New Homes are Less Expensive to Maintain

April is new homes month. And one of the virtues of a newly constructed home is the savings that come from reduced energy and maintenance expenses.

In a previous analysis, we used data from the 2009 American Housing Survey (AHS) to offer proof. The AHS classifies new construction as homes no more than four years old.

For routine maintenance expenses, 26% of all homeowners spent $100 or more a month on various upkeep costs. However, only 11% of owners of newly constructed homes spent this amount. In fact, 73% of new homeowners spent less than $25 a month on routine maintenance costs.

monthly maint costs

Similar findings are available for energy expenses. According to the 2011 AHS, on a median per square foot basis, homeowners spent 81 cents per square foot per year on electricity. Owners of new homes spent less: 68 cents per square foot per year. For homes with piped gas, homeowners spent on average 50 cents per square foot per year. Owners of new homes spent just 34 cents per square foot per year.

The 2011 data show similar results for various other utilities. For water bills, homeowners averaged 28 cents per square foot per year, while owners of new homes averaged 22 cents.  For trash bills, the median for all homeowners was 15 cents per square foot per year, while for new construction the median was 13 cents per square foot per year.

These data highlight that a new home offers savings over the life of ownership due to reduced operating costs. And in fact, these reduced costs result in lower insurance bills as well. The median cost for all homeowners of property insurance is 39 cents per square foot, while it is only 31 cents per square foot for owners of new homes.

These reduced expenditures represent one of the many reasons that the current system of appraisals needs updating to reflect the flow of benefits that come from features in a new home.


NAHB – Eye on Housing


Morgate Rates Fall for 6th Straight Week!

Mortgage Rates Fall for 6th Straight Week


Mortgage rates for most U.S. home loans have fallen for the sixth straight week, although a majority of analysts predict rates will start to increase soon with the upcoming release of the latest unemployment data.

Key averages have seen steady declines since the beginning of January and saw a drop this week after economic reporting showed a cooling in home sales for the month of December.

This week the average for a 30-year fixed-rate mortgage dropped to 4.23 percent, down from 4.32 percent last week, according to the latest survey from mortgage buyer Freddie Mac. At the beginning of January, the same loans averaged an interest rate of 4.53 percent. A year ago, the 30-year average was 3.53 percent – a year-over-year increase of 0.7 percentage point.

The average rate on a 15-year fixed loan also dropped this week, falling to 3.33 percent from 3.40 percent last week. It averaged 3.55 percent at the beginning of this year, and was at 2.77 percent a year earlier.

Additionally, averages for the two most popular hybrid adjustable-rate mortgages fell.  At 3.12 percent a week ago, the five-year ARM is now trending at 3.08 percent. A year ago, it averaged 2.63 percent. The one-year ARM dropped to 2.51 percent from 2.55 percent a week ago. It averaged 2.53 percent at this time last year.

“Mortgage rates fell further this week following the release of weaker housing data,” Frank Nothaft, vice president and chief economist for Freddie Mac, said in a statement. “The pending home sales index fell 8.7 percent in December to its lowest level since October 2011. Fixed residential investment negatively contributed to GDP in the fourth quarter for the first time since the third quarter of 2010. Also, the Institute for Supply Management reported a significant slowing in growth in the manufacturing industry in December than the market consensus forecast.”

Mortgage rates had been rising steadily in December after the Federal Reserve announced it would begin to curb its bond-buying stimulus program in January. However, rates have eased over recent concerns that the market would not be able to support a dramatic upward shift in home prices.

The bond-purchase program has helped offset dramatic gains in real estate prices and kept affordability elevated while the market has stabilized. Despite the recent economic reporting, the housing market at large continues to show signs of recovery.

Looking ahead, rates may rise in the short-term as a result of the upcoming January employment report. In the latest Mortgage Rate Trend Survey by, half of the analysts polled believe averages will increase over next week, while 33 percent believe rates will hold steady.

“I predict that the January employment report, to be released Feb. 7, will be stronger than expected, especially if you include the revisions to the December numbers,” said Assistant Managing Editor Holden Lewis. “Non-farm payrolls will be better than expected; the unemployment rate could actually go up. A higher unemployment rate would imply continued low inflation, but the market might not interpret it that way. Money will flow from bonds to stocks, resulting in higher bond yields and mortgage rates.”



Feb 6, 2014

By:   for

Infographic: History of Mortgage Rates

Since 1971, when mortgage rates first started being tracked, they have ranged from a high of 18.63 percent in the early 80′s to a low of 3.20 percent in late 2013. Currently, rates are still relatively low and for many prospective home buyers, low rates can greatly affect the affordability of a home and the monthly mortgage payment. But, what will the future hold?

“After dropping to all-time lows at the end of 2012, rates have steadily rebounded throughout 2013. Now that the Federal Reserve has announced plans to begin winding down its stimulus program, which has helped keep rates low while the economy was still fragile, we expect rates will rise above 5 percent in 2014 as the economic recovery gains steam. Although those who missed out on mortgages in the 3 percent range may be disappointed that they missed that historic window, rates are still extraordinarily low by historic standards,” says Erin Lantz, director of Zillow Mortgage Marketplace.


January 6, 2014 – Author Erin Lantz for Zillow Blog



Buy a Home Before 2014

New rules, rising rates could mean fewer options

December 13, 2013 1:58PM via
real estate contract

The year 2014 will be a type of test market for the mortgage industry, with the Federal Reserve expected to eventually taper its mortgage securities purchases.

Not to mention the fact that 2014 is forecasted to bring a rise in rates and new lending rules that are likely to reshape the process of acquiring a mortgage.

With all of that in mind, is advising consumers to consider buying homes before the end of this year.

The site goes as far as naming the top five reasons for buying real estate before the dawn of 2014.

Among them the fact that rates are already up one to 2% over last year, and it’s still possible to grab a 30-year, FRM at 4.5%, according to lenders cited by HomeFinder.

New lending rules, including the qualified mortgage definition, will shift debt-to-income ratio requirements higher, potentially making it more difficult to buy a property, the report claims.

Lower sales during the holidays also could mean more inventory to comb through.

And finally, anyone who buys before the end of the year can begin deducting the interest right away, maximizing tax deductions.

Homebuyer Confidence Picks Up for the First Time in 2013

Source: by |

This quarter, buyers breathed a little easier. The latest Redfin Real-Time Buyer Survey found that homebuyer confidence picked up for the first time in 2013, a sentiment that almost certainly reflects softer competition and buyers’ improved negotiatingpower during real estate’s slow season. Also, mortgage rates have fallen from year-to-date highs in the third quarter, easing some affordability concerns.

Their relief is unlikely to last long, however. This quarter, new questions revealed that many homebuyers have unrealistic mortgage rate expectations and high rate sensitivity. To our surprise, over 80 percent of buyers surveyed believe that “normal” mortgages fall under 5 percent for a 30-year fixed rate loan. In fact, rates have averaged 6.7 percent since 1990. At the same time, over 40 percent said they would be unable or unwilling to buy a home if mortgage rates rose further. Given the Federal Reserve’s plans to unwind its stimulus program in 2014, which will push mortgage rates up, these survey results suggest that many buyers may face a tough adjustment in 2014.

This quarter, homebuyers:

  • Are slightly more confident in the market: After three consecutive quarters of decline, 28% of survey respondents said now is a “good” time to buy a home, up from 24% in the third quarter. At the same time, 58% of survey respondents believe it is an “OK” time to buy a home in their neighborhood, nearly flat from 59% in the third quarter.
  • Continue to be frustrated with the level of home inventory: Buyers in the fourth quarter were most frustrated with the number of homes for sale, with 60% of buyers citing “low inventory” as their top concern about buying a home, compared to 58% in the third quarter. Buyers also named “rising prices” as a top concern, with 52% of buyers choosing this option.
  • Are very rate-sensitive: Responding to a new question on mortgage rates, 85% said that mortgage rates were important in their home-buying decision, with 42% of respondents saying the level of mortgage rates were “very important,” and that they “would be unable or unwilling to buy a home if rates rose further.”

About the Survey

The survey was taken between November 21 and November 24, 2013. Survey respondents included 518 active homebuyers who had toured a home with a Redfin agent since August 27, 2013. Respondents spanned 22 metropolitan markets in the U.S.: Atlanta, Austin, Baltimore, Boston, Charlotte, Chicago, Dallas, Denver, Houston, Los Angeles, Orange County, Miami, Long Island, Philadelphia, Phoenix, Portland, Raleigh, Sacramento, San Diego, San Francisco, Seattle, Washington, D.C.

Survey data and charts are below. If there are questions you’d like us to include in the survey next time, please let us know in the comments section below!

Buyer Confidence Shifts Course…

For the first time in 2013, buyer confidence is starting to improve.

Good time to buy

…While Perspectives on Selling Plunge

As buyers have become more confident about buying a home, fewer believe this is a “good time” to sell a home.
Good time to sell

Low Inventory Remains Top Concern

Buyers continue to be frustrated by the limited number of homes for sale, followed by rising prices.
Concerns about Buying

Mortgage Rates Matter

Survey respondents showed high sensitivity to fluctuations in mortgage rates.
Importance of mortgage rates

30-Year Fixed Mortgage Rates Plummet 16 Basis Points

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.06 percent, down from 4.22 percent at this same time last week.

The 30-year fixed mortgage rate steadily declined last week, leveling off near 4.12 percent over the weekend before falling to the current rate this morning.

“Mortgage rates during the past week have fallen back to lower levels, helped by Federal Reserve vice chair Janet Yellen’s assurances before the Senate Banking Committee that Federal Reserve stimulus won’t be removed too quickly. This trend halves the increases of the prior two weeks,” said Stan Humphries, chief economist at Zillow. “Looking ahead, rates will be influenced by the Federal Reserve’s meeting minutes, scheduled for late Wednesday, as observers try to read the tea leaves to assess the likelihood of a December taper.”

Additionally, the 15-year fixed mortgage rate this morning was 3.05 percent, and for 5/1 ARMs, the rate was 2.69 percent.

November 19, 2013 | Category:Finance | Author:Alexa Fiander | Source:

Seven Reasons to Own Your Home

Published by Realtor Mag September 23, 2013.

7 Reasons to Own Your Home

  1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.
  2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
  3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
  4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
  5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
  6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
  7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Housing Market Confidence on the Rise

Originally posted by on August 13, 2013.

Home buyers, home builders, and the general public have renewed their confidence in the economy and in the housing market. This doesn’t necessarily mean everything is back to normal, but because consumers are more than two-thirds of the economy, a confident consumer is more likely to buy a home.

The evidence of an improved outlook is widespread. Two organizations survey consumers on a monthly basis, and their indexes are at levels last seen in early 2008 before the financial collapse and the beginning of the worst recession in more than 70 years. In addition, these national surveys also ask questions about attitudes toward home buying.  The University of Michigan survey asks if it is a good time to buy a home, and more than 80 percent of those surveyed responded “yes,” which is the highest percentage since 2003. The Conference Board asks if the respondent intends to buy a home in the next six months, and affirmative responses are at the highest in the history of the index.

Builder Confidence Up Builders also are demonstrating renewed confidence. The NAHB/Wells Fargo Housing Market Index (HMI) is a monthly measure of builders’ confidence and the overall index is at its highest level since 2005. The survey driving the index asks three questions about current home sales, expectations for future sales, and customer traffic. The expectation component also is at its highest level since 2005, and the current sales index is at the highest since January 2006.

Builders’ confidence has been rising faster than builders’ production. The HMI increased 75 percent in a year while single-family housing permits rose 25 percent. A similar advanced confidence move occurred after the 1990 recession when the HMI rose 120 percent as permits increased 52 percent. Eventually, permits caught up with builders’ attitudes in the 1991–92 recovery, and I expect the same in this recovery.

Confidence has returned because the things that worried consumers and builders are improving. Households have reduced their debt levels to what they were in 2003 at a bit over one year’s income. At the peak, households owed 130 percent of their annual income and reducing that meant less spending and more repaying and saving. The savings rate has settled back to near historic levels, which means more income spent.

Meanwhile, households feel wealthier because house prices have moved forward. House prices have seen positive moves for more than a year in part because of pent-up demand and investors competing for limited inventories. House prices are back to levels seen in 2008 as they were falling and in 2004 as they were rising. Higher, consistently growing house prices offer consumers the comfort that they will not see a decline in their equity if they buy and provides more equity if they sell.

Employment Gains Job additions have not been as stellar as home values, but the number of people employed has increased steadily and the number of people looking for a job has declined. From the peak, the U.S. lost 8.7 million jobs and has since gained back 6.7 million, or more than three-quarters of the loss. Of course, in that time, the population of employable people increased so unemployment remains at least 2 percentage points above a sustainable level, and some workers are so discouraged that they dropped out of the labor force and do not count as unemployed.

Those working and with good credit face some of the best housing affordability conditions in history. Since 2009, the NAHB/Wells Fargo Housing Opportunity Index has been above 70; that is, a family earning the median income could afford more than 70 percent of all homes sold in the previous quarter. The most recent quarter did dip to 69.3 as home prices and interest rates rose.

All signals point to positive movements in the underlying causes of improved confidence and hence in continued growth in new-home construction and sales.


Link to original article:

New Home is Dream Come True!

Originally posted by the Santa Maria Times January 18th, 2013

James and Gabriela MedleySanta Maria, CA  (January 2013) — For James and Gabriela Medley, the search for their next home took them back and forth, between new and old, foreclosure and short sale, just about every possible option.

The fact that they decided to move to the beautiful new home community of Lavigna in Santa Maria showcases the spectacular value the neighborhood offers.

“We looked for months and months, and basically shopped every foreclosure and short sale in the area because we thought the pricing would best fit our budget,” James stated.

“What we discovered, much to our delight, was that the new homes at Lavigna actually offered the best value of all.  And, as a first-time buyer, I was able to secure a no down payment VA loan, which was also a big plus for us.

“We have a brand new home, one in which nobody has ever lived. There’s nothing to fix, nothing to buy, and of course we also have new appliances and a 10-year structural warranty.  We fell in love with the lot size, square footage and a very comfortable floor plan.  The community’s swimming pool, clubhouse and nearby park areas are added luxuries.  And, our neighbors are great.

“Lavigna was definitely the best option for us, and believe me, we looked everywhere.  We’ve been living here about a year now, and couldn’t be happier”, he added.

Adding to the Medleys’ happiness is that they recently won a free 40” HDTV in a raffle at a Santa Maria Chamber of Commerce mixer hosted by Lavigna.

The Medleys purchased a Plan 13 home at Lavigna, with three bedrooms, two and one-half baths, a great room, living room and dining room.

Less than 30-miles south of San Luis Obispo, Lavigna is a dream come true for first-time home buyers… a beautiful new 3 or 4 bedroom home in a gated community for a price in the mid $200,000s!

Lavigna offers spacious one and two-story, three, four and five bedroom homes, with two to two and one-half baths, and up to 2,043 square feet of interior living area.

Lavigna homes are highlighted by two and three-car garages, as well as an excellent selection of interior and exterior appointments.  A community swimming pool and spa are available for the enjoyment of homeowners, as well as a spacious recreational area and playground.

Lavigna offers a serene, comfortable ocean close setting, with all the amenities which make for an ideal living environment.

Enjoy a swim party with your neighbors, the weekly BBQ get together, or a picnic in one of the many parks in the Santa Maria area. It’s all available at Lavigna, along with a sense of pride in your home and community that so many homeowners hope to achieve.

To make your purchase at Lavigna even smoother, the community offers a variety of financing options tailored to meet the changing needs of today’s home buyers, including zero down VA, as well as FHA financing. Many other loan programs are also available.  Please visit the sales office for additional information.

Lavigna has been created with healthy living in mind. You’ll notice the flexible design and creative floor plans, the quality construction, energy-efficient appliances, natural lighting and fixtures, a smart irrigation system, and green environmentally-friendly materials.

Located at the intersection of Battles Road and Westgate Road in Santa Maria, Lavigna is approximately two miles west of the 101 Freeway.

The Sales Center is open daily 11 a.m. to 5 p.m., closed Wednesdays and Thursdays. For additional information, please call 805-922-9100 or visit

Lavigna is another fine community from The Towbes Group, one of the Central Coast’s most prominent home builders.  Based in Santa Barbara, The Towbes Group has more than 50 years of professional experience in all aspects of real estate development, including construction, development and property management.

Home Construction Shows a Pulse

Originally posted by the Santa Maria Times on April 26th, 2012

Santa Marians will soon hear those familiar sounds of spring — pounding hammers and buzzing saws — as construction begins on a number of new houses in town.

Most home builders have been on extended leave — or found other professions — since the housing market collapsed four years ago. But a few are strapping on their tool belts again this summer as at least one local builder begins building again.

The Towbes Group, developers of the gated community of Lavigna on the west side of Santa Maria, is beginning two new phases this year which will include 20 homes. A dozen will be started next month, according to Courtney Seeple, project manager for Towbes Group.

It’s a sign that’s promising for the Santa Maria housing market, and one that’s bucking the trend for new home construction throughout the country.

According to the National Association of Home Builders, sales of newly built, single-family homes dropped 7.1 percent in March to a seasonally adjusted rate of 328,000 units. That drop followed strong February sales which many experts attributed to mild winter weather across the country.

“Construction is continuing in the commercial and industrial sectors, but we are now seeing renewed interest in housing construction,” noted Santa Maria Community Development Director Larry Appel. “We have met with a number of local builders who are ready to resume construction in town.”

The Towbes Group has adjusted its new offerings at Lavigna to fit the still recovering housing market.

“Because of the times and our perception of the market, we have downsized these homes,” Seeple said. “We’re finding now that our smaller houses are some of our better houses.”

In its early phase, the development’s most popular designs were 1,800-square-feet and larger. The current phase is matching customer demand with models beginning around 1,200 square feet.

Three-car garages are among the most sought-after amenities, too.

Lavigna sales manager Teresa Shoneff said nine homes have been sold since the beginning of the year, and she believes the development’s new models and lower prices — smaller models start around $250,000 — are driving those sales.

“We’re seeing an end of some of the credit problems people had over the past few years,” Shoneff said. “We already have a waiting list for our next phase.”

Seeple said they aren’t seeing many people from outside the Santa Maria Valley among their buyers. He also said historically low interest rates on home loans are also driving the buyers.

“Our buyers are working Santa Maria people. Two jobs, working people,” he said.

While any residential construction is a good sign for the city and the industry, the Towbes Group might have the market cornered in Santa Maria. It was responsible for 22 of the 28 residential building permits issued by the city Community Development Department since Jan. 1, 2011.

In Santa Barbara County, 58 building permits have been issued for single-family homes so far in 2012 compared to 60 last year. The majority of those — 33 — have been in the unincorporated areas, with 10 in Lompoc.

In San Luis Obispo County 55 permits have been issued for single-family homes this year compared to 50 through the same time period in 2011.

“We’re seeing minor signs of an up-tick in activity. Certainly nothing to jump up and down about,” said Jerry Bunin, governmental affairs director for the Home Builders Association of the Central Coast. “It’s a minor step in the right direction.”