Where Are Interest Rates Headed In 2019?

The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily throughout 2019.

Where Are Interest Rates Headed in 2019? | Keeping Current Matters

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly. But don’t let the prediction that rates will increase stop you from purchasing your dream home this year!

Let’s take a look at a historical view of interest rates over the last 45 years.

Where Are Interest Rates Headed in 2019? | Keeping Current Matters

Bottom Line

Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.

Source: Keeping Current Matters, 12-5-18

Posted on December 6, 2018 at 5:48 pm
Beverly Moser | Posted in Uncategorized |

Buyers: Don’t Be Surprised By Closing Costs!

Many homebuyers think that saving for their down payment is enough to buy the house of their dreams, but what about the closing costs that are required to obtain a mortgage?

By law, a homebuyer will receive a loan estimate from their lender 3 days after submitting their loan application and they should receive a closing disclosure 3 days before the scheduled closing on their home. The closing disclosure includes final details about the loan and the closing costs.

But what are closing costs anyway?

According to Trulia:

Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.)”

Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. As mentioned before,

Closing costs are typically between 2% and 5% of your purchase price.

Trulia continues to give great advice, saying that:

“…understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.”

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

Source: Keeping Current Matters, 11-26-18

Posted on November 26, 2018 at 10:49 pm
Beverly Moser | Posted in Uncategorized |

Where Are Home Values Headed Over The Next Few Years?

There are many questions about where home prices will be next year as well as where they may be headed over the next several years to come. We have gathered the most reliable sources to help answer these questions:

The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter.

Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives.

Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.

Freddie Mac – An organization whose mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.

The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.

Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets always.

Here are their projections of prices going forward:

Where are Home Values Headed over the Next Few Years? | Keeping Current Matters

Bottom Line

Every source sees home prices continuing to appreciate – just at lower percentages as we move through the next several years.

Source: Keeping Current Matters, 10-25-18

Posted on October 25, 2018 at 4:52 pm
Beverly Moser | Posted in Uncategorized |

The True Cost Of NOT Owning Your Home

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for the entirety of America’s existence.

Realtor.com reported that:

“Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option…as people get more savings in their pockets, buying becomes the better option.”

What proof exists that owning is financially better than renting?

1. In a previous blog, we highlighted the top 5 financial benefits of homeownership:

  • Homeownership is a form of forced savings.
  • Homeownership provides tax savings.
  • Homeownership allows you to lock in your monthly housing cost.
  • Buying a home is cheaper than renting.
  • No other investment lets you live inside of it.

2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.

3. Less than a month ago, we explained that a family that purchased an average-priced home at the beginning of 2018 could build more than $49,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment – along with a profit margin!

Bottom Line

Owning your home has many social and financial benefits that cannot be achieved by renting.

Source: Keeping Current Matters, 10-8-18

Posted on October 8, 2018 at 4:43 pm
Beverly Moser | Posted in Uncategorized |

Here are Oregon’s 50 best public high schools for 2019

The roster of Oregon’s top public high schools is dotted with representatives from the Portland area.

However, it’s not quite as Portland-centered as one might think. Indeed, the top-rated public high school sits far outside the Portland metro area. What’s more, such cities as Corvallis have multiple representatives on the list, which is based on information Pittsburgh-based researcher Niche.com prepared in advance of the 2018-19 school year.

An examination of top public high schools provides businesses with several excellent metrics. Those relocating may take a facility’s geographic info into consideration as a way to keep employees with families happy. What’s more, many top-rated schools have strong engineering and science programs that might offer work study candidates to savvy companies.

Niche.com bases its rankings on statistics from the U.S. Department of education, along with millions of reviews from students and parents. Ranking factors include state test scores, college readiness, graduation rates and the quality of the school’s teachers.

The rankings are based on the degree to which certain factors affect the overall grade. A school in the top 10, for instance, might have the same overall grade as another school but rank higher because it performed better in academics, which comprises a big part of the overall mark.

The rankings breakdown goes like this:

  • Academics account for 60 percent of the grade. The figure is derived from state assessment proficiency, SAT/ACT scores and survey responses on academics from students and parents.
  • Culture and Diversity accounts for 10 percent of the overall grade. The category is based on racial and economic diversity and survey responses on school culture and diversity from students and parents
  • “Parent/Student Surveys on Overall Experience” comprises another 10 percent of the grade. Those responding to the surveys rank their experiences on a scale of one to five.
  • Quality of Teachers contributes to 10 percent of the grade. The score is predicated on teacher salaries and teacher absenteeism, as well as state test results and survey responses from students and parents.
  • The availability of clubs and activities, the quality of health and safety at the schools, resources and facility and sports each comprise 2.5 percent of the overall grade.

A few notes about the final rankings:

  • The No. 1 overall school has risen quickly, ranking sixth among public high schools in 2016.
  • Nine of the schools are based in Portland. Just two of those rank in the top 10.
  • Another eight are based in the city’s western suburbs. The highest-rated public high school among that list ranks third.
  • Lake Oswego counts two schools in the top 50. Both rank in the top 10.
  • Eleven of the schools are based in other Portland suburbs.
  • Central Oregon counts three schools on the list while just one Oregon Coast public high school made it.

Source: Andy Geigerich, Portland Business Journal, 8-14-18

Posted on September 10, 2018 at 4:28 pm
Beverly Moser | Posted in Uncategorized |

Why this housing boom is different from the last

The rising home prices and strong demand in the current housing market have some making comparisons with the previous boom in the mid-2000s; but it’s very different according to a new analysis.

Mark Fleming, chief economist of First American Financial, says that market fundamentals remain strong but there are signs that price appreciation may be slowing.

However, he does not see the risk of a market crash like the one that followed the previous boom.

“The price appreciation experienced in the housing market during the mid-2000s was characterized by a surge in demand driven by wider access to mortgage financing,” he says. “Price appreciation in today’s housing market is characterized by a shortage of supply. The supply of homes on the market remains extremely low, and the homes that hit the market sell very quickly – an indication that demand is outpacing supply.”

Low mortgage rates, high demand, low supply, and the strong US economy, are all supporting the market. And even where buyers pull back, frustrated by a lack of available homes, Fleming expects an easing of prices rather than a slump.

“As buyers pull back from the market and sellers adjust their price expectations, house prices will adjust, but the strong economic conditions and the shortage of supply relative to demand continue to support the housing market,” says Fleming. “We’re seeing the first indications that price appreciation may be slowing, but the underlying fundamental housing market conditions support a natural moderation of house prices rather than a sharp decline.”

Homebuying power is strong
First American’s Real House Price Index for June, which is based on changes in single-family home prices, interest rates, and incomes; shows an increase in prices of 1.5% between April and May 2018, 11.4% year-over-year.

Consumer house-buying power declined 1.0% between April and May 2018 and declined 3.6% year over year.

“While unadjusted house prices are 1.3% above the housing market peak in 2006, consumer house-buying power has increased by 55% over the same time period. House-buying power, how much one can buy based on household income and the 30-year, fixed-rate mortgage, has benefited from a declining rate environment, and slow, but steady household income growth,” Fleming explains.

The five states with the greatest year-over-year increase in the RHPI are: Nevada (+21.0%), Ohio (+18.5%), New York (+18.3%), Michigan (+17.5%), and New Hampshire (+17.2%).

No state had a year-over-year decrease in the RHPI in June.

“Consumers buy homes based on how much it costs each month to make a mortgage payment, not the price of the home. Lower mortgage interest rates and growing incomes mean home buyers can afford to borrow more and buy more, which drives price appreciation,” concludes Fleming.

Source: Mortgage Professional America, Steve Randall, 8-28-18

Posted on August 28, 2018 at 7:26 pm
Beverly Moser | Posted in Uncategorized |

Hottest markets see slowdown in home-value growth

Home value appreciation is slowing down in two-thirds of the largest housing markets in the US, according to the Real Estate Market Report released by Zillow for July.

Seattle, Tampa, Fla., Sacramento, Calif., and Portland, Ore., recorded the greatest home-value growth slowdowns in July.

After leading the US in home-value growth in the year-ago period, Seattle reported the greatest slowdown over the past year and is now only the 12th fastest-appreciating housing market. The city’s home values had a 14% annual appreciation rate at this time last year, but they have since slowed down to 9%.

Despite the local slowdowns, national home value growth has not slowed yet, with US home values rising 8% in the past year. The median home value in the US is $218,000, the highest value ever reported. However, Zillow forecasts the annual appreciation rate to drop to 6.8% over the next 12 months.

“The nation’s pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade,” Zillow Senior Economist Aaron Terrazas said. “But despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it’s far too soon to call it a buyer’s market. And in many of the nation’s more affordable areas, aside from the pricey and exclusive San Francisco Bay Area, home value growth has perked up as buyers continue to seek good value for their money. But it’s clear that the winds that have boosted sellers over the past few years are ever-so-slightly starting to shift.”

Although most of the largest markets recorded slowdowns in home-value growth, the current annual appreciation rate is still higher than historical norms in all but four of the markets analyzed. For example, while home-value growth slowed significantly in Tampa, values still increased 10.5% in the past year. Meanwhile, the historic average rate of appreciation is just over 5%.

Source: Mortgage Professional America, Francis Monfort, 8-27-18

Posted on August 28, 2018 at 4:10 pm
Beverly Moser | Posted in Uncategorized |

Housing market slowdown worries are unfounded, expert says

A decade after the financial crisis and the housing meltdown, worries that the housing market is headed for another significant downturn are unfounded, according to the chief economist for the National Association of Realtors.

The housing market has essentially recovered from the financial crisis, with mortgage default and foreclosure rates near record lows, Lawrence Yun said. He said that he believed some of the nation’s most overheated real estate markets will see sales slow this year – as many already have – but stressed that those slowdowns were due to low inventory and rising prices, not weak demand. However, Yun did warn that home prices in many areas were rising at an unsustainable rate.

“Over the past 10 years, prudent policy reforms and consumer protections have strengthened lending standards and eliminated loose credit, as evidenced by the higher-than-normal credit scores of those who are able to obtain a mortgage and near record-low defaults and foreclosures, which contributed to the last recession,” Yun said. “Today, even as mortgage rates begin to increase and home sales decline in some markets, the most significant challenges facing the housing market stem from insufficient inventory accompanying unsustainable home-price increases.”

Yun cited strangled inventory as the main issue in the housing market right now. Inventory levels have fallen for three consecutive years, according to NAR.

“The answer is to encourage builders to increase supply, and there is a good probability for solid home-sales growth once the supply issue is addressed,” he said. “Additional inventory will also help contain rapid home-price growth and open up the market to prospective homebuyers who are consequently – and increasingly – being priced out. In the end, slower price growth is healthier price growth.”

Yun anticipated a rise in inventory and moderate price growth in 2019, according to NAR. He projected that existing-home sales would rise 2% in 2019, while home prices would rise by 3.5%.

Source: Mortgage Professional America, Ryan Smith, 8-27-18

Posted on August 28, 2018 at 4:03 pm
Beverly Moser | Posted in Uncategorized |

What Does The Recent Rash Of Price Reductions Mean To The Real Estate Market?

Last week, in a new report from Zillow, it was revealed that there has been a rash of price reductions across the country. According to the report:

  • There are more price cuts now than a year ago in over two-thirds of the nation’s largest metros
  • About 14% of all listings had a price cut in June
  • Since the beginning of the year, the share of listings with a price cut increased 1.2%
  • This is the greatest January-to-June increase ever reported, and more than double the January-to-June increase last year

Senior Economist Aaron Terrazas further explained:

“A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsized price gains in recent years.”

What this DOESN’T MEAN for the real estate market…

This doesn’t mean home values have depreciated or are about to depreciate.

A seller may put a home worth $300,000 on the market for $325,000 hoping a bidding war will occur and an overanxious buyer will pay more than its actual value. That has happened often over the last few years. If the seller gets no offers and reduces the price to $300,000, it doesn’t mean the home dropped in value. It is still worth $300,000.

Home prices will continue to appreciate over the next 12 months. In this same report, Terrazas remarks:

“It’s far too soon to call this a buyer’s market, home values are still expected to appreciate at double their historic rate over the next 12 months, but the frenetic pace of the housing market over the past few years is starting to return toward a more normal trend.”

What this DOES MEAN for the real estate market…

This does mean that sellers should be more conservative when it comes to the price at which they list their homes – especially sellers in the upper end of each market.

Sellers have been listing their homes at inflated prices hoping a super-hot market will deliver a buyer willing to pay virtually any price to ensure they don’t lose the house. That strategy has worked somewhat successfully over the last two years. However, the time that strategy would have worked may have passed.

Again, quoting Aaron Terrazas in the report:

“The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly.”

Bottom Line

Prices are not depreciating. However, if you want to sell your house quickly and with the least amount of hassles, pricing it correctly from the beginning makes the most sense.

Source: Keeping Current Matters, 8-23-18

Posted on August 23, 2018 at 9:07 pm
Beverly Moser | Posted in Uncategorized |

Lack Of Listings Slowing Down The Market

As the real estate market continues to move down the road to a complete recovery, we see home values and home sales increasing while distressed sales (foreclosures and short sales) continue to fall to their lowest points in years. There is no doubt that the housing market will continue to strengthen throughout 2018.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory!

Here’s what a few industry experts have to say about the current inventory crisis:

Lawrence Yun, Chief Economist for the National Association of Realtors

“Inventory coming onto the market during this year’s spring buying season…was not even close to being enough to satisfy demand, that is why home prices keep outpacing incomes and listings are going under contract in less than a month – and much faster – in many parts of the country.”

Sam Khater, Chief Economist for Freddie Mac

“While this spring’s sudden rise in mortgage rates [took] up a good chunk of the conversation, it’s the stubbornly low inventory levels in much of the country that are preventing sales from really taking off like they should… Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.”

Alexandra Lee, Housing Data Analyst for Trulia

This seasonal inventory jump wasn’t enough to offset the historical year-over-year downward trend that has continued over 14 consecutive quarters…Despite the second-quarter gain, inventory was down 5.3% from a year ago. Still, this represents an easing of the double-digit drops we’ve been seeing since the second quarter of 2017.”

Bottom Line

If you are thinking about selling, now may be the time. Demand for your house will be strongest while there is still very little competition which could lead to a quick sale for a great price.

Source: Keeping Current Matters, 7-23-18

Posted on July 23, 2018 at 7:30 pm
Beverly Moser | Posted in Uncategorized |