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Monthly Archives: June 2014

What’s Ahead For Mortgage Rates This Week – June 30, 2014

What's Ahead For Mortgage Rates This Week June 30 2014Last week brought several economic and housing sector reports including Existing Home Sales, Case-Shiller and FHFA home prices for April, as well as New Home Sales. Freddie Mac’s weekly mortgage rates survey and the weekly report on new jobless claims were released on Thursday, and Consumer Sentiment for June rounded out the week on Friday.

Existing Home Sales Stronger than Expected! 

Good news came from the National Association of REALTORS® Existing Home Sales report for May, which reported 4.89 million previously owned homes sold on a seasonally-adjusted annual basis. Analysts had projected a seasonally-adjusted annual figure of 4.75 million existing homes sold based on April’s reading of 4.65 million existing homes sold; April’s reading was later adjusted to 4.66 million. May’s reading represented a monthly increase of 4.90 percent over April’s reading and was the second consecutive monthly increase in previously owned home sales.

The median sales price for existing homes sold in May was $213,400, which represented a 5.10 percent increase year-over-year.

May’s reading for existing home sales was the highest in seven months, and mortgage rates trended down during May, but strict lending standards were cited as a significant obstacle to first-time homebuyers.

Federal Reserve Chair Janet Yellen recently said in a press conference that mortgage lenders “need more clarity” as to their potential liability for failed mortgages. Mortgage lenders and loan servicing companies can be required to repurchase defaulted loans or to reimburse Fannie Mae and Freddie Mac for losses associated with mortgage defaults and foreclosures.

Case-Shiller, FHFA Report Slower Pace for Home Price Growth

The S&P Case-Shiller Home Price Index and FHFA’s House Price Index for April documented slowing rates of home price growth. Case-Shiller reported a 10.80 percent year-over-year growth in home prices for April, and FHFA reported a year-over-year gain of 5.90 percent rate of appreciation for home sales associated with mortgages owned by Fannie Mae and Freddie Mac.

Analysts noted that home price growth is leveling out after last year’s steep appreciation in home prices. While homeowners may disagree, economists say that a slower rate of home price growth can actually bode well for housing markets. More buyers can afford a home, which adds stability to housing markets. First-time buyers provide a foundation for home sales; if they cannot buy homes, then homeowners can’t sell existing homes and buy new homes. A slower but consistent rate of home price growth allows homeowners to build home equity, but won’t likely lead to housing “bubble.”

New Home Sales Blast Past Expectations, Mortgage Rates Fall

The U.S. Department of Commerce reported that new home sales for May reached a six-year high with a reading of 504,000 new homes sold on an annual basis. April’s reading exceeded expectations of 440,000 new homes sold as well as April’s adjusted reading of 425,000 new homes sold. The month-to-month increase in new home sales from April to May was the largest monthly increase in home sales in 22 years.

Although analysts caution that month-to-month seasonally-adjusted sales reports are volatile, this uptick in new home sales may help bolster builder confidence in housing markets. May prices for new homes also rose with the median home price at $282,000. This reading represents a year-over-year increase of 6.0 percent for new home prices.

The Northeast led regional results for new home sales with its reading of 54.50 percent; The West reported an increase of 34.00 percent. New home prices in the Southeast rose at an annual rate of 14.20 percent, and the Midwest region reported a 1.40 percent increase in new home prices. While analysts characterized the Northeast region’s May reading as exaggerated, overall results for new home prices indicate a comeback for new home prices.

Freddie Mac put some icing on the good news cake with its weekly mortgage rates report. Average rates for a 30-year fixed rate mortgage dropped to 4.14 percent with discount points lowered to 0.50 percent. The average rate for a 15-year fixed rate mortgage fell by eight basis points to 3.22 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.98 percent with discount points lower at 0.40 percent.

Thursday’s Weekly Jobless Claims Report reading fell by 2000 new claims to a seasonally adjusted reading of 312,000 new claims filed. Analysts had expected a reading of 310,000 new jobless claims. 214,000 per month have been added to the economy from January to May 2014.

Positive economic developments were not lost on consumers. The Consumer Sentiment Index for June posted a reading of 82.5 against an expected reading of 81.9 and May’s reading of 81.2.

This Week’s News

Scheduled economic news includes Pending Home Sales, Construction Spending, the ADP Employment report, and the Non-farm Payrolls Report. The National Unemployment Rate report along with Freddie Mac’s PMMS and Weekly Jobless Claims round out the week. No news is scheduled for Friday’s Independence Day holiday.

 
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Posted by on June 30, 2014 in Market Outlook

 

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Low Budget Decorating Tips For Your Home

Low Budget Decorating Tips For Your HomeDon’t despair if you are short on cash. You can still have a beautifully decorated home. Sometimes a little elbow grease is a decent replacement for extra cash, and other times you can get great deals by shopping around. You may even find the expensive item that you wanted for a great bargain.

Indoors

Simple things can mean a lot. You can change the entire look and feel of a room by just changing the window treatments. New drapes or blinds add warmth and appeal and will instantly give your home a fresh new look.

If that’s not enough, a fresh coat of paint transforms any room. Paint is one of the least expensive home decorating tools, and you can save even more money by doing it yourself instead of hiring a painter. It doesn’t require a lot of skill it just takes some time and good planning.

If your furniture looks tired, adding new throw pillows in vibrant colors that either match or contrast your room’s colors can make a world of difference, and help your old furniture regain its appeal.

The bathroom is the second most commonly remodeled room in the house (after the kitchen), but it can cost a lot of money to replace cabinets, fixtures, or tile. Simple things can help give your bathroom a face-lift: add candles for a lovely glow and inviting fragrance. Get new towels to hang and repaint walls. Re-grout any tiled areas for a fresh new feel.

Outdoors

Coming home from a long day of work to a worn-out looking home can be a downer. Add some hanging baskets of flowers or vines by the door and trim your path with a flower bed or decorative stone. Apply a little labor and repaint the trim on windows and doors to give your home a quick lift.

It doesn’t take a lot of money to make your home a haven.

 
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Posted by on June 27, 2014 in Home Decorating

 

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A Guide to Selecting a Home and Property That Will Suit Your Growing Family

A Guide to Selecting a Home and Property That Will Suit Your Growing FamilyBoth seasoned homeowners and first-time buyers know making the decision to purchase a new home is not one that is taken lightly. There are so many things to consider, from choosing a home with growth potential to finding a community to support a family’s interests and lifestyle.

While the decisions may seem endless, don’t be discouraged. Develop a strategic approach to buying a home with our definitive guide to selecting a home and property that will suit a growing family’s needs. Use this guide, along with advice from a trusted real estate professional in your area, to get started on the path to home ownership.

Look For Neighborhoods With Growth Potential

Choosing the right location is one of the most grappled with decisions when it comes to buying a home. While some home-buyers aspire to “keep up with the Joneses,” purchasing a home in the “trendy” neighborhood of the moment, savvy home-buyers know the best bargains can be found in “up-and-coming” locales.

Skip the higher property values and congestion and search for a home in an unincorporated area with growth potential. This might require driving a few extra blocks for that morning Starbucks coffee, but this will easily be overlooked once the community grows (and your home value with it).

Unfinished Basements Are Your Friend

Sure, most home-buyers cringe when they enter the sometimes scary, always dark and lonely, unfinished basement. But the savvy home-buyer knows unfinished basements are their friend.

A basic renovation can take the space from ghastly to awesome. Unfinished basements provide a number of options for growing families and are a great way to add bathrooms, bedrooms and common areas for kids and teens.

Choose A Home With Income Potential

While the average buyer is interested in a single-family home, don’t discount homes with basement apartments or mother-in-law suites. These types of home configurations can lead to significant income potential and can help to offset the cost of a monthly mortgage payment.

Income potential doesn’t just include garage apartments and mother-in-law suites; it encompasses open space as well. Build a duplex or a guesthouse on extra land for a significant return on investment. Or, take advantage of special land grants to grow crops or house bees on unused acreage.

Think Long-Term When Choosing Schools

When choosing schools, think macro not micro. Remember to evaluate school districts at all levels: elementary, middle and high schools. Don’t choose a community based on the elementary school, if the middle and high schools are not as impressive.

A young child might be an elementary school student upon purchasing the home, but will matriculate through the school district during the course of a 30-year mortgage. Be sure to select a home in a community with a school district that can support youngsters at every level.

For more information about finding a home for a growing family, contact a real estate agent in your area. 

 
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Posted by on June 26, 2014 in Housing Analysis

 

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Getting Past No: What To Do If You’re Turned Down For A Mortgage Or Other Home Financing

Getting Past No: What to Do If You're Turned Down for a Mortgage or Other Home FinancingGetting pre-approved for a mortgage loan is an integral part of having the ability to purchase a home in today’s society.

With most home prices well above what the majority of us have in the bank, getting approved for a mortgage can be the deal maker or breaker when it comes to purchasing a piece of property. Therefore, getting rejected for a mortgage can feel like a huge loss.

The first thing to realize, however, is that there are action steps you can take to get to “yes.” Here’s what to do if you’re turned down for a mortgage or other home financing.

Shop Around: Don’t Take “No” The First Time

If you get a “no” from your bank the first time around, don’t be fooled into thinking that everyone will give you the same answer.

Instead, be sure to shop around your mortgage with different banks, and opt to speak to a mortgage broker to leverage all of your options.

When looking at several different lenders, you’ll have a much higher chance of getting a yes since every lender adheres to different rules and restrictions. Though you may end up with a mortgage with a slightly higher interest rate, you’re likely to get approved for a mortgage or other home financing.

Ask Friends: Get A Co-Signer

If your “no” was the result of bad credit history or a low credit score, perhaps you should consider asking for the help of friends and family. Sometimes bringing a co-signer in on the deal who has better credit history and a higher credit score will change the response of your bank or lender significantly, and suddenly you’ll find yourself hearing the sought-after “y” word.

Ask Questions: Fix The Problem

If you’ve sought out several different banks and lenders, and still find yourself with rejected mortgage applications, be sure to understand why the “no” came in the first place. If it’s an issue of your credit history, which can’t be appeased with a co-signor, you may need to put in the time in order to correct some of your credit issues.

Other common reasons why people are rejected for a mortgage include unrealistic borrowing expectations, i.e. applying for a mortgage that is too high for you to satisfy, as well as an unreliable employment history or a general lack of credit history. Speak with your mortgage professional to determine the reason, and if shopping around or bringing in a co-signor doesn’t transform the “no” to a “yes,” seek to fix the problem instead.

Though it can be a daunting task to apply for a mortgage after you’ve been rejected, ensuring that you arrive at that ultimate “yes” is something you need to undertake in order to purchase a home and reach that next milestone in your life.

Having trusted professionals on your side is something that will surely ease the tension on all things involved in purchasing a home, including getting approved for a mortgage. For more information on how to get past “no” when searching for a home, call your trusted real estate professional today.

 
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Posted by on June 25, 2014 in Home Buying Tips

 

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Dos And Don’ts Of Buying Distressed Real Estate

How to Build the Ultimate Tree House for Your Children in Just Seven StepsDistressed real estate is real estate in need of serious repairs. These properties are often called “handyman specials.” If you have the skill or the money to complete the repairs, you can often find great deals. Here are some dos and don’ts of buying distressed real estate.

DO Get A Home Inspection

Distressed homes need repairs. Some of these repairs, like broken floor tile, are easy to see. Others, like water damage in the attic, can be easily hidden. The only way to know for sure what you’re buying is to have the property inspected by a professional home inspector.

DO Pay Attention To The Home’s Market Value

You don’t want to buy a home and spend your hard-earned money for repairs only to find out the home is worth less than you paid for it. Have your agent complete a comparative market analysis so you know what the home is worth.

DO Have An Estimate For Repairs

There’s no point buying a distressed home if you can’t afford the cost of the home and the repairs. Get an estimate from at least three contractors before you buy. Knowing the cost of repairs beforehand will help you make the best decision.

DON’T Think About Potential Profit

You’ve probably heard countless stories about people who bought distressed properties and sold them for outrageous profits. However, the reality is that most distressed homes are sold for a small profit or no profit.

DON’T Buy A Home Just Because The Price Is Low

When you buy distressed homes, you have to consider more than just the asking price. Add together the cost of repairs, insurance, and what you can realistically expect to make from the sale. This will tell you if the home really is a good investment for you.

DON’T Buy If You Don’t Have The Money

No matter how good a deal you find on distressed homes, they aren’t worth it if they will stretch your budget too far. The last thing you want to deal with is damage to your credit score and the risk of foreclosure in the event you can’t pay for the home.

Looking for a great deal on distressed real estate? Contact your trusted real estate professional today.

 
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Posted by on June 24, 2014 in Real Estate

 

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What’s Ahead For Mortgage Rates This Week – June 23, 2014

What’s Ahead For Mortgage Rates This Week June 23 2014 Last week’s scheduled economic news included the National Association of Home Builders/Wells Fargo Housing Market Index, Housing Starts and Building Permits. The Fed’s Federal Open Market Committee (FOMC) issued its usual statement at the conclusion of its meeting, and Fed Chair Janet Yellen also gave a press conference.

Home Builder Confidence Improves, but Housing Starts Slow

NAHB released its Housing Market Index report, which reached its highest reading in five months. The index moved up from 45 to 49; a reading of 50 indicates that more builders are confident about housing market conditions than those who are not. David Crowe, NAHB chief economist, said that builder confidence is in line with consumer confidence; he noted that consumers are waiting for a stronger economic recovery before buying homes and that builders didn’t want to build more homes than markets would bear.

According to the latest figures from the Department of Commerce, May housing starts fell to 1.00 million from April’s reading of 1.07 million on a seasonally adjusted annual basis, and missed the consensus reading of 1.02 million. Building permits issued in May fell by 6.40 percent to 991,000 permits issued for single and multi-family construction. In recent months, permits for single family homes have fallen, while permits for multi-family units are increasing. This concerns economists as single-family homes generate sales of retail goods including furniture and home improvement supplies, while multi-family housing is often occupied by renters and yields fewer home related purchases.

Warmer weather was expected to add to the pace of housing starts, but this did not occur during May.

Fed Reduces Asset Purchases, Mortgage Rates 

FOMC members reduced the Fed’s monthly asset purchases by $10 billion, for a monthly volume of $35 billion in Treasury securities and MBS. The meeting minutes noted FOMC concerns that inflation has not yet reached the committee’s benchmark of 2.00 percent inflation as a benchmark of economic recovery.

The minutes reflected FOMC’s position that it will maintain the target federal funds rate at between 0.00 and 0.25 percent for a considerable period after the asset purchases under the current quantitative easing program have ended. While analysts previously associated “considerable period” with a time frame of six months, Fed Chair Yellen stated during her press conference that there was no formula for determining the Fed’s actions; she emphasized that the Fed and FOMC would monitor a wide range of economic indicators, economic reports and developments in support of any decisions to change current monetary policy.

In response to a question about tight credit, Chair Yellen cited banks’ reluctance to lend to all but those with “pristine” credit scores as a factor contributing to slower recovery in the housing sector.

Mortgage Rates, Jobless Claims

Freddie Mac reported lower mortgage rates on Thursday. The reading for a 30-year fixed rate mortgage was 4.17 percent, a decline of three basis points. Discount points were also lower at 0.50 percent. The average rate for a 15-year fixed rate mortgage was lower by one basis point at 3.30 percent; discount points were unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell to 3.00 percent from last week’s reading of 3.05 percent. Discount points were unchanged at 0.40 percent.

New jobless claims were higher than expected at 312,000; analysts had predicted a reading of 310,000 against the prior week’s reading of 318,000 new jobless claims.

No economic reports were released Friday.

What’s Ahead

This week’s economic calendar includes several housing-related reports. Existing home sales, the Case-Shiller Housing Market Index and New Home Sales will be released along with multiple consumer-related reports and weekly updates for mortgage rates and new jobless claims.

 
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Posted by on June 23, 2014 in Market Outlook

 

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How To Attract High-End Buyers For Your Home For Sale

How To Attract High End Buyers For Your Home For SaleThere’s at least one good thing about the drop in the dollar and it’s boosting the real estate market. Many high-end Europeans are now looking toward the U.S. for a vacation home or permanent residence, and that could mean big hope for your home for sale. However, this also means a different way of selling.

Stage A Benefit

No open house for high-end buyers. Host an event instead – maybe even a benefit dinner for a worthy charity. Let people come and view the property, but give them an avenue to mix and mingle as well. In addition, they get to see how the house handles a bunch of guests.

Showcase A Chef

If you have a gourmet kitchen (or two), check with chefs that would like to showcase their cooking abilities. This creates an entire “house-buying” experience for your guests. Again, they see what the featured kitchen can handle as well as being able to enjoy the culinary arts of a professional chef.

Host A Private Tour

If your home has beautiful gardens and a large landscape, add a private concert or tour of the gardens. A wine cellar and large sitting rooms can turn the event into a stylish wine tasting event.

The biggest trick in attracting high-end buyers is showing off the house’s best features. If the event is hosted at night, you can show how attractive the home is with an overall “candlelight” appearance. You might even go so far as to set the time for when the sky is at it’s best and frames the home just right.

First impressions are everything, so pull out all the stops. Don’t let any great feature go undiscovered, from indoor swimming pools to music rooms and manly dens. Let your home shine!

 
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Posted by on June 20, 2014 in Home Selling Tips

 

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