Dec 15, 2014 | Market Outlook
Although there were few scheduled economic events related to mortgages and housing, last week brought an article about housing projections for 2015. Other news included increased job openings along with lower than expected jobless claims and higher mortgage rates.
Job Openings, Retail Sales and Mortgage Rates Rise
The U.S. Department of Commerce reported that November job increased to 4.80 million as compared to October’s reading of 4.70 million job openings. Weekly jobless claims corresponded as new claims fell to 294,000 as compared to the prior week’s reading of 297,000 new jobless claims. This was the lowest reading for new jobless claims in three weeks. Analysts had expected a reading of 206,000 new jobless claims.
Further signs of economic strengthening were seen in the retail sector. Retail sales posted their strongest gains in eight months with a gain of 0.70 percent in November according to the Commerce Department. November’s reading exceeded expectations of a 0.40 percent increase which was based on October’s original reading of a 0.30 percent increase in retail sales. November’s retail sales (excluding automotive sales) rose by 0.50 percent, which was the highest reading since June. October’s reading was later revised to 0.50 percent. Automotive sales rose by 1.70 percent in November, which was their highest reading since August.
Amidst last week’s economic gains, mortgage rates also rose. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage was 3.93 percent, a gain of four basis points over the previous week. The average rate 15-year mortgage gained 10 basis points at 3.20 percent. The average rate for a 5/1 adjustable rate mortgage rose by four basis points to 2.94 percent. Average discount points for all three loan types remained steady at 0.50 percent.
Analysts Offer Housing Predictions for 2015
Fortune reported predictions made by analysts during a panel discussion on housing trends. David M. Blitzer, chairman of the S& P Index Committee, characterized next year’s housing trends as “mysterious.” Analysts pinpointed the influence of the millennial generation as gaining strength in housing markets. As millennials begin to buy their first homes, their tastes and preferences are expected to overshadow the long-held influence of the baby boomer generation. Millennial influence includes a trend called millennial mis-match; Millennials prefer to live in high-cost areas including New York City, Honolulu, Hawaii and Austin, Texas, but their status as first-time home buyers conflicts with this preference. Other trends discussed by analysts attending the panel discussion included:
Mortgage rates predicted to rise: Stronger economic conditions and no Federal stimulus are expected to contribute to rising mortgage rates, which some analysts said were expected to rise to approximately 5.00 percent for a 30-year fixed rate mortgage.
Home price growth and affordability expected to decline: Home prices gained 6.40 percent year-over-year in October 2014 as compared to growth of 10.60 percent for the same period in 2013. High demand for homes in pricey markets coupled with rising mortgage rates are expected to price the middle class out of many high-demand markets.
What’s Ahead
This week’s scheduled economic events include the Wells Fargo/National Association of Home Builders Housing Market Index report for December and the Commerce Department’s December report on Housing Starts. The Federal Open Market Committee (FOMC) of the Federal Reserve will release its customary statement after its meeting concludes on Wednesday. The FOMC statement will be followed by a press conference given by Fed chair Janet Yellen, who also chairs the FOMC.
Dec 12, 2014 | Real Estate Tips
Are you thinking about buying or selling a home? If you don’t know a real estate agent or have a referral to one, you may end up working with someone unfamiliar who you will need to build a relationship with. Of course, as with any relationship there’s always a chance that things can go sour.
In today’s blog post we’ll share three easy ways that you can ruin the trust and rapport that you’ve built with your real estate agent.
#1: Lie or Embellish the Facts
When you ask a real estate agent to represent you in the home buying or selling process they’re going to need accurate information to help you make the best decisions. Lying or embellishing the facts can cause significant issues and should obviously be avoided.
For example, if your agent asks you how much you can afford for your new home, give them an accurate figure based on your mortgage pre-approval, your income and your current financial situation. If you’re selling your home and your real estate agent asks you about the home’s maintenance history, be honest and don’t try to cover anything up.
#2: Cheat on Them with Another Agent
Once you have a real estate agent searching for that perfect new home, they may need to expend quite a bit of effort in order to find exactly what you’re looking for. Imagine how hard they would work if they discovered that you’re having another real estate agent perform the same job, but only one of them will be paid for their work?
Don’t cheat on your real estate agent. If you feel that your agent is doing a poor job or you could find someone better, let them know. It’s better to move on than to have professionals working behind each other’s backs.
#3: Fail to Be Trusting or Respectful
If you fail to show trust and respect for your real estate agent you can rest assured they’re not going to bend over backwards to help you squeeze out that extra discount or get your home sale closed as quickly as possible. Treat your real estate agent as you wish to be treated and they’ll be more than willing to do their job.
Buying or selling, an experienced real estate agent is the best way to ensure that your transaction goes according to plan and that you accomplish your goals. When you’re ready to discuss buying a new home or selling your current one, contact your real estate agent and they’ll be happy to assist. Don’t forget to keep the above points in mind!
Dec 11, 2014 | Home Mortgage Tips
Whether you’re about to close on a lovely new house for your growing family or a stylish beachfront condo so you can retire close to the ocean, one thing is certain: you’re going to face a variety of closing costs. Insurance, taxes, financing fees, title fees, attorney fees and other costs will need to be paid, and if you’re a savvy buyer you’ll do everything you can to save on them.
In today’s post we’ll share three quick tips that can help you reduce your closing costs when you buy your next home.
Tip #1: Include Closing Costs in Your Negotiations with the Seller
As closing costs are a part of the real estate transaction they’re an excellent item to include in your negotiations with the seller.
For example, if you consider that closing costs might be 3 or 4 percent of the home’s value you can try to bring the seller’s asking price down to get those costs included. Or, you may be able to entice the seller with the prospect of a quick sale if they are willing to pay your closing costs in order to get you to sign on the dotted line.
Tip #2: Compare All of Your Mortgage Options
If you’re using mortgage financing to cover some of the up-front purchase cost of your home you’ll have other closing costs to pay including lender fees, mortgage insurance and more. Be sure to compare all of your options with your trusted mortgage advisor to ensure that you’re getting the best possible deal and paying the least amount in fees and interest.
You may also be able to save a bit on your closing costs by choosing a “no points” mortgage. In this type of mortgage you’ll end up saving on closing costs but you’ll be left paying a higher interest rate. Spend a bit of time doing the math to determine the best course of action.
Tip #3: Ask About Every Fee You’re Required to Pay
Finally don’t forget that you’re the customer and that you have the right to know about each one of your closing costs and why you’re expected to pay them. Being informed about all of the various items in your transaction will help ensure that you’re not paying something you could have avoided.
There you have it – three excellent tips for reducing your closing costs when you purchase your next home.
Dec 10, 2014 | Home Buyer Tips
Does your home feel like it’s starting to burst at the seams? Many homeowners across the country can relate to this feeling having bought a home only to run out of space due to a growing family or for other reasons. Let’s take a quick look at a few questions that will help you to determine whether buying a new home or expanding your current home is the best choice when you’re in need of some extra space.
Why Are You in Need of More Space?
The first question you’ll need to answer is…”why?” Are you running out of space because you’ve decided to start a family and have another child on the way? Or perhaps you’ve decided to start a business out of your home and you’ve outgrown the small room you had set aside as your office? Whatever the case, a major renovation or a move to a new home are both major decisions and ones that shouldn’t be made lightly. Sit down with your family and consider why you need more space and what you would do with a larger home if you had one.
How Much Space Do You Need?
“How much space” is another consideration that you’ll need to make in order to come to the best decision between expansion and buying a new home. If you find that your needs are perfectly suited except for that missing bedroom you may want to undergo a renovation. Conversely, if you find that you could use at least 2 or 3 new rooms and some extra room in the garage, you may want to start shopping for a new home.
Note that expanding your home to add an extra bedroom or to finish the basement will provide a limited amount of additional space – space which may end up feeling constrained later if your family or needs continue to grow. If you’re thinking bigger over the long term, you’ll likely be better served in finding a larger home that has extra room that you can grow into.
Other Factors for Consideration
If you’re thinking about expanding your current home you’ll want to consider how this will impact the other rooms in the house. Are you going to feel the need to renovate every room once that new bedroom is added? If so, is renovating a wise investment or should you simply move on to a newer home?
Living in a more spacious home is a liberating experience that your entire family will enjoy. Contact your local real estate agent today to learn more about buying larger properties and to view available real estate opportunities in your area.
Dec 9, 2014 | Home Buyer Tips
Size matters when you are buying a new home. Whether you plan to expand your family, need more room for your stuff, or are concerned with resale value, you want to get the most space for your money. Also, if you want to add a feel of luxury to your home, one of the best ways to do it is to create open spaces rather than cramming all your furniture in rooms so tiny you can barely walk around without knocking something over.
Traditionally speaking, the larger a home is, the more it costs. If there are two newly built houses side by side in a subdivision, the bigger one is likely to cost more. However, there are some tricks to finding spacious houses that are affordable.
Choose Emerging Neighborhoods
Houses in this year’s trending neighborhood are at their peak prices. Clever buyers look for neighborhoods that are in the process of being gentrified, buying at the bottom rather than the top of the market, to get more house for their money.
Fix It Up
Houses in perfect condition, that show well, sell for a premium. If you want to get more house for your money, choose something that needs a bit of TLC. A house that has pink walls and orange shag carpet might appear just too ugly to consider when you first view it, but it might just need a few coats of paint and some new carpet to become a spacious dream home.
Do Some Finishing
Unfinished areas such as attics and basements can be finished to create additional living spaces. The basement could become a family room and the attic an extra bedroom or study. An unfinished space can become the extra bathroom you need to make morning more manageable.
Consider an Addition
Contractors can add rooms to a house. If you have a large lot, you can build an extra wing. With a one story ranch house, it may be possible to raise the roof and add a second story.
The more stuff you have, the smaller your home appears. Reduce clutter and invest in smaller condo size furniture to give even the smallest home the appearance of spaciousness. Call an experienced real estate professional if you want to find your spacious luxury home at a bargain-basement price.
