Wichita, KS economic update, June, 2011

Economic update for June, 2011


Check this graph to see how your State is doing. http://www.bea.gov/newsreleases/regional/gdp_state/2011/gsp0611.htm



Why housing demand will increase:

Housing formations are expected to average about 1.2 million a year. Not all of these families will want to rent so demand to buy will increase over the next 10 years after the low numbers in 2007 through 2009.

Employment is increasing in almost all areas (was lower than expected in may, 2011) and people will be able to afford a new and larger home.

Financing remains plentiful even though credit requirement have increased. VA and FHA loans during the 1st week of June, 2011 were 4.25% for a 30 year fixed rate loan.
Rates for a 15 year FHA r VA loan have been quoted at 3.5% and a 5/1 Arm loan (locked for 5 years) has been quoted at 3.25% on a 30 year term. This is an excellent loan for home owners who are only going to own in their local area for only 3-5 years.

Homes are more affordable. It is cheaper to buy than rent in many US markets.
The long term advantage of buying over renting is still true. Buyers are entering the market because they do not want to miss the bottom of the market.

I believe there will be a dramatic recovery in housing. There has been a historic drop in construction, an increase in household formation, a steep decline in prices, historically low rates rents are increasing and a large availability of mortgage funds.

96% of homeowners say homeownership has been a positive experience. 84% thinks homeownership makes more since than renting and 2 out of three Americans believe the lifestyle benefits of homeownership are superior to any financial benefits. Data provided by a Fannie Mae National Housing Survey released this May, 2011.


Don’t believe everything you read on the Internet: Zillow.com reports values for homes In various markets around the country. For Kansas City the values they report can be off as much as 16.1% according to their web site. This is why you need a Realtor to evaluate what your home is worth. Their data is more up to date and the local Realtors are more attuned to the local market and nuances..