Tag Archives: Business and Economy

For Buyers, Credit Matters—but How Much?

Borrowers not as creditworthy as others often have higher mortgage payments; in fact, according to an analysis recently released by Zillow, the average borrower categorized with credit as “fair” can be on the hook for $21,000 more than a borrower with an “excellent” score.

Here’s how: Borrower A has a credit score that’s stellar (“excellent”), and obtains a 4.50 percent rate. Borrower B has a credit score that’s less than stellar (“fair”), and obtains a 5.10 percent rate. If both have a 30-year mortgage and a home with a median price tag, over the course of the loan, Borrower B has $21,000 more to pay than Borrower A.

Across the largest markets, the differences vary:

Zillow_Credit_Scores

“When you buy a home, your financial history determines your financial future,” says a senior economist at Zillow. “Homebuyers with weaker credit end up paying substantially higher costs over the lifetime of a home loan. Of course, homeowners do have the option to refinance their loan if their credit improves, but as mortgage rates rise, this may be a less attractive option.”

Mortgage rates have risen since the start of the year, recently hitting a point not seen since 2011, according to Freddie Mac.

For more information, please visit www.zillow.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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A look at Triangle home prices at 2018 halfway point

Home sale trends continue to deepen throughout the Triangle at the halfway point of the year, with median prices rising 7 percent over last year.

The median price home now tops out at $265,000, up from $248,000 at this time in 2017, according to data tracked by the Triangle Multiple Listing Service.

The price increases come as the home market remains tight across the region. The number of new listings has risen, but only slightly, at just 1.8 percent over this time last year.

Anfindsen’s analysis of only the second quarter found an increase in new listings as well, but the uptick was mostly due to new homes and not the “needed” resale inventory priced under $400,000, according to the TARR report.

Demand for the limited inventory remains strong, with the average number of days a home sat on the market in the Triangle dropping from 37 through June of last year to 31 this year.

The trends aren’t unique to the Triangle. Home prices continue to rise across the country, especially in large metro areas. The trend is being driven by increased demand, fewer homes for sale and more expensive labor and materials costs for new construction.

Nowhere in the Triangle are the price increases as steep as Durham County, where the median sales price has jumped more than 11 percent over last year, rising to from $228,000 to $253,000. Average days on market also remain the lowest in Durham County, where the time it takes a home to sell has sunk from 29 days to 21.

Troubles with low inventory remain in Durham and Wake counties, where the number of new listings is about the same or just below last year. That is not the case on Johnston and Orange counties, where new listings have increased more than 10 percent and 8 percent, respectively.

The Triangle still ranks favorably in housing affordability compared to its peer cities, but that could be changing in the near future. Data analytics firm CoreLogic continues to rank Raleigh and the Durham-Chapel Hill metro area as having housing markets that aren’t over-valued, but the company’s economists believe that could change in the next five years as prices and interest rates rise. “Between house prices rising and mortgage rates going up, the monthly mortgage payment to buy a house rises faster than the monthly income of local residents,” CoreLogic Chief Economist Frank Nothaft says.

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Raleigh is second-best performing city for jobs in U.S., report says

Raleigh is the second-best performing city in the United States, according to the latest index released by the Milken Institute.

In its report “Best-Performing Cities: Where America’s Jobs are Created and Sustained,” Milken points to Raleigh’s comparatively low business costs and thriving research and development-driven industries as major reasons for the high rank.

A number of metrics were considered in the overall ranking, including job growth, wage growth, GDP growth, etc. Raleigh ranked in the top 10 in several categories such as 5-year wages/salary growth, 1-year job growth and high-tech location quotient.

Raleigh climbed four spots from last year’s report. “The region has experienced strong job and wage growth in recent years, and short-term job gains indicate that economic momentum remains strong,” the Milken report stated. “In the 12 months ending in August 2017, the rate at which new positions were created in Raleigh was 2 percent higher than the U.S. average.”

The Utah metro of Provo-Orem nabbed the top spot. The Dallas-Plano-Irving metro in Texas, the San Francisco metro area and Fort Collins, Colorado, rounded out the top five in the large cities/metros category. The Charlotte metro, which includes Concord and Gastonia, ranked No. 13 in the report.