Newsletter – Page 78

Updates to Conforming loan limits mean 2 million U.S. homes no longer require a jumbo loan

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This could open up more home options for buyers shopping at higher price points and hoping to avoid the additional fees of a jumbo loan More than 2 million homes across the country no longer require a jumbo loan, according to a new analysis by Zillow Home Loans. This means customers will have additional available inventory that is covered by a more accessible financing option. The change is due to the Federal Housing Finance Agency’s (FHFA) recent increase of conforming loan limits to $1,089,300 in some high-cost markets. The news may be welcome for buyers looking to purchase a home this coming shopping season, as jumbo loans often come with additional fees and more stringent qualification standards, making them less affordable for most buyers. The FHFA increased the limits on the home price that qualifies for a conforming loan, which is the largest amount a mortgage company can lend to a borrower and still sell the loans conventionally to Fannie Mae and Freddie Mac. Compared to conforming loans, jumbo loans typically require a higher credit score — 700 is the minimum score that many lenders accept for a jumbo loan, versus the score of 620 that many require for a conforming loan. Bigger down payments are also the norm with a jumbo loan: Jumbo loans often require 20% down, although some call for even higher down payments. Some jumbo loans also will require proof of larger cash reserves than conventional loans (up to 12 months worth). For the majority of the country, the conforming loan requirement increased by $79,000 — going from $647,200 in 2022 to a baseline of $726,200 in 2023. In the most expensive parts of the country (103 counties), the conforming loan limit was raised to $1,089,300, topping the $1 million mark for the first time. These counties are largely concentrated in the nation’s most expensive metro areas, along the coasts and in the Mountain West. These updates to loan limits come within a changing housing market. While home price appreciation has slowed, home prices are still significantly higher than a year ago. Affordability challenges weighed heavily on home sales in the second half of 2022 — the number of listings that went pending in November fell by 16.5% from October and are down 38% compared to last November. “The addition of 2 million homes that now qualify for conforming loan options across the county is welcome news for home buyers entering a shopping season with fewer homes on the market,” said Nicole Bachaud, Zillow Home Loans senior economist. “Home price appreciation has slowed significantly, and this means that homes nearing jumbo loan territory will stay eligible for conforming loans longer than we have seen in the last few years.” A recent survey from Zillow Home Loans shows that prospective buyers spend nearly as much time researching their next TV purchase as they do their mortgage lender. Home buyers looking to purchase in the next year can take steps now to research and prepare for their mortgage as they get started on their home-financing journey, including: “Buyers should educate themselves about loan limits in their area and speak with qualified loan officers so they are making informed choices about their home purchase and the best loan option for their personal financial situation,” said Bachaud. Source: Zillow

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The supply of homes for sale posted a record year-over-year increase this week as homes linger on the market. But some buyers are making their way back, with Redfin’s Homebuyer Demand Index showing an uptick in early-stage demand. The total number of homes for sale rose 18% from a year earlier during the four weeks ending December 25, the biggest increase since at least 2015, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Inventory is up even though new listings are down by double digits because homes are taking a long time to sell amid 6%-plus mortgage rates (the average 30-year rate ticked up to 6.42% this week), economic uncertainty and the typically slow holiday season. The typical home was on the market for 40 days before going under contract, more than double the record low of 18 days set in May and the slowest pace since January 2021. Just over one-quarter (28%) of homes went under contract within two weeks, the lowest share since January 2020. Some buyers are dipping their toes back in the market, as they’re able to take their time searching. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other Redfin buying services–is up 14% from its October low. Still, Redfin doesn’t expect sales to tick up until well into January. “This week’s mortgage-rate pop can be chocked up to a handful of factors, but the week between Christmas and New Years is typically the slowest of the year for pending sales,” said Redfin Deputy Chief Economist Taylor Marr. “We’ll know more about the direction of rates and whether the recent uptick in early-stage demand will translate into sales when we’re settled into the new year.” Home prices fell from a year earlier in 17 of the 50 most populous U.S. metros Home-sale prices fell year over year in 17 of the 50 most populous U.S. metros during the four weeks ending December 25. Prices fell 9% year over year in San Francisco, 6.5% in San Jose, 6% in Los Angeles, 4.5% in Detroit, 4.4% in Pittsburgh, 3.7% in Sacramento, 3.6% in Oakland, CA and 2.3% in Austin. They fell 2% or less in New York, Seattle, Anaheim, CA, Phoenix, Chicago, Newark, NJ, Riverside, CA, Boston and Washington, D.C. This marks the first time Boston prices have fallen since at least 2015, as far back as this data goes. It’s the first time Washington, D.C. prices have fallen since 2016. Leading indicators of homebuying activity: Key housing market takeaways for 400+ U.S. metro areas: Unless otherwise noted, this data covers the four-week period ending December 25. Redfin’s weekly housing market data goes back through 2015. To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-homes-linger-on-market

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As homeowner needs evolve, flexible floor plans provide a customizable solution without requiring renovations Clayton, a national builder of attainable housing, continues to evolve home design features as homeowner needs change. As demand for more flex spaces increases post-pandemic, Clayton is focused on providing built-in spaces within its homes that can be customized to meet the evolving needs of the household. Experience the full interactive Multichannel News Release here: https://www.multivu.com/players/English/9030355-home-buyers-seek-out-flex-spaces-clayton-designers-answer-call/ According to a recent article, home builders and designers are seeing a strong demand for flexible-living spaces, also called bonus rooms or multipurpose rooms. Rooms that serve multiple purposes appeal to buyers that want more space but can’t afford the extra square footage. As people’s lives at home evolve and continue to require flexibility, Clayton’s floor plans are adapting to include more flex spaces. A flex space is a room or area that can meet any person or family’s needs – such as a place to work from home, a dedicated spot to work out or a room to teach or play with your children. Flex spaces can include built-in desks and nooks, along with a variety of other options. Clayton offers dozens of different floor plans that incorporate flex spaces, including the Belmont and Let It Be floor plans, the Epic Collection, and Southern Charm. “The Clayton Design Team consistently looks for ways to improve the quality and style of our homes at every point in the home building journey,” said Clayton’s lead designer Megan Foster. “Our team collaborates with Clayton’s home building facilities across the country and implement top home buyer trends and designs into our newest floor plans to better serve our customers.” Consumer trends: a space to grow and adapt Clayton’s team of professional designers often lean into consumer insights research that explores how people live inside their homes. During the pandemic, the Insights team at Clayton recognized the need for more flexible spaces included in the design of available floor plans that would allow homeowners to have a space that could evolve alongside their lifestyle. For younger buyers, flex spaces offer the opportunity to adapt as their life evolves. For later generations, flex spaces on the main floor, for example, can become primary suites later in life. The Design team at Clayton aims to plan for all stages of life. While Americans have, for the most part, returned to pre-pandemic life, the desire for living spaces that can easily be transformed to suit their needs has remained. According to a recent report, many builders and architects nationally are putting in “reading nooks” and “drop zones” where they can. Three significant trends include the following: Research conducted by the Clayton Insights team echoed those trends. Between the first quarter of 2020 and the third quarter of 2021, the desire for a home that offers the ability to customize their space moved from not ranking at all to becoming one of the top 10 most important physical features of a home. Health and wellness are also top priorities for home buyers, according to research conducted by Clayton Insights. Spaces that can be used for various activities or hobbies, including an in-home gym, are top priority to prospective home buyers. In fact, these dedicated wellness spaces are part of a national trend of including “wellness design” as part of the core design of a home. By using research on demographics, lifestyle trends and working with facilities to leverage production capabilities, Clayton creates quality, on-trend products at an attainable price. View some of our most popular flex space floor plans here. About Clayton Founded in 1956, Clayton is committed to opening doors to a better life and building happyness® through homeownership. As a diverse builder committed to quality and durability, Clayton offers traditional site-built homes and off-site built housing – including modular homes, manufactured homes, CrossMod® homes, tiny homes, college dormitories, military barracks and apartments. In 2021, Clayton built 60,701 homes across the country. Clayton is a Berkshire Hathaway company. For more information, visit claytonhomes.com. CrossMod is a registered trademark of the Manufactured Housing Institute. SOURCE Clayton

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Retiring Baby Boomers and Early Gen Xers Drove American Migration Patterns as Eastern States See Highest Inbound Moves United Van Lines released the company’s 46th Annual National Movers Study, which indicates Americans continued to move to lower-density areas accelerated by lifestyle preferences such as a career change, retirement and wanting to be closer to family. According to the results of the study, which tracks the company’s exclusive data for customers’ state-to-state migration patterns, Vermont saw the highest percentage of inbound migration (77%) for the second consecutive year. However, for the fifth consecutive year, the study found that more residents moved out of New Jersey than any other state, as 67% of New Jersey moves were outbound, which is down from the five-year trend of 70%. The study and its accompanying survey, which examines the motivations and influences for Americans’ interstate moves, also revealed more Baby Boomers and Gen Xers moved than any other age group last year, as those aged 55 and older accounted for more than 55% of all inbound United Van Lines moves in 2022. Additionally, the survey shows the top motivations for inbound moves include a desire to be closer to family (35%, and continues to be a primary driver post-COVID), a new job/company transfer (33%, which continues to decrease as a driver post-COVID) and retirement (20%). Oregon followed Vermont as a top inbound state for 2022 with an inbound percentage of 67%. In the Northeastern region of United States, several states – including Rhode Island (66%), Delaware(61%) and Washington, D.C. (59%) – were popular moving destinations in 2022. Southeastern states continued to see a high percentage of moves, including South Carolina (61%), North Carolina (61%) and Alabama (58%). “Key factors like retirement, wanting to be closer to family and lifestyle changes influenced by the pandemic along with current housing prices drove moving patterns in 2022,” Michael A. Stoll, economist and professor in the Department of Public Policy at the University of California, Los Angeles, said. “The United Van Lines study encompasses data that Americans are now moving from bigger to smaller cities, mostly in the South, some in the West, but even an increase of migration to the Northeast, which has not been typical. We’re also seeing younger Millennials migrating to vibrant, metropolitan economies, like Washington, D.C. and Portland, Oregon.” Additionally, Delaware, North Carolina and New Mexico (58%) joined the list of top 10 inbound states in 2022. Delaware and New Mexico cited retirement as a top motivation for moving to the states. Contrary, Wyoming (57%) and Pennsylvania (57%) joined the list of top 10 outbound states last year. Moving for a new job/company transfer is cited as the top motivation for moving out of those states. “Our United Van Lines study and survey offers year-over-year insights into where and why Americans are moving,” United Van Lines Vice President of Corporate Communications Eily Cummings said. “For the last several years, Idaho was a top destination, as Americans migrated from Northern California, Washington and even Oregon due to a similar lifestyle in the state. With an influx of new residents, housing prices and other living costs start to increase over time, and these popular destinations become hot spots for inflation. As a result, the study underscored that Americans are moving from expensive cities to lower-density, more affordable regions.” Moving InThe top inbound states of 2022 were: Of the top ten inbound states, four — Vermont, Oregon, South Dakota and New Mexico — are among the least densely populated states in America, with less than 100 people per square mile. South Dakota and New Mexico are among the top 10. Moving OutThe top outbound states for 2022 were: Balanced Several states saw nearly the same number of residents moving inbound as outbound. Missouri and Nevada are among these “balanced states.” Since 1977, United Van Lines annually tracks migration patterns on a state-by-state basis. The 2022 study is based on household moves handled by the UniGroup network (parent company of United Van Lines) within the 48 contiguous states and Washington, D.C. and ranks states based off the inbound and outbound percentages of total moves in each state. United classifies states as “high inbound” if 55 percent or more of the moves are going into a state, “high outbound” if 55 percent or more moves were coming out of a state or “balanced” if the difference between inbound and outbound is negligible. To view the entire 2022 study, an interactive map and archived press releases and photos from United, please visit United Van Lines.

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Sales of luxury U.S. homes fell 38.1% year over year during the three months ending Nov. 30, 2022, the biggest decline on record, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That outpaced the record 31.4% decline in sales of non-luxury homes. Redfin’s data goes back to 2012. The luxury market and the overall housing market have lost momentum this year due to many of the same factors: inflation, relatively high interest rates, a sagging stock market and recession fears. But the high-end market has slowed at a sharper clip for a handful of reasons, including: Expensive coastal markets led the decline in high-end home sales. In Nassau County, NY (Long Island), luxury-home sales plummeted 65.6% year over year during the three months ending Nov. 30, the largest decline among the most populous U.S. metropolitan areas. Next came four California metros: San Diego (-60.4%), San Jose (-58.7%), Riverside (-55.6%) and Anaheim (-55.5%). These markets are prohibitively expensive for most buyers even when the economy is thriving, so it’s not surprising more buyers would back off during a downturn. There are early signs that overall homebuyer demand is starting to creep back as interest rates decline, which may ultimately cause the decline in luxury sales to ease. Mortgage applications and Redfin’s Homebuyer Demand Index—a measure of requests for tours and other buying services—have both been on the rise, and Redfin real estate agents say they’re seeing more buyers move off of the sidelines. “There has been a small shift in the market that’s not fully showing up in the data yet. With mortgage rates falling, a lot of house hunters see this as their moment to come back and compete,” said Seattle Redfin agent Shoshana Godwin. “Many of my buyers are taking out jumbo loans—mortgages typically used for purchases of high-end homes. While some data shows jumbo mortgage rates above 6%, some of my buyers are getting rates in the low 5% range.” Luxury-Home Supply Rises Most in Six Years The number of luxury U.S. homes for sale rose 5.2% year over year to roughly 163,000 during the three months ending Nov. 30, the largest increase since 2016. By comparison, the supply of non-luxury homes declined 5.7% to about 552,000. The large decline in luxury home sales is contributing to the rise in supply, but new listings are also a factor. New listings of luxury homes fell just 2.9% year over year during the three months ending Nov. 30, compared with a 19.8% drop in listings of non-luxury homes. Home-Price Growth Slows Across the Board Home-price growth has slowed across the housing market due to ebbing demand. Prices of both luxury and non-luxury homes rose 10% year over year during the three months ending Nov. 30, compared with 17% growth one year earlier. The median sale price was $1.1 million for luxury homes and $325,000 for non-luxury homes. Metro-Level Highlights: Three Months Ending Nov. 30, 2022 To view the full report, including charts and more metro-level data, please visit: https://www.redfin.com/news/luxury-home-sales-november-2022/

Clayton® & Next Step® Unveil White Paper That Shows Off-Site Built Homes Appreciate as Well as Site-Built Homes

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Clayton, a national builder of attainable housing, and Next Step, a national nonprofit housing organization, have released an educational white paper highlighting the wealth-building benefits of off-site built housing: Off-Site Built Homes Proven To Appreciate In Value – Providing Equity Building Opportunities & Reshaping Today’s Housing Market. As home buyers navigate a market with low affordable housing inventory, off-site built housing continues to represent a smart and attainable homeownership solution. Off-site built homes, also known as manufactured, modular or CrossMod® homes, are constructed inside a climate-controlled home building facility and finished on-site, allowing for a quicker, more efficient building process. These homes are uniquely positioned to bridge the affordability gap for entry-level and middle-tier housing and are more affordable for both developers and buyers. When placed on a property with a permanent foundation, these homes have the ability to build wealth over time like site-built homes. The white paper incorporates statistics from a growing body of research showing off-site built homes regularly appreciate similar to site-built homes, including: CrossMod homes, the newest category of off-site built housing, present a new evolution for the off-site built home industry. These homes blend off-site construction and on-site features such as drywall interiors, porches and garages to produce an affordable home that can be financed and appraised alongside site-built homes. “We know many people are getting priced out of today’s housing market. At Clayton, we strive to open doors for more people by bringing homeownership within reach,” said Kevin Clayton, CEO of Clayton. “Owning a home provides individuals and families with more than a place to live – it’s an opportunity to build wealth over the years while earning more value for money spent.” “Homeownership has been an essential part of the blueprint for wealth building in this country for decades, but current home prices aren’t reflective of what most people can afford,” said Stacey Epperson, President and CEO of Next Step. “If we want to address the homeownership gap for individuals and families, particularly for those living in historically underserved communities, we need to embrace the efficiency, quality, and affordability offered by off-site built homes.” This is the second educational paper published in partnership with Next Step and Clayton that highlights off-site built housing as a solution to the affordable housing crisis. You can read the full white paper here: Off-Site Built Homes Proven To Appreciate In Value – Providing Equity Building Opportunities & Reshaping Today’s Housing Market.