If your New Year’s resolution was to make your dream log home a reality in 2012, the Log Homes Council has 10 economic trends why now is the time to make your move.
1. Single-Family Construction on the Rise
Last year closed out with an increase in single family housing starts, according to a report from the National Association of Home Builders. Single-family housing starts increased 4.4% in December to a seasonally-adjusted annual rate of 470,000, the best monthly number since May 2010 when the home buyer tax credit ended.
2. Housing Market Hit Bottom Last Year
The new home construction market hit bottom in 2011 and has started to rebound, according to John Burns of John Burns Real Estate Consulting, which offers nationwide housing analysis and forecasts for builders, banks,
investors and building product suppliers.
3. Prices Have Stabilized
Home prices have generally stabilized in most markets where investor activity is high, according to John Burns. Renters can become homeowners without increasing their monthly payment, which is in many neighborhoods.
4. Strong Increase in Existing Home Sales
Existing home sales continued to grow on a month-to-month basis in December, rising for a third consecutive month. The National Association of Realtors (NAR) reported sales of existing homes comprised of completed transactions of single-family, townhouses, condominiums and co-ops rose 5.0 percent in December to a seasonally adjusted annual rate of 4.61 million.
5. Builders’ Outlook Improving for Fourth Straight Month
The NAHB/Wells Fargo Housing Market Index rose to 25 in January, the highest reading since June 2007. This marks the fourth consecutive monthly increase for a total change of 11 points and the largest four month increase since 2003. All three components increased and all four regions showed positive change.
6. New Home Construction Will Grow 21% in 2012
New home construction will grow by 21 percent in 2012, predicts John Burns. Even with this growth, it will make it the fourth lowest year of new housing starts in U.S. history.
7. Improved Mortgage Availability
John Burns predicts increased mortgage availability in 2012, thanks to aggressive credit being provided by FHA and government sponsored enterprises or GSE’s. He also predicts loans will get more expensive, as these entities increase their fees. “I am also betting that we will get some more underwriting clarity, which will make it easier to get a mortgage. Right now, the banks don’t know what the putback risk and risk retention rules are, so they are lending more conservatively than they would otherwise,” John Burns says.
8. It’s About Monthly Payment, Not Price
Because media reports are often focused on home prices instead of monthly mortgage payments, home buyers are focused on the wrong metric, according to Wayne Yamano, vice president at John Burns Real Estate Consulting. “The media is also overly focused on price because they tend to live in the expensive markets like New York and Washington D.C.,” Yamano says. “What consumers and the media are ignoring is the monthly payment, which is absolutely fantastic right now and highly unlikely to get much better. Everyone is just assuming that mortgages rates will stay low forever.
“Did you know that if prices fall another 10%, but mortgage rates rise 1 percentage point, fewer people will be able to qualify to buy a house? Add to the equation the discussion in D.C. about reducing the allowable Debt/Income ratios on mortgages, and even more people will be unlikely to qualify.”
9. Time to Buy is Now
For those in the market for a new log home, John Burns advises that the time to buy is now. “If I had to wager on three things going up in the next 5-10 years, it would be 1) home prices, 2) mortgage rates, and 3) rental rates. Things could get more affordable next year, but if you are a qualified, prospective home buyer sitting on the fence waiting for affordability to get even better, at some point you are going to get burned. I would buy now.”
10. Make Your Dream Home a Reality
If you’re ready to make your dream of log home living a reality this year, turn to the companies that belong to the Log Homes Council. These companies offer peace of mind. All have adopted policies designed to protect your investment, as well as assist everyone involved in this project.
Editor’s Note: Honest Abe Log Homes is a long-time member of the NAHB and Log Homes Council.
Article by: The Log Homes Council | http://www.loghomes.org/content/top-10-reasons-buy-log-home-2012