a bathtub, and it obviously just kept leaking and leaking and leaking,” Matt Grauvogl, Madison’s Water Utility Field supervisor, said about the photo to WKOW.com.

Here are a few tips from the experts to protect a home from the extreme cold:

Open cabinet doors. This may seem unusual, but HouseLogic, a home maintenance and remodeling website operated by the National Association of REALTORS®, suggests opening any cabinet doors covering plumbing in the kitchen and bathroom during cold weather. “This allows the home’s warm air to better circulate, which can help prevent the exposed piping from freezing,” the site notes. “While this won’t help much in pipes hidden in walls, ceilings, or under the home, it can keep water moving and limit the dangerous effects of freezing weather.”

Insulate. Keep drapes and blinds closed except when windows are in direct sunlight. Also, cover window air conditioners and insulate electrical outlets and switches on exterior walls with foam seals, which are available at home centers. Run paddle ceiling fans on low in reverse (clockwise when looking up) to help circulate more warm air, recommends “Today’s Homeowner With Danny Lipford.”

Turn the faucets on inside. Turn the faucets on occasionally to keep water moving through your system and slow down the freezing process. Aim for about five drips per minute, suggests HouseLogic.

Change filters on heaters. A heater needs to be checked annually to help prevent issues later on. But until you can schedule a checkup, change your filters, especially if you haven’t done so in a while. A clogged filter can prevent heat from getting into the home. “It’s no different than our vehicles that require preventative maintenance,” Steve Kistner, general manager at Kalins Indoor Comfort, told KTIV.com. “Our heating and cooling systems need the exact same things so they can work when we all count on them in this extreme cold. Eighty to 90 percent of the calls we go on right now are maintenance-related.”

Check outdoor connections. Make sure any outdoor spigots on all hoses have been disconnected and the spigots have been turned off and drained, advises the Madison Water Utility.

Shut off water immediately if pipes are frozen. If your pipes are already frozen, turn off the water immediately. Close off any external water sources, such as garden hose hookups. “This will prevent more water from filling the system, adding more ice to the pile, and eventually bursting your pipes—the worst-case scenario,” HouseLogic.com notes. “This will also help when the water thaws; the last thing you want after finally fixing your frozen pipes is for water to flood the system—and thus, your home.”

How to Protect Your Home During Extreme Cold Weather,” Today’s Homeowner With Danny Lipford and “5 Tricks to Keep your Pipes From Exploding This Winter,” HouseLogic.com

First-time buyer surveys consistently show the top hurdle to homeownership is saving up for the down payment. But potential home shoppers may be misunderstanding the amount of money they really need to buy a home.

Down payment resources

© pawel.gaul – E+/Getty Images

“Paying 20 percent down is, quite frankly, a myth,” Karen Hoskins, vice president at NeighborWorks, told HouseLogic. “Most buyers pay only 5 percent to 10 percent down—some even pay zero.”

Several assistance programs exist to help buyers with down payment concerns break into homeownership. For example, 69 percent of about 2,500 homebuying programs tracked by Down Payment Resource offer down payment assistance. The average amount of assistance from these programs tops $11,000.

HouseLogic offers several places where buyers can search for down payment assistance, including through national government programs. The Federal Housing Administration offers loans to first-time buyers with down payments as low as 3.5 percent. Programs like the USDA Rural Development Loans and VA Home Loans offer eligible buyers zero down payment loans.

Mortgage financing giants Fannie Mae and Freddie Mac offer eligible buyers loans where they can put down as little as 3 percent of the purchase price. When buyers put down less than 20 percent, they pay private mortgage insurance each month to protect the lender’s interest.

Many state and local homebuying programs offer assistance programs too. There are many different forms of assistance, such as forgivable loans and grants (gifts for some or all of the down payment and closing costs) to soft mortgages (down payment assistance loans that are deferred for some period of time based on the program’s requirements).

To find a program, HouseLogic recommends NeighborWorks, which provides housing counselors to discuss mortgage options for free, and the Down Payment Resource, where buyers can check their eligibility for assistance programs. Mortgage brokers should also be able to supply buyers with information about programs in their area and help determine eligibility.

Read the full scope of your buyers’ options and share the available resources for down payments—or no down payments—on HouseLogic.

Known Ways You Can Buy a House With No Down Payment,” HouseLogic.com (December 2018)