Moving Up To Your Dream Home? Don’t Wait!

Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values will fall. History, however, has shown this not to be true.

Where are home values today compared to the beginning of the year?

While rates have been rising, so have home values. Here are the most recent monthly price increases reported in the Home Price Insights Report from CoreLogic:

  • January: Prices were up 0.5% over the month before.
  • February: Prices were up 1% over the month before.
  • March: Prices were up 1.4% over the month before.

Not only did prices continue to appreciate, the level of appreciation accelerated over the first quarter. CoreLogic believes that home prices will increase by 5.2% over the next twelve months.

How can prices rise while mortgage rates increase?

Freddie Mac explained in a recent Insight Report:

“In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

Bottom Line

If you are thinking about moving up to your dream home, waiting until later this year and hoping for prices to fall may not be a good strategy.

Source: Keeping Current Matters, 5-17-18

Posted on May 17, 2018 at 5:54 pm
Beverly & Doug Moser | Category: Uncategorized

What If I Wait Until Next Year To Buy A Home?

We recently shared that national home prices have increased by 6.7% year-over-year. Over that same time period, interest rates have remained historically low which has allowed many buyers to enter the market.

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Reporthome prices will appreciate by 5.2% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 5.2% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

What If I Wait Until Next Year to Buy a Home? | Keeping Current Matters

Bottom Line

If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

Source: Keeping Current Matters, 5-7-18

Posted on May 15, 2018 at 4:23 pm
Beverly & Doug Moser | Category: Uncategorized

Market Action for April 2018

Posted on May 14, 2018 at 6:42 pm
Beverly & Doug Moser | Category: Uncategorized

5 Ways Tax Reform Has Impacted The 2018 Housing Market

Starting late last year, some predicted that the 2018 tax changes would cripple the housing market. Headlines warned of the potential for double-digit price depreciation and suggested that buyer demand could drop like a rock. There was even sentiment that homeownership could lose its coveted status as a major component of the American Dream.

Now that the first quarter numbers are in, we can begin to decipher the actual that impact tax reform has had on the real estate market.

1. Has tax reform killed off home buyer demand? The answer is “NO.”

According to the Showing Time Index which “tracks the average number of buyer showings on active residential properties on a monthly basis” and is a “highly reliable leading indicator of current and future demand trends,”buyer demand has increased each month over the last three months and is HIGHER than it was for the same months last year. Buyer demand is not down. It is up.

2. Have the tax changes affected America’s belief in real estate as a long-term investment? The answer is “NO.”

Two weeks ago, Gallup released its annual survey which asks Americans which asset they believed to be the best long-term investment. The survey revealed:

“More Americans name real estate over several other vehicles for growing wealth as the best long-term investment for the fifth year in a row. Just over a third cite real estate for this, while roughly a quarter name stocks or mutual funds.” 

The survey also showed that the percentage of Americans who believe real estate is the best long-term investment was unchanged from a year ago.

3. Has the homeownership rate been negatively impacted by the tax changes? The answer is “NO.”

Not only did the homeownership rate not crash, it increased when compared to the first quarter of last year according to data released by the Census Bureau.

In her latest Z Report,” Ivy Zelman explains that tax reform didn’t hurt the homeownership rate, but instead, enhanced it:

“We have been of the opinion that homeownership is most highly correlated with income and the net effect of tax reform would be a positive, rather than negative catalyst for the homeownership rate. While still in the early innings of tax changes, this has proven to be the case.”

4. Has the upper-end market been crushed by new State and Local Taxes (SALT) limitations? The answer is “NO.”

In the National Association of Realtors latest Existing Home Sales Report it was revealed that:

  • Sales between $500,000 and $750,000 were up 4.5% year-over-year
  • Sales between $750,000 and $1M were up 15.1% year-over-year
  • Sales over $1M were up 17.3% year-over-year

5. Will the reforms in the tax code cause home prices to tumble over the next twelve months? The answer is “NO.”

According to CoreLogic’s latest Home Price Insights Report, home prices will appreciate in each of the 50 states over the next twelve months. Appreciation is projected to be anywhere from 1.9% to 10.3% with the national average being 4.7%.

Bottom Line

The doomsday scenarios that some predicted based on tax reform fears seem to have already blown over based on the early housing industry numbers being reported.

Source: Keeping Current Matters, 5-10-18

Posted on May 10, 2018 at 4:00 pm
Beverly & Doug Moser | Category: Uncategorized

Homeowner vacancy rates plunge to near 2-decade lows

The U.S. homeowner vacancy rate dropped to 1.5 percent in the first quarter, the lowest level since 2001, a sign that houses aren’t going to waste amid a residential supply crunch.

The rate was down from 1.7 percent a year earlier and 1.6 percent in the fourth quarter, the U.S. Census Bureau said in a report Thursday. The vacancy rate is the proportion of the non-vacation-home inventory that is vacant and for sale.

The declining vacancy rate only adds to concerns about record low housing supplies, Genworth Mortgage Insurance Chief Economist Tian Liu said. There were 1.67 million U.S. homes for sale in March, down 7.2 percent from a year earlier and the lowest for that month in data going back to 1999, according to the National Association of Realtors.

“The decline in vacancy rate has been an important, though silent, addition to the housing supply,” Liu said in a statement. “Home prices will likely rise further, and the need for more affordable new homes is also greater.”

Source: Bloomberg, 4-26-18

Posted on April 26, 2018 at 11:08 pm
Beverly & Doug Moser | Category: Uncategorized

Market Action for March 2018

Posted on April 20, 2018 at 9:05 pm
Beverly & Doug Moser | Category: Uncategorized

Trend Alert: Big, Bold Floral Walls

If there’s one thing you can count on, it’s that some type of floral pattern will always be in style. And they’re even more prevalent in spring – especially this year. “We can hear Miranda Priestley’s dripping sarcasm now: Florals? For spring? Groundbreaking,” mused Country Living.

But today’s floral trends are a far cry from your grandmother’s busy, tightly patterned situation. Instead, it’s all about big and bold, and the trend is hitting hard for those who want to make a statement on one wall, or more.

This Ellie Cashman Design “dramatic, large-scale floral wallpaper is inspired by the still life paintings of the Dutch Golden Age,” they said. “Majestic, ethereal blooms cascade down a dark, shadowy background.” The wallpaper appears as part of Elle Décor’s April Edit: Large-Print Florals (Their edit also includes dinnerware, placemats, and pillows, along with several fashion pieces.). “The April Edit is devoted to all petals, pistils, and stems,” they said. “A fresh bouquet, literal or figurative, marks the start of spring like no other. But beyond adding a fresh spray wherever counter space allows, plant a seed in your wardrobe and on your wall, too.”


Elle Decor
It’s just one of the large-print florals that are breaking the light and airy mold this season. Expect to see lots of these dark, dramatic looks, many with black backgrounds and others that continue with the jewel tone theme we’ve been seeing in fashionable interiors.

This black-backed print helps an entry come to life.


houselust
You don’t need a flat wall to create a statement wall – and your large floral print doesn’t have to be the only print in the space, etiher.


mydomaine.com
Think you can’t go bold in a small space? Think again!


hgtv.com – Mike Schwartz
Maybe it’s the fifth wall you have your eye on.


hgtv.com – Twist Tours
“Floral prints are always ‘in’ if you ask Anthropologie,” said Country Living. “Rather than a traditionally feminine look in 2018 they feel especially fresh and more interesting styled in a casual bohemian way. Juxtaposing florals with organic textures and neutral palettes evokes a new kind of elegance that is appealing.”

We also love that you can incorporate this trend into your home even if you don’t want to make such a semi-permanent commitment. There are numerous peel-and-stick options that will give you the look in an easily removable material, like this one from Etsy.


etsy.com
Or this fun and unique pattern from Walls Need Love that adds peacocks to the mix.


wallsneedlove.com
If the thought of covering a wall in something so bold is still too much, even in a removable application, think about smaller bursts of flower power, like these drapes.


theeverygirl.com – SF Girl By Bay
Or some show-stopping recovered dining chairs.


pinterest.com
 Source: Jaymi Naciri, Realty Times, 4-15-18
Posted on April 16, 2018 at 4:33 pm
Beverly & Doug Moser | Category: Uncategorized

Why It’s So Important To Get The 411 On A Neighborhood Before Buying A Home

When buying a new home, the neighborhood is every bit as important as the house itself. So, you need to check it out. Thoroughly. Yes, you look at the schools and you figure out how close the nearest Target is and you also (hopefully) research crime reports and take a look at sex offender maps of the areas you are considering.

But is that enough?

When it comes to researching your neighborhood, what you don’t know can hurt you. What if you bought a house in this Arlington, TX neighborhood in the summer, unaware that in the winter, it’s overrun with migratory egrets. If you’re thinking it might be cool to have visitors for a few months, consider this: One homeowner in the area estimated that the egrets “cost her $10,000 on the constant cleanup of their droppings and a heavy pruning of her trees once they flew away last fall,” said NBC DFW. And, It is Against The Law to disturb them.

Google is your friend if you’re looking to learn more about potential neighborhoods. But it turns out the best tools for figuring out what’s going on are the people who may soon become your neighbors. After all, how else would you know that the woman two doors down runs a screaming yoga class out of her garage three nights a week. That the guy across the street likes to do his mowing at the crack of dawn every Saturday morning (despite the fact that he’s been warned multiple times). Or that you might be moving next to someone who is “blatantly hostile,” said The Balance.

The site detailed a story in which buyers changed courses on a home they loved when they discovered that their potential neighbors disputed the property boundaries and planted rose bushes on what was probably not their land. It gets worse. They also said, “We smoke like chimneys and plan to sit out on our front porch every night smoking,” with a smirk, “And there’s nothing you can do about it.


http://aplus.com/
Not only will meeting the neighbors “give you a good idea of whether you will be compatible, but neighbors will disclose material facts that a seller might forget to mention,” they said. “Sellers can be forgetful about these things and not purposely trying to fail to disclose.”

Meeting and talking with neighbors could give you a more detailed understanding of the neighborhood, including things that might impact your decision to buy, like:

It may be full of renters

No offense to renters, but it could be that a preponderance of them in your neighborhood affects your home values. “While it’s hard to do an analysis down to every property, we found that ZIP codes with a higher-than-average concentration of renters have lower property values compared to the county they are located in – by 14%,” said Realtor.com.

Your real estate agent should be able to give you an understanding of the ratio of owner–occupied homes to rentals in the neighborhood you are considering.

There could be plans you don’t know about

Maybe there’s a new multi-family community coming that could add traffic to the neighborhood streets and also impact the local schools. Or a new retail project with a loud preschool—or a loud bar. Or even transitional housing for formerly homeless individuals that would, at the very least, be a political football in the neighborhood.

In addition to talking to neighbors, there are a few other ways you can combat surprises in the neighborhood you’re thinking of moving to:

Visit multiple times – during the day, night, and on weekends. If you only saw the house on a Saturday afternoon, you may not know that commuters love to cut through the neighborhood twice a day, Monday – Friday. “Your new neighbor’s kid might get his drum kit out only during evenings or at weekends,” said The Mortgage Reports. “And there might have been a reason the student house on the other side was so quiet on the morning of the open house: Its residents were too hungover to get up after one of their frequent all-night parties.”

Check out Nextdoor if you can – Nextdoor is a treasure trove of information and can give you a good feel for what it would be like to live there. But, it could be tricky to get in because Nextdoor is hyper local and reserved for residents of a particular neighborhood. Try following Nextdoor’s own recommendations for joining the site in “neighborhoods outside of your primary residence,” which involves using a separate email address – but beware that you may not be able to register an address that is already being used on the site. If that doesn’t work, you may be able to ask your real estate agent for help, or perhaps a potential new neighbor can be of assistance.

Source: Jaymi Naciri, Realty Times, 4-4-18

Posted on April 5, 2018 at 9:01 pm
Beverly & Doug Moser | Category: Uncategorized

Freddie Mac: Rising Mortgage Rates DO NOT Lead To Falling Home Prices

Recently, Freddie Mac published an Insight Report titled Nowhere to go but up? How increasing mortgage rates could affect housing. The report focused on the impact the projected rise in mortgage rates might have on the housing market this year.

Many believe that an increase in mortgage rates will cause a slowdown in purchases which would, in turn, lead to a fall in house values. Ultimately, however, prices are determined by supply and demand and while rising mortgage rates may slow demand, they also affect supply. From the report:

 “For current homeowners, the decision to buy a new home is typically linked to their decision to sell their current home… Because of this link, the financing costs of the existing mortgage are part of the homeowner’s decision of whether and when to move.

Once financing costs for a new mortgage rise above the rate borrowers are paying for their current mortgage, borrowers would have to give up below-market financing to sell their home.

Instead, they may choose to delay both the sale of their existing home and the purchase of a new home to maintain the advantageous financing.”

The Freddie Mac report, in acknowledging this situation, concluded that prices are not adversely impacted by higher mortgage rates. They explained:

“While there is a drop in the demand for homes, there is an associated drop in the supply of homes from the link between the selling and buying decisions. As both supply and demand move together in this way they have offsetting effects on price—lower demand decreases price and lower supply increases price.

They went on to reveal that the Freddie Mac National House Price Index is…

“…unresponsive to movements in interest rates. In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

The following graph, based on data from the report, reveals what happened to home prices the last six times mortgage rates rose by at least 1%.

Freddie Mac: Rising Mortgage Rates DO NOT Lead to Falling Home Prices | Keeping Current Matters

Bottom Line

Whether you are a move-up buyer or first-time buyer, waiting to purchase your next home based on the belief that prices will fall because of rising mortgage rates makes no sense.

Source: Keeping Current Matters, 3-22-18

Posted on March 22, 2018 at 3:50 pm
Beverly & Doug Moser | Category: Uncategorized

Fed announces rate hike, mortgages already on the rise

Fed announces rate hike, mortgages already on the rise

REPOSTED DIRECTLY FROM INMAN NEWS.

In a widely anticipated move, newly appointed Federal Reserve Chairman Jerome Powell on Wednesday announced a modest benchmark interest rate hike of between 1.5 percent and 1.75 percent amidst continued optimism over economic growth in 2018.

In the first of what economists predict will likely be three adjustments in 2018, the Fed called for a 25 basis point increase, and a fed funds rate of 1.63 percent, at the conclusion of the Central Bank’s two-day Open Market Committee meeting. The new benchmark rate is the highest since September 2008, near the beginning of the housing crisis.

“Information received since the Federal Open Market Committee met in January indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate,” according to a statement issued by the Fed on Wednesday. “Job gains have been strong in recent months, and the unemployment rate has stayed low.”

Powell said median projections for inflation now stand at 1.9 percent this year, 2 percent in 2019 and 2.1 percent in 2020, all within the target rate of 2 percent.

“In making our policy decisions over the next few years we will continue to aim for inflation of 2 percent while sustaining the economic expansion and a strong labor market,” said Powell during a press conference on Wednesday. “In the committee’s view, further gradual increases of the federal funds rate will best promote these goals. By contrast, raising these rates too slowly would raise the risk that monetary policy would need to tighten abruptly down the road, which could jeopardize the economic expansion.”

The movement of the Fed rate — up or down — can put pressure on mortgage interest rates, which often follow the lead of the 10-year Treasury note, otherwise known as the “long bond.” Freddie Mac’s Primary Mortgage Market Survey reports the average 30-year fixed rate hovering at 4.44 percent, but Wednesday’s benchmark rate hike has already been folded into current mortgage rates, Greg McBride, chief economist of bankrate.comtold USA Today.

Current rates are still considered historically low compared to pre-recession levels. In the year 2000, for example, the average 30-year fixed rate stood at 8.21 percent, and in 2007 it hovered at 6.22 percent, according to Freddie Mac. But Steve Rick, chief economist of CUNA Mutual Group, also said in an interview with USA Today that additional increases throughout the year could push the 30-year fixed as high as 5 percent by December.

Research from Zillow issued Wednesday suggested that such a hike could lift costs associated with buying a home in nearly 20 metropolitan markets above historical averages.

“If mortgage rates reach 5 percent by the end of this year, and assuming home value appreciation over the course of the year in line with Zillow’s forecast, almost half of the nation’s 35 largest markets will be less affordable than they were historically,” wrote Zillow Senior Economist Aaron Terrazas in a statement issued Wednesday ahead of the rate hike. “If rates reach 6 percent – near the upper end of forecasters’ expectations – homes in 20 of the country’s 35 largest markets will be less affordable than historic norms.”

Ruben Gonzales, an economist at Keller Williams, said alarm over inflation could lead to increased volatility in mortgage rates and steeper hikes later this year. Nonetheless, he forecasted that historically low inventory, not higher rates, would have more influence over the housing market, thus allowing wiggle room for more adjustments in 2018.

“We believe that limited supply is likely to remain the predominant factor restricting home sales this year, and that there is some room for higher mortgage rates before the sales pace of existing homes is substantially impacted,” said Gonzales in a prepared statement. “We are currently projecting existing-home sales for 2018 to be even to slightly below 2017 sales.”

Lawrence Yun, chief economist for the National Association of Realtors, said potential homebuyers should be prepared for mortgage rate hikes over the next several years, but added that increased construction of residential housing in the near-term could help balance rising housing costs.

“The tight labor market will hurry-along the Fed to raise rates,” said Yun in a prepared statement. “Housing costs are also rising solidly and contributing to faster inflation. The one thing that could slow the pace of rate increases would be to tame housing costs through an increased supply of new homes. Not only will more home construction lead to a slower pace of rate hikes, it will also lead to faster economic growth. Let’s put greater focus on boosting home construction.”

The rate hikes are the first since the departure of Janet Yellen in early February. Nominated by President Barack Obama to succeed Ben Bernanke in 2014, she helped guide a fragile economy following the Great Recession by deploying fewer interest rate increases than many of her predecessors to offset high unemployment at the time.

Powell, a member of the Federal Reserve’s Board of Governors since 2012 and currently the Central Bank’s 16th chairperson, is largely viewed as a moderate who would carry on Yellen’s legacy while favoring legislation that would roll back post-2008 banking regulations.

Powell is the first Fed chair in four decades without a degree in economics. Prior to joining the Board of Governors he served as a clerk in the United States Court of Appeals for the Second Circuit in New York before diving into private practice at the investment bank Dillon, Read & Co. and, a decade later, the Carlyle Group. Along the way, he was appointed to the Treasury Department by President George W. Bush and worked at several high-profile private investment firms before being nominated in 2012 to the Fed.

In his first comments since his appointment as chair, Powell spoke cautiously about Trump administration trade policies when asked by reporters, steering away from controversial economic views by the president in recent months including the enactment of lumber, aluminum and steel tariffs.

“First, there’s no thought, I think, that changes in trade policy should have any affect on the current outlook,” said Powell. “The second thing I would say is that a number of participants reported in their conversations with business leaders around the country that trade policy has become a concern going forward for that group.”

Source: Jotham Sederstrom, Inman News, 3-21-18

Posted on March 21, 2018 at 9:20 pm
Beverly & Doug Moser | Category: Uncategorized

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