Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.
SAN JOSE, SAN FRANCISCO CONTINUE TO HAVE THE NATION’S MOST EQUITY-RICH HOMEOWNERS
As Pacific Union published in its first-quarter 2018 real estate report, single-family home prices in San Francisco and Silicon Valley posted substantial annual home price gains, a respective 25.5 percent and 19.5 percent. And that type of appreciation means that the Bay Area’s largest two cities remain those with the most equity-rich homeowners in the country.
That’s according to ATTOM Data Solutions latest Home Equity & Underwater report, which says that there were more than 13.8 million U.S. properties classified as equity-rich in the first quarter, representing about 25 percent of homes with a mortgage. The company defines equity-rich properties as those with loans comprising 50 percent or less of the property’s estimated value.
As in past quarters, San Jose has the most equity-rich homeowners in America, with 66.1 percent falling into that category. San Francisco is No.2 for the highest number of equity-rich homeowners at 56.0 percent, followed by Los Angeles at 45.4 percent.
Those three cities also have virtually no seriously underwater properties, ranging from .01 percent in San Jose to .03 percent in Los Angeles. Nationwide, 9.5 percent of homes were considered seriously underwater in the first quarter, defined as those where the loan amounts are at least 25 percent higher than the property’s value.
THE AMERICAN DREAM IS ALIVE AND WELL IN SILICON VALLEY
A recent study ranks San Jose among the top 10 places in the country to acheive the American dream, though if that dream includes owning a home, it will be an expensive one to realize
An analysis by SmartAsset seeks to determine the 25 best U.S. cities for living the American dream on a 100-point scale based on diversity, economic mobility, unemployment rates, homeownership rates, and median home value. After placing No. 12 in last year’s version of the study, San Jose has moved into the top 10 in 2018, ranking No. 8 with an overall score of 83.63. San Jose is one of three California cities to make the cut and the state’s highest-ranking representative.
SmartAsset notes that San Jose’s high score stems from its diversity, low unemployment rate, and income growth. But of course, the city doesn’t fare as well in the housing-related categories; San Jose’s median home value of $802,000 is the highest of any of the 25 included on the list.
SAN JOSE POSTS DOUBLE-DIGIT PERCENT ANNUAL RENT PRICE GAINS
Buying a home is not the only rising housing cost in Silicon Valley, with the region posting double-digit percent rent price increases from last spring.
Zumper’s latest monthly rent report puts the average cost for a one-bedroom unit in the San Jose metropolitan area at $2,500 in May, up 10.6 percent year over year to make it the nation’s third most expensive renal market. Two-bedroom rental costs in San Jose also rose, up 5.3 percent since May 2017 to $3,000.
As has been the case for many consecutive months, San Francisco remains America’s priciest city in which to rent an apartment, with one-bedroom prices rising 2.1 percent year over year to $3,440. Oakland, which ranks as the nation’s seventh most expensive rental market, saw similar modest annual price growth, up 1.9 percent to $2,100.
FEDERAL RESERVE HOLDS OFF ON INTEREST-RATE INCREASE
Although the Federal Reserve declined to raise interest rates at its meeting last week, economists expect it to make more hikes this year than previously believed.
As HousingWire.com reports, the Fed said that it would keep interest rates in the current range of 1.5 percent to 1.75 percent. In a statement, the Fed cited the country’s strong job growth and low unemployment rate as reasons supporting its decision to leave rates unchanged.
In an analysis of April’s U.S. job numbers, in which the unemployment rate fell to a near 18-year low of 3.9 percent, Pacific Union Chief Economist Selma Hepp projects that the Fed will raise interest rates four more times in 2018 rather than the previous forecast of three. That, she says, will cause mortgage rates to accelerate quicker than initially believed.
Shared with permission from the Pacific Union Blog