To Wait or Not To Wait

Why Waiting To Buy Might Not Make Sense

March 31 2015

Whether you are a first time or a move-up buyer, there are two factors that will impact the amount of house you can afford in your price range: home prices & mortgage rates.

Let’s look at what the experts are predicting over the next twelve months for these two areas:

PRICES

Over 100 economists, real estate experts and investment & market strategists were recently polled as a part of the Home Price Expectation Survey. They were asked to project where home prices are headed. The average value appreciation projected over the next twelve-month period is approximately 4.4%.

MORTGAGE INTEREST RATES

In the latest Economic & Housing Market Outlook from Freddie Mac, they predict that the 30-year fixed mortgage rate will be 4.7% by this time next year. As of last week, the Freddie Mac rate was 3.69%.

What does this mean to you?

If you are a first-time buyer currently looking at a home priced at $250,000, this is what it could cost you on a monthly basis if you wait until next year to buy:

If you are a move-up buyer currently looking at a home priced at $500,000, this is what it could cost you on a monthly basis if you wait a year to buy:

Bottom Line

With both home prices & interest rates projected to increase, waiting to buy could put a serious dent in your family’s wealth.

To see how this applies to your unique situation just call, text or email.

NEW HOME SALES CONTINUE TO MOVE UP

When you are ready to move, new home or existing home just call text or email.

Feb. new-home sales soar to 7-year high

Doug Carroll, USA TODAY 4:24 p.m. EDT March 24, 2015

New homes under construction are shown for sale in Charlotte, N.C.(Photo: Chuck Burton, AP)

New-home sales soared almost 8% in February as a snowy winter month failed to deter buyers as expected.
Sales of single-family homes rose to a seasonally adjusted annual rate of 539,000, up 7.8% from January, the Commerce Department said Tuesday. That dwarfed economists' median forecast for a 470,000 annual rate and a small monthly decline, according to Action Economics' survey before the report.
Instead, January's sales rate also was revised up to 500,000 from 481,000 previously reported.
February's rate was the highest since February 2008. The last time new-home sales had back-to-back months with rates at or topping 500,000 was in April-May 2008, according to Census Bureau data from Haver Analytics.
Preliminary figures released Tuesday show February sales rates compared with January's surged 152% in the Northeast, fell 13% in the Midwest, rose 10% in the South and fell 6% in the West. The South and West account for the bulk of the national total.
Economists caution that the monthly new-home sales data are volatile because the sample sizes are small and the seasonal adjustments can produce unreliable data. Last month's figures could be revised down in next month's report as more data come in.
Not adjusting the data for seasonal variations shows new-home sales for the past 12 months total 450,000 through February. That is the highest 12-month figure since January 2009, but the trend is still about the same total as the month before, says Richard Moody, chief economist of Regions Financial.
"Yes, the pace of sales is improving, but that improvement continues to come at a grudging pace," he said in a note to clients. "While we do expect the pace to increase steadily over the course of 2015, we nonetheless expect that increase to remain gradual."
The median price of homes sold last month was $275,000. On a seasonally adjusted basis, the supply of new homes for sale fell 1.6% from January but rose almost 13% from a year earlier.
Builders are modestly optimistic about their industry's prospects this year, citing shortages of lots and labor and tight loan underwriting standards as factors that continue to strain supply.
The National Association of Home Builders/Wells Fargo confidence index for March dropped two points to 53, the NAHB said on March 16. It was the third straight monthly decline. The index is seasonally adjusted.
Index readings above 50 indicate more builders view market conditions as good rather than poor.
Existing-home sales also have been modest. The National Association of Realtors reported Monday that February sales rose 1.2% to a seasonally adjusted annual rate of 4.88 million. That was a little short of economists' consensus forecast and below the average monthly rate of 4.92 million last year and 5.07 million in 2013.
Many forecasts call for improved home sales this year.
In buyers' favor, interest rates remain near historic lows. The average U.S. fixed rate on a 30-year mortgage has mostly hovered below 4% since October and was 3.78% last week, according to mortgage financier Freddie Mac. But recent reports say lenders are restricting loan approvals for applicants with less than superior creditworthiness

KEEP YOUR HOUSE SAFE

5 Ways Your House Can Kill You — And How to Prevent It

By: Dona DeZube

Published: October 6, 2011

What do your furnace, your windows, and your gas grill have in common? They’re all conspiring to do you harm if you’re not careful. Here’s how to protect yourself and your family from easily preventable accidents.

Your home may seem safe and cozy, but there may be dangers lurking. Could you be at risk from one of these all-too-common problems?

1. Carbon monoxide poisoning

If your furnace or a gas appliance malfunctions, your house could fill with odorless, colorless, carbon monoxide gas that can be fatal. The Centers for Disease Control estimates that carbon monoxide poisoning kills over 400 people annually.

Prevent it

• Install $40 carbon monoxide detectors near the furnace and your bedrooms. Buy one recommended by Consumer Reports or one with an Underwriters Laboratory “UL” mark

• Install $40 carbon monoxide detectors near the furnace and your bedrooms. Buy one recommended by Consumer Reports or one with an Underwriters Laboratory “UL” mark that also says "Single Station Carbon Monoxide Alarm" and has an audible alarm.

• Get your HVAC and gas appliances serviced every year. Leaking natural gas can cause your house to explode.

• Don’t run cars in the garage with the garage door shut — more people die from carbon monoxide poisoning from idling cars than from furnaces, the CDC says.

2. Chimney fire

Creosote can be a killer. A by-product of bio fuels, such as firewood, creosote can build up on your chimney walls. This tar-like substance is highly flammable and can catch fire, melting the mortar, cracking tiles, and causing flue liners to collapse.

If the flames reach the exposed wood frame of your house, it could burn down in a matter of minutes. About 170 people a year die from fireplace and chimney fires.

Prevent it 

• Have your wood fireplace cleaned, and chimney inspected once a year (twice a year if you burn more than three cords of wood annually).

Burn only dry, cured firewood.

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3. BBQ gas explosion

You turn on your gas grill with the lid shut, go in the house, find your matches, then come back out and strike a match, blowing up your gas grill, knocking you unconscious, and setting your house aflame.

About 35 people die from propane-related explosions in the average year.

Prevent it

• Never turn on the gas to your barbecue grill with the lid shut.

• Set your grill up at least 10 feet from the house.

• Do a bubble test to look for leaking gas – put liquid soap on the connectors running between the gas tank and the barbecue and look for bubbles indicating a gas leak. 
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4. Drowning in a backyard pool

Drowning causes almost 2% of all unintentional injury deaths nationally. In states where pools are common, such as Florida, drowning is a leading cause of death for children 1- to 4-years-old.

Prevent it

• Inside, install childproof locks, and door and window alarms so you know when someone leaves the house. This is especially important if your house is part of the fencing system that surrounds your pool.

• Outside, put isolation fencing around all sides of your pool, install a self-closing, self-latching gate, and use pool and spa covers.

• Install a pool alarm ($90-$200).

• Learn CPR before you need it.
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5. Falling out the window

You open the window in your bedroom to get some fresh air on a hot summer day. Your 10-year-old twins are jumping on the bed and one of them falls against the window screen. The screen pops out and drops down to the front yard of your multi-story condo. That narrow escape could have ended in disaster -- 15 to 20 children under the age of 11 die annually from falls out of windows.

Prevent it

If you have young children, install window guards or window stops: 

• Open your double-hung windows from the top rather than the bottom.

• Keep furniture away from windows.

To-do list for Homeowners Now

SPRING-SPIRATION

Finally, spring is officially here. As the days continue to pass by during the season, day time will begin to increase. Spring refers to the season/idea of rebirth, rejuvenation and regrowth.  Therefore, spring is the perfect time to renew your garden/landscaping.  Here are a few tips to get your garden/landscaping a fresh new look.

Prepare your lawn:Rake your lawn to remove winter debris, dead growth, and leftover leaves from the fall. This will help bring light and air to the top soil level and allow the grass to grow. If there are any bare patches on your lawn, rake the area(s) firmly and then reseed.

Weed the young weeds now:
Any weeds that are in your garden beds will be the easiest to pull now since the roots are shallow. To minimize the growth of new weeds, cover bare spots with mulch or a ground cover.

Clean your gutters:
To prevent water from drowning on your plants below, be sure to clean your gutters. A house-end attachment specially designed for gutters will make the process a lot easier.

Fertilize:
Using coffee grounds to prep your soil is a great way to save money and be ‘eco-friendly’. Coffee grounds are filled with nitrogen, a mineral that helps in plant growth.  You can also use egg shells as a fertilizer. Crushed egg shells are rich in calcium carbonate which helps enrich the soil.

Water your plants:
Use cooking water. Watering plants with left over cooking water is a great way to add vitamins and minerals left behind after boiling pasta and vegetables. Make sure that the water has cooled down before you shower your plants. To fight off plant infections, use cooled off chamomile tea.

Garden at night:
Studies have shown that planting in the moonlight will actually make your plants grow faster and stronger. Planting at night also maximizes water usage.

If you are wondering about a new garden spot, please call, text or email.

The Real Reasons Americans buy homes

SURPRISE!! Among the top 5 reasons Americans buy homes, the top 4 are not financial.

The REAL Reasons Americans Buy a Home

December 23 2014

Last week, we reported on the financial reasons that the New York Times felt that homeownership was important. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.

There’s No Place Like Home

The top 4 reasons to own a home cited by respondents were not financial.

1. It means having a good place to raise children & provide them with a good education

From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.

2. You have a physical structure where you & your family feel safe

It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.

3. It allows you to have more space for your family

Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.

4. It gives you control over what you do with your living space, like renovations and updates

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:

5. Owning a home is a good way to build up wealth that can be passed along to my family

Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?

Bottom Line

Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, it's a great time to reflect on the intangible factors that make a house a home.

When you are ready to see how this applies to your unique situation, call, text or email me.

ANOTHER EASING OF HOME LOAN REQUIREMENTS

NOW EVEN MORE PEOPLE CAN TAKE ADVANTAGE OF TODAY'S HISTORICALLY LOW INTEREST RATES

Freddie Mac’s New 3% Down Program

March 23 2015

Today, Freddie Mac is scheduled to start buying mortgages with down payments of only three percent – the first time down payments have been this low on Freddie Mac loans in nearly five years. The program is called Freddie Mac Home Possible AdvantageSM.

In a recent Executive Perspectives, Dave Lowman EVP, Single-Family Business Freddie Mac, explained the potential impact this program will have on the housing market:

“There's a new reason Realtors and lenders may expect more qualified borrowers at the closing table during this spring's home buying season. In addition to low mortgage rates and rising job growth, the down payment hurdle is starting to shrink for creditworthy borrowers, including first-time homebuyers.”

And the mortgage industry agrees with Mr. Lowman. In a recent survey of mortgage originators by the National Association of Realtors (NAR), it was revealed that most loan officers believe the move to a lower down payment will increase access to mortgage credit. Here are that survey’s findings:

Bottom Line

Many potential buyers are “ready and willing” to buy a home but have been afraid they may not be “able” because of a lack of adequate savings for a down payment. Check with a local real estate or mortgage professional to understand what the new rules may mean to you.

When you are ready to see how this applies to your unique situation, just call, text or email.

Home Ownership Rates

Despite all the dire publicity here is what has actually happened to home ownership:

Now with mortgages easier to obtain we should see the rate go up some.

What? You thought mortgages were unavailable? Not with a reasonable credit score and income.

To see how this applies to your unique situation, please call (717-856-0669) text or email.

RENT TRAP

Easier to avoid than you may think

Don’t Get Caught in the ‘Renter’s Trap’

March 18 2015

There are many benefits to homeownership, one of top ones, is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

The National Association of Realtors (NAR) just released their findings of a study in which they studied “income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years in metropolitan statistical areas throughout the US.”

Don’t Become Trapped

The study revealed that over the last five years, a typical rent rose 15%, while the income of renters grew by only 11%. If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment.

The top 5 markets where renters have seen the highest increase in rents since 2009 are:

• New York, NY (50.7%)
• Seattle, WA (32.4%)
• San Jose, CA (25.6%)
• Denver, CO (24.1%)
• St. Louis, MO (22.3%)

Homebuyers, who were able to purchase their home over the same five-year period and lock in their housing costs, were able to grow their net worth as home values have increased and their mortgage balances have gone down.

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWire reported that analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment. 

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

According to Freddie Mac:

“Depending on their credit history and other factors, many borrowers can expect to make a down payment of about 5 to 10%. And new 3% down financing options for qualified borrowers could mean a down payment as little as $6,000 for a $200,000 home.”

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

To see how this applies to your unique situation, please call, text or email

Don't Lose the Luck You already have

There are no guarantees about the future but a buyer today has a bit of historic luck.

Don’t Let Your “Luck” Run Out

March 17 2015

The 30-year fixed mortgage interest rate is currently still below 4%. Many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year, believing they still have time to lock in a low rate.

If you look at what the experts are predicting over the course of the next 12 months, it may make the decision for you.

Predictions for 2016 2Q:

• 4.2% - Fannie Mae
• 4.7% - Freddie Mac
• 4.9% - Mortgage Bankers Association
• 5.3% - National Association of Realtors

Even an increase of half a percentage point can put a dent in your family’s net worth.

Let’s look at it this way…

The monthly payment (principal & interest only) on a $250,000 home today, with the current 3.86% interest rate would be $1,173.

If we take that same home a year later, the Home Price Expectation Survey projects that prices will rise about 4.4% making that home cost $11,000 more at $261,000.

If we take Freddie Mac’s rate projection of 4.7%, the monthly mortgage payment climbs to $1,354.

Some buyers might not think that an extra $181 a month is that bad. But over the course of 30-year mortgage you have spent an additional $65,160 by waiting a year.

To see how this applies to your unique situation just call, text or email.