To the highest bidder: Christina and Kevin Dirks have been searching for a house in the Denver area for four months at prices up to $275,000. They made offers on six homes—and were outbid on each one. “When we first started looking, you had to pay $10,000 over” list price to win the bidding, Christina Dirks tells The Wall Street Journal. “Then, as the weeks went by, it went up to $20,000. And now it’s up to $30,000 and $40,000.” Bidding wars, a hallmark of last decade’s housing boom, are making a comeback in a number of metro areas across the U.S. But while the earlier wars reflected enthusiasm fueled by easy-money mortgages, the current froth stems from a market short of homes for sale. Read the full story. Though housing inventory in the Baton Rouge area market had shrunk by 15.8% in May compared to the same month last year, the most recent month for which data is available, a number of residential Realtors here tell Daily Report they have not seen bidding wars here.
It’s a generational thing: The number of renters who are 65 or older will reach 12.2 million by 2030, more than double the level in 2010, according to research by the Urban Institute in Washington. While the millennial generation born after 1980 has driven demand for apartments in recent years, baby boomers—those born from 1946 to 1964—will be the next wave, pushing up rents and spurring construction of more multifamily housing, Bloomberg reports. That’s leading real estate developers to build projects where multiple generations can coexist. Should the supply of rental properties fail to keep up, however, younger people will be competing for housing with the burgeoning population of older Americans. Already, rental vacancy rates are hovering near 21-year lows. That’s pushing the national median rental price for all types of homes to $1,367 a month as of May, up 14% from four years ago, according to data from Seattle-based Zillow, a real-estate website. Read the full story.
Reading the tea leaves: U.S. consumers expect current mortgage rates to rise through the rest of 2015 and into next year. According to Fannie Mae’s National Housing Survey, which queried 1,000 households, 50% of U.S. consumers think mortgage rates are on the way up, and another 37% believe rates will stay above 4%. The survey is meant to measure changing consumer attitudes toward housing and mortgages nationwide. Rising rates are expected to fuel this year’s existing and new home sales, and next year’s sales as well. With conventional 30-year fixed rate mortgage rates currently averaging near 4%, homes are going under contract at their fastest rate in a decade. Since the start of May, domestic mortgage rates have been rising, climbing 25 basis points overall. For the 30-year fixed-rate mortgage, today’s mortgage borrowers can expect a rate near 4.125% for conventional loans; 4% for FHA loans; and 3.875% for VA and USDA loans. APRs vary by product. Themortgagereports.com has the full story.
Editor’s note: Columnist Tom Cook is off this week. His column will return to Daily Report next Tuesday afternoon.
