Though contractors are HUNGRY for work and you'll probably save on labor costs, several reports suggest that prices on construction materials of all sorts are rising. This afternoon the Associated General Contractors of America said that during January a broad index of construction materials rose 0.9 percent on top of a 4.9 percent increase over the previous 12 months. Prices are particularly high for diesel fuel and anything made with steel. A story in the Los Angeles Times details some of the issues. Was also a recent story by my colleague, Susan Feyder, about the issue in the Star Tribune.
A new quarterly survey says that while new home construction is still struggling, the remodeling market has hit bottom and is poised to improve during the coming year. Remodeling Magazine's Residential Remodeling Index, which ranks the top 100 hottest remodeling markets nationwide, says that the Twin Cities metro area was No. 3 overall in terms of remodeling activity during the third quarter 2010. Cincinatti and Houston topped the list.
The survey, which is based on building permit data and other information, suggests that remodeling activity has picked up significantly and is expected to grow during the coming year. That's not a surprise given the stagnant housing market. With sales falling many homeowners are optiong for fix-up projects instead of selling. Here's a link to the full report, which includes details on the 2011 forecast.
While home sellers are cursing, landlords are clapping; the stagnant housing market has been a boon for landlords. Last year was a record year for rental absorption rates, which means that more apartments were rented in 2010 than ever before, according to a year-end report from GVA Marquette Advisors. The report said that during 2010 6,400 market rate units were rented; that compares with a loss of 3,450 renters in 2009.
GVA also credits improvments in the economy for boosting the number of new renters, who spent the last couple years doubling up in apartments, moving home or choosing not to move at all.
Rents have remained stable this year, but with not enough construction to equal new demand, expect rents to rise during 2011.
January is such a good time to take a good hard look at your financial life, and if you're hoping to reduce your mortgage expenses without refinancing, Lynnley Browning of the New York Times offers a smart look at how to do it. She says that you can lower your monthly mortgage payment and save interest may without overwhelming fees that come with refinancing “recasting,” or “re-amortizating” your mortgage. Not all lenders and servicers, will do it, but it pays to check out the possibility.
Here's a link to her story: www.nytimes.com/2011/01/02/realestate/mortgages/02Mort.html
The latest word on foreclosures from CoreLogic: Foreclosure rates in the Twin Cities metro area have increased for the month of September is 1.99 percent for the month of September, an increase of 0.14 percentage points compared to September of 2009 when the rate was 1.85 percent. Foreclosure activity in Minneapolis-St. Paul-Bloomington is lower than the national foreclosure rate which was 3.29 percent for September 2010, representing a 1.30 percentage point difference.
Also in Minneapolis-St. Paul-Bloomington, the mortgage delinquency rate has decreased. According to CoreLogic data for September 2010, 5.58 percent of mortgage loans were 90 days or more delinquent compared to 5.64 percent for the same period last year, representing a decrease of -0.06 percentage points.*
As of September 2010, 0.99 percent of homes with a mortgage in Minneapolis-St. Paul-Bloomington were in REO (real estate owned) status, meaning after they were not sold at auction, they were returned to possession of the lender. This is an increase over one year prior when 0.80 percent of homes were in REO status.
Did you get in under the wire on the lowest mortgage rates on record? Hope so. This week, according to several national surveys, mortgage rates spiked, but are still at unbelievable lows. Check out an analysis of the current rate environment from mortgage broker, Alex Stenback, who explains why rates are rising and what it means in terms of payment increases for a typical borrower. Check out his blog post at www.behindthemortgage.com/