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Builder attention shifts from luxury segment to starter homes

Posted by Mehran Aram on Tue, Aug 27, 2019 @ 05:08 AM

It appears that wealthy buyers are holding off for the time being as seen in a growing number of luxury homes that are sitting on the market, another indication that high prices and concerns about a recession are beginning to weigh down the housing market.

Toll Brothers, a luxury home builder, shared last week that orders for new home developments in California have plummeted 36 percent compared to last year.

Low mortgage rates and a cooling off in price gains are prompting would-be entry level buyers to get in the market. This is driving demand for starter-homes, which are more moderately priced, to skyrocket.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.625 percent and 15-year rates are near 3.125 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Housing Market, Homebuilders, Luxury Homes, Starter Homes

Luxury home sales down for first time in 2 years

Posted by Mehran Aram on Sat, Feb 9, 2019 @ 05:02 AM

The sales volume of the priciest homes in the U.S. is falling but their price tags are rising. Real estate brokerage Redfin released data this week that showed a four percent decrease in sales of homes priced at $2 million or more during the fourth quarter of 2018. This is the first time in more than two years that home sales at that price point have declined on a year-over-year basis. Uncertainty on Wall Street may have been a factor for the decline according to Redfin.

“In the fourt quarter of 2018 there was a lot of economic uncertainty – the stock market was all over the place,” said Daryl Fairweather, Redfin’s chief economist. “This may have encouraged luxury sellers to hold on to their real estate assets and also caused luxury buyers to be reluctant to make major home purchases.”

Nonetheless, luxury home prices continue to rise. The average sale price for the top 5 percent most-expensive homes in the U.S. rose 4.7 percent in Q4 to an average of $1.772,000.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home sales, home prices, real estate, Mortgage rates, Luxury Homes, Real Estate Assets, Average Sales Price, Sales Price, Home Sales Volume