Scottsdale Real Estate News

The US Commerce Department reported that sales of new single-family homes dropped to a near one-year low last month. The recent setback occurred despite two consecutive months of sales gains. Industry experts say Scottsdale housing remains on firm ground thanks, in part, to a rise in home prices.

A Closer Look at Scottsdale Housing

Scottsdale housing remains stable. even though sales of new single-family homes dropped to a near one-year low last month.

The 11.5% drop in new-home sales was the lowest since November 2014. While the new-home sales news is less than encouraging, it has some housing insiders scratching their heads as other reports show a brighter outlook for the new-home sector of the Scottsdale housing economy. One explanation for the downturn is that new-home sales can fluctuate on a month to month comparison because of small sample extractions.

One housing industry expert labeled the recent new-home sales data “unreliable,” claiming that a number of other indicators pointed to continued steady growth in the sector. Recent existing-home sales data and moderate-to-strong housing starts are among the reasons the Commerce Department report could be an anomaly. In addition, the median price of a new home rose 13.5% in September from last year, reaching a high for 2015 of nearly $297,000.

The increase in home sales prices would indicate either a change in the number of more expensive houses, or that builders are raising prices on their product offerings. Soft demand, therefore, would go hand in hand with slower price gains.

A good Scottsdale housing market continues to support growth in overall consumer spending resulting from higher household income and wealth. The US economy reported growth of 3.9% in the second quarter of 2015. Economists previously predicted new-home sales falling slightly, but only to a level of 550,000 units. The seasonally-adjusted level was actually 468,000 last month. However, sales increased 2% compared with September of 2014.

The new-home supply in the Scottsdale housing market lags behind the most recent housing boom total, with inventory being less than half of what it was at that time. Using the pace of September’s sales data, the new-home supply would take 5.8 months to fully clear, up from a 4.9 months estimate during August.

We'll keep you informed on the Scottsdale housing statistics right here, and also at Twitter and Facebook. Be sure to follow us there as well.

The House of Representatives recently voted to pass a bipartisan bill to provide a "hold harmless" grace period for Scottsdale mortgage lenders for the implementation of the Consumer Financial Protection Bureau's (CFPB's) TILA-RESPA Integrated Disclosure (TRID) Rule. The new rule went into effect October 3rd.

Scottsdale mortgage lenders are receiving a grace period on the disclosure rules that went into effect October 3rd.

"Good Faith" From Scottsdale Mortgage Lenders

Extending the grace period until February 1, 2016, the Homebuyers Assistance Act ensures mortgage lenders protection from compliance enforcement if they exhibit a food faith effort to adhere to the TRID rules and regulations.

Although the Homebuyers Assistance Act passed win the House Financial Services Committee the White House tried to veto it. Issuing a statement, the White House wrote “The Administration strongly opposes (the Act,) as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages…"

House leaders commend the bill as a means of facilitating lenders’ ability to provide financing for prospective home owners. One House member said, “There is no reason that CFPB regulations should prevent homebuyers from being able to buy and close on a home.” Other leaders echoed those sentiments by acknowledging the bill would assist Scottsdale mortgage lenders in avoiding loan closing delays or difficulties — calling them “bureaucratic delays” that should not add to the stress off buying a home.

The move comes as an answer to many mortgage lenders’ requests for additional time to ensure full compliance with the new rules and regulations required by TRID. Allowing a formal hold-harmless period while Scottsdale mortgage lenders can, in good faith comply with the requirements, will result in minimal impact on consumers and their residential home mortgage loan closings.

The sponsor of the bill, Rep. French Hill (R-Arkansas) noted the legislation was brought about to allow for more clarity on the CFPB's TRID rule and that "the stories he and his colleagues have heard regarding efforts to comply, and lingering uncertainty on several aspects of the rule." Extending a grace period will help guarantee access to mortgage credit by enabling Scottsdale mortgage lenders the opportunity to prepare for full compliance without fear of penalty.

In addition to the recent House action, the Federal Housing Administration (FHA) recently joined the CFPB, Fannie Mae and Freddie Mac in establishing a grace period for the enforcement of the TRID Rule. Unlike the open-ended grace period granted by Fannie Mae and Freddie Mac, the FHA’s grace period expires on April 16, 2016. All three agencies specifically warned the grace period should not be utilized as an excuse by Scottsdale mortgage lenders or others to ignore the CFPB’s new regulations.

With the actions of Fannie Mae, Freddie Mac and the FHA, an effort is now in process in Congress to finalize a formal grace period for TRID enforcement by the CFPB.

See more articles pertaining to rules Scottsdale mortgage lenders must adhere to in the Scottsdale Mortgage Info section of our site below Scottsdale Real Estate Categories in the column to your right. Remember, we also post tips daily on Twitter and Facebook, sometimes dealing with mortgage news and factors affecting the mortgage market. Check us out there, too.

Scottsdale housing is obviously affected by interest rates, and recently, the much anticipated rate hike by the Federal Reserve was once again put on hold because Fed Chairwoman Janet Yellen said she thinks the housing market is still not where it needs to be. 

Jeff Taylor of Digital Risk appeared on Fox Business News after Yellen's comments about the housing market being depressed or distressed, countering her assertion that the housing sector is depressed, citing that housing indicators are at all-time highs.

Many in the Scottsdale housing sector have actually been hoping the Fed WOULD raise interest rates. Taylor points out some of the reasons why this thinking actually makes some sense…

Stay abreast on what the Fed does in the future with interest rates by continuing to follow us on Twitter and Facebook. We post daily there. Also stay abreast of the Scottsdale housing market by checking here frequently for more up to date news as it affects Scottsdale housing.

The effects of a down economy over the past few years has taken its toll on first-time Scottsdale homebuyers. Industry experts cite the inability of young Americans to accumulate savings for down payments and an unstable job market as major reasons. The result is they are sitting on the sidelines longer than ever before jumping into the home buying market.

It is taking longer for young Scottsdale homebuyers to be able to purchase their first home

According to the well-known real estate data source, Zillow, first-time buyers now rent for six years before deciding to buy — more than double the time from a generation ago. And, Zillow says, the average age of a first-time buyer is 33, three years older than their parents' generation which was around age 30.

Financial Challenges Facing Scottsdale Homebuyers

Millenials are having trouble saving sufficient cash to make down payments. But that’s not all. According to Census Bureaus reports they're slower in reaching certain traditional benchmarks such as marriage, having children and career decisions. As a result, homeownership has declined to a nearly 50-year low of 63.4%.

By waiting to purchase, many Scottsdale homebuyers are paying higher prices for their first homes when compared to their incomes. At slightly over $140,000, today's first-timers pay more than 2.5 times their annual income. A generation ago, a first home was roughly 1.7 times a borrowers annual income.

Zillow reports that millennials want to buy, but are forced to wait until they have children. And with rental rates continuing to rise, many prospective first-time Scottsdale homebuyers find it difficult — even impossible — to save enough money for a down payment to qualify for most mortgages. Another factor in waiting to buy seems to be their penchant for job security and stability. Not surprisingly, for a generation that first broke into the labor force during a recession, they recognize the importance of finding, keeping and thriving in a job or profession. As such, the timetable for Scottsdale homebuyers depends largely on employment stability.

Housing experts say this trend will likely continue, as millennials' habits remain unchanged as a result of higher rents and the increasing importance of finding and securing their place in the workforce.

See more articles pertaining to Scottsdale homebuyers in the Scottsdale Home Buying Tips section, or the Scottsdale Real Estate News section of our site just below Scottsdale Real Estate Categories in the column to your right.

Remember, we also post tips daily on Twitter and Facebook. Check us out there too.

In a recent speech given in Cleveland, OH Federal Reserve chair Janet Yellen said she anticipates raising interest rates before the end of the year. She went on to say that the frequency of any increases would be gradual and would depend on the continued improvement of the U.S. economy.

“… I want to emphasize that the course of the economy and inflation remains highly uncertain, and unanticipated developments could delay or accelerate this first step. We will be watching carefully to see if there is continued improvement in labor market conditions, and we will need to be reasonably confident that inflation will move back to 2% in the next few years,” Yellen said.

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In summary, Chair Yellen stated there were some determining factors that may possibly hold back future growth. She noted that businesses are retaining large cash amounts on their company balance sheets — an indication of risk aversion — and the housing market seems on the way to gradual improvement. Some market experts predict the Federal Reserve will raise interest rates as early as the end of the summer.

Get more news on interest rates, and news that affects the Scottsdale housing market, by reading the other articles we have in the section on Scottsdale Real Estate News under Scottsdale Real Estate Categories to the right, and by following us on Twitter and finding us on Facebook.