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Morgan Stanley Housing Report Sees Restrictive Lending Limiting Owner-Occupied Purchases, Rental Costs Rising As Home “Effective Home Ownership Rate” May Drop Below 60%

8 08 2011

There are about 2.2 million vacant homes available for sale in the U.S.
7.5 million homes are facing foreclosure that would add to the excess housing supply
This will continue to cause home values to drop further
The homeownership rate fell to 65.9 percent as of June 30, the lowest level in 13 years
Home ownership peaked at 69.2 percent in June 2004, the Commerce Department reported July 29
The effective homeownership rate would drop below 60 percent if delinquent buyers who are expected to lose their houses to foreclosure are removed from the total
“Mortgage credit remains tight, making home purchases more difficult, while rental demand is accelerating, causing rents to rise quickly,”
“If nothing is done soon, we will find ourselves in a situation where owner-occupied housing becomes unobtainable due to lack of credit, while rental housing becomes unobtainable due to rising costs.”

For more: http://www.bloomberg.com/news/2011-08-08/bulk-buying-would-ease-u-s-housing-crisis-morgan-stanley-analysts-say.html

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Tags: Home Ownership, Home Value, Housing Market, Mortgage Loans, Renters, Reports
Categories : Delinquencies, Economic Statistics, Home Sales, Home Values, Housing Market, Mortgage Industry, Purchases, Short Sales, Statistics, Underwriting

U.S. Housing Market: Home Price Decline Is Bringing “Price-To-Rent” Ratio Back To Historical Norms Favoring Homebuyers In Long-Term

5 07 2011

http://renovationlendinginstitute.com/

Starting in 2000, rent growth did not keep pace with the steep home price appreciation, pushing the price-to-rent ratio well above the historic average. Many market observers have identified the dislocation between prices and rents as both an indicator of the housing bubble and as a tool for helping to understand the relative affordability of these two housing options.

Home prices have been declining since 2006, forcing the price-to-rent ratio to revert to its long-term average. As of the first quarter of 2011, the price-to-rent ratio is slightly below 1.0, suggesting that on the national level renting is essentially the same as buying economically, although the trend seems to be tilting toward buying going forward.

For more: http://nreionline.com/finance/news/rent_versus_buy_home_0705/

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Tags: Charts, First-Time Homebuyers, Home Prices, Homebuyers, Homes, Price-To-Rent, Renters
Categories : FHA, Financing, Homes, Housing Market, Mortgage Industry, Purchases, Reports

Is It Time To Buy A Home?: “Home Price-To-Rent Ratio” Indicator Shows It Is A Favorable Time To Purchase A Home In Most Areas But Housing Prices Still High Compared To Historical Levels

18 04 2011

http://renovationlendinginstitute.com/

The price-to-rent ratio is the cost of the median home divided by a year’s median rent
When the ratio is under 20, buying may make more sense than renting
The ratio has consistently been higher in some places and lower in others
A ratio that’s still higher than historic norms suggests prices may have further to fall

Metropolitan area	Peak of the bubble (Q1 2006)	Current (Q4 2010)	Long-term average (1989-2003)
U.S.	18.46	11.34	9.56
Atlanta,GA	19.04	14.69	13.42
Austin,TX	20.00	22.44	15.79
Boston,MA	22.98	18.72	15.37
Baltimore,MD	21.05	15.55	11.30
Charlotte,NC	22.67	21.75	16.17
Chicago,IL	23.39	15.23	16.19
Cincinnati,OH	18.00	15.30	14.58
Cleveland,OH	16.19	13.13	13.24
Columbus,OH	20.88	17.17	15.68
Dallas-Fort Worth,TX	16.89	16.46	15.58
Denver,CO	25.34	20.93	16.30
Detroit,MI	18.37	9.94	13.42
East Bay,CA	53.49	30.36	29.08
Fort Lauderdale,FL	28.70	15.43	13.36
Hartford,CT	20.48	18.59	13.51
Honolulu,HI	36.69	33.16	23.02
Houston,TX	15.94	16.83	13.34
Indianapolis,IN	16.73	16.24	13.78
Inland Empire,CA	29.07	13.66	16.60
Jacksonville,CA	21.43	13.88	12.12
Kansas City,MO	17.88	16.48	13.62
Las Vegas,NV	30.62	13.30	14.96
Long Island,NY	24.91	19.75	12.08
Los Angeles,CA	26.41	15.96	12.57
Memphis,TN	19.38	15.64	15.75
Miami,FL	30.11	15.28	12.19
Milwaukee,WI	23.78	20.82	15.03
Minneapolis,MN	21.69	14.05	13.48
Nashville,TN	23.71	22.19	16.99
New Orleans,LA	22.14	16.49	13.16
New York,NY	18.64	14.07	9.42
Norfolk,VA	24.65	21.71	16.52
North -Central New Jersey	30.63	23.11	17.46
Oklahoma City,OK	13.53	14.26	11.33
Orange County,CA	44.00	28.69	20.54
Orlando,FL	24.52	12.02	12.49
Palm Beach County,FL	27.80	13.38	13.06
Philadelphia,PA	17.00	13.38	9.94
Phoenix,AZ	26.36	12.06	12.07
Pittsburgh,PA	11.94	11.64	9.85
Portland,OR	32.07	24.17	17.36
Raleigh,NC	22.17	22.85	16.79
Richmond,VA	22.77	21.29	14.93
Sacramento,CA	30.28	14.99	15.59
Salt Lake City,UT	20.30	19.24	14.53
San Antonio,TX	15.14	16.47	12.63
San Diego,CA	36.66	22.55	18.18
San Francisco,CA	43.15	29.32	24.41
San Jose,CA	46.43	29.95	23.33
Seattle,WA	30.16	22.69	16.84
Bridgeport,CT	24.85	20.57	14.92
St. Louis,MO	17.78	15.92	13.02
Tampa,FL	25.21	13.37	13.31
Washington- Northern Virginia -Maryland	27.41	17.35	13.00

Source: Fiserv, Federal Housing Finance Agency, Property Portfolio Research, Moody’s Analytics

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Tags: Home Prices, Housing Market, Indicators, Prices, Renters
Categories : Federal Government, Financing, First-Time Homebuyer, Foreclosures, Home Sales, Homes, Housing Market, Mortgage Industry, National Public Radio, Purchases

Surveys Show That Both Homeowners And Renters Believe “Owning A Home Is A Smart Decision Over The Long Term”

27 01 2011

Among the findings of NAR’s “American Attitudes About Homeownership” survey:

The vast majority of both home owners and renters say that owning a home is a smart decision over the long term. Even in today’s challenging economy, 95% of owners and 72% of renters believe that over a period of several years, it makes more sense to own a home.

Home owners are much more likely to be satisfied with the quality of their family and community life than renters. While more than half of owners (56%) are “very” or “extremely” satisfied with the overall quality of their family life, only about one-third (36%) of renters report the same levels of satisfaction. Also, 43% of home owners are “very” or “extremely” satisfied with their community life, compared with 30% of renters.

An overwhelming majority of home owners are happy with their decision to own a home. A full 93% of owners surveyed would buy again.

Most renters aspire to home ownership. The majority of renters (63%) say they are at least somewhat likely to purchase a home at some point in the future. Among them, young adults (18- to 24-years-old) have the strongest aspirations for home ownership.

For more: http://www.realtor.org/statsanddata/homeownership/attitudes_homeown