MONEY Investing

When Wall Street Becomes a Landlord

First the pros snap up cheap houses. Then come new ways for you to invest in them. Be careful.

The stronger-than-expected housing recovery — a 20% rebound since 2010 — owes a lot to the investors who swept into recession-ravaged cities and scooped up distressed homes.

Nowhere has that been truer than in the suburbs ringing Atlanta, where rampant overbuilding and economic woes produced a flood of foreclosures.

At the same time, the local rental market couldn’t absorb all the displaced owners. That combination proved irresistible to mom-and-pop investors, whose all-cash purchases stabilized the market: Atlanta home prices rebounded from a 12.7% decline in 2009 to flat in 2010.

Related: Cities where the real estate deals are

Then Wall Street came to town. This second wave of housing investors is spending billions to flip foreclosures into single-family rentals. In January one in every four homes sold in Atlanta went to a large investor, four times the national average, says RealtyTrac.

“They’re coming from all over, even out of the country,” says Atlanta agent and property manager Scott Goeber.

In June 2012 the Atlanta office of real estate manager Waypoint Homes was “me and my cellphone,” says regional director David Zanaty. By last fall he had hired 50 people and bought 600 homes, and hoped to own 1,500 by March.

Large investors are swarming local markets. Real estate powerhouse Blackstone has spent $8 billion to buy 43,000 homes nationwide. American Homes 4 Rent has spent $3.5 billion on 21,700 homes.

Now these buying sprees are being converted to investments.

Since December 2012, four single-family home real estate investment trusts, similar to REITs that own apartment buildings or shopping centers, have opened up to individual investors. American Homes 4 Rent’s AMERICAN HOMES 4 R COM USD0.01 'A' AMH -0.8182% is the largest; most recently Waypoint merged with the home-rental division of Starwood Property to form Starwood Waypoint Residential Trust STARWOOD WAYPOINT COM USD0.01 SWAY -0.3095% , a REIT that owns close to 5,800 homes.

Plus, a new breed of bonds, which bundle rents from single-family homes, is being peddled to institutional investors, such as pension managers or mutual funds. Last October, Blackstone rolled out a $479 million bond backed by 3,207 homes in five states. Deutsche Bank estimates that another $5 billion in home rental bonds will hit the market this year.

So far investors have not been enthusiastic. Some of Blackstone’s bonds are selling below the offer price, and most of the REITs have underperformed their index. The business model is too new, says Brad Thomas, editor of iREIT Investor.

The biggest firms expect to generate 5% to 7% a year in return from rents, according to a Bank of America report. But that hinges on keeping down the cost of maintaining far-flung homes.

“If a toilet breaks, you’ve got to send someone to fix it,” Thomas says. “It’s difficult to do that efficiently. In an apartment complex, a property manager can walk the building.”

Related: Dreary outlook for formerly hot housing markets

And REIT investors shouldn’t count on big price gains. “It’s unproven how their asset value will grow in a more normal market,” says Forward Real Estate Long/Short manager Ian Goltra.

Plus, the REITs have been plowing capital into buying homes, not paying big dividends. And yield is a big reason to own REITs, notes Goltra. Top apartment REITs currently pay more than 4%. The highest available yield in a single-family rental REIT is 1.2%.

“It’s early days,” says Goltra. “For now, they’re too risky.”


Dreary Outlook for Formerly Hot Housing Markets

To sort out what you can expect in real estate this year, MONEY zeroed in on four markets: upscale neighborhoods, new investor favorites, booming growth cities, and once-busy areas that have quieted down. Whether your local real estate market is heating up or cooling off, here’s what you need to know about buying, selling or renovating your home.


During the past couple of years investors swooped in to snatch up deals in cities clobbered by the crash, driving up prices. But with that low-hanging fruit gone, these markets are now cooling off. In 2014 they should see less impressive price hikes and far more homes for sale. And if rates rise, these areas could get even flabbier, since last year’s price jumps put many homes out of reach for locals.

Related: 10 Fastest Growing Cities

How you’ll know: Your first clue is the amount that area home values increased in 2013. Look at’s Trends page: Anything over 15% is in the pocket. A big jump in the number of homes for sale is another giveaway. (Think Sacramento, which saw December available listings spike 58% from a year earlier.) Check the page’s Total Listings column to see whether your area has had a similar increase.


Take your time. While most of these areas aren’t quite a buyer’s market, you’ll have more choices and power than last year, so don’t rush into a place you don’t love.

Ask for extras. You may want to build in a clause that says your offer is contingent on your ability to get financing or to sell your current home.

Bid low. When markets start to slow down, sellers get nervous — and pliable, says Los Angeles agent Connor Maclvor. Ask your realtor to send you listings where the price has been cut. Those sellers are the most eager, says Maclvor; set your bid at 8% to 10% under asking.


Court bargain hunters. A year ago Phoenix sellers could price above similar listings and still get 10 bids in the first week, says agent Greg Markov: “Not anymore.” Now you want your house to look like a deal, he says.

Check current asking prices for comparable homes, then price your house near the bottom of the range. Two weeks and still no offer? Cut it by 5%.

Max out your listing. Choose an agent that offers pro photos. Homes that have them sell faster and for up to 3% more, according to Redfin. Go beyond, Trulia, and Zillow by posting your house on Craigslist. Make sure that your agent is promoting it on Facebook, Twitter, and Pinterest.

Creating a video for your listing (or to post on YouTube) is another option; 12% of sellers tried it last year, says NAR. If you go that route, walk the camera through the home, since buyers want to see the layout, says Princeton, N.J., broker Henderson.

First impressions count. With more competition for buyers, the focus on curb appeal and staging is back. Be sure your front yard looks neat, pressure-clean the roof, and repaint your front door. Inside, eliminate all clutter. A professional stager can suggest paint colors and lighting and furniture arrangements that will help your place look its best; a two-hour consultation typically costs $150 to $400, according to contractor referral site


Don’t panic. This isn’t another bust: Your home will still appreciate. In fact, CoreLogic predicts that prices in last year’s hottest 20 markets will rise at an average annual rate of 3.7% through 2018, vs. 3.1% nationwide. Keep those numbers in mind if you’re thinking about remodeling. Smaller projects that bring your home in line with your neighbors’ will pay off, but you’re unlikely to see big enough gains to justify a massive renovation.


Rent This Sewer! Satirical Signs Mock San Francisco Real Estate Prices

Scot Hampton

Gentrification hits a whole new low.

You might not be able to afford a condo in San Francisco’s tech-inflated real estate bubble, but what about a sewer, mailbox, or bus stop? Photographer Scot Hampton created satirical For Rent signs that show just how ridiculous the rental market in the city is.

Rent out a garden penthouse studio (also known as a street side planter) for just $7350! It’s light and airy—and exposed to the elements. A basement one-bedroom is cheaper at $3500 and it has “arched interiors” but you’ll have to live like the Teenage Mutant Ninja Turtles. Requires the use of a ladder for entry.

The photo essay is a commentary about gentrification as much as it is about homelessness and the need to adapt urban space into a livable environment. While the tech industry calls the homeless “degenerates,” the population living on the streets of the city is increasing. It’s only too easy to imagine people trying to make homes in the spots Hampton shoots.

TIME Games

Monopoly’s “House Rules” and What America Thinks of Capitalism

Hasbro's latest gimmick acknowledges that people play Monopoly in ways that fight the ruthless principles of the game.

You may have heard the news that Hasbro is planning to change Monopoly. It’s not. The game maker is polling fans on Facebook about a list of widely used unofficial “house rules,” some of which will be included as options in a new edition of the game. They’re already options, of course; if you play Monopoly, you probably use some of them. You didn’t need Hasbro’s permission, and you still don’t. (Confession: until today I did not realize that having to go around the board before buying properties was not an actual rule to begin with.)

As a marketing gimmick, this is old news for Hasbro, which is trying to again to sell new copies of a game that is already in closets from coast to coast. (Remember last year, when the company killed the poor iron.) But the house rules under consideration, as listed by Hasbro, are pretty interesting for what they tell us: People don’t like Monopoly very much.

OK, that’s not entirely true. In sheer terms of longevity, sales, and cultural reach, Monopoly is one of the most popular board games of all time. But there’s clearly a love-hate thing going on here. Yes, it’s about family, friends, and fun. It’s also about endless, exhausting game sessions, bad feelings, and watching yourself slowly be utterly destroyed by losing everything you have.

So people have modified the game–and they’ve done so mostly in ways that are directly at odds with the game’s principles and what the game says about the market. Old-school Monopoly is a fight to gain dominance in an economy of tightly limited resources. No one helps you out; no one ever gets a raise.

But most of the “house rules” are about adding windfalls, softening blows, and providing chances for losers to turn things around. Running out of funds? Maybe you’ll land on the Free Parking jackpot or roll snake eyes! Income not keeping up with rising housing costs? Let’s double the salary for passing Go! Can’t afford a property? Make a deal with another player and own the property collectively! (In one deliciously anarchic rule, “Break the Bank”–a new one on me–players seize half the bank’s assets at the start of the game and grab at it in an Occupy Monopoly free-for-all.)

In other words, the ways players have customized the game over the decades suggests that people aren’t totally comfortable with harsh, sink-or-swim capitalism, even in the form of a game with play money that has no real-life consequences. (Especially, maybe, when the person you are sending to the poorhouse is your mom or your nine-year-old son.)

I’ll grant you I’m reading a lot into a board game here. But Monopoly is a game that practically begs to be read into. It’s a game popularized during a depression and named after a predatory business practice; it encourages Darwinian competition but also makes it sound vaguely shady. (Why do players spend that much time in jail, anyway?) And it was believed to be inspired by The Landlord’s Game, a didactic turn-of-the-century game designed to protest the exploitation of tenants. It’s not only moralistic games like Chutes and Ladders that have messages built into their play; hell, we have a game called Life that literally says that the object of living is to end your days with the most money.

There is something for economic liberals in the way people have modified Monopoly: left to their own devices, average Americans will inject massive amounts of fiscal stimulus into the economy and create a pool of tax-and-fee revenue for redistribution. And I suppose there’s something for conservatives here as well: all these feel-good palliative measures, money for nothing, and attempts to cushion the blow for losers in the end only prolong the suffering and the inevitable outcome, which is that one person must win and the others must be bankrupted.

If you don’t like that, you’ve got to play a different game.

TIME Saving & Spending

Spring Is Here! Too Bad You’re Still Paying for a Bitterly Cold, Costly Winter

Snow shovelers in the Capitol Hill neighborhood in Washington, D.C., on March 17, 2014.
Snow shovelers in the Capitol Hill neighborhood in Washington, D.C., on March 17, 2014. Jonathan Ernst—Reuters

This year's brutal winter wreaked havoc on roads, homes, and most likely, your finances. Here’s a look at a few of the groups that got hammered by the harsh weather, and that are likely to bear the costs of the season for quite some time

The brutal winter of 2013-2014 wreaked havoc on roads, homes, and most likely, your finances. It’s been a horrendously awful winter for many businesses as well.

There was reason for some to welcome the stormy, bitterly cold weather that descended on much of the nation in early 2014. Supermarkets thrived during the peak (nadir?) days of polar vortex frigidity as shoppers stocked up on staples in anticipation of waiting out the storms, and businesses selling plows and snowblowers understandably made a killing as the snow and ice piled up week after week.

Then there’s the rest of us, who will remember the winter that’s just passed as one chock full of tire-busting potholes, frozen pipes, roof collapses, and monster heating bills. Restaurants, retailers, car dealerships, delivery services, and other businesses have also suffered. Even some businesses that normally cash in when cold and snow arrive fared poorly because this winter brought just too much, well, winter. Travel Michigan noted that the ski and snowmobile business dipped in recent months because the weather has caused tourists cancel trips. Yes, people have been deciding it’s too cold and snowy to go … snowmobiling.

(MORE: Springtime Is Finally Here as the Vernal Equinox Arrives)

Here’s a look at a few of the groups that have gotten hammered by the winter of 2013-2014, and that are likely to bear the costs of the season for quite some time:

By late January, it was clear that the winter was shaping up as an epically bad season for potholes. The mix of heavy precipitation with rapid freeze-thaw cycles has resulted in an inordinately large number of potholes on roads, and dangerous, tire-wrecking conditions have arrived much earlier than usual in the season. Drivers shouldn’t expect the pothole plague to disappear anytime soon, as local public works crews have been overwhelmed by requests to fix damaged roads. Cities like Des Moines, Iowa, have received more than 600 calls since December from citizens reporting potholes, for instance, while greater Indianapolis has fielded more than 10,000 pothole service requests this season.

Every day, it seems, there are more reports of potholes causing chaos for drivers—for instance, a huge pothole on I-75 in Detroit this week, which caused traffic to slow to a crawl as two lanes were closed so that crews could do a quick patch job. “It’s the worst we’ve seen it in decades,” a West Virginia DOT spokesman, speaking of this winter’s potholes and road conditions, told the MetroNews recently. “It’s unbelievable.”

Last fall, a transportation research group known as TRIP released a report on bumpy roads, indicating that during a normal year, drivers fork over the equivalent of $277 per year due to vehicle repairs, tire wear, and depreciation thanks to potholes and generally poor road conditions. This year, drivers should anticipating paying a lot more than that.

Unusually cold temperatures make for unusually high heating bills. This is especially the case for homes heated by propane, thanks in part to a propane shortage that hit several states early this year. Citing data from the U.S. Energy Information Administration, USA Today reported last week that the average homeowner will pay 54% more this year for heating a home with propane. Homes in the Midwest heated by propane will see their bills soar the highest, from an average of $1,333 last year to $2,212 for this season. Homes heated with electricity, natural gas, or coal, meanwhile, are projected to face bills that are 5% to 10% higher than last year.

(MORE: Meet the Low-Key, Low-Cost Grocery Chain Being Called ‘Walmart’s Worst Nightmare’)

Beyond budget-busting heating bills, homeowners around the country have been hit with plenty of other costs related to the brutally cold winter. The list of headaches—and hefty expenses—includes a heaping share of frozen pipes, roof collapses, and ice dams. Oh, and soon, flooded basements are probably inevitable. As one insurance agent told the Detroit News, as spring arrives, “The warmer temperatures will exaggerate and accelerate the melt, and then we’re going to have basement issues.”

State and Local Governments
Around the nation, many towns have already exhausted the budgets they allocated to clearing and salting roads and fixing potholes. In many cases, local authorities have been forced to use emergency funds to keep roads open and safe. West Virginia, for instance, just announced it was increasing the spring pothole-patching budget to $30 million, up from $18 million.

In recent weeks, states have been scrambling to round up precious road salt to cope with storm after storm. Things were so bad in New Jersey that the transportation department warned the state might be forced to close down major roads—even interstates—because crews didn’t have enough salt. Inevitably, the combination of high demand and insufficient supply of salt led to soaring prices; in some cases, the cost of road salt rose by a factor of four. The Washington Times noted that some salt supply companies have seen shippings triple in recent months and net four-quarter earnings rise by as much as 94%.

Abnormally cold weather has caused people to stay inside rather than go out and spend money. That’s the basic explanation used by car dealerships, fast food, and other business categories for months of underwhelming sales tallies. The list of businesses blaming Mother Nature for subpar earnings and sales reports also extends to the likes of Federal Express, which said all the storms resulted in it losing $125 million in profits last quarter, and Walmart, which pointed to snow and cold weather as a reason for slumping sales in January and early February.

(MORE: The Government Is a Hitman, and Uber, Tesla, and Airbnb Are in Its Crosshairs)

Speaking of the world’s largest retailer, Walmart just announced a huge lawn and garden sale that plays off homeowner desires to shake off winter. “Given the extreme winter many of our customers experienced, we know they are preparing to restore their gardens and outdoor living spaces,” Michelle Gloeckler, senior vice president of home, Walmart U.S., said via press release.

Of course, Walmart also helps the sale, featuring $1.97 bags of mulch, discounts on grills, mowers, and the like, will help the company recover from the brutal winter and kick off a big spring.

The bad news for consumer, homeowner, driver, and retailer alike may be that, despite what the calendar says, winter—meaning cold and snow—hasn’t necessarily disappeared. The latest extended forecasts from the National Weather Service, appropriately published in angry CAPS, offers the following predictions for the days and weeks ahead:


TIME real estate

Real Estate Website Trulia Targets Women in Largest Ad Campaign Ever

Real estate website Trulia really, really wants you to download its app. The company is spending $45 million in its first national ad campaign to convince home-buyers, particularly women, to use the company’s mobile products.

The campaign, centered around the slogan “Moment of Trulia,” casts Trulia as a service that can help people search real estate listings on the go. The first in a series of TV spots shows a couple using Trulia’s app to search housing listings in the gym, on the drive home and even in the shower. Trulia says the campaign is targeted primarily at women between the ages of 25 and 44. “Most of the advertising in the category sells the dream of finding the perfect home, but life isn’t like that. The process can be daunting and you often have to make trade offs,” Kira Wampler, Trulia’s chief marketing officer, said in a company press release. “We wanted to take an authentic, real approach to the category and show consumers specifically, how our mobile products solve their real life problems during the home search.”

The campaign will include TV and radio commercials, outdoor ads and online marketing. At $45 million, the campaign dwarfs all of the company’s past efforts—Trulia spent less than $8 million on all advertising in 2013. The sum is more than one-quarter of the $145 million in revenue Trulia generated in all of 2013. The huge spend is part of the company’s broader effort to get more people browsing on mobile, where Trulia says people are more likely to contact real estate professionals about specific houses than they are on a desktop computer.

The big outlay is also an effort to keep up with Zillow, a competing real estate listings site that launched its first national ad campaign last summer. Zillow had about 15 million more monthly unique visitors to its sites and mobile apps in 2013 than Trulia and generated $50 million more in revenue.

TIME real estate

This Broke Country Is Basically Giving Away Free Villages

Ian Aitken—Getty Images/AWL Images RM

Spanish real estate agencies are selling entire abandoned villages for cheap—and some mayors are giving them away for free

In the market for an ancient Spanish village? They come cheap these days.

Thousands of abandoned villages across Spain are up for sale as jobs leave the countryside and rural life slowly fades in the country, reports Agence France-Presse, and there are so many of them, that some are literally being given away for free.

Specialized real estate agencies help identify the around 2,900 empty villages and sell them to owners, many of them foreigners, who are surprisingly hard to come by. But some municipalities, desperate for caretakers of the ancient and abandoned properties, are giving away villages for free.

A stand of three stone houses and a granary—a typical hamlet in northwest Spain—can fetch less than $100,000. Some villages have requirements that purchasers must preserve them, many of which date back to the Middle Ages.


TIME Music

Real Estate Shift Focus for New Album ‘Atlas’

Real Estate
Domino Records

Their third LP, Atlas, trades in 20/20 hindsight for the courage of trying to grasp an endlessly unclear future

The power of Real Estate’s sophomore album, 2011′s Days, was hidden in the same elements that many interpreted as safe. On its own, the sunshine-beckoning feel of the New Jersey band’s braiding guitars — always loosely played, air-tightly arranged — paired with Martin Courtney’s throw pillow-soft vocals suggested stakes no higher than Atlantic tide crashes at ankle depth. That was deliberate. Courtney’s lyrics firmly declared a deep personal investment in the easy days, only with such gentle composure that you’d sooner think he was just stoned. By never raising its voice, the album demanded we lean in to appreciate. Aimless drives through green aisles, strolls through decomposing leaves, long space-outs to the monotony of suburban landscapes. These aren’t moments of juvenile, indecisive navel-gazing to be derided as wasted life, Days argued. They’re growth-fostering revelations of the gift. It’s important. It’s real.

That’s the thing about closure: It can feel incongruously peaceful for the staggering nature of the realizations that come attached. Now, with their collective early 20s internalized and in the rearview, Real Estate shift focus to a matter with far less capacity for composed handling: looking forward. Their third LP, Atlas, trades in 20/20 hindsight for the courage of trying to grasp an endlessly unclear future. Look no further than the alarmingly forward lyric that opens side B opener “Crime”, one that wouldn’t have been allowed within a mile of Days: “Toss and turn all night/ Don’t know how to make it right/ Crippling anxiety.” In stark contrast to Days, Courtney is struggling with the impossibility of appreciating what he doesn’t know or understand; just like Days, the laid-back tone in his voice couldn’t be more misleading.

(MORE: Coldplay Announces New Album for May)

In line with this new focus, the chords and arrangements on Atlas are the densest Real Estate have ever attempted, shading their sunshine into something palpably more mysterious, like a sunset in inclement weather: it’s pretty, sure, but has abnormally complex coloration — more ominous, and unique, and weird than usual. The chemistry between Courtney and Matt Mondanile’s guitars has grown exponentially, and bassist Alex Bleeker’s lines are equally outstanding, expertly restrained and motion-sensitive. On “Talking Backwards”, one of the two or three best songs Real Estate has ever made, the three construct a flawlessly economic Technicolor groove to support Courtney as he airs terrifying relationship doubts with disproportionate calm: “The only thing that really matters/ Is the one thing I can’t seem to do.”

The instrumental “April’s Song” feels like the album’s nostalgia break, the only moment where they’re able to enjoy the breeze rather than press forward, and the song that most recalls Days. Bleeker’s sole lead contribution, “How Might I Live”, tackles guilt — just as his contribution on Days, “Wonder Years”, did, only this time with question marks instead of periods. No moment is more directly vulnerable and uncertain, though, than Courtney’s lament in the chorus of side A closer “The Bend”: “It’s so hard to feel in control here/ Like I’m behind the wheel but it won’t steer.”

On “Past Lives”, Courtney, 28 and married with his first child on the way, addresses the strange sensation of coming home again. “I cannot come back to this neighborhood/ Without feeling my own age,” he sings. Later, he chases a minute-long instrumental segment with a single couplet to punctuate the song’s conclusion: “And even the lights on this yellow road/ Are the same as when this was our town.” It seems innocuous, like a particular Pearl Jam lyric that Courtney might have absorbed off the radio as a kid, from when Eddie Vedder was his age and approaching peak success with his band: “Everything has changed. Absolutely nothing’s changed.” This is the type of confused backwards talk that a suburban upbringing can inspire, even years after the fact. That’s the deceptive power of the suburbs. You get older, and they stay the same age.

Essential Tracks: “Talking Backwards”, “Crime”, and “Navigator”

More from Consequence of Sound: Real Estate: On the Road, Not the Beach
More from Consequence of Sound: The 30 Best Songs for Movie Trailers

TIME real estate

A Robust Housing Recovery? Not So Fast

Hal Bergman—Getty Images

That’s a question I’m asking after reading some new housing data and real estate market studies out this week. The national numbers make it seem like we’re having a pretty good year for housing, which is one of the keys to overall economic growth in this country. (As Warren Buffett once told me, if you fix housing, you can fix the American economy.) And house prices did go up by a healthy 11.4 % in 2013, with the latest Case Shiller data showing an 8 –year high. So far, so good.

But two things concern me about the market right now. One, the new numbers are trailing indicators—house prices reflect where we have been, not where we are going. The second half of 2013 was weaker than the first, and the last few months of home sales in particular have been slack. That information will take about six months to trickle through into the official data, which is one of the reasons that the smart folks at Capital Economics believe that “2014 will mark a significant slow down in the pace of house price appreciation.” Despite the Fed’s “forward guidance” about keeping interest rates low for years to come, it will be interesting to see if the market buys it. The Fed can only control base rates, not market rates for mortgages, and if they start creeping back up, we may see a significant pull back in refinancing and mortgage applications as we did last summer. Less demand on that front would eventually mean lower prices.

But as in so many areas of the economy, the state of the market will depend very much on where you live. There’s a big, deep new study just out from the Conference Board’s Demand Institute, looking at the state of the housing recovery in 2200 cities around the country. That study finds that there’s a large and growing bifurcation in housing in America. The top 10 percent of cities in the country (ranked by the aggregate value of their owner occupied homes) now hold 52 percent of all housing wealth. Basically, we’ve got a 1 percent/99 percent phenomenon happening in housing, which has massive wealth implications for middle class Americans, who still hold the majority of their wealth in their homes.

For starters, if you are counting on using home equity as part of your retirement plan, you’d better hope you live in one of those top ten market; price increases will be three times greater in the strongest markets than in the weakest ones. Over the next five years, while national prices are estimated to grow only about 2 % a year between 2015 and 2018, some of the top markets are predicted to boom, while about 50 % of all housing markets are still trying claw their way back from the housing crash and Great Recession, with many still underwater.

Perhaps most interesting is the fact that while some markets simply have a natural home court geographic advantage (think prime East and West coast real estate), you can also craft housing policy that creates a more vibrant market, as cities like Hoboken, NJ have done. If housing continues like this, it will have big long-term implications for retirement and consumer spending. (Every dollar of new housing wealth has a much bigger impact on spending than wealth created in the stock market does.) Reason enough to bring bifurcation into the current discussions in Washington around housing reform, and creating a market in which all Americans, not just the richest, can get a 30-year mortgage at a decent rate.

TIME real estate

New Homes Selling At Fastest Rate Since July 2008

New home sales increased 9.6 percent in January

Sales of new homes in January reached their fastest pace since July 2008, reviving hopes of a sturdy recovery in the housing market after growth slowed at the end of last year.

New home sales increased 9.6 percent in January to a seasonally-adjusted annual rate of 468,000, the Commerce Department reported Wednesday, easing concerns that rising interest rates were slowing house sales. Sales fell 3.8 percent in December and 1.8 percent in November. The annual rate is the highest since July 2008, when it hit 477,000 homes.

Economists are forecasting sales of new and previously occupied homes to rise in 2014, reports the Associated Press, boosting job gains and improving the economy. The median home price in January was up 3.4 percent from a year ago to $260,000, and interest rates on a 300-year mortgage increased to 4.33 percent last week.

Even while sales improved in January, cold winter weather slowed construction starts last month by 16 percent.


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