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Monthly Archives: November 2015

What’s Ahead For Mortgage Rates This Week – November 30, 2015

Whats Ahead For Mortgage Rates This Week November 30 2015

Although last week’s economic calendar was cut short by the Thanksgiving holiday, several housing-related reports were released. The FHFA reported on third quarter results for its Housing Market Index and the Commerce Department reported on new home sales for October. Freddie Mac released its weekly report on mortgage rates and data on new weekly jobless claims was also released.

FHFA, Commerce Department report Gains for Home Prices, New Home Sales

Home prices for mortgages associated with mortgages owned or backed by Fannie Mae and Freddie Mac increased 1.30 percent during the quarter ended September 30. This was the 17th consecutive seasonally adjusted quarterly increases for home prices based on sale-only transactions. FHFA home prices rose by 0.80 percent from the second to third quarter of 2015 and rose by 5.70 percent from third quarter 2014 to third quarter 2015 readings.

New home sales rose by a seasonally adjusted annual rate of 10.70 percent to 495,000 sales based on a downwardly revised September reading of 447,000 new home sales.

New home sales results were mixed according to the Commerce Department. Sales of newly built homes rose by an astounding 135.30 percent in the Northeast and increased by 8.90 percent in the South and by 5.30 percent in the Midwest. Sales of new homes declined in the West with a reading of -0.90 percent.

Home shoppers received good news as the median price of a new home fell 6 percent to $281,500. Inventory of new homes increased to its highest level since 2010. Higher inventory could ease demand and rapidly rising home prices associated with low supplies of new homes for sale.

Mortgage Rates Mixed, Jobless Claims Lower

Average mortgage rates varied last week according to Freddie Mac. 30-year fixed mortgage rates were two basis points lower at 3.95 percent; the average rate for a 15-year fixed rate mortgage was unchanged at 3.18 percent, and the average rate for a 5/1 adjustable rate mortgage was three basis points higher at 3.01 percent. Average discount points where 0.70 for a 30 year fixed rate mortgage and averaged 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

New jobless claims fell from the prior week’s reading of 272,000 new claims to 260,000 new claims. Analysts expected a reading of 270,000 new claims. The four-week rolling average of new jobless claims was unchanged at 271,000 after an adjustment to the prior week’s average of 270,750 new claims to a weekly average of 271,000 claims filed over the previous four weeks.

What’s Ahead

This week’s scheduled economic news includes reports on construction spending along with Labor Department releases on the national unemployment rate and Nonfarm Payrolls. Freddie Mac’s report on mortgage rates and weekly data on new jobless claims will be released as usual.

 
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Posted by on November 30, 2015 in Market Outlook

 

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S&P Case-Shiller: September Home Prices Gain Across U.S.

SP CaseShiller September Home Prices Gain Across US

Home prices increased across the S&P Case Shiller 20-City Home Price Index in September. According to the 20-City Home Price Index, Year-over year home price gains increased to 5.50 percent from August’s reading of 5.10 percent. 17 cities posted higher year-over0year price gains in September as compared to August.

Western cities led price gains with San Francisco, California reclaiming its lead with a year-over-year gain of 11.20 percent in September. Denver, Colorado followed with a year-over-year gain of 10.90 percent and Portland, Oregon achieved the third highest year-over-year home price gain of 10.10 percent. Phoenix, Arizona had the longest consecutive run of year-over-year price gains for ten months and had a year-over-year gain of 5.30 percent.

Month-to Month Home Prices Indicate Stronger Housing Markets

After seasonal adjustment, the 20-City Home Price Index reported a month-to-month gain of 0.60 percent in September with home price gains in 19 cities. David M. Blitzer, Chairman of the S&P Indices Committee, said that home prices are growing at more than twice the rate of inflation. While this is good news for home sellers, it also means that home buyers are finding that home prices are rising faster than other economic sectors. Rising home prices present a challenge for first-time and moderate income home buyers. First-time buyers drive housing markets as their home purchases bring new demand into the market and allow current homeowners to move up to larger homes.

Mr. Blitzer also said that in spite of widespread media coverage of the Federal Reserve’s likely plan to raise its target federal funds rate from 0.00 to 0.250 percent to 0.25 to 0.50 percent in December, the increase in the federal funds rate should not cause an major rise in mortgage rates, which are expected to stay near 4.00 percent for a 30-year fixed rate mortgage.

Based on readings for national median income, median home price and average mortgage rates, Mr. Blitzer said that affordability for homeowners within the median income range who were buying median priced homes had “slipped recently.”

Year-end reports on housing markets and general economic conditions will likely cause adjustments to forecasts for home prices and affordability. Strong labor markets may improve affordability for home buyers and the actual impact of any Fed move to raise rates will influence housing markets and home prices in 2016.

 
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Posted by on November 27, 2015 in Market Outlook

 

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Thinking About Downsizing? Here’s What You Need to Know About Life in a Condo

Thinking About Downsizing? Here's What You Need to Know About Life in a CondoThe shift from home living to condo life may seem like a minor one, but there are plenty of things that will differentiate your lifestyle other than size when it comes to making a condominium purchase. If you’re contemplating this move and wondering about some of the things that this might entail, here are a few factors that are worth considering.

The Fees You’ll Have to Pay

While a smaller condo is unlikely to have the same associated costs as a large home, you will be paying a monthly condominium fee that will be covering maintenance and insurance so that many repairs and upgrades won’t have to be paid out of pocket. While this cost will not cover each and every maintenance issue that can occur in a condo, it should keep you covered for many standard home costs. When purchasing a condominium, it’s important to read about what this monthly fee entails.

The Life of Central Living

Life in the suburbs can often mean that you’re far away from the amenities of the city, but many condominiums are built in areas that are full of restaurants, pharmacies, cultural centers and grocery stores which are only a short distance away. If you don’t mind getting into the car to run your errands, this might not be that important to you, but if you enjoy the exercise and like having amenities close by this type of living situation can be a welcome change.

Less Room for Stuff & Storage

Condo life can certainly eliminate many of the responsibilities of having a home, but if you’re downsizing there’s a possibility that you may have to get rid of a large number of items to successfully fit into your new space. If you’ve thought about the decision a lot and are convinced that condo living is the right choice, it’s still worth considering how much storage space you will have in your new home so that you can plan for this change, and shift your living style to fit the demands of a smaller space.

There are a lot of things to think about if you’re planning to downsize into a condo, but if you’ve considered the space you’ll have to work with and the conveniences that will make your life easier, you’re probably already prepared for the shift. If you’re curious about condo living and options available in your area, you may want to contact a local real estate agent for more information.

 
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Posted by on November 25, 2015 in Home Buyer Tips

 

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Existing Home Sales Fall More Than Expected

Existing Home Sales Fall More Than Expected

Sales of previously owned homes reached 5.36 million sales on a seasonally adjusted annual basis and fell by 3.40 percent in October according to the National Association of Realtors®. Rising home prices and a shortage of available homes strained housing markets. Concerns over potentially higher mortgage rates may have sidelined home buyers as concerns over an anticipated rate hike by the Federal Reserve persisted. Many analysts expect the Federal Reserve to raise rates at its December meeting of the Federal Open Market Committee, which oversees the Fed’s monetary policy. Raising the target federal funds rate would cause consumer interest rates and mortgage rates to increase as well.

Shortage of Available Homes Could Lead to “Inventory Crunch” Next Spring

Lawrence Yun, Chief Economist for the National Association of Realtors®, cited concerns over the shortage of homes for sale. He said that a persisting shortage of available homes could lead to an inventory crunch during next spring’s peak selling season.

Home prices increased by 5.80 percent year over year to an average of $219.600. Rising home prices impacted decreasing sales in the West and South while home sales held steady in the Northeast, where home price growth was the slowest.

First-time Home Buyers Lag in Home Purchase Numbers

Although first-time buyers represented 31 percent of home buyers in October, which was a two percent increase over September’s participation, first-time home buyers usually represent approximately 40 percent of buyers of existing homes. First-time buyers are important to housing markets as they generate sales of homes by homeowners wishing to move up or relocate.

First-time buyers can be adversely affected by home prices and mortgage rates; a shortage of first-time buyers could create further slowdowns in home sales. There is good news due to steady job growth, which is important to those who are considering buying a home. Strict mortgage credit requirements are showing signs of relaxing and home builders are encouraged by current and future housing market conditions.

The National Association of Realtors® forecasts that 2015 sales of pre-owned homes at a level of 5.3 million sales, which would be the highest sales rate since 2007. Sales of existing homes are expected to rise by 3 percent in 2016, but mortgage rates and affordability will continue to influence actual sales and overall health of housing markets in the New Year.

 
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Posted by on November 24, 2015 in Market Outlook

 

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What’s Ahead For Mortgage Rates This Week – November 23, 2015

Whats Ahead For Mortgage Rates This Week November 23 2015

Last week’s economic events included reports the National Association of Home Builders Housing Market Index, Housing Starts and the release of minutes for the most recent meeting of the Fed’s Federal Open Market Committee. The details:

NAHB: Builder Confidence in Housing Markets Dips

The National Association of Home Builders reported that builder confidence dropped to a reading of 62 as compared to October’s revised reading of 65. Any NAHB reading above 50 indicates that more builders are positive about market conditions than not. NAHB’s assessment of housing market conditions is based on readings for three aspects of current and future market conditions. November’s reading of 67 for current housing market conditions was three points lower than October’s reading of 70. Expectations for market conditions for sales of single family homes over the next six months fell by five points in November to a reading of 70. Builders’ sentiment about prospective buyer foot traffic in new single family developments rose by one point to 48.

Home builders started more new homes than at any time since September 2007; analysts cited wage growth and low unemployment figures along with high demand for homes as driving builder confidence in housing markets. Demand for homes continued to exceed homes available for purchase, which is a driving force for builder confidence.

NAHB Regional Builder Confidence Readings 

Regional readings provide a snapshot of regional housing market conditions on a month-to-month bases and on a three month rolling average. The monthly readings for November were lower except for the Western region, which gained one point for a reading of 77. The Northeastern region held steady with a reading of 52; the Midwest’s reading also decreased by one point to 59 and builder confidence in the Southern region fell by five points to 62.

Monthly regional readings for home builder confidence can be volatile due to regional economic conditions; the NAHB provides a three-month rolling average for its four U.S. regions. In November, the Northeast region reported a reading of 50 which was three points higher than October’s reading. The Midwest region was unchanged from October’s reading of 60; the South also reported no change from its October reading of 65. The Western region posted an increase of 69 to 73 over the three months between August and November.

Housing Starts Lowest Since Spring Floods

According to the Commerce Department, housing starts fell by 11 percent to an annualized reading of 1.06 million in October. This was the lowest reading since last spring, when construction was adversely impacted by flooding. September’s reading was adjusted to 1.19 million starts. Meanwhile, building permits issued rose by 4.10 percent to an annual rate of 1.15 million starts in October.

While housing starts fell by 18.60 percent in the South, permits issued rose to their highest level since 2007. The South is the most active region for home construction and accounts for half of all new home construction in the U.S.

Mortgage Rates, New Jobless Claims Lower

Mortgage rates fell across the board last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage fell by one basis point to 3.97 percent; the average rate for a 15-year fixed rate mortgage fell two basis points to 3.18 percent and the average rate for a 5/1 adjustable rate mortgage was five basis points lower at 3.03 percent. Discount points averaged 0.60 percent for a 30-year fixed rate mortgage and 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

New jobless claims also fell last week to a reading of 271,000 new claims filed as compared to expectations of 270,000 new claims filed and the prior week’s reading of 276,000 new claims filed. Lower jobless claims indicate further strengthening of labor markets, but seasonal hiring may have positively impacted the reading for new jobless claims.

What’s Ahead

Next week’s scheduled economic news releases include several housing reports. Existing Home Sales, the S&P Case-Shiller Housing Market Index, FHFA House Prices and New Home Sales will be posted along with regularly scheduled reports on mortgage rates and new jobless claims. There will be no economic reports released on Thursday or Friday due to the Thanksgiving holiday.

 
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Posted by on November 23, 2015 in Market Outlook

 

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How Do I Know If I Am Ready To Buy A Home?

How Do I Know If I Am Ready To Buy A Home?

As you’ll see in this video, you can find out by asking yourself some questions:

  • Do I have a steady source of income (usually a job)?
  • Have I been employed on a regular basis for the last 2-3 years?
  • Is my current income reliable?
  • Do I have a good record of paying my bills?
  • Do I have few outstanding long-term debts, like car payments?
  • Do I have money saved for a down payment?
  • Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer “yes” to these questions, you are probably ready to buy your own home.

 

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Posted by on November 20, 2015 in Home Buyer Tips

 

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Remodeling 101: How to Create a Proper Budget for Any Renovation, Large or Small

Remodeling 101: How to Create a Proper Budget for Any Renovation, Large or SmallWhether you’re readying to put your home on the market or you haven’t updated your space in a while and want to modernize, approaching renovations can be a struggle. With so many things to fix up, both large and small, it can seem overwhelming to prioritize, set the money aside and get to work. If you’re having trouble figuring out where to begin with budget, here are some tips for how to properly prioritize so you can maximize your renovation expenditures.

Determine What Is Most Important

Whether it’s the tile floor in your bathroom or the outdated kitchen sink, if the need for an upgrade in a certain part of your home has been staring you in the face for a while, you’ll want to begin there. By determining your first priority and the no-frills cost assessment of completing it, you can arrive at the cost of what renovating the item will mean. Once you’re in the ballpark, you can then move on to any additional features or accessories that may perk up your basic renovation.

Add A Little Extra To The Budget

The downside of any budget is that costs will always come along that were not predicted, and they can entirely break the bank and your original projections. Instead of hoping for the best, add some extra money to the outline of total expenses for your renovation so you can be prepared for some of the hiccups that will come along. This will ensure that you have the financial wherewithal to complete the renovation and won’t be disappointed in the final outcome for your finances.

Consider Where You Can Cutback

Whether you’ve been dreaming of a new living room set for a while or replacing the flooring in the kitchen, you can update the area of your choice while still economizing in other ways. For example, if you’re going for modern eclectic in your living room, you may want to splurge on an updated couch, but you may be able to save by purchasing a retro coffee table online or a unique side chair that’s secondhand to go along with it. This may provide a unique upgrade, without all the expense of in-store purchases.

It can be hard to know where to begin when it comes to revamping your house, but it’s important to start with what you really can’t live without and move outward from there. If you’re curious about home renovations and how they can improve the market value of your home, you may want to contact your local real estate professional for more tips.

 
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Posted by on November 19, 2015 in Around The Home

 

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