Higher walkability equals higher profit margins when it comes to home sales, according to a new report from Redfin. The report found that homes within walking distance of schools, shopping, parks and other amenities sell for an average of 23.5%, or $77,668, more than properties that are car-dependent.
To determine how much walkability affected home prices, Redfin examined sale prices and Walk Score rankings for almost 1 million homes sold in 2019 in 16 major US metropolitan areas and two Canadian cities. About a quarter of active Redfin listings are considered walkable, with a Walk Score ranking of 50 to 100. Only about 4% are considered a “walker’s paradise,” with a Walk Score of 90 or above.
While homebuyers will pay more for walkability, that premium has dropped 2.3% since the last time Redfin conducted the study in 2015.
“The premium drop is tied to affordability,” said Daryl Fairweather, Redfin’s chief economist. “Properties that are more affordable are seeing the most demand and price growth right now, and homes in less walkable neighborhoods often fall into this category. There just aren’t as many people who can afford walkable neighborhoods. Many house-hunters are also willing to move to less walkable neighborhoods in order to get single-family homes.”
Source: Redfin and MPAMAG
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 3.000 MBS) gained +25 basis point (BPS) from last Friday's close which caused fixed mortgage rates to move lower compared to the prior week.
Overview: It was all Coronavirus, all the time last week. Even Fed Chair Powell addressed it in his live press conference. Last Monday, the number of cases ere 2,839 and 82 deaths, and this Monday, its 17,388 confirmed cases and 362 deaths. The potential global economic impact is severe and long bonds perform very well (lower rates) when economic outlooks dim.
The Talking Fed: The FOMC kept their key interest rate at 1.75% but did increase their rate on reserves by 5 BPS. You can read their official statement here.
Some key takeaways from the statement and Powell's live press conference:
GDP: We got our first look at the 4th QTR GDP which came in at a 2.1% growth rate and match the market consensus.
Inflation Nation: The Fed's key measure of inflation came in as expected as the YOY PCE Core (ex food and energy) hit 1.6%. The Headline number missed on the YOY reading (1.6% vs est of 1.7%) but beat on the MOM reading (0.3% vs est of 0.1%). Personal Income rose by 0.2% on a MOM basis vs est of 0.3%. Personal Spending rose by 0.3% which matched expectations.
Manufacturing: The January Chicago PMI was dismal at 42.9 vs est of 48.8.