Thursday, August 29, 2013

The COST of a Home: Last Year, This Year & Next Year

Courtesy of Keeping Current Matters/The KCM Blog
Posted: 26 Aug 2013

Same Price, Lesser CostThe cost of a home is determined mainly by two components: price and mortgage rate. Today, we want to show how the monthly cost of purchasing a median priced home has changed over the last twelve months and how it might change over the next twelve months. For the first two examples, we will be using the National Association of Realtors’ (NAR) Existing Home Sales Report to establish median price and Freddie Mac’s Primary Mortgage Market Survey to establish mortgage rate. We also assumed a 20% down payment in all examples.

 

LAST YEAR

The median priced home in the country was selling for $187,800. The 30-year fixed mortgage rate was at 3.5%. Here is what it would cost to buy a home last year:
Last Year

 

TODAY

The median priced home in the country is selling for $213,500. The 30-year fixed mortgage rate is at 4.5%. Here is what it would cost a purchaser to buy a home today:
This Year
The monthly cost increased by: $190.78!

 

NEXT YEAR

Projecting into the future in real estate can be rather tricky. To establish future pricing, we depended on the over 100 housing experts surveyed for the Home Price Expectation Survey who called for an approximate appreciation rate of 5% over the next twelve months. For the interest rate, we took the average of the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae. Here is what these experts project will be the approximate cost of a home a year from now:
Next Year
The monthly cost will increase by about: $97.32!

 

Bottom Line

From a financial perspective, why wait if you are thinking about buying?

Case-Shiller Report

August 27, 2013
The S&P/Case-Shiller Home Price Indices are calculated monthly using a three-month moving average. Index levels are published with a two-month lag and are released at 9 am EST on the last Tuesday of every month. The S&P/Case-Shiller U.S. National Home Price Index is calculated quarterly and levels are published in February, May, August, and November, also with a two-month lag. Index performance is based on non-seasonally adjusted data.

S&P/Case-Shiller Phoenix Home Price Index

The S&P/Case-Shiller Phoenix Home Price Index measures the average change in value of residential real estate in Phoenix given a constant level of quality. It is included in the S&P/Case-Shiller Home Price Index Series which seeks to measure changes in the total value of all existing single-family housing stock.

The Cromford Report™

Courtesy of Fidelity National Title Agency

          Luxury Market Report
          Click HERE for Luxury Market Report

          Northeast Valley Market Report
          Click HERE for NE Valley Market Report  

Where are home prices headed this fall?

CBS News/MoneyWatch
August 22, 2013


Article by Ilyce Glink about prices nationwide, with some specific information related to Phoenix metro area (see quote below).


To get an idea of what might happen in the fall, we can look to Phoenix as a microcosm of the national market. Phoenix has unique housing market seasons: While most markets see a natural uptick in sales and prices in the spring and summer and a corresponding slowdown in the fall and winter, Phoenix doesn't.

Its "fall" season happens during the summer -- when it's just too hot outside to buy houses -- and the market naturally slows down, said Michael Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University. 

During the summer, prices have been stable.

"Prices remained almost completely flat, while last year they lost a few percentage points," Orr said.

For Orr, the discussion of the housing market "going soft" is all theoretical. It's a discussion of what might happen, and not what is happening.