Developer's Digest - Latest Developments in Real Estate

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Developer's Digest - Latest Developments in Real Estate

Stay up-to date with the latest news in Real Estate Development.


Demand for weekly mortgages falls to a three-month low as rates start to rise once more

Mortgage rates, after dipping throughout May, surged last week, impacting the recent increase in mortgage demand. The average interest rate for 30-year fixed-rate mortgages on conforming loan balances rose slightly from 7.01% to 7.05%, with points increasing to 0.63 from 0.60. This minor increase led to a 5.7% drop in total mortgage application volume week-over-week, hitting the lowest since early March, according to the Mortgage Bankers Association. Refinance demand fell by 14% in one week, although still up 12% year-over-year. Purchase applications also decreased by 1% weekly and were down 10% compared to last year. The lack of existing homes on the market continues to challenge many prospective buyers. Following a statement from Federal Reserve official Neel Kashkari hinting at prolonged high interest rates, mortgage rates escalated by 12 basis points in just one day.

Here are the areas where rents are increasing and decreasing

During the pandemic, a work-from-home dynamic and new migration patterns drove up both single-family and multifamily rent prices. Recently, multifamily rents in April dipped by 0.8% compared to last year, with a modest monthly rise of 0.5% due to a significant influx of new apartment supply, the highest since 1990. The national median rent was $1,396. Apartment vacancies also increased to 6.7% in March, the highest since August 2020. Conversely, single-family rents rose by 3.4% year-over-year in March, despite more rental homes being built, with a 20% increase in starts in the first quarter alone. Cities like Seattle and New York saw significant rent increases, while Austin, Miami, and New Orleans faced declines. Townhomes experienced their first rent decline in 14 years, influenced by the rising supply of multifamily units in some markets.

According to the research, these home renovation projects have the highest return on investment ever

Home renovation activity remains robust even post-pandemic, with certain upgrades yielding unprecedented returns. According to Zonda Media's 2024 Cost vs. Value report, garage door replacements now offer the highest average return at 194%, followed by steel front doors at 188%. The focus on exterior improvements is significant, with nine of the top ten highest ROI projects being outdoor enhancements. However, high-cost projects like major kitchen and bathroom remodels yield much lower returns, at 38% and 45%, respectively. Real estate experts emphasize the importance of practical upgrades like HVAC conversions or new windows, which are crucial for enhancing a home’s appeal and value in a competitive market.

Selling your house could result in capital gains taxes. This is how your bill can be calculated

As U.S. home values rise, more sellers face capital gains taxes due to exceeding the Section 121 exclusion limits, which protect up to $250,000 of profit for single filers and $500,000 for married couples. CoreLogic data shows that nearly 8% of 2023 home sales surpassed the $500,000 exemption, a significant increase from 3% in 2019. To minimize taxable gains, homeowners should enhance their cost basis by including purchase and sale fees such as title and legal fees, transfer taxes, and real estate commissions. Additionally, capital gains can be further reduced by documenting home improvements that extend the property’s life, enhance its value, or adapt it for new uses. However, routine repairs do not qualify. Proper documentation of these improvements is crucial to defend against potential IRS audits.



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