Area Single-family Home Sales Brisk

Nationally single-family home sales fell 7.2 percent to an annual rate of 4.51 million in February from 4.86 million in January, but are still 2.0 percent higher than the 4.42 million pace a year ago. The median existing single-family home price was $212,300 in February, up 4.3 percent from February 2015.
February existing-home sales in the Northeast descended 17.1 percent to an annual rate of 630,000, but are still 5.0 percent above a year ago.
According to Lawrence Yun, chief economist for the National Association of Realtors (NAR) said, “The overall demand for buying is still solid entering the busy spring season, but home prices and rents outpacing wages and anxiety about the health of the economy are holding back a segment of would-be buyers.
Maine single family home sales in January and February outpaced last year’s numbers with 1794 homes sold, sixteen percent over the same period in 2015.
The trend was even more dramatic for single family home sales in Penobscot County up over 20% for the first two months of this year.
Leading the pack was the Bangor Area which includes Bangor, Brewer, Hamden, Hermon, Holden, Glenburn, Orono, Old Town and Veazie with January and February with 97 home sales, 40% above the same period last year.
Area Realtors expect the recent decline in mortgage rates to 3.66 percent will have a positive impact for home sales in 2016.

NAR Generational Survey: Young Buying in Suburban Areas

A growing share of homebuyers are millennials, and more of them are purchasing single-family homes outside of urban areas, according to the 2016 National Association of Realtors® Home Buyer and Seller Generational Trends study, which evaluates the generational differences1 of recent home buyers and sellers. The survey additionally found that although student loan debt is more prevalent among millennial buyers, they aren’t the generation with the largest student debt balances.
The share of millennials buying in an urban or central city area decreased to 17 percent (21 percent a year ago) in this year’s survey, and fewer of them (10 percent) purchased a multifamily home compared to a year ago (15 percent). Overall, the majority of buyers in all generations continue to purchase a single-family home in a suburban area, and the younger the buyer, the older the home they purchased.
Lawrence Yun, NAR chief economist, says while millennials may choose to live in an urban area as renters, the survey reveals that most aren’t staying once they’re ready to buy. “The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” he said. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out.

What Makes or Keeps a City Hot?

One word: jobs. But what creates lots of good jobs? Innovation, says Enrico Moretti, professor of urban economics at University of California, Berkeley. One job in an innovation-based industry like hightech, biotech, pharmaceuticals, or digital entertainment produces five additional professional and service jobs, Moretti says. Traditional manufacturing produces only 1.6 additional jobs, he adds.

High-tech jobs also attract more high-tech jobs, as newer innovators are drawn to an existing ecosystem of creative ideas and highly specialized vendors. The bad news: This tendency to concentrate where innovative companies already exist is creating a split between winning and losing cities, which Moretti in his recent book, The New Geography of Jobs, calls “The Great Divergence.”
So how can a city join the ranks of hot innovation centers like San Jose, Boston, Austin, Raleigh, and Seattle? “By and large, it’s a matter of chance,” says Moretti. For example,
he says, the young Bill Gates moved Microsoft to Seattle from Albuquerque to be near his family.

Cities can take steps to help move into the innovation column, however. A well-educated labor force, good universities, a business-friendly climate, financial incentives, low taxes, and a vibrant social scene all help. “Cities can create a fertile soil for the seed of innovation to germinate, but they can’t plant the seed,” says Moretti.

Mortgage Rates – Back on Free Fall

Mortgage rates declined this week, giving a boost to buyer affordability, Freddie Mac reports in its weekly mortgage market survey.
Since the beginning of this year, 30-year rates have fallen nearly 40 basis points, “helping housing markets sustain their momentum in this year,” says Sean Becketti, Freddie Mac’s chief economist. The National Association of REALTORS® reported this week that existing-home sales had increased 4 percent in February over January and are up 11 percent from last year.
Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 25:
– 30-year fixed-rate mortgages: averaged 3.62 percent, dropping from last week’s 3.65            percent average. Last year at this time, 30-year rates average 3.80 percent.
– 15-year fixed-rate mortgages: averaged 2.93 percent, falling from last week’s 2.95                  percent average. A year ago, 15-year rates averaged 3.07 percent.

Source: Freddie Mac