Nov 19, 2013 | Housing Analysis
The National Association of Home Builders released its Housing Market Index for November on Monday. This month’s HMI reading was 54 against expectations of a reading of 55. October’s reading was also 54 after being downwardly revised.
Readings over 50 generally indicate that a majority of builders surveyed are confident in current housing market conditions, but the current pause came after two months of decline in home builder confidence. While the short term index readings are lower than in past months, the HMI is currently 20 percent higher than last year.
David Crowe, chief economist for NAHB said that “the fact that builder confidence remains above 50 is an encouraging sign.” Mr. Crowe also cited federal debt and budget issues as factors that keep builders and consumers from building and buying homes.
Fluctuating Mortgage Rates Of Concern To Builders, Home Buyers
Home builders are also subject to the impact of volatile mortgage rates, which can create affordability issues for first time and moderate income home buyers. There is some good news concerning mortgage rates as the Federal Reserve announced its plant to keep its quantitative easing program in effect in the coming months.
QE was implemented in 2012 and consists of the Fed purchasing $85 billion per month is treasury and mortgage-backed securities with the goal of keeping long-term interest rates and mortgage rates low.
Home builder confidence readings are not in synch with construction rates, as builder confidence was rapidly driven by excessive demand for homes against minimal inventories of available homes in many areas.
Components of November’s HMI provide more precise indications of builder confidence. November’s reading for confidence in sales of single family homes within the next six months fell from 61 in October to 60 in November.
Builder sentiment for current home sales was unchanged at 58 and the November reading for builder confidence in buyer foot traffic fell by one point from 43 in October to 42.
Regional Home Builder Confidence Readings Mixed
Regional builder confidence readings for November were as follows:
Northeast: This region gained 14 points with a reading of 44 for November.
South: Builder confidence rose by one point to a reading of 55.
Midwest: November’s reading declined by eight points to 54.
West: The reading for November was one point lower at 58.
Home sales are typically slower during the holiday season and winter months.
Nov 18, 2013 | Mortgage Rates
The Veterans Day holiday on Monday contributed to a quiet week for economic news. On Wednesday the reading for the federal budget deficit for October fell from September’s reading of -$120 billion to -$92 billion.
Freddie Mac Released Its Primary Mortgage Market Survey On Thursday
The average mortgage rates increased across the board, but remain below historical levels. The rate for a 30-year fixed rate mortgage rose by 9 basis points from 4.16 percent to 4.35 percent with discount points decreasing from 0.80 percent to 0.70 percent.
The average 15-year mortgage rate rose from 3.27 percent to 3.35 percent with discount points the same at 0.70 percent. The rate for a 5/1 adjustable rate mortgage increased from 2.96 percent to 3.01 percent with discount points moving from 0.50 percent to 0.40 percent.
Weekly Jobless Claims were released Thursday and were reported at 339,000 new claims. This was higher than the expected number of 335,000 new claims, but lower than the prior week’s reading of 341,000 new claims.
In other news, Janet Yellen, the President’s choice for chairing the Federal Reserve, defended the Fed’s quantitative easing policy during her first confirmation hearing before the Senate Banking Committee. QE, which involves Fed purchases of $85 billion monthly in Treasury and mortgage backed securities, was designed to keep long-term interest rates and mortgage rates low.
Credit Reporting Agency: Mortgage Defaults Reach 5-Year Low In Q3 2013
TransUnion, one of three major credit reporting agencies in the U.S., reported that mortgage defaults fell to a five-year low to a reading of 4.09 percent for the third quarter of 2013.
This reading is lower year-over-year than the revised reading of 5.33 percent for the third quarter of 2012. The reading for third quarter 2013 mortgage defaults is also lower than the reading of 4.32 percent for the second quarter of 2013.
A mortgage default is defined as a home loan that is at least two months past due on payments.
Analysts cite moderate but stable job gains, comparatively low mortgage rates and a short supply of available homes as factors contributing to improvements in the housing sector. Analysts noted that mortgage defaults have declined during the past five quarters.
As defaulted mortgage loans made before the economy crashed are foreclosed, mortgage defaults were expected to continue falling. TransUnion reported that it expects mortgage defaults to fall below 4.00 percent by year-end.
What’s Coming Up: NAHB Index, FOMC Minutes
This week, the National Association of Home Builders is scheduled to release its Home Builder Confidence Index for November.
Along with the weekly releases of Jobless Claims and Freddie Mac’s PMMS report on mortgage rates, the FOMC is expected to release the minutes of its last meeting. Existing Home Sales for October are also set for release.
Nov 16, 2013 | Home Buyer Tips
An open house gives you a great opportunity to look more closely at real estate you might be interested in buying. It also affords you the chance to chat with the owner or real estate agent so you can bring up any issues or hesitations you have with the home.
Knowing what to ask can be difficult, so below are examples of questions to ask at the next open house you attend.
Why Has The Seller Decided To Sell Now?
If you ask why the seller is moving, you could learn valuable information to help determine your offer or possibly whether or not you want to buy the home.
Knowing whether the owners are about to go into foreclosure, have experienced trouble in the neighborhood, or if they’ve retired and completely paid off the home can help you understand how urgently they need to sell their property.
Has The Seller Had Any Other Offers?
Don’t forget that you are not only negotiating with the seller for a price, you are also competing with other potential buyers. It really helps to know what you are up against.
It is important to understand that you might not get a 100% straight answer to this question as most sellers know that competition or perceived competition can cause a potential buyer to move forward more quickly and at a higher price.
If you’re comfortable in this discussion, you might want to try and see if you can find out the details of any other offers.
Does The Property Have Special Ownership Costs?
Ask the agent or owner about the other costs associated with owning the property, such as Home Owners Association fees within a condo complex or a gated community. It’s important to know about these extra expenses in advance so you can make an informed offer.
You may also want to ask about any pending litigation concerning the property. Litigation is not always a deal killer, but it’s better to know the details before you sign closing documents.
What Furniture And Appliances Are Being Sold With The House?
Most of the time, a seller will include their major appliances such as the refrigerator, stove and dishwasher with the home, but this isn’t always the case. If you don’t already have these items, it’s important to know whether they are included in the purchase price.
Is There Anything Else That You Want To Leave With The Home?
This is an important question to ask. Especially if there are specific things in the home that you have a strong interest in. Perhaps there is custom art work or a pool table that fits perfectly in the game room.
The seller may be eager to part with those items and include them in the sale of the home or sell them at a large discount. The open house is a great opportunity to learn more about a home before making the decision to buy it, so be sure you ask the right questions.
Nov 15, 2013 | Around The Home
Updating home decor used to be more than just a small task and a lot of work. Fear no more if you have a flair for home decoration projects you are in luck. Nowadays there are so many resources and outlets to use. There are no more excuses for not being to afford a home decor project.
DIY Is The New Black
There a billion home decor and DIY magazines and websites out there but the best way to receive fresh and unique ideas Pinterest has become the new Google in DIY projects. Not only does it provide inspiration and it’s easy to browse and search projects.
If you are looking to get involved in re-puporsing or recycling existing furniture and other home goods, not only can your costs stay low, but it’s likely that you have the required project materials in your home already.
A Sampling Of Some Projects Include:
- Making bathrooms more private using stenciled window patterns
- Creating slip-covered, upholstered headboards
- Disguising less-than-perfect cabinet/cupboard doors with prints
- Transforming old mirrors and windows into functional message boards
- Decoupaging retro posters to revitalize old furniture
- Resuing old glass jars and creating light fixtures
- Old potato sacks can be wrapped around canvas to create tack boards
- Used tires can be repainted and used as flower pots
- Raggety old shirts can be cut up and used as new pillow cases
- Painting an accent wall adds a new energy into any room
The projects range in difficulty from basic to advanced. Some require nothing more than scissors and glue; others require advanced skills in woodworking and sewing. One thing is for certain is that there is something for everyone.
These are just a few ideas to add some spice in your home decor, the Holidays are around the corner and what a great way to get involved than doing a DIY project together. Which ones will you incorporate into the decor of your home? For more information about DIY projects and home ownership, feel free to contact your tursted real estate professional.
Nov 14, 2013 | Home Building Tips
You’ve found the perfect new development and think your children would love swimming in the community pool and riding bikes on the wide streets. The new construction’s sales agent gave you a price and made a strong pitch urging you to buy immediately.
The question is, should you sign on the dotted line or bring in a real estate agent to handle the contract and negotiations?
The first thing you need to realize is that the new construction sales agent represents the developer and has their investment in mind. A real estate agent is someone who will be on your side. They’ll represent your interests and can help you.
Go Through The Process
If you’re looking at a specific development, the sales agent might offer you a discount if you sign without using a real estate agent. This is because the sales commission for the real estate agent usually comes out of the seller’s pocket.
However, most developers have this figure built into their price, so you might as well enlist a real estate agent’s help and advice — it’s free after all.
Decide If It’s A Smart Investment
Developers are invested in the property they’re trying to sell. They need to unload every lot in order to make a return on their investment, so it’s likely they don’t have your best interests in mind. A real estate agent will know what homes sell for in the area, what the school district is like and if it’s a good neighborhood. They’ll be able to recognize if it’s a good fit for your family.
Negotiate With Insider Knowledge
A real estate agent knows their market and usually the local gossip. If they’ve heard that a developer is willing to entertain low offers, then they might have clients that could buy in a neighborhood thought to be out of their price range. Also, they’ll know which upgrades a developer is likely to include in order to make the sale.
Decipher Confusing Paperwork
Buying property comes with a lot of paperwork. Contracts can be extremely confusing, so it’s always a good idea to have a seasoned veteran read over yours. A real estate agent has a great deal of experience with complicated contracts and knows what phrasing should be included and where sellers slip in sneaky wording.
From making sure the new construction is right for you to ensuring you get the upgrades you want and examining the contract with a fine-toothed comb, a real estate agent will represent your interests and get you the best deal.
