Fed Leaves Rates Alone But Hints at Future Hikes | #MomemtaryRateRelief #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Fed Leaves Rates Alone But Hints at Future Hikes | Realtor Magazine

The Federal Reserve decided Wednesday to hold off on raising its short-term interest rates. But it hinted that it likely will deliver its third interest rate increase of the year at its next meeting in late September. The Fed’s key rate does not have a direct impact on mortgage rates, but it usually influences them.

Rising interest rates

© pbombaert – Moment/Getty Images

“Economic activity has been rising at a strong rate,” the Fed’s statement read. Economic output rose at a 4.1 percent annual rate in the second quarter, which is the highest three-month increase since 2014.

In June, the Fed had raised its benchmark rate to a range between 1.75 percent and 2 percent. On Wednesday, it voted unanimously to keep the rate at 2 percent. The Fed has hinted at two more increases before the end of 2018.

“The cost of borrowing has increased, whether you are dealing with mortgage loans, auto loans, student loans, or credit cards,” Ric Edelman, co-founder and executive chairman of Edelman Financial Services, told CNBC. “It’s more expensive now than it was a month ago and it’s projected that it will get higher still.”

The economy, the Fed, and inflation all have an influence over long-term fixed-rate mortgages. Mortgage rates have already been on the rise, with the 30-year fixed-rate mortgage averaging about 4.71 percent, up from 4.09 percent in 2015, CNBC reports.

Those with adjustable-rate mortgages or home equity lines of credit will also be affected. Greg McBride, chief financial analyst at Bankrate, recommends those with ARMs to refinance into a fixed-rate mortgage that will likely offer a lower rate than what an ARM will adjust to later this year. Homeowners with HELOCs, McBride adds, may want to ask their lender to freeze the interest rate on their outstanding balance or consider refinancing into a fixed-rate home equity loan (note that there are caps on how much owners can access).

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Inventory Climbs in a Third of Largest U.S. Cities | #GoodNewsForBuyers #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Inventory Climbs in a Third of Largest U.S. Cities | Realtor Magazine

Housing inventories in high-priced markets are gradually making a turnaround. One-third of the largest 45 U.S. metros saw a yearly increase in housing inventory in July, realtor.com® reports. In some markets, the inventory increase has been dramatic. For example, in Silicon Valley, the San Jose metro posted a 44 percent increase in inventory compared to a year ago.

House monopoly pieces

© mile84 – iStock/Getty Images Plus

The greater number of choices, however, doesn’t mean lower prices. The median list price continues to rise and remained at an all-time high of $299,000 in July, unchanged from June, realtor.com® reports. In the 45 largest metros that realtor.com® tracked, prices are notably higher in markets where inventory is on the rise.

The uptick in housing inventories appears to be concentrated in high-priced housing markets, realtor.com® reports. The inventory of homes listed above $350,000 rose 5.7 percent, while the inventory of homes below $200,000 plunged 15.6 percent. The inventory of homes between $200,000 and $350,000 was essentially flat, decreasing slightly at 0.6 percent.

“July inventory growth is in high-priced, competitive markets, and often at the pricier end of these markets,” says Danielle Hale, realtor.com®’s chief economist. “Although signs of an inventory turnaround are encouraging, whether they mean good news for buyers remains to be seen. These areas are seeing more new listings and some construction growth, but high prices and fast-selling homes are causing some buyer hesitation which is reflected in fewer home sales.”

 

July year over year inventory change. Visit source link at the end of the article for full text.

© realtor.com

 

*Excluded: Denver, Columbus, Las Vegas, Nashville and Birmingham data is under revision and excluded due to MLS feed changes. Adjusted: Washington and Baltimore inventory trends are adjusted to show total listing movement instead of active listing movement due to MLS feed changes. Active listings are non-pending, for-sale home listings.

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How Much Cigarette Smoke Decreases Resale Value | #SmokingInside #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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How Much Cigarette Smoke Decreases Resale Value | Realtor Magazine

Smoking in a home can reduce that property’s resale value by up to 29 percent, according to realtor.com®. And home buyers who fall for a home that reeks of smoke shouldn’t assume the odor will go away as soon as the smoker moves out.

Tobacco-specific nitrosamines and nitrous acid can cling to walls and other surfaces within the house. “You could breathe in several hundred nanograms of these carcinogens long after the last cigarette burned out,” warns Joshua Miller, director of technical training at Rainbox International, a home restoration company.

Researchers at San Diego State University measured third-hand smoke pollutant levels in smokers’ homes after they moved out. They found that pollutants remained two months later, even after the homes had been cleaned and vented.

Sellers are not required to disclose that someone smoked inside a home. Buyers can detect a smoky smell themselves, or they may suspect a strong wave of air fresheners is masking an odor. A home inspector may be able to weigh in, too, or buyers can have their agent ask the seller’s listing agent directly.

Removing the cigarette smell from a home is not easy and sometimes removing entire systems is the only way to remove the stench quickly—the smoke will seep into everything.

“Clean the air ducts,” advises Richard Ciresi, owner of Aire Serv in Louisville, Ky. “Professional air duct cleaning is an effective way to eliminate odors that manifest when you turn on the furnace or AC.”

He also suggests changing the filter on your HVAC unit as frequently as every 30 to 45 days.

Miller recommends washing the walls and ceiling with a 3:1 vinegar-water mixture. “Ceilings can be the biggest culprit in a persisting smoke smell in a home, since cigarette smoke tends to travel upwards and latch onto the first surface it comes in contact with,” Miller says.

Repainting the walls may help but the smell will eventually come back if homeowners don’t first use an odor-neutralizing primer, such as Kilz, before repainting.

Fabrics can also hold smoke. “You can sprinkle a deodorizing powder like baking soda on carpets,” Miller suggests. Odors can cling onto lightbulbs as well, so be sure to insert fresh bulbs.

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Consumers: Family Ties Don’t Trump Free Dream Home | #InterestingStats #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Consumers: Family Ties Don’t Trump Free Dream Home | Realtor Magazine

Just how much would consumers be willing to give up if they could get their dream home for free? Residential lender FindAMortgageBroker.com posed this question to about 1,000 homeowners and non-homeowners. The lender is not giving away a free dream home, but wanted to find out to what extent Americans value the idea of a dream home.

Consumers’ willingness to shut off communication with friends and family was surprising, at 16 percent, says Mat Ishbia, CEO of United Wholesale Mortgage in Pontiac, Mich., about the study’s findings. “You wouldn’t be able to show off that dream home,” he told CNBC. Eighteen percent of respondents also said they’d be willing to give away their beloved pet to get their dream home for free.

American homeowners and non-homeowners were given eight scenarios and asked if they would give up items or people to own a dream home for free. Here’s how they responded:

  • 35% would eat fast food for every meal for one year;
  • 17% would vote against their own political leanings for the rest of their life;
  • 18% would give away their pet(s);
  • 26% would turn down an offer for their dream career;
  • 19% wouldn’t step foot outdoors for two years;
  • 53% would not openly root for the Cleveland Browns for the rest of their life;
  • 16% would abruptly cut off all communication with everyone they know for one year;
  • 49% would drink nothing but water for five years.

 

The lender had a message for its surveyed participants: Before you take any extremes in making such sacrifices, talk to a lender. A lack of certainty is the biggest roadblock to buying a home, Ishbia says. He says too many consumers make guesses about what they need to qualify for a mortgage. Gaps in knowledge can create internal barriers and hinder searching for more information, he says. Getting a mortgage is “an emotional process, and one of the biggest financial decisions you’ll make,” Ishbia says.

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Are we seeing some pricing relief for buyers? | #MarketShifts #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Has the Inventory Crunch Begun to Subside? | Realtor Magazine

Contract signings rose in all four major regions across the U.S. last month, a sign that dwindling home sales—which have plagued the market at an unusual time of year this summer—will reverse course in the coming months, the National Association of REALTORS® reports.

NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 0.9 percent month over month in June to a reading of 106.9. “After two straight months of declines in pending home sales, home shoppers in a majority of markets had a little more success finding a home to buy last month,” says NAR Chief Economist Lawrence Yun. “The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates. Even with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand. As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace.”

Despite last month’s rise, contract signings are still down 2.5 percent compared to a year ago, NAR reports. Nevertheless, Yun says the worst of the supply crunch may now have passed. In June, existing inventory was up slightly on an annual basis, marking the first increase in three years. Several large metros saw year-over-year surges in inventory levels last month:

  • Portland, Ore.: +24 percent
  • Providence, R.I.: +20 percent
  • Seattle: +19 percent
  • Nashville, Tenn.: +17 percent
  • San Jose, Calif.: +15 percent

“Home price growth remains swift, and listings are still going under contract at a robust pace in most of the country, which indicates that even with rising inventory in many markets, demand still significantly outpaces what’s available for sale,” Yun says. “However, if this trend of increasing supply continues in the months ahead, prospective buyers will hopefully begin to see more choices and softer price growth.”

 

Pending Home Sales - June 2018

© National Association of REALTORS®

 

 
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Young Americans Push Homeownership Rate Up | #Awareness #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Young Americans Push Homeownership Rate Up | Realtor Magazine

The U.S. homeownership rate posted another increase, reaching 64.3 percent in the second quarter, up a tenth of a percentage point from the first quarter, the Commerce Department reported this week. The rate has increased 0.6 percentage points over the past year.

Younger Americans, specifically those under the age of 35, are behind most of the recent increases in the ownership rate. The homeownership rate of this younger buyer group increased to 36.5 percent in the second quarter, up 1.2 percentage points from a year earlier.

Despite the overall increase in the second quarter, the homeownership rate still remains far below its peak of 69.2 percent in late 2004.

Some economists are skeptical whether the homeownership rate will continue its recent climb. Sales of existing homes dropped 2.2 percent in June, and sales of newly built homes also dropped in June compared to the previous month, according to the National Association of REALTORS® and National Association of Home Builders. Low inventories of homes for-sale, higher home prices, and higher mortgage rates are all keeping an unseasonal lid on home sales this summer. Existing-home prices have surged 5.2 percent over the past year to a record high in June, NAR reports. The 30-year mortgage rate has increased more than half a percentage point since early January to 4.54 percent, according to Freddie Mac.

“Homeownership has bottomed out, but is likely to go more or less sideways for the foreseeable future,” Mark Zandi, economist of Moody’s Analytics, told The Wall Street Journal. “Easing credit standards and a strong job market will support homeownership, but higher mortgage rates and the change in the tax law weigh on it.”

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Interest Rates on the Rise Again | #InterestRates #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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With Rates Back on the Rise, Prospective Buyers Pause | Realtor Magazine

 
Freddie Mac chart on mortgage rates

 

Mortgage rates reversed course this week, rising slightly over the past week and reaching their highest level since late June, Freddie Mac reports.

“The next few months will be key for gauging the health of the housing market,” says Sam Khater, Freddie Mac’s chief economist. “Existing sales appear to have peaked, sales of newly built homes are slowing and unsold inventory is rising for the first time in three years.”

Affordability pressures are mounting in many markets, with the combination of continuous price gains and higher mortgage rates, Khater says. These factors “appear to be giving more prospective buyers a pause,” he says. “This is why new and existing-home sales are not breaking out this summer despite the healthy economy and labor market.”

Freddie Mac reports the following national averages with mortgage rates for the week ending July 26:

  • 30-year fixed-rate mortgages: averaged 4.54 percent, with an average 0.5 point, rising from last week’s 4.52 percent average. Last year at this time, 30-year rates averaged 3.92 percent.
  • 15-year fixed-rate mortgages: averaged 4.02 percent, with an average 0.4 point, increasing from last week’s 4 percent average. A year ago, 15-year rates averaged 3.20 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.87 percent, with an average 0.4 point, and were unchanged from last week. A year ago, 5-year ARMs averaged 3.18 percent.
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‘Fair’ vs. ‘Very Good’ Credit: The Impact on Mortgages | #KnowYourCredit #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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‘Fair’ vs. ‘Very Good’ Credit: The Impact on Mortgages | Realtor Magazine

Consumers who make efforts to raise their credit scores from “fair” to “very good” may see big payoffs. LendingTree researchers analyzed loan request and average loan balance data to see how a lower credit score can increase borrowing costs for the average consumer. They compared the impact across several types of debt: mortgages, student loans, auto loans, personal loans, and credit cards.

Overall, raising a credit score from “fair” (580-669) to “very good” (740-799) can save a consumer $45,283 on their debt. That’s the average in extra interest on all debt that consumers will pay when they have a credit score ranked as fair. Mortgage costs can account for 63 percent of those potential savings. By raising a credit score from fair to very good, consumers could save $29,106 in mortgage costs, the study shows.

For example, a person with a high credit score would likely have a monthly mortgage payment that is $81 less than someone with a fair credit score. “The person with very good credit could invest that money, use it to pay down debts faster, or to increase the down payment on future loans, which could exponentially increase the value of those savings over the same 30-year period,” LendingTree reports.

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Buyers Say Garages, Updated Kitchens Aren’t as Important as School | #SchoolIsImportant #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Buyers Say Garages, Updated Kitchens Aren’t as Important as This | Realtor Magazine

The home’s garage, large backyard, and updated kitchen may not be as important to home shoppers as the school district, according to a new survey released by realtor.com® of more than 1,000 people who closed on a home in 2018. Seventy-eight percent of buyers surveyed say they’re willing to give up home features to get their school district of choice, and home shoppers are willing to give up their most desired home features to get that.

“Most buyers understand that they may not be able to find a home that covers every single item on their wish list,” says Danielle Hale, chief economist for realtor.com®. “But our survey shows that school districts are an area where many buyers aren’t willing to compromise. For many buyers, ‘location, location, location,’ means ‘schools, schools, schools.’”

The extent of compromises that buyers are willing to make to get their top-choice schools may be surprising too. For example, 78 percent of buyers who said schools were important in their house hunt said they had to compromise on certain home features. The features they most commonly reported giving up in exchange for their preferred school district were a garage (19 percent); a large backyard (18 percent); an updated kitchen (17 percent); desired number of bedrooms (17 percent); and an outdoor living area (16 percent). A spring home buyer survey conducted by realtor.com® had showed a garage was the number one feature that home buyers were looking for this year, followed by an updated kitchen and an open floor plan.

Not surprising, the desire for particular schools did vary by a buyer’s life stage and age. Ninety-one percent of buyers with children said school boundaries are important or very important compared to 34 percent of those without children.

Buyers surveyed said they determined the school district they wanted to live in by looking at schools’ test scores, followed by the availability of accelerated programs, arts and music, diversity, and before- and after-school programs. Realtor.com® offers a tool through its site’s search to specify a district or school boundary so buyers can search for homes within that preferred area.

 

realtor.com school infographic. Visit source link at the end of the article for full text.

© realtor.com

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6 Most Profitable Markets for Sellers | #SanJoseOnList #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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6 Most Profitable Markets for Sellers | Realtor Magazine

Sellers are cashing in on yet another record high for sale prices, with the median annual return on home sales reaching 8 percent nationally over the last 12 months, according to realtor.com®. But some cities are seeing annual returns stretch as high as 14 percent, researchers found in an analysis of the 100 largest U.S. metros. “Owning can be a great way to build up overall net worth,” says realtor.com® Chief Economist Danielle Hale. “If you’re looking to transition in a local market [to a bigger home], you have the home equity. If you’re looking to retire and move somewhere else, you have the money to do that.”

Some of the nation’s fastest-growing cities are seeing the highest returns, as well as areas that were hardest hit during the Great Recession. Some homeowners “walked into the room when everyone was running out,” says Jonathan Miller, president and CEO of appraisal firm Miller Samuel in New York. “They are now being compensated for their risk.”

In its analysis, realtor.com® defined profit as the difference between the two most recent sales of a property and used that information to create an average annualized return for its rankings. (The site limited its rankings to one metro per state for geographic diversity.) The cities that ranked highest on realtor.com®’s list as the most profitable housing markets for sellers are:

1. Bridgeport, Conn.

  • Average annualized return: 14%
  • Median list price: $789,100

2. Detroit

  • Average annualized return: 12%
  • Median list price: $260,000

3. Seattle

  • Average annualized return: 12%
  • Median list price: $582,400

4. San Jose, Calif.

  • Average annualized return: 12%
  • Median list price: $1,240,300

5. Palm Bay, Fla.

  • Average annualized return: 12%
  • Median list price: $270,000

6. Denver

  • Average annualized return: 11%
  • Median list price: $467,600
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