Real Estate Information Archive

We’re becoming a nation of renters, so we’ve been told since the housing bubble burst in 2008.

We never bought the narrative. Surveys, most notably those produced by Fannie Mae, continually show that the vast majority of people prefer to own than rent. We’re not surprised. If given the choice between owning or renting a home, most people will choose owning. That’s human nature.

The good news is that more people are moving into a key home-buying age demography – those age 30 to 39.  Data aggregated by CalculatedRiskBlog show that people embrace and pursue home buying with more conviction when they hit their 30s. This age demography is expected to grow significantly over the next decade.

Given current trends, the long-term outlook on housing remains positive, particularly for new-home construction. This market niche has yet to return to historical norms. Starts have historically averaged 1.5 million per year. Today, that number is around one million. Rising demand driven by millennials hitting their 30s will help lift annual starts back to historical norms. This is a key reason we expect starts – single-family starts, in particular – to grow in coming years.

 Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Back on Pace Again

After a respite in January, payrolls returned to form in February: Job growth was again in excess of 200,000 for the month. Specifically, payrolls rose by 242,000, which held the unemployment rate at 4.9%. What’s more, another 30,000 was added to the payroll tally for the prior two months.

Markets have certainly turned more optimistic in recent weeks. Stocks are again on the rise; commodity prices continue to trend higher.  Oil, in particular, is up $9 a barrel over the past three weeks. This isn’t great news for us at the pump, but it is good news for the U.S. oil-and-gas sector, which has struggled with $30-a-barrel oil. (The sector swims in debt, estimated at $2 trillion, that needs to be serviced.) Nevertheless, gasoline remains below $2 a gallon in many parts of the country. Higher energy prices are unlikely to send the economy into a tailspin.

More good news is found in the U.S. dollar, which has loosened its grip on the world economy. The dollar has depreciated against many currencies. This makes it less expensive for foreign countries to import commodities, because most international transactions are settled in dollars. A falling dollar is also indicative of a rising risk appetite. The dollar and dollar-denominated investments – e.g., U.S. Treasury securities – are viewed as havens. Fewer investors are seeking havens these days.

Things are looking pretty good. When things are looking pretty good, lending rates tend to rise. The yield on the 10-year U.S. Treasury note hovers around 1.9% – 20 basis points higher than where it was two weeks ago. As the 10-year note goes, so, too, go mortgage rates. Not surprisingly, mortgage rates have been on the rise. The 30-year fixed-rate mortgage, though still priced well below 4% for best execution, is at a one-month high.

Odds are rising that another interest-rate increase could come sooner than later. Last week, traders in federal funds rate futures contracts were placing a 30% chance of another rate increase by June. The odds of a June rate hike have increased to 35%.

Of course, just because the Federal Reserve raises the federal funds rate doesn’t mean all rates will rise. Market interest rates have remained staid since the Fed implemented its first rate increase this past December.  That said, additional rate increases would be a sign that Fed officials are convinced the economy is on strong footing and that consumer-price inflation has taken hold. This paradigm points to rising market rates, and market rates that are unlikely to backtrack.

Yes, we’ve been down this road before: What goes up can, and has, come down.  But if we’ve got a Fed committed to raising interest rates, there’s less of a chance rates will come down.  We’ve got good lending rates today; odds are falling that they’ll be better tomorrow.

 Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

A month ago, the augments against another round of Federal Reserve rate increases were formidable: Slow economic growth in China, negative interest rates in Europe, a soaring U.S. dollar, weak commodity prices, and falling global stock prices.

Odds of another federal funds rate increase were low. Indeed, traders were giving no more than single-digits odds for another rate increase before June.

After a couple weeks of strong performance in the global financial markets, the odds for a June increase are on the rise. Today, traders are betting for a 30% chance of another rate increase by June. Those arguments that seemed so impenetrable a month ago seem less impenetrable today. This means the Fed will be less hesitant to raise the fed funds rate.

Of course, the Fed can raise the fed funds rates and mortgage rates could fall, which we saw after the Fed raised the fed funds rate in December. But when the Fed raises rates again, it will likely be backed by firmer financial-asset prices and stronger economic growth. Inflation will also likely be more prevalent. The market will be less inclined to move against the Fed.

To be sure, a couple weeks of solid financial-market performance and firming asset prices doesn't make a trend. It's worth highlighting, though, that if current advances hold, then there's a good chance we could see 4% on the 30-year loan sooner than later.  Yes, everything occurring today could be gone tomorrow, but it can be risky to bet that way.

 Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Trends Are Beginning to Reverse

For most markets, the trend has been down in 2016: stocks, mostly down; commodity prices, mostly down; interest rates, mostly down; home sales, mostly down. Home prices have been the noticeable exception. They've trended mostly up, and continue to do so. The latest price data from CoreLogic show prices up 6.9% nationally.

That said, things have been changing up a bit in recent days. Stock prices have moved higher, as have commodity prices. Oil prices, in particular, have rallied strongly. You may have noticed gasoline prices at the pump are higher today than they were a couple weeks ago.

Interest rates have certainly picked up pace. Within the past week, the 10-year U.S. Treasury note has seen its yield rise 15 basis points.  As the 10-year note goes, so, too, goes mortgage rates. Rates have risen to where they were a month ago. Rates are still low compared to the start of 2016 – the 30-year loan is still priced well-below 4% for best execution – but they have moved noticeably higher over the past week.

Higher rates will take some steam out of the refinance market. Last week, refinances were already down 7%, according to Mortgage Bankers Association data. We're sure we'll see another drop when the MBA reports for this week. That's no surprise; refinances are much more interest-rate sensitive than purchases.

As for purchases, we still see steady volume. The MBA reports applications were off 1%  last week.  But year over year, applications are up 27%. Mortgage activity suggests we should see robust housing activity this spring, though the start might be a little sluggish. The pending home sales index was actually down 2.5% for January.

Since the beginning of the year, we've been saying that low interest rates would hold through the first quarter of 2016. We still have a month to go, but we still think rates will remain accommodating. There is a caveat to our outlook: keep an eye on oil and stock prices. If they continue to trend higher, there is a good chance mortgage rates could hitch along for the ride.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

If we would have asked this question a couple months ago, “yes” would have been the obvious answer.  It seemed a fait accompli – a done deal. Traders were certainly betting that way. After the Federal Reserve raised rates in December, federal funds rate futures contracts were priced for another rate increase by March, and then for a couple more thereafter.

Today, it looks less like a done deal. Traders are giving low odds for another rate increase this year. In fact, they're giving only a 34% chance of another increase for December. For a rate increase before then, they're giving even lower odds. This tells us that most market participants don't believe that the Federal Reserve will follow through on its plan to implement more rate increases.

Of course, that can change in a heartbeat.  If commodity prices (again lead by oil) and global stock prices continue to rise, you can be sure the Fed will be emboldened to move forward on interest rates. Therefore, we once again have to counsel, don't take today's low lending rates for granted.

 Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

An Important Economic Driver Is Sputtering

Residential investment is a meaningful contributor to gross domestic product (GDP). The National Association of Home Builders estimates residential investment contributes 5% annually to GDP. That's roughly $85 billion.

Unfortunately, housing's contribution to GDP has waned in recent months, at least when focusing on investments in starts. January's data show that starts posted at 1.099 million on an annualized rate. This is a 3.8% reduction from December's tally, and a disappointment compared to the 1.185 million most economists were expecting.

The start rate has been declining for the past three months. It's unlikely we'll see much of pick-up in the near future. Permits for single-family homes increased an anemic 1.6%. Multi-family permits rose 2.1%. (Of course, multi-family includes a lot of apartment rental construction, which doesn't do much for sales and mortgage lending activity.)

Builder optimism, not surprisingly, correlates with starts. The NAHB home builder sentiment index dropped three points to 58 this month. This is the lowest reading since May 2015. The good news is that optimism continues to outrun pessimism. (A reading below 50 would mean pessimism is the predominate sentiment.) Demand really isn't the issue; creating supply is. Builders cite a dearth of qualified labor and available lots for the slowdown.

Last week, we mentioned that we expected to see a pick up in lending activity when the Mortgage Bankers Association reported numbers for that week. On that front, refinances continue to roll in.  They were up 16% week over week. Unfortunately, purchase activity disappointed. Purchase applications were down 4%.

We weren't terribly surprised to see a drop in purchase activity. Though mortgage rates were near a one-year low, other variables weighed on the market. Global financial markets remain in distress, as they have been for most of this year.  Our own stock market has had a rough February. We can't overlook commodities; oil hit a 14-year low last week.

The good news is that the mood in the financial markets has improved over the past week. Stocks have rallied. Commodity prices, oil in particular, have moved higher. This points to a more optimistic outlook for global growth.

Of course, when optimism rises, so do lending rates. We've seen the yield on the 10-year U.S. Treasury note rise nearly 15 basis points this week. Mortgage rates have trended higher. This isn't a negative, though. Rising rates are tethered to rising financial-market expectations and rising consumer confidence.

We've been saying for the past month that an improved economic outlook outweighs low mortgage lending rates in sustaining housing. We still believe that's the case. We believe that there's no reason to fear a rising-rate environment, if we are entering one. Rising rates point to more positives than negatives.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

We introduced and discussed the yield curve and how it has historically been a reliable predictor of recessions last week. (In review, the yield curve is simply a plot of all the government securities – one-month through 30-years.)

We were interested to see how the recent drop in yields has impacted the yield curve.  Our concern was that the drops have been concentrated on the long-end of the curve – five years and out.  If that occurred, the yield curve would show signs of flattening. This wouldn't be desirable because it could portend bad things to come.

That good news is that with the exception of the one-month T-bill and the one-year T-note, yields have been relatively uniform in falling.  As we noted earlier, we would like yields to cease falling, because that would indicate expectations for more economic activity.  Sluggish activity remains an overhang.

That said, the yield curve looks healthy and normal. This suggests there is still reason to view 2016 with optimism, which we do. Though global economic activity has slowed in recent month, it appears a recession isn't imminent.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

And They Keep Going Lower

Last week, we asked “how low can they go?” We find out this week that they can go lower.

Of course, we're referring to mortgage rates. The trend in rates remains downward sloping, which is no surprise. Over the past five days, the 10-year U.S. Treasury note chipped off another 15 basis points, which means the yield on this influential long-term lending benchmark is below 1.75%.  The rate on a prime conventional 30-year mortgage will hover two percentage points higher (give or take a few basis points) than the yield on the 10-year note.

Most of the national mortgage surveyors report best rate execution on a 30-year conventional mortgage below 3.7%. This is about it where it was this time last year. We see similar drops in the 15-year loan and, to a lesser extent, the 5/1-year ARM.

Lower lending rates have been good for business. The Mortgage Bankers Association's latest survey shows refinances up 16% week over week. A meaningful gain was also reported on purchase applications, which were up 7%.  When the MBA reports for this week, we expect to see a further increase in weekly activity.

Low rates are a nice stimulant, at least for the short term. But as we mentioned last week, we really don't like the idea of the 30-year fixed-rate mortgage hanging this low indefinitely. The problem is that low rates frequently come encumbered with discouraging economic news.

Indeed, that's the case. Stocks around the world continue to sell off; commodity prices continue to fall. Oil is the number one commodity everyone focuses on, and it has recently been quoted below $28/barrel. This is good news when we fill up at the gas station. It's less welcomed news for U.S. oil producers, many of whom are drowning in debt that they can no longer service.

Stocks and commodities are trending lower over fears the world's major economies – including our own – are slowing, and could slow to the point of recession. Investors, in turn, have taken haven in U.S. Treasury securities and other government debt. Bloomberg reports that $7 trillion of sovereign government debt, roughly 30% of all government debt worldwide, now yields a negative interest rate. This means many investors aren't even seeking a return; they're simply seeking a place to warehouse their cash.

So, yes, low rates are nice, but an improved economic outlook would be even nicer.  After all, we are one big inter-dependent economic family.  For now, it appears today's low mortgage rates will remain.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

The yield on the 10-year U.S. Treasury note continues to hang near 2%. Not surprisingly, the 30-year fixed-rate mortgage continues to hang below 4%. As we mentioned last week, 2% on the 10-year note gets us sub-4% rate quotes on the 30-year loan.

Given the way the stock market has performed to start 2016, we expect mortgage rates to hold these lows for some time. Many investors are wary of stocks; wary investors take refuge in Treasury securities. The money that flows into these securities raises their price and lowers their yield. Because mortgage bonds take their cue from Treasury securities – the 10-year note in particular – investors are willing to accept lower-rate mortgages.

Stock-market risk perception runs high, which means risk aversion runs high. That's good news for us, because we are able to avail ourselves of low-rate financing. We're seeing mortgage rates we haven't seen in seven months. But keep in mind, it will take only a couple of sustained stock-market rallies for risk perception to change and for money to flow out of bonds and into stocks.

A big bounce in the stock market could easily lead to a big bounce in mortgage rates.

 Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Chalk it up to the January Effect

Our mood may have been a little too dour to start the New Year.  Maybe it's the time of year. January is something of a down month: The December holidays and all the festivities they engender are behind us. The days are short and there is really nothing to look forward to. Negative news, which there has been a surfeit of lately, tends to get amplified.

January is finally winding down, and the latest data releases are winding up – positively. Home sales, which we've been down on lately, have reemerged with a vengeance.

Existing home sales unexpectedly soared, increasing 14.7% to 5.46 million on an annualized rate, in December. The surge was strong enough to turn a negative into a positive. Total sales for 2015 posted at 5.26 million, 6.5% higher than the 4.94 million posted in 2014. But if December sales would have held at November's pace, sales for the year would have finished down.

That said, existing home sales still face near-term headwinds: Low supply continues to plague the market, as it has for the past two years. Total homes for sale fell to 1.79 million in December from November's 2.04 million. Supply relative to sales dropped to only 3.9 months. Supply is as low as it has been in nearly 11 years. It might be tough for sales to hold December levels as we head into spring.

Fourteen and seven must be the magic numbers for December. Existing home sales rose 14.7%, and so did new home sales. Specifically, new home sales increased 14.7% for 2015. There were 501,000 new homes sold last year compared to 437,000 in 2014. As for monthly numbers, we see new home sales were up 10.8% to 544,000 on an annualized rate in December compared to November.

As with existing home sales, supply could limit future new home sales. Supply did rise by 6,000 in December to 237,000, but supply relative to sales fell back to 5.2 months from 5.6 months.

Pricing could also be a limiting factor to sales growth. Prices continue to plow ahead in most major markets. Case-Shiller's 20-city index rose 0.9% in November.  All 20 cities Case-Shiller follows reported monthly gains. Year over year, Case-Shiller's index shows prices up 5.8%.

Of course, all markets are local markets, and a few local markets can skew the national average. Portland home prices are up 11.1% year over year, followed by San Francisco at 11% and Denver at 10.9%. Washington DC, at 2.1%, Chicago, at 2.0%, bring up the rear, but these rates of price appreciation are closer to historical norms. Therefore, they're more sustainable.

One month's worth of sales data doesn't make a trend, but it's a start. The uptick in purchase applications, which increased 5% last week, does lift our spirits and gives us good reason to anticipate the spring selling season.

 Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.