What to expect from housing in the 2nd half

The housing outlook for the second half of the year is all about affordability—for buying and renting. How bad will it get, and how much will it hurt the recovery in home sales?

Home prices are still rising, but at a slower pace than this time last year. That cannot be said of mortgage rates, which are now on a straight trajectory up. The short supply of homes for sale shows little sign of improving, though, which is keeping prices high. At some point, however, higher mortgage rates will hit affordability and could trump that short supply in taking the heat out of home prices.

Homebuilders have not ramped up production that much this year, and they are unlikely to surge ahead in the next six months. They want to hold on to their pricing power, and they are hampered themselves by tight credit and an acute shortage of skilled labor. Builders are also still not back into the speculative game; they are building only for contract buyers. There will be gains in new construction, but not enough to make a serious dent in the supply problem.

Renters are unlikely to see much relief. There has been more multifamily construction of late, and more deliveries of new units, but demand is growing faster. Occupancy is at a record high, and that gives landlords strong pricing power. Renters do not appear to be turning into buyers, at least not in sizable numbers, and the second half of this year will see no change in that. High rents make it harder to save for a down payment, and even as more new households form, the vast majority of these residents are renters.

The biggest change in the second half will likely be a sharper focus on mortgage credit availability. Lenders are facing new regulations that will make them ever more careful; rising rates, however, will make them hungrier for business. Independent lenders will likely take on an even bigger share of the pie, as they tend to be more flexible and creative with credit.

By Diana Olick CNBC Real Estate Reporter 

According to CNN Money Article; 

Becoming a homeowner requires a lot of cash, but a college degree can sometimes make it harder.

In 30 of the top 100 markets in the country, saving for a 20% down payment is faster without a college degree, according to a new study from Trulia.

"In those markets, a household with a college degree isn't making that much more than a household without," said Ralph McLaughlin, Trulia's housing economist. "The burden that student debt brings to a household with a college degree makes it slower to save for a down payment."

A home is the biggest purchase most people will make, and there's been a lack of buying activity among Millennials. Student loan debt tends to get blamed. While going to college usually means higher lifetime earnings, hefty student loans can erode savings and make it harder to accumulate a down payment.

"It's pretty clear cut that most new home buyers feel that saving up for a down payment is their biggest obstacle to buying a first home," said McLaughlin.

Millennials without a degree can save for a down payment at least one year faster than college grads in Columbia, S.C., El Paso, Texas, Las Vegas and Daytona Beach, Fla.

But one state is a big exception.

The California market is particularly tough to become a homeowner. Seven out of the 10 housing markets where it takes the longest to save for a down payment are located in The Golden State.

But those with a degree have an advantage there. Not only is the income premium for a college degree high in the state, homes are very expensive and prices continue to rise, according to McLaughlin. "Only those with the highest income and high-income growth trajectories can save for a down payment."

In San Francisco -- which is experiencing double-digit price gains -- it will take 25-30-year-olds with a college degree nearly 30 years to save for a 20% down payment on a median-priced home. And for those without a diploma in that age group, it's nearly impossible to save the cash to put down.

Outside of California's heated housing market, there are many markets where saving for a down payment takes less than seven years for a young person, with or without a degree. Buyers in Detroit face the smallest wait time at 4.1 years with a college degree and 5.3 without.

Ohio is also an affordable options for Millennial buyers.

"Ohio is a state that if you want to buy a house, it's going to be your best shot at doing so," said McLaughlin. "You are going to be able to do it faster than any other state in the country -- every major Ohio market makes the list.

CNN Money July 8,2015

By Kathryn Vase

Orange County Housing Market Update:

Informative for Californian and specially for

O.C homeowner;

According to Orange County Association of Realtors,  pending home sales in Southern California posted back-to-back double-digit year-over-year gains, a positive trend to be sure. In Orange County, Pending Sales were up 11.1 percent for detached homes and up 8.3 percent for attached properties compared with May last year. Although overall inventory levels should continue to rise throughout the summer months, Orange County's current supply of homes is too low to meet demand. In May, the inventory of detached homes was down 15.6 percent to 4,797, and the inventory of attached homes was down 26.6 percent to 2,474 versus a year ago. Compared with this time last year, months' supply of inventory was down 20 percent to 3.2 months for detached homes and down 26.5 percent to 2.5 months for attached homes. Tight inventory has resulted in fierce competition for existing listings, with many properties attracting multiple offers and some even becoming the subject of old fashioned bidding wars.
Not surprisingly, we are seeing a corresponding increase in home prices. In May, the Median Sales Price was up 4.8 percent to $712,750 for detached homes and up 6 percent to $415,000 for attached. It should be noted that, in April, the share of equity-or non-distressed property sales edged up to account for 91.6 percent of all home sales in California, the highest percentage since 2007.