Category: Real Estate

Mortgage Rates Stay Flat, But That’s a Good Thing | Realtor Magazine

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The 30-year fixed-rate mortgage barely budged this week, remaining low at a 3.75% average, Freddie Mac reports.

“Mortgage rates have essentially stabilized over the last two months, which reflects the recovery and improvement in the economy from the malaise earlier in the year,” says Sam Khater, Freddie Mac’s chief economist. “Going forward, the combination of low mortgage rates, tight labor market, and high consumer confidence should set up the housing market for continued improvement in home sales heading into late summer and early fall.”

What the Fed’s Rate Cut Means for Your Buyers

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 1, 2019:

• 30-year fixed-rate mortgages: averaged 3.75%, with an average 0.6 point, unchanged from last week’s average. Last year at this time, 30-year rates averaged 4.60%.
• 15-year fixed-rate mortgages: averaged 3.20%, with an average 0.5 point, rising from last week’s 3.18% average. A year ago, 15-year rates averaged 4.08%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.46%, with an average 0.4 point, falling from last week’s 3.47% average. A year ago, 5-year ARMs averaged 3.93%.

Renovations With the Worst ROI | Realtor Magazine

Some of the most popular renovations, such as a kitchen remodel or landscape upgrade, are likely to cost your sellers more than they’ll get back at resale. And a major mistake sellers make when undertaking home improvement is tailoring the project to their own personal tastes without considering potential resale value, Alex Lavrenov, a broker with Warburg Realty in New York, told Forbes.com. Some costly renovations may even hurt your sellers’ chances of attracting offers at all.

When a homeowner remodels, he or she should keep in mind the impact of the work on a potential sale. Forbes.com recently interviewed real estate professionals to highlight remodeling projects that likely won’t add value to a home, including:

So what are the best home renovations for ROI at resale? Check out the National Association of REALTORS®’ Home Remodeling Impact Report, which covers DIY projects and outdoor features.

Removing the bathtub. Large, luxurious standing showers are trendy, but getting rid of a bathtub altogether could prove to be a costly mistake. “Families with small children will most likely want a bathtub,” says Jean Brownhill, CEO and founder of Sweeten, which matches homeowners with contractors. “Older homeowners will more likely want a walk-in shower for accessibility’s sake. Think about your neighborhood demographics and who has been moving in and out. If it’s largely an older demographic, building a walk-in shower is probably a good idea. If it skews younger, keep that bathtub.”

Hobby rooms. “Specialized hobby spaces will only appeal to other hobbyists who share your passions, whether jewelry making, pottery, or woodworking,” says Gerard Splendore, another broker with Warburg Realty. “I don’t know if anyone includes a home darkroom anymore, but if it is in the listing description, it may deter buyers from even coming to see the property.”

Over-customization. Wallpaper, fixtures made from high-priced materials, or painting the walls with designs can be a turnoff to buyers. “These types of features tend to be very personal to the current homeowner and don’t necessarily translate into added value for the next homeowner,” Lavrenov says. “My recommendation would always be for the seller to save their energy and money because these cosmetic renovations probably will not add any resale value.” Beware of adding fixtures, such as shelving, media consoles, and Murphy beds. “You want to steer clear of adding fixtures that the buyer might actually want to do away with as soon as they move in or renovations that they feel actually take away from the living space.”

In addition, real estate referral company HomeLight recently produced the following infographic detailing some of the best and worst renovation projects as they relate to ROI. HomeLight found that simply deep-cleaning your house could have a significant return on investment compared to high-end landscaping.

 

© HomeLight

Contract Signings Point to Reversal in Home Sales Slump | Realtor Magazine

Home sales appear poised to reverse their downward trend, as contract signings in each of the four major U.S. regions rose in June, according to the National Association of REALTORS®’ latest Pending Home Sales Index. The West saw the highest increase in contract signings last month, according to NAR’s report.

The index rose 2.8% to a reading of 108.3 in June. Contract signings are now up 1.6% year over year, ending a 17-month streak of annual decreases. NAR Chief Economist Lawrence Yun sees the increase as the likely start of a lasting trend for home sales in the coming months. “Job growth is doing well, the stock market is near an all-time high, and home values are consistently increasing,” Yun says. “When you combine that with the incredibly low mortgage rates, it is not surprising to now see two straight months of increases.”

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Yun says that last month’s uptick in contract signings proves that buyers are showing greater interest in the housing market and its potential for wealth gain. He reiterates the need for home builders to increase construction and add inventory to markets starving for housing. “Homes are selling at a breakneck pace—in less than a month, on average, for existing homes and three months for newly constructed homes,” Yun says. “Furthermore, homeowners’ equity in real estate has doubled over the past six years to now nearly $16 trillion. But the number of potential buyers exceeds the number of homes available. We need to see sizable growth in inventory—particularly entry-level homes—to assure wider access to homeownership.”

Do I Need a Permit for That? | Realtor Magazine

When undertaking a remodel or home improvement project, how do you know when you need a building permit from your city government?

Cities require permits to ensure that the changes on a home go on record. The changes also are reviewed by an inspector to ensure they’re up to code. For example, if you decide to rewire your electricity panel , exposed wires could represent a safety issue to you and your home.

When homeowners sell their home, buyers and lenders will want to know if any remodels they did complied with building codes. So the permit could salvage a sale too.

“The general rule of thumb is that structural, electrical, plumbing, or mechanical work will require a permit,” notes Redfin at a recent blog post.

A fence installation or repair, window installations, plumbing and electrical work, replacing the water heater or changes to the ventilation system, as well as gas and wood fireplaces all will likely require a permit for the work. Also, any additions or upgrades made to the home, typically of $5,000 or more, will likely require a permit.

On the flip side, permits likely won’t be needed for painting, installing floors or faucets, or landscaping work.

Permit requirements vary by city. Check with the local building department to be on the safe side.

The Most Common Problems Uncovered in Home Inspections | Realtor Magazine

Very few home inspections ever come back completely clear. Indeed, 86% of buyers who recently had a home inspected said their inspector identified at least one problem, according to a new survey from Porch.com, a home remodeling resource, which surveyed about 1,000 buyers who hired a home inspector during their home purchase.

Some of the most common issues uncovered threatened the essential components of a home too. In a fifth of the cases, the home’s roof was a major culprit. Other issues included cosmetic flaws, but also more serious cracks and leaks were found, according to the survey. Electrical problems also were common, and among the most concerning, since they can pose a fire risk, according to the study. Problems with windows also were prevalent, appearing in more than 18% of reports that had issues detected.

 

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7 Home Inspection Myths

5 Ways to Prepare for a Home Inspection, Avoid Costly Repairs

Landscape Inspections Count Too

In nearly half of the cases where home inspections turn up problems, buyers and their agents are able to negotiate a lower final sales price, the survey found. The lower sales price tended to be negotiated based on the cost of the repair or replacement. For example, home buyers who discovered problems with the heater were able to negotiate the sales price down by $1,250, on average. That is about the cost of installing a new heater.

 

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Many buyers say their lender required them to get a home inspection as part of their mortgage qualification. For most buyers, the average inspection cost $377, which tended to be a smaller fee than other fees associated with purchasing a home. Many home buyers said they found their inspector through a recommendation from their real estate agent.

 

© Porch.com

The Most-Loved Interior Styles in Every State | Realtor Magazine

Minimalism, traditional, and Victorian interior home styles appear to be losing some appeal in favor of the public’s rising appreciation for the industrial aesthetic. Industrial decor is now the most popular interior design style in the country, according to a new report from Joybird, a furniture company. The industrial look has a factory feel with a modern touch, often featuring open layouts, metal appliances and features, and exposed brick.

Joybird researchers analyzed the most-searched interior design trends in each state, based on Google Trends data from June 2018 to May 2019. The industrial style was the top choice among 12 states nationwide, the highest on the list.

 

© Joybird

 

Design tastes did show some variation across the country. For example, in the South, modern farmhouse and rustic style tended to be the most popular, while vintage was big in the Northeast. Industrial was the most-searched-for style in the Midwest, and tied with modernism in the West, according to the survey.

 

© Joybird

Mortgage Rates Are Back to Near 3-Year Lows | Realtor Magazine

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After a slight uptick last week, mortgage rates fell back to what’s become a more regular pattern this summer of hovering near three-year lows. Home buyers are responding to the lower rates, and mortgage applications for home purchases have continued to rise steadily the last two months to the highest year-over-year change since the fall of 2017, says Sam Khater, Freddie Mac’s chief economist.

“While the improvement has yet to impact home sales, there’s a clear firming of purchase demand that should translate into higher home sales in the second half of this year,” Khater says.

Freddie Mac reported the following national averages with mortgage rates for the week ending July 25:

• 30-year fixed-rate mortgages: averaged 3.75%, with an average 0.5 point, falling from last week’s 3.81% average. Last year at this time, 30-year rates averaged 4.54%.
• 15-year fixed-rate mortgages: averaged 3.18%, with an average 0.5 point, falling from last week’s 3.23% average. A year ago, 15-year rates averaged 4.02%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.47%, with an average 0.4 point, falling from last week’s 3.48% average. A year ago, 5-year ARMs averaged 3.87%.

Avoid These 5 Painting Mistakes | Realtor Magazine

Paint can make a big difference and give fresh life to the interior and exterior of a home. Having a new hue can improve a room’s appeal, but making the wrong choice can ruin it.

Design experts recently shared some of the most common painting mistakes with Apartment Therapy, including:

1. Selecting baby hues.

“I cringe when I see baby blue walls,” Alessandra Wood, an interior design expert and vice president of style at Modsy, told Apartment Therapy. “Light blues easily run into nursery territory, which makes the space feel childish.” Instead, Wood recommends selecting a more saturated shade for the space and then using the baby blue as an accent.

2. Failing to factor in light.

Always remember that a paint shade can vary depending on how light filters into a room. If you’re going off a paper swatch, expect some variation when you actually go to paint your walls. Pick a shade or two lighter than the paint chip, designers recommend. “Remember that when picking a color, go for a lighter shade,” Jill Johnson and Suzanne Ascher, co-founders of Waterleaf Interiors, told Apartment Therapy. “It always goes on darker than it looks.” Better yet, test it out first on the walls with an actual paint sample to be sure it’s the color you want before making a full commitment.

How to Choose the Right Paint Color

The Hottest Paint Colors of 2019

3. Choosing the wrong finish.

The finish you choose for your paint can also have a big impact on the room. “Paint comes in a handful of finishes, from flat to a high gloss,” says Elizabeth Sesser, interiors associate at Ike Kligerman Barkley. “Selecting the right one for your space or application is key.” Consider the finish before applying a primer and be sure to know the options of different finishes: matte, gloss and flat.

4. Forgetting the ceiling.

The ceiling is just as important as the other walls, designers say. “Never use anything but flat paint on a ceiling where light reflects even more than on walls, showcasing shadows and uneven drywall like crazy,” Caitlin Murray, an interior designer and founder of Black Lacquer Design, told Apartment Therapy. Opt for a low-luster sheen to help mask any ceiling flaws.

5. Painting accent walls.

Some designers believe the accent wall trend—painting only one wall in a space a bolder hue—is starting to wane. “If you’re going to go through the effort of painting, do the whole room,” Sesser suggests. “Just the single wall makes the space feel unfinished.”

Faux Lawns Offer No-Fuss Grass Alternative | Realtor Magazine

More homeowners are leaning towards maintenance-free faux turfs for their yards, according to landscapers.

Architect Christopher Brandon of Brandon Architects in Costa Mesa, Calif., told The Wall Street Journal that about 75% of the projects he does for modern-style homes now ask for artificial grass. Since faux turf does not require water and the green stays vibrant all year long, there is virtually zero maintenance. Brandon says he likes to do a mix of the artificial grass with real plants surrounding it to blur the lines between fake and real.

Homeowners in Napa Valley told WSJ they spent $60,000 on a synthetic lawn for their 3,600-square-foot parcel of land. “[Real] grass is messy,” homeowner Hillary Ryan, also a real estate professional, told WSJ. “We paid six times more to have the faux grass installed.” The turf can thrive in drought-prone places like California, and the lawn can withstand sports activities from their school-age children, Ryan says. They paired their faux turf with native, drought-tolerant real plants.

Natural grass is priced at less than $2 a square foot for initial landscaping, but it requires mowing and maintenance, Tommy Beadel, co-founder at Thomas James Homes in Aliso Viejo, Calif., told WSJ. Beadel is a custom homebuilder that installs synthetic and natural turf. High-end synthetic grass, on the other hand, can cost $11 to $19 a square foot. Troy Scott, owner of Heavenly Greens in San Jose, Calif., says the synethic grass can save homeowners in the long run.

Synthetic lawns can last up to 20 years, and the only maintenance required is attending to the occasional pop-up weed.

Luxury owners and landscape designers used to think very negatively about faux lawns, but more high-end homeowners are  warming up to the trend. Most of the negative perception about fake yards is because the faux products offered to homeowners were the same ones used on sports fields. Synthetic lawns nowadays are a combination of nylon, polyethylene and polypropylene, and tend to have better drainage, stay cooler in the sun, and feel softer. New fake lawns look more like regular grass from pigment variation that mimics the color of natural grass, WSJ reports.

“Even the mention of the word fake sends peoples toes curling,” Grahame Hubbard, a New York-based landscape designer specializing in terraces and rooftops, told WSJ. Sometimes faux grass takes some convincing, so Hubbard shares photos of his work via Instagram using hashtags like #syntheticlawn to sell potential clients on their low-maintenance options, which include turf.

Hispanics Buyers Are Gaining Ground as Housing Customers | Realtor Magazine

Hispanics are posting the largest homeownership gains of any ethnic group, new Census Bureau data shows. The wave of growth is a far cry from four years ago when the Hispanic homeownership rate reached a 50-year low. Since then, ownership among this segment has risen 3.3 percentage points, Census Bureau data shows.

To be clear, whites still have higher levels of overall homeownership. The Hispanic homeownership rate is at 47.4%, which still remains well-below the 73% rate for non-Hispanic whites in the first quarter. But it’s the growth in ownership rates among Hispanics that housing analysts are predicting could have a significant impact on the housing market over the next decade.

“The housing market would look very different today if it weren’t for a tidal wave of Latino home buyers,” Gary Acosta, co-founder and chief executive of the National Association of Hispanic Real Estate Professionals, told The Wall Street Journal.

Hispanics comprise 18% of the U.S. population, yet they accounted for nearly 63% of new U.S. homeowner gains over the past decade, according to NAHREP.

While the Hispanic ownership rate grows, ownership rates among blacks plunged to the lowest levels on record in the first quarter of this year, Census data shows. Economists note this is the first time in 20 years where Hispanics and blacks—the two largest racial minorities in the U.S.—are no longer following the same path when it comes to homeownership rates. A growing population of young Latinos is boosting housing markets across the country. Like all ethnicities, however, Hispanics have faced recent challenges to homeownership. For example, saving for a down payment is the biggest obstacle: 4.6 million of Hispanic millennials earn enough to afford a home in their area but are impeded without sufficient down payment funds or enough available housing inventory, shows a separate study from the Urban Institute. Still, this segment of buyers is showing resilience when it comes to increasing their homeownership rates.