Housing Inventory Heats Up
A slight drop in mortgage rates in June might have been the jolt the housing market needed to make up for lost time earlier this spring. Monthly data at Realtor.com found that the number of homes for sale rose for the eighth consecutive month, and supply is up 36.7% year-over-year. This means that inventory is higher now than it was during the summers of 2021-2023, and if it continues to grow, it could surpass summer 2020 levels soon.
Some particularly positive news: The supply of relatively affordable homes — those in the $200,000 to $350,000 range — saw the highest rate of annual growth at 50%.
Florida led the way earlier this year in inventory growth, with Tampa supply surging 92.7% and Orlando up by 81.8%. Austin, San Antonio and Memphis are back to pre-pandemic inventory levels, while Nashville is just 1% below the levels seen five years ago. Las Vegas was the only major metro seeing a 29.5% decrease in homes for sale.
Regionally, the South and West are experiencing the highest growth, with inventory rising 48.7% and 36.5% respectively year-over-year. The Midwest (up 21%) is next, followed by the Northeast (11.8%).
Should Investment Properties Replace College Dorms?
Back-to-school is around the corner. Even though parents begin saving for their children’s education decades in advance, their bank balances may not keep up with rising costs. In addition to tuition, books and living expenses, students who leave home for school will be paying for room and board.
Since college dorms add thousands to tuition bills, some parents buy a second property as an alternative. While this can be a smart decision, you’ll want to consider issues and do your homework about a property investment for your college student. Here’s why:
- Some schools require students to live on campus during their freshman year or longer.
- Not all students want the responsibility of living in a place their parents bought. Some may find this overwhelming.
- Buying a larger property and charging other students rent can be time-consuming and potentially risky.
- Is there a possibility that the child will transfer to another college? What would happen to the rental property if this happened?
- Once the college student graduates, the homeowner parents will need to decide whether to keep the property, sell or rent it
More Buyers Choosing Fixer-Uppers
While most buyers prefer modernized, move-in-ready homes, some bargain hunters are still willing to buy a fixer-upper. Would-be buyers need to keep renovation costs in mind, as well as the home’s current functionality. Will they be able to move in after closing, or will they have to wait until essential plumbing or electrical repairs are completed?
If you’re involved in purchasing an unmodernized home, here are areas that need a closer look:
Roofs: Repairs can incur a significant cost, and earlier leaks may have caused more damage than you’ll see during a walk-through.
Plumbing: Any pipes installed before 1980 will need special attention, as older materials are more likely to leak.
Electricity: Find out when the home’s wiring was last updated. Older homes often lack safety features like ground fault circuit interrupters (GFCIs). The electrical panel, aka breaker box, can also provide clues about the home’s safety.
Walls: If you spot cracks in walls, uneven floors and sticking doors, there could be expensive foundation repairs in the buyer’s future.
Land: In addition to FEMA flood ratings, look for evidence of flooded basements or erosion. Some types of soil are less stable than others, which means that one heavy rain can cause an expensive, unwanted surprise.
Remember, working with a knowledgeable mortgage professional can guide you through the process and answer any specific questions you may have. Core Bank’s team of lenders are committed to helping you achieve your dreams, whether you’re ready to buy, build or refinance your home. Contact someone from our team and apply today!
The post Summer Mortgage Update appeared first on Core Bank.
