Category: Real Estate

Where Mortgage Debt Is Highest | Realtor Magazine

For most Americans, a home purchase is the biggest purchase of their life and thus requires taking on a large amount of debt. The average mortgage debt can vary considerably from state to state.

“Cost of living and home prices are a big factor,” says Greg McBride, chief financial analyst at Bankrate. “The cost of living impacts how much you can save for something like a down payment, and home prices impact how much you have to borrow.”

Mortgages Are the Happiest Type of Debt

Wealthier states tend to have the highest amount of mortgage debt. 24/7 Wall St., a personal finance website, pinpointed which states have the highest amount of mortgage debt. Here are the top 10:

1. California

• Avg. mortgage debt: $347,652
• Median home value: $509,400 (2nd highest)
• Median household income: $71,805 (8th highest)
   

2. Hawaii

• Avg. mortgage debt: $342,613
• Median home value: $617,400 (the highest)
• Median household income: $77,765 (3rd highest)
   

3. Maryland

• Avg. mortgage debt: $256,744
• Median home value: $312,500 (9th highest)
• Median household income: $80,776 (the highest)
   

4. Massachusetts

• Avg. mortgage debt: $252,624
• Median home value: $385,400 (3rd highest)
• Median household income: $77,385 (4th highest)

 

5. Washington

• Avg. mortgage debt: $250,467
• Median home value: $339,000 (5th highest)
• Median household income: $70,979 (10th highest)
   

6. New Jersey

• Avg. mortgage debt: $247,868
• Median home value: $334,900 (6th highest)
• Median household income: $80,088 (2nd highest)

7. Virginia

• Avg. mortgage debt: $246,379
• Median home value: $273,400 (11th highest)
• Median household income: $71,535 (9th highest)

8. New York

• Avg. mortgage debt: $243,244
• Median home value: $314,500 (8th highest)
• Median household income: $64,894 (14th highest)
   

9. Colorado

• Avg. mortgage debt: $241,980
• Median home value: $348,900 (4th highest)
• Median household income: $69,117 (11th highest)
   

10. Connecticut

• Avg. mortgage debt: $235,786
• Median home value: $273,100 (12th highest – tied)
• Median household income: $74,168 (5th highest)

Is Inventory Tightening Again? One Forecast Says Yes | Realtor Magazine

In just a few months, home shoppers may begin to see a drop in the number of homes for sale, which could lead to the return of bidding wars and quicker home sales, a new report from realtor.com® predicts.

Realtor.com® researchers predict a major shift to occur in the housing market that will affect buyers’ bargaining power well into 2020. With high demand for the limited number of homes for sale, buyers may need to be braced to pay higher home prices.

The U.S. median listing price in June reached its highest point of the year at $316,000. Properties in June spent an average of 56 days on the market, a two-day increase from a year ago.

“It was only 18 months ago that the number of homes for sale hit its lowest level in recorded history and sparked the fiercest competition among buyers we’ve ever seen,” says Danielle Hale, realtor.com®’s chief economist. “If the trend we’re seeing continues, overall inventory could near record lows by early next year. So far there’s been a lackluster response to low mortgage rates, but if they do spark fresh buyer interest later in the year, U.S. inventory could set new record lows.”

Newly listed homes have either declined or only increased very little in 2019. Why aren’t more homeowners taking advantage of the market and listing their homes for sale? “It’s likely a combination of a rate lock, recently decreased consumer confidence, and older generations choosing to age in place,” Hale says. Consumers are showing slightly more concern over a potential recession and future economic growth that could be making them skittish.

But low mortgage rates also may be keeping many homeowners in place. Seven years ago, the 30-year fixed-rate mortgage reached its lowest average at 3.3%, according to Freddie Mac’s records. That prompted many homeowners to refinance and lock in lower monthly mortgage payments.

Rates today remain low, but they’re still 50 basis points higher than they were in December 2012. That means many homeowners still have mortgages with rates well below today’s averages.

How Much Money Will You Need to Retire – A House?

Most Americans believe they’ll need an average of $1.7 million to retire, according to a new study from Charles Schwab. Researchers analyzed 1,000 401(k) plan participants across the country.

“The bulk of folks do not get there,” Nathan Voris, a managing director at Schwab Retirement Plan Services, told CNBC.

More than half of respondents surveyed say they are contributing 10% or less of their salary to their 401(k), which is the largest source of retirement savings. The average annual contribution is $8,788, according to the Charles Schwab study.

But that likely won’t be nearly enough if you started saving later on life, the study finds. A person in their 20s who saves 10% to 15% of their salary each year likely would have enough to retire comfortably whereas a person who doesn’t start until age 45 or older would need to set aside up to 35% of their salary annually, according to the study.

Yet, two-thirds of U.S. workers surveyed by theEmployee Benefit Research Institutesay they are “very” or “somewhat confident” that they’ll have enough to live comfortably throughout retirement. But only 42% have used retirement calculations to estimate how much they’ll actually need.

4 Maintenance Chores To Keep In Mind Regularly | Realtor Magazine

Homeowners who fail to perform certain maintenance tasks in a timely manner may face hefty repair bills in the future. Professional home inspectors shared with Apartment Therapy some of the most important home maintenance chores that owners should be doing.

1. Clean your gutters. Be sure to check and clean gutters throughout the year to remove any debris. “Once debris is carefully removed, any dirt or grime should be thoroughly cleaned and cleared; any missing caulk replaced; and holes, cracks, or loose areas repaired,” Benjamin Martin, a home inspector and president of Florida Certified Home Inspections, told Apartment Therapy.
2. Check the HVAC system. Change filters out once a month. If any condensation is gathering on the outdoor AC unit, flush the condensate drain with soapy, hot water and vinegar, experts say. Hire an HVAC professional for semi-annual maintenance to keep it operating correctly and potentially stave off an expensive replacement.
3. Flush out any plumbing clogs. Even seemingly small clogs can become more problematic if not taken care of right away. Regularly remove any grime or hair buildup in the shower; remove any gunk that accumulates near a toilet valve; and replace worn flappers (the rubber seal inside the tank), Martin says. Check underneath the sinks and inside the cabinets to make sure there are no water spouts from a leak.
4. Address insect problems. Don’t let bug problems escalate, warns Kathleen Kuhn, CEO and president of HouseMaster Home Inspections. Termites can cause extensive damage; carpenter ants can damage the wood where they nest; and powder post beetles can create hollowed out spaces in your wood. Also, watch out for supersized bee hives. Call in a professional to get the home’s yard sprayed.

Survey: Buyers Rank Commute Time Above Square Footage | Realtor Magazine

Commute time is an important factor to buyers when they’re deciding on a home to purchase. Eighty-five percent of buyers say they would sacrifice other home features, such as lot size, square footage, and home style, in order to shorten their commute to work, according to a survey of more than 600 realtor.com® users. Forty percent say they are looking to reduce their commute time by up to 45 minutes.

 

® realtor.com

® realtor.com

 

In response, realtor.com® announced a new tool that enables buyers to filter their home-search results according to rush-hour and off-peak commute times. “Our commute time filter is different from others in the marketplace because it gives buyers the ability to toggle between rush-hour and off-peak commute times,” says Chung Meng Cheong, chief procurement officer for realtor.com®. “With a more holistic view of their drive to and from work, people are able to make more informed decisions about where to live and, hopefully, reduce some unnecessary stress from their daily lives.”

Home shoppers can enter basic search information, such as number of bedrooms, bathrooms, and location desired. They can then filter listings to match their preferred commute time. Commute times are offered in 10-minute increments up to 60 minutes or more. All of the available homes that match the search parameters and commuting distance will then be displayed.

The Commute Time Filter is available on realtor.com®’s iOS app and will soon be available on Android, as well as mobile and web versions.

Low 30-Year Rates Keep Buyers in Summer Market | Realtor Magazine

® REALTOR® Magazine

 

Mortgage rates barely budged this week, keeping borrowing costs low for summertime home shoppers. Mortgage rates continue to hover near their 2016 averages. “We’re seeing a tug of war happen as the fixed-income market flashes warning signs while the equities market continues to march higher with optimism,” says Sam Khater, Freddie Mac’s chief economist. “The data suggests the economy is weakening but is still on very solid ground, with high consumer confidence and a strong labor market. Closer to home, the housing market continues to slowly improve and gain momentum as we head into the second half of the year, which is good news and should keep the economy growing.”

Freddie Mac reported the following averages for mortgage rates for the week ending July 3:

• 30-year fixed-rate mortgages: averaged 3.75%, with an average 0.6 point, up slightly from last week’s 3.73% average. Last year at this time, 30-year rates averaged 4.52%.
• 15-year fixed-rate mortgages: averaged 3.18%, with an average 0.5 point, rising from last week’s 3.16% average. A year ago, 15-year rates averaged 3.99%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.45%, with an average 0.4 point, rising from last week’s 3.39% average. A year ago, 5-year ARMs averaged 3.74%.

Contingent Offers May Not Hurt You As Much | Realtor Magazine

Compared to a year ago, a contingent offer may be less likely to threaten a sale, according to an analysis from the real estate brokerage Redfin. Fewer buyers waived financing and inspection contingencies in May than they did last year.

In May, 14.6% of successful offers submitted by Redfin agents waived the inspection contingency, which is down from 19.8% a year earlier. Meanwhile, nearly 12% of buyers waived the financing contingency, down from 13.2% a year prior.

Buyers may be tempted to waive contingencies in highly competitive markets in order to make their offer look more attractive and avoid any hangups and negotiations in situations with multiple offers. Inspection contingencies, for example, allow a buyer to cancel the deal if something surfaces during the inspection period; a financing contingency allows buyers to cancel their offer if their financing falls through, like if an appraisal comes in below the purchase price.

“Sellers are more willing to give buyers what they want because sellers don’t have as much negotiating power as they did a year ago,” says Daryl Fairweather, Redfin’s chief economist. “Last year, sellers would often receive multiple offers and had their pick of the litter. Now that they have less control of the market, sellers are taking on more of the risk from the buyer—like the risk that the buyer can’t sell her own home, or the risk that something unnerving is found during the inspection.”

About 74% of transactions had a contract contingency in May, according to the REALTORS® Confidence Index. The most common contingencies involved home inspections, obtaining financing, and getting an acceptable appraisal.

Home-sale contingencies—which are used by buyers who need to sell their own home in order to buy a new one—are also increasing. In May, 8.4% of successful offers submitted by Redfin agents included a home-sale contingency, up from 4.4% a year earlier but down from 8.5% in April.

“Typically, a seller won’t even consider an offer with a home-sale contingency during the first week or two that the home is on the market,” says Glenn Rickel, a Redfin real estate professional in the Chicago area. “If the buyer is not already under contract with the home they have to sell, they’re asking a big favor of the seller to take their home off the market for two months or more and hope that the buyer’s home sale goes through smoothly. Now that more homes are taking longer to sell, it’s become easier for a move-up buyer to find a home that has been on the market for a few weeks or a few months, which makes the seller a lot more likely to accept an offer with a home-sale contingency.”

Statewide PSA Warns Real Estate Scams Put You at Risk | Realtor Magazine

The growing threat of wire fraud scams targeting real estate transactions is prompting the Utah Division of Real Estate to launch a statewide campaign in warning the public. A real estate email scam is trying to dupe unsuspecting buyers out of their down payment right before settlement.

The Utah Division of Real Estate has produced a public service announcement video that is airing on local television stations as well as a statewide billboard campaign through the end of August.

The email scam—affecting transactions across the country—targets real estate agents’ and title companies’ email accounts. Scammers learn when transactions are scheduled and, usually within 24 hours of a transaction closing, they’ll use the email account to send new wiring instructions to the buyer, seller, title, or escrow agent, lender, real estate agent, or broker. The new wiring instruction will have the funds directed to a bank account outside of the country. After the funds are transferred, they are usually quickly dispersed to multiple banks and quickly become untraceable and unrecoverable.

More than $149 million was lost by consumers nationwide in 2018 from this type of email real estate fraud, according to a Federal Bureau of Investigation report.

“All parties in a real estate transaction should be very wary of any last-minute changes over email,” says Jonathan Stewart, director of the Utah Division of Real Estate. “Once criminals gain access to your email account, they can make anything sound legitimate. We hope by educating consumers about this statewide email scam, we can prevent Utahns from becoming victims.”

8.2M Could Have Lower Mortgage Payments | Realtor Magazine

Mortgage rates are dropping, giving millions of homeowners an opportunity to lower their monthly payments. An estimated 8.2 million borrowers could refinance and potentially lower their monthly payments by at least 75 basis points, estimates Black Knight, a mortgage software and analytics firm. This marks the largest percentage of homeowners who stand to benefit from lower mortgage rates since the end of 2016.

Last week, the average 30-year fixed-rate mortgage reached a two-and-a-half-year low of 3.73%, Freddie Mac reports.

The average borrower stands to save about $266 per month on their mortgage by refinancing, according to Black Knight. About 1.5 million borrowers—or 35% of those who took out their loans last year—could benefit from refinancing, the report notes. Refinancing can lower monthly payments and also provide access to money for homeowners who have substantial home equity. About 44 million borrowers have at least 20% equity in their homes. The average amount available to access is $136,000, Black Knight reports.

Borrowers, however, are being more conservative in tapping into home equity than in years past. About $54 billion was withdrawn in home equity in the first quarter of this year—the lowest amount in four years. Black Knight reports that less than 1% of available equity has been withdrawn.

Real Estate Pros Reveal 3 Common Landscaping Mistakes | Realtor Magazine

Curb appeal is a big deal in real estate, and great landscapes can help get potential buyers to the front door. But real estate pros say they repeatedly see how landscapes can turn off would-be buyers.

Real estate professionals recently revealed to Apartment Therapy some of the top landscaping mistakes they most often see, including:

1. Planting trees too close to the home.

Homeowners may not realize how big a tree will grow as it matures and plant it too near the property. “Plant them several feet away from your home so their limbs won’t rub against your home,” Melissa Okabe, a real estate professional at Alta Properties in Los Angeles, told Apartment Therapy. “Overhanging limbs can also damage the roof, and spreading roots might damage the foundation.”

5 Ways to Upgrade a Landscape for Less Than $1,000

10 Easy Staging Tips for Curb Appeal

Match the Curb Appeal to the Home’s Style

2. Failing at good yard care.

Yards require upkeep. “Sellers should always trim and thin trees and bushes so the home is the focal point,” says Nick Meyer, a real estate pro with EQ1 Real Estate in San Jose, Calif. They should “pull weeds, mulch the flower beds for a clean aesthetic, and add a pop of color with flowers, especially in areas that can accent the front door and walkways. It should all be done in a manner that is substantial enough to not look like a quick-flipped property.”

3. Not following the terrain.

Another common mistake real estate pros see is owners who are new to an area will plant what they like or grew up in their yards, not taking into account their new location. “The biggest mistake I see people make with landscaping is trying to create what they had ‘back home,’” Tamara Heidel, a broker at Heidel Realty in Las Vegas, told Apartment Therapy. “To compensate for the dry climate, I have seen people ‘plant’ fake flowers. Fake grass has become very popular here too. Embracing the desert with all its natural beauty can be tough for people coming from a greener environment, but your yard should fit into the landscape.”