Fewer new homes are being built with a fireplace, a sign the cold-weather amenity is falling out of favor with home buyers. A record low percentage of newly constructed single-family homes—41%—last year included a fireplace, according to an analysis of U.S. Census Bureau data from the National Association of Home Builders. The share of single-family homes with fireplaces has been declining since 2015, the NAHB reports.
“An obvious explanation for the declining trend is that builders are foregoing fireplaces in some of their homes so they can bring them in at prices their customers can afford,” the NAHB reports on its Eye on Housing blog. “Keeping new homes affordable has become a considerable challenge lately.”
Fireplaces are usually considered a desirable amenity but not a must-have, the NAHB notes. Fifty-five percent of buyers rate gas-burning fireplaces as desirable, while 48% say the same of wood-burning fireplaces as desirable, according to the survey. That places such features in the middle of the list of decorative features most sought-after in terms of desirability, according to the NAHB’s “What Home Buyers Really Want” survey. However, only 16% of buyers say either type of fireplace is essential in a home purchase.
Fireplaces are the most uncommon home feature in the lower price points of the market. For example, just 7% of new single-family homes started in 2018 that were priced under $150,000 had fireplaces. On the other hand, more than 60% of homes priced at $500,000 or above had a fireplace.
President Donald Trump has called on the U.S. Federal Reserve to drop interest rates to zero, or even negative, at its next meeting on Sept. 17. That has sparked several discussions this week on how that could impact the housing market.
For one, that could mean cheaper mortgages for home buyers, housing analysts say. While the Fed’s benchmark rate does not have a direct influence on mortgage rates, it does often influence them.
“If the federal rates go down to zero, mortgage rates could drop from 3.56% for a 30-year fixed-rate loan, as of Thursday, to, well, nothing,” realtor.com® reports. Is it feasible? Bank of America officials told USA Today: “We believe negative rates in the U.S. are a possibility.”
How would a zero mortgage rate work? “Most people think they’d get money back … but not really,” says George Ratiu, senior economist at realtor.com®. “A portion of your loan is forgiven each month so you end up paying a little less over the life of the loan.” Buyers and refinancers could expect fees to rise as a result. Lenders would still need to turn a profit.
Lower mortgage rates cause payments to go down and could lead to more qualified buyers, Don Frommeyer of CIBM Mortgage in Indianapolis told realtor.com®. “Their debt goes down, and they become eligible to buy a bigger home,” he says.
One country has already seen the impact from low- or negative-rate loans. Denmark’s third-largest bank, Jyske Bank, began offering its customers 10-year mortgages with a negative 0.5% interest rate. Clients are paying the bank less than they owe on the loan. Other banks in the country are following suit.
Low interest rates could be a boon for home shoppers, but for savers or retirees who live off their savings it could be a “tremendous blow,” Ratiu says. “They would end up having to pay money to keep their funds in the bank,” he told realtor.com®. “You’re not likely going to be incentivized to save.” That could also make it tougher for some people to save up for a down payment.
The 30-year fixed-rate mortgage reversed course this week, rising to an average of 3.56%. Despite the uptick, this is the first time that the 30-year fixed-rate mortgage has been under 3.6% for more than four consecutive weeks since the fourth quarter of 2016, Freddie Mac reports.
“Pipeline purchase demand continues to improve heading into the late fall with purchase mortgage applications up 9 percent from a year ago,” says Sam Khater, Freddie Mac’s chief economist. “The improved demand reflects the still healthy underlying consumer economic fundamentals, such as a low unemployment rate, solid wage growth, and low mortgage rates. While there has been a material weakness in manufacturing and consistent trade uncertainty, so far, the American consumer has proved to be resilient with solid home purchase demand.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 12:
30-year fixed-rate mortgages: averaged 3.56%, with an average 0.5 point, rising from last week’s 3.49% average. A year ago, 30-year rates averaged 4.6%.
15-year fixed-rate mortgages: averaged 3.09%, with an average 0.5 point, rising from last week’s 3% average. A year ago, 15-year rates averaged 4.06%.
5-year hybrid adjustable-rate mortgages: averaged 3.36%, with an average 0.3 point, rising from last week’s 3.3% average. Last year at this time, 5-year ARMs averaged 3.93%.
Most Americans have no regrets about buying a home. In fact, it’s made them happier, a new survey shows.
Ninety-three percent of Americans say they are happier after buying a home, and 83% would never go back to renting, according to Bank of America’s latest Homebuyer Insights Report, based on a survey of nearly 2,000 consumers. Most owners say they have an emotional attachment to their home, and ownership also has improved their lifestyle and variety of hobbies.
“We know how much ownership means, and we see examples every day of how owning a home gives our clients the power to build personal wealth and make memories,” says D. Steve Boland, head of consumer lending at Bank of America. “They’ve told us very clearly that homeownership is invaluable, and that’s why we’re actively providing assistance with down payment and closing costs to help people buy homes and create a new lifestyle.”
Eighty-eight percent of survey respondents say that buying a home is the best decision they’ve ever made. Seventy-nine percent say that owning a home has changed them for the better. Three out of four homeowners surveyed say they pursued new hobbies after buying a home, including:
Landscaping/gardening: 47%
Cooking/baking/grilling: 45%
Interior design/remodeling: 33%
Further, two-thirds of respondents say their relationships with family and loved ones has changed for the better since purchasing a home. They credited homeownership as improving their relationships in the following ways:
Given families a sense of pride: 47%
Allowed homeowners to entertain more: 49%
Enabled homeowners to bring the entire family under one roof: 24%
Mortgage rates, which remain near three-year lows, stand to help not only home buyers but current homeowners who want to unlock potential savings through mortgage refinancing. In fact, homeowners who purchased property as recently as a year ago could reap significant financial benefits by refinancing today.
Eighty percent of mortgages originated in 2018 have an interest rate at least 0.75 percentage points higher than today’s 3.4% average. But those are hardly the only homeowners who may want to consider a refinance. Borrowers who took out a mortgage before 2004—when interest rates were much higher—also stand to decrease their rate by 1.75% or more by refinancing, according to data analytics firm Black Knight.
More than half of American homeowners with a mortgage have a rate that is at least 75 basis points higher than the current average, according to Black Knight. It’s the largest number of potential refinancers since 2000, when Black Knight began tracking the metric.
Homeowners also are finding more equity in their homes. Total home equity nationally surged to a record high last quarter of $6.3 trillion. The average homeowner has $14,000 in equity available via a cash-out refinance or other home equity product, according to Black Knight. The majority of homeowners—76%–could access their “tappable” equity with “little change to their existing 30-year rate or perhaps even a slight improvement,” according to Black Knight.
Tappable equity is highest in the nation’s priciest coastal cities, such as Los Angeles and San Francisco. But many homeowners in Texas and Florida are also seeing significant amounts of equity.
Your clients don’t need a perfect credit score to buy a home. But the higher the score, the more likely they will benefit from lower interest rates.
Only about 1.4% of the population has a perfect 850 on their FICO credit score. “Achieving a perfect credit score is largely out of your hands,” Riley Adams, a licensed certified public accountant and senior financial analyst for Google, told Apartment Therapy. It can take years to build up a perfect credit score of paying bills on time and paying off debts.
Apartment Therapy recently asked financial experts how consumers can improve their score and inch closer to an 850. Here are a few tips:
Always pay your bills on time. On-time payments comprise 35% of your FICO score. A single 30-day past due report can quickly bring down your score.
Maintain low credit card balances. Keep your credit use below 30%. Otherwise, lenders may start to think you’re overextended. To get closer to that perfect 850 credit score, however, you’ll need to keep your average credit utilization rate to just 5.8%, according to Experian. Sara Rathner, credit cards expert at NerdWallet, told Apartment Therapy that it’s a good habit to pay your credit card balance more than once a month. “That can lower the total balance remaining on your card when your billing cycle ends, so that lower number is what credit bureaus see,” she notes.
Limit your inquiries. While asking for a free credit report to review every year isn’t going to hurt you, hard inquires to a lender in checking your credit for a loan or credit card could. Keri Danielski, consumer finance expert at Mint and Turbo, told Apartment Therapy that these queries can actually appear on a credit report and affect a credit score. Hard inquiries from applying for a new loan or credit account can stay on your credit report for up to two years. Nathan Grant, an analyst with Credit Card Insider, told Apartment Therapy that consumers will likely end up with a higher credit score when they haven’t applied for new credit within the past year.
Home shoppers may be able to breathe a sigh of relief. They’re facing fewer bidding wars for the homes they want to buy.
About 10% of offers written by Redfin real estate agents on behalf of their customers faced a bidding war in August, down from higher than 42% a year earlier, according to the brokerage’s index that measures competitive offers nationwide. August’s percentage is also the lowest bidding-war rate on record since at least 2011.
The national rate of bidding wars peaked at 59% in March 2018, but has since been dropping.
“Despite remaining near three-year lows, mortgage rates have failed to bring enough buyers to the market to rev up competition for homes this summer,” says Redfin Chief Economist Daryl Fairweather. “Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase. But assuming a recession doesn’t arrive this fall or winter, consumers will likely adjust to the new ‘normal’ of continued volatility in the stock and global markets, and the people who need and want to make a move will take advantage of low mortgage rates. As a result, I still expect home-buying competition to pick back up in the new year.”
In August, San Francisco was the most competitive market in Redfin’s analysis. Thirty-one percent of offers written by Redfin agents on behalf of their clients faced a bidding war last month. That is down from 73.5% a year earlier.
Other markets seeing the highest percentage of bidding wars in August were in San Diego (18.4%); Las Vegas (17.1%); Boston (15%); and Los Angeles (14.4%).
Meanwhile, the least competitive markets were Atlanta (2.4% of customer offers faced a bidding war); Miami (3.1%); Raleigh, N.C. (4.2%); Philadelphia (4.3%); and Chicago (5%).
Drilling a hole in the wall to hang pictures or a TV might sound like a simple DIY project. But handyman services are warning that homeowners could do a lot of damage to a home if they aren’t careful.
Many homes have pipes and wires that run through a wall. Homeowners who are unaware of these could risk personal injury or serious damage to their home.
Realtor.com® recently featured safety tips to avoid hole-drilling nightmares, including:
Watch light switches and sockets.“The main dangers [of drilling into a wall] are hitting an electrical wire, water pipe, or gas pipe,” says Issabel Williams, a crew member with Fantastic Handyman. “All of these scenarios can lead to electrocution or flooding.” To help determine what’s behind a wall, Williams suggests to avoid drilling around light switches and sockets since electrical wires tend to go horizontally and vertically around them. “You can [also] get an idea of where wires and pipes run by looking in the attic and basement to see where they go up or down through framing,” Williams told realtor.com®.
Use a stud finder. A stud finder can help locate vertical beams that frame the house. Mark the stud location with a pencil so you know where to drill. Studs are usually placed 16 to 24 inches apart. “Electrical wires often run vertically along studs,” Matt Daigle, founder and CEO of sustainable home improvement site Rise, told realtor.com®. “A stud finder is a convenient handheld tool that makes locating studs hidden behind drywall a quick and easy task.” Drywall is not as supportive for hanging items on so it’s imperative to check where the studs are, Williams adds. “Otherwise you risk having a serious accident with falling objects,” Williams notes.
Be leery of bathroom and kitchen walls. Walls that connect to your bathroom and kitchen are likely to have pipes within. If you hit a pipe, you’ll find substantial resistance, Williams says. “And unless you hit it where it passes through a stud, your drill bit will probably deflect off of the curved surface,” Williams adds.
A newer color palette with jewel tones is taking hold in landscaping, and it’s among the hotter trends for this fall, according to the National Association of Landscape Professionals. Seventy-seven percent of Americans report relaxing in their yards at least once a month, according to a survey from Engine’s Caravan, conducted on behalf of the NALP. Carving out an inviting outdoor space is becoming increasingly important for homeowners.
The NALP recently released a list of its top outdoor fall staples for the coming season, including:
Jewel tones: The classic fall colors of orange, yellow, and red are getting competition from a newer palette this year with jewel tones, the NALP notes. “Sapphire blue, emerald green, amethyst purple, ruby red, and citrine yellow all bring warmth to fall landscape design,” the NALP notes. Landscapers recommend adding jewel tones to outdoor spaces through unique container gardens, decorative furnishings, and accessories. Also, seasonal plantings like pansies, celosia, dianthus, and black-eyed Susan also draw from the trendy hues.
Cozy outdoor living: Create an inviting outdoor spacethat you can still enjoy in the fall. Fire features continue to remain popular, whether one-touch natural gas, propane ignition, or traditional wood-burning options. Also, pergolas are gaining popularity, along with retractable canopies and heating systems that can extend their use in colder climates. “Signature features, like fire features and pergolas, complemented by comfortable seating and attractive and aromatic plantings and jewel tones, will bring resort-like comfort to homes,” the NALP notes.
The 30-year fixed-rate mortgage averaged 3.49% this week, the lowest average since October 2016, Freddie Mac reports. “Mortgage rates continued the summer swoon due to weaker economic data,” says Sam Khater, Freddie Mac’s chief economist. “While economic growth is clearly slowing due to rising manufacturing and trade headwinds, economic fundamentals are still solid for U.S. consumers. The unemployment rate is low, housing affordability is improving, home buyer demand is rising, and home price growth is stable.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 5:
30-year fixed-rate mortgages: averaged 3.49%, with an average 0.5 point, falling from last week’s 3.58% average. Last year at this time, 30-year rates averaged 4.54%.
15-year fixed-rate mortgages: averaged 3%, with an average 0.6 point, dropping from last week’s 3.06% average. A year ago, 15-year rates averaged 3.99%.
5-year hybrid adjustable-rate mortgages: averaged 3.30%, with an average 0.4 point, dropping from last week’s 3.31% average. A year ago, 5-year ARMs averaged 3.93%.
