In November 2012, we reported a contrarian view on density and economic growth. In that article, we mentioned that cities with increased activities at their core centers fare well. This week’s news gets even more interesting. How many of us have avoided or wanted to avoid homes near public transportation fearing noise, crowding and a fall in home prices?! According to a recent study by National Association of Realtors and American Public Transportation Authority, home values performed 42% better when located near public transportation facilities. Between 2006 and 2011, residential properties near rapid transit areas in Boston, Chicago, San Francisco, Minneapolis and Phoenix have done considerably better compared to other properties.
Both Freddie Mac and Fannie Mae showed wild swings to their investors on the concern over whether the profits will flow back to them.
Freddie Mac released March 2013 US Economic and Housing Market Outlook. The highlights of the report are key predictions for 2013 that the US economic growth, led by a housing market, will come in around 3.5% in 2013, Housing Starts are predicted to increase to 950,000, and mortgage rates are expected to remain below 4%.
U.S. house prices rose 0.6% on a seasonally adjusted basis from December to January, according to the Federal Housing Finance Agency’s monthly House Price Index. National home prices have not declined on a monthly basis since January 2012.
Economists predict home value appreciation through 2017 will continue with nearly 34.2% rise in the US Zillow Home Price Index, according to the Zillow Home Price Expectations Survey Q1 2013.
Building permits in February 2013 were at a seasonally adjusted annual rate of 946,000, up 4.6% from the January rate and up 33.8% from February 2012.
Housing starts in February 2013 were at a seasonally adjusted annual rate of 917,000, up 0.8% from the January estimate and up 27.7% from February 2012.
According to CoreLogic, there are still nearly 10.4 million mortgages in negative equity. The average amount of equity for all properties with a mortgage is 31%. There are nearly 6.7 million properties either with less than 5% equity or with more than 125% Loan to Value Ratio.
Long term rates dropped: Freddie Mac’s 30-year fixed-rate mortgage averaged 3.54% for the week ending March 21, 2013, and the 15-year fixed-rate mortgage averaged 2.72%.