Yajnesh Rai

This Is the Best Time of Year to Get a Mortgage | Realtor Magazine

Home buyers better hurry: This month may offer the best time of year to get a mortgage. But February can offer some of the best rates too, according to a new study from Haus, a home-finance startup.

The firm studied seasonality, loan size, credit scores, and other factors that play a role in mortgage rates. Researchers found that in January, lenders tend to offer discounts of nearly 20 basis points compared to the time period between June and October when rates are typically at their highest. After January, December and February tend to be the next cheapest months, according to the Haus study.

“While we can’t say for exact certainty why rates are lower in January than in the summer months, we can speculate that competition for customers matters,” Ralph McLaughlin, chief economist at Haus, notes in the report. “Since home buying and refinancing is seasonal, there is less mortgage origination in winter months, so it could be that lenders must lower their rates to stay competitive and attract business.”

But the housing market is booming this season. The Haus study analyzed loan data from Freddie Mac for more than 8.5 million mortgages that originated between 2018 and 2021.

Over recent weeks, mortgage rates have been hovering at all-time lows. But economists do warn that rates could rise over the coming months depending on the trajectory of the economy.

Many buyers don’t have much control over the timing of their loans. To put themselves in the best position, the study notes the importance of credit scores. Borrowers with credit scores above 800 tend to receive mortgages with rates that were 42 basis points lower than borrowers with scores below 650. Also, shopping around for a mortgage tends to result in savings. The study found a difference of 75 basis points between the most and least expensive large mortgage lenders nationwide.

“This means that, all else equal, the same borrower would get a 5% rate with the most expensive lender and a 4.25% rate with the least expensive lender,” McLaughlin notes.

Builders Rush to Produce More Homes | Realtor Magazine

Homebuilders started on more homes at the end of the year, up by double-digit margins and the highest construction numbers since September 2006. But rising lumber prices and increasing regulatory costs pose risks to future production, the National Association of Home Builders notes.

Overall housing starts, reflecting single-family and multifamily construction, rose 5.8% in December 2020 to a seasonally adjusted annual rate of 1.67 million units, the U.S. Department of Housing and Urban Development and U.S. Census Bureau reported Thursday. Broken out, single-family starts rose 12% to a seasonally adjusted annual rate of 1.34 million units. The multifamily sector, which includes apartment buildings and condos, fell 13.6% to a pace of 331,000 units.

Single-family housing starts for all of 2020 totaled 991,000, up 11.7% compared to the previous year.

“The worst of the housing shortage could soon come to an end,” says Lawrence Yun, chief economist of the National Association of REALTORS®. “More inventory is clearly needed to lessen the heat of multiple offers and the consequent frustration of multiple losing bids.”

For the past 13 years, homebuilders have been underproducing homes at rates below historic norms, Yun says. “Therefore, it will take robust home construction this year and next, at a minimum, to fully supply the market to properly meet the demand,” Yun says. “More construction also means more local job creation. The housing sector looks to lead the economy in recovery in 2021.”

Still, builders are concerned about whether they will be able to meet demand in 2021. “Builder concerns about a changing regulatory landscape have triggered many to move up their plans to pull permits and put shovels to the ground,” said Chuck Fowke, chairman of the National Association of Home Builders. “Our latest builder sentiment survey suggests somewhat softer numbers ahead due to rising building costs and an uncertain regulatory climate.” Read more: Uptick in Costs, COVID-19 Cases Shakes Builder Confidence

The builder association is still forecasting for production increases in 2021, but the gains could be tempered by ongoing supply-side challenges related to material costs and delivery times, a decrease in buildable lots, and regional labor shortages that are “exacerbating affordability woes,” said Robert Dietz, NAHB’s chief economist.

Regionally, single-family and multifamily starts on a year-to-date basis (January through December 2020 compared to a year earlier) are highest in the Midwest, up 13.2%, followed by the South (7.5%), the West (6.2%), and the Northeast (2.8%).

Mortgage Rates Continue to Hover Near Record Lows | Realtor Magazine

For nearly a year, mortgage rates have remained near historic lows. The 30-year fixed-rate mortgage fell this week to average 2.77%, Freddie Mac reported. Its lowest average on record was 2.65%, recorded earlier this January.

“We’re now seeing rates fluctuate a bit as political and economic factors drive Treasury yields higher,” says Sam Khater, Freddie Mac’s chief economist. “However, we forecast rates to remain relatively low this year as the Federal Reserve keeps interest rates anchored near zero for a longer period of time if needed until the economy rebounds.”

The National Association of REALTORS® predicts mortgage rates to rise only slightly over the course of the next few weeks, forecasting the 30-year fixed-rate mortgage to average 3% for the first half of this year.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 21:

• 30-year fixed-rate mortgages: averaged 2.77%, with an average 0.7 point, falling from last week’s 2.79% average. Last year at this time, 30-year rates averaged 3.60%.
• 15-year fixed-rate mortgages: averaged 2.21%, with an average 0.6 point, falling from last week’s 2.23% average. A year ago, 15-year rates averaged 3.04%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.80%, with an average 0.4 point, dropping from last week’s 3.12% average. A year ago, 5-year ARMs averaged 3.28%.

Freddie Mac reports average points along with average commitment rates to better reflect the total upfront cost of obtaining a mortgage.

2020’s Existing-home Sales Attain 14-Year Peak | Realtor Magazine

Existing-home sales in 2020 surged to the highest level in 14 years, landing 22% higher than a year ago, the National Association of REALTORS® reported Friday. Existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—posted big gains year over year and rose by 0.7% in December 2020 compared to November 2020’s already unseasonably high rates.

“This momentum is likely to carry into the new year, with more buyers expected to enter the market,” says Lawrence Yun, NAR’s chief economist. “Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%. Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway.”

Existing-home sales in December 2020 reached a seasonally adjusted annual rate of 6.76 million. Still, home buyers are finding a limited number of homes for sale. Inventory levels are at record lows. That has placed continued pressure on home prices, which continue to post double-digit yearly gains.

The median existing-home price for all housing types in December 2020 was $309,800, up nearly 13% compared to December 2019, NAR reports. Every major region of the U.S. saw home prices rise last month.

Here’s a closer look at key housing indicators from NAR’s latest report:

• Days on the market: Seventy percent of the homes sold in December 2020 were on the market for less than a month. Properties typically remained on the market for 21 days that month, down from 41 days in December 2019.
• Housing inventories: Total housing inventory at the end of December totaled 1.07 million units, down 23% compared to a year ago. Inventories are at an all-time low at a 1.9-month supply at the current sales pace. “To their credit, homebuilders and construction companies have increased efforts to build, with housing starts hitting an annual rate of near 1.7 million in December, with more focus on single-family homes,” Yun says. “However, it will take vigorous new-home construction in 2021 and in 2022 to adequately furnish the market to properly meet the demand.”
• First-time buyers: First-time buyers comprised 31% of sales in December, down from 32% in November.
• Investors/second-home buyers: Individual investors and second-home buyers purchased 14% of homes in December, a decline from 17% a year prior. Investors and second-home buyers tend to account for the largest bulk of cash sales, which accounted for 19% of transactions in December.
• Distressed sales: With moratoriums still in place, foreclosures and short sales comprised less than 1% of sales in December, down from 2% a year ago.

Regional Breakdown

Here’s a closer look at existing-home sales fared across the country in December 2020:

• Northeast: Existing-home sales rose 4.5%, a 27% increase compared to a year earlier. Median price: $362,100, up 19% from December 2019.
• Midwest: Existing-home sales were unchanged in December compared to November, but were up 26.2% from a year earlier. Median price: $235,700, a 13.7% annual increase.
• South: Existing-home sales rose 1.1% in December, up 20.7% annually. Median price: $268,100, an 11.3% increase from December 2019.
• West: Existing-home sales dropped 1.4% compared to a month prior but are nearly 18% higher than a year ago. Median price: $467,900—up 14.2% from December 2019.

Are Some Buyers Going ‘Too Far’ to Win a Bidding War? | Realtor Magazine

Facing an upsurge in housing demand across the country, many home buyers are finding themselves in bidding wars for the limited inventory on the market. To win, buyers are trying to find ways to entice sellers beyond price—and at times are taking it too far, real estate professionals say.

Mary Lou Wertz of Maison Real Estate in Charleston, S.C., talked toThe Wall Street Journal about one couple relocating from New York who fell in love with a $1.2 million, four-bedroom home online. The seller had already accepted another offer, however. The New York couple offered to pay $10,000 more than the other buyers as well as offer their competitors $25,000 to walk away from the home. They also told the seller that they would make a $30,000 donation toward a hospital for cancer research since the seller had recently lost his wife to cancer.

Ultimately, the New York couple’s offer was not accepted. The offer seemed “a little over the top” to the seller, Wertz told theJournal.

Another couple shared with theJournal how they toured 50 Los Angeles homes, submitted 16 offers—sometimes above the asking price—and were outbid every single time. But they weren’t about to lose out on a three-bedroom home listed for $735,000 in the Northridge area. “We were turning up at showings, and there would be a line of people who were there before us,” Andrea Kissling of Los Angeles told theJournal. “These houses were getting 30 or 40 offers and going $100,000 over asking.”

The buyers noticed memorabilia around the house of the Harry Potter films. So they produced a Harry Potter-themed video for the sellers (one of the buyers provides design services for Warner Bros.). The video fawned over the home and showed the couple reading Harry Potter books to their children. The couple also offered to buy the sellers VIP passes to The Wizarding World of Harry Potter at Universal Studios Hollywood.

Despite all the work, the couple still lost out to a higher offer for the home.

Chris Furstenberg of Nourmand & Associates in Los Angeles told theJournal that one of his clients—a filmmaker—once made an offer that came with the promise of tickets to the Academy Awards. Still, the seller went for a higher offer.

Furstenberg says such enticements often only work to settle a tie in a bidding war. But if there’s a higher price, that usually always wins out in the end—no matter how much buyers try to sweeten the deal with other offerings.

Biden Extends Eviction Moratorium to March 2021 | Realtor Magazine

In one of his first actions after taking office on Wednesday, President Joe Biden signed an executive order to extend the federal ban on evictions till the end of March. The eviction moratorium was previously set to expire at the end of January.

About 14 million Americans are behind on their rent payments, CNBC reports.

But extending an eviction ban could also come at the price of landlords. The National Association of REALTORS® has been among housing groups advocating for rental assistance to also help the nation’s landlords. NAR and other industry groups have argued that a federal eviction moratorium without rental assistance would lead to a crisis in which housing providers couldn’t cover their costs and tenants would fall further and further behind in payments.

So far, Congress has allocated $25 billion toward rental assistance. Biden’s $1.9 trillion stimulus plan—unveiled last week, prior to him taking office—calls for an additional $25 billion in rental assistance. Read more: Biden Plan Calls for $25B in Renal Assistance, Extending Eviction Ban

Extending the eviction moratorium was one of several actions Biden took shortly after his inauguration Wednesday. He also signed executive orders to extend a pause on student loan payments, rejoin the Paris Agreement on Climate Change, and other actions.

FHFA Extends Foreclosure, Eviction Moratorium Through February | Realtor Magazine

For the fifth time, the Federal Housing Finance Agency is extending single-family foreclosures and real estate–owned eviction moratoriums on properties backed by Fannie Mae and Freddie Mac, the agency announced Tuesday. The extension runs until Feb. 28. The moratoriums are in place due to the financial impact brought on by the COVID-19 pandemic.

The program was originally scheduled to expire in June 2020. The most recent deadline for the program was Jan. 31.

The foreclosure moratorium applies only to single-family mortgages backed by Fannie Mae and Freddie Mac. The real estate-owned eviction ban applies to properties that have been acquired by Fannie or Freddie through a foreclosure or deed in lieu of foreclosure transaction.

“To keep our communities safe, and families in their homes during the COVID-19 pandemic, FHFA is extending Fannie Mae and Freddie Mac’s foreclosure and eviction moratorium,” FHFA Director Mark Calabria said in a statement.

Fannie Mae and Freddie Mac also offer loss mitigation programs to borrowers who may be experiencing hardship in making their payments. Qualified borrowers could be eligible for loan modifications or temporary forbearance for up to 12 months, whether the hardship was caused by COVID-19 or not. The FHFA says that program will remain available even when the COVID-19 forbearance flexibilities end.

Last week, the FHFA also announced it would continue to allow for alternative appraisals and employment verifications on government-backed loans until Feb. 28 to help prevent settlement delays.

Real Estate Pros Pick 2021’s 7 Biggest Housing Issues | Realtor Magazine

The lack of inventory will be the biggest story in housing this year, said real estate professionals recently surveyed by HomeLight, a real estate referral company. HomeLight’s Top Agent Insights report, conducted in the fourth quarter of 2020, reflects responses from more than 1,000 real estate professionals nationwide.

What issues are top-of-mind for real estate professionals for 2021? Survey respondents identified seven key trends expected to affect housing the most in the new year, according to the HomeLight survey:

1. Inventory shortages.

Eighty-four percent of the real estate professionals surveyed said that inventory was lower than they expected at the end of 2020. The National Association of REALTORS® reports that inventory levels in November were down 22% compared to a year ago. Real estate pros in the South Atlantic surveyed by HomeLight were most likely to cite a lack of inventory as the top factor affecting their housing markets in 2021. Midwestern agents were the least likely to cite inventory woes.

2. Widely distributed vaccines to boost consumer confidence.

Fifty percent of agents said that a widely distributed vaccine could encourage more sellers to list their homes and help offset inventory challenges. “This indicates that buyers could have more housing options later in the year, though with inventory starting from such a low place, the market could remain highly competitive for a while,” the HomeLight report says. The vaccine also could help businesses reopen fully and give more Americans added job security and the confidence to enter the housing market.

3. Some homes will be lost to foreclosure.

Forty percent of real estate agents believe that the end of forbearance and stimulus plans this year could cause an increase in foreclosures in their markets. However, growing home equity may help homeowners sell in a strong market if they are facing foreclosure.

4. Low mortgage rates will continue to drive demand.

Ninety-seven percent of agents said that low mortgage interest rates increasing buyer demand in their markets, the HomeLight report notes. Sixty-eight percent of agents reported that their renter clients decided to speed up their plans to purchase a home, 66% said current homeowners opted to trade up faster, and 46% said older adults decided to downsize sooner due to the low rates. There are some concerns, however, that mortgage rates could increase from record lows over this year. Thirty-four percent of agents say they expect mortgage rates to rise as more people receive the vaccine and the economy improves.

5. A permanent shift to remote work could encourage more moves.

Nearly 15% of agents said the shift to working from home could have the biggest impact on the real estate market in 2021. “Many employers will likely give the final word on which jobs are to become permanently remote in the coming months, which could trigger another round of relocations,” the HomeLight report notes. “With California frequently topping lists of states with the most remote jobs, agents in the Pacific Coast were most likely to cite this trend (19.8%), followed by agents in the Northeast (16.2%).” The impact of remote work on real estate likely will be the least prominent in the South Central region. Only 8.3% of agents in the South Central region of the U.S. cited remote work as an influential real estate trend for 2021.

6. Virus surges won’t lead to further market panic.

“The U.S. may not yet have a handle on COVID-19, but the surprise element has passed,” the report says. Real estate professionals are more prepared to take their businesses virtual and to still transact while socially distanced. Virtual tours, digital closing technology, and remote showings are all methods that real estate pros have increasingly turned to in the pandemic. “Compared to 2020 when buyer activity abruptly halted due to the virus and then surged once lockdowns eased up, this year is likely to be one of relative normalcy for housing trends,” the report says.

7. Affordability challenges persist and tax credits may help.

As affordable housing issues mount, lawmakers are racing to try to come up with solutions. Thirty-seven percent of non-homeowners cite down payment as one of the biggest obstacles to homeownership. Eleven percent of agents surveyed believe that finding an affordable home will be a major challenge facing buyers in 2021. But some are optimistic that tax credits expected from the new administration may help. Fifty-five percent of the real estate professionals surveyed by HomeLight said they were in support of President Biden’s proposed $15,000 down payment tax credit for first-time buyers. The tax credit—which, as proposed, will be able to be used at the time of purchase—has been proposed as an extension of the Recovery Act’s temporary tax credit.

Don’t Skip These 7 Home Projects Before Selling Your House – Redfin

Maybe you’ve decided it’s time to leave your condo in New York City for a more spacious house in Dallas now that you can work from home. Or, maybe your family is growing and you’re looking for a house with a larger yard or in a different school district. Whatever your reason is, you’ve decided it’s time to sell your current home. Whether this is your first time or you have experience, selling your home can be a big task. So, unless you’re in a major time-crunch or on a tight budget, it’s best to put a little work into your home before listing it for sale so you can sell your home quickly, and possibly for more money. 

From installing new flooring to making eco-friendly upgrades, there’s a lot of home improvements you can – and should – do to make your home stand out when it hits the market. But with so many potential home upgrades, it may feel overwhelming to know where to start. Luckily, we’ve listed out the 7 home projects to consider if you’re selling your home this year.

1) Update your flooring

If the floors in your home are worn out or outdated, it can be a huge turnoff to potential buyers. Even if you’ve grown used to the stains on the carpet or you no longer notice the divet in the kitchen floor, you’ll want to have your flooring updated before listing your home for sale. 

There are many types of flooring and the right choice will depend on your home. However, you can never go wrong with hardwood. In fact, hardwood is the most popular and valuable type of flooring to potential homebuyers in the US. Laminate and ceramic are also great flooring options to consider. To be sure you’re choosing the right type and style for your home, it’s best to talk with a flooring professional in your area. 

2) Freshen up your paint 

Are your walls scuffed, scraped, or just an unappealing color? A fresh coat of paint is a simple yet effective home update, allowing you to maximize the look and feel of your space in next to no time. As people tour your home, online or virtually, they’ll notice the small details. You won’t want a poor paint job or an outdated, dark orange kitchen wall to be an influencing factor on their decision. Instead, opt for neutral paint colors to appeal to a wide range of buyers. 

Keep in mind that painting isn’t just for the inside, either. A fresh coat of exterior paint can do wonders for your home’s appearance and curb appeal.  If you’re crunched for time or this home project is too big of an undertaking, hire a professional painter so that your home is looking its best when it hits the housing market.

3) Give your kitchen a face-lift

The kitchen is the heart of the home and it’s often one of the top priorities for buyers. So a kitchen in need of a lot of work can be all it takes to turn a buyer off for good. With stylish, designer kitchens as one of the major home design trends this year, you’ll want to prioritize this home project to help your house stand out against the competition.

If a complete remodel doesn’t fit within your budget, don’t worry. Upgrading your kitchen doesn’t mean you need to go all out and buy brand new appliances – a few little cosmetic touches can go a long way. Things like new cabinet faces, drawer pulls or, if necessary, a new counter, can completely turn a kitchen around. Even adding a new backsplash or going bold with contrast cabinetry can make all the difference. If you’re not sure which upgrades are necessary, consider speaking with a contractor or real estate professional about current trends in your area. 

4) Enhance your landscaping: curb appeal is key

Many homebuyers want the complete package – inside and out. A beautiful home is only made better by a beautiful yard, so if your property is a little bland on the outside, the right finishing touches can spark buyer interest. That’s why landscaping is one of the most important home projects to complete before you sell your house.

Landscaping can be comprehensive – things like koi ponds and expansive patios – but can also be straightforward and simple. Planting shrubs along a sidewalk, adding a small flower garden, or even putting fresh mulch around trees can be affordable and easy ways to create eye-catching curb appeal. Whether you want to completely upgrade your outdoor space with an intricate landscape design, or your front yard just needs a well-manicured lawn with some fresh flowers, a landscaper can help you tackle this home project.

5) Replace your windows

Depending on the age and condition of your home, it might be time to replace your windows. Even if you’ve only lived in your home for 5 years, you should ask yourself how long the previous owners were living there and if they ever had them replaced? If your windows have minor damages, then they may just need a simple repair. But if the frames are worn, there’s leaking when it rains, it’s difficult to open or close, or there’s just visible damage – you’ll want to hire a professional to replace them.

6) Repair your garage door

Does your garage door squeak and squeal, or is it full of dings and scrapes? Then this is one of the home projects you’ll want to stop pushing off. If your garage door no longer looks or acts up to par, then a replacement is probably necessary – especially if it’s seen years of use with little to no maintenance. Potential homebuyers will notice these issues and may request that you repair them as part of the purchase agreement. That’s why it’s a good idea to get ahead of home projects like this before listing your home. And even if your garage door is functioning as it should, this can be a great cosmetic update to freshen up your home’s exterior.

7) “Green” home projects for an eco-friendly home

These days many buyers are looking for homes with eco-friendly features so taking the time to add some “green” upgrades to your home can be well worth it. And, luckily, there’s a handful of ways you can make your home more green. If your budget allows, then installing solar panels is the ultimate eco-friendly upgrade you could make. Solar panels can reduce the overall cost of electricity and energy bills, are a more environmentally-friendly energy solution, and can even increase the value of your home.  And if you live in a city like San Diego or Honolulu where it’s become a popular home feature, you’ll want to invest in this eco-friendly upgrade. 

FHFA Extends Relaxed Pandemic Lending Standards | Realtor Magazine

The Federal Housing Finance Agency announced it will continue to allow for alternative appraisals and employment verifications on government-backed loans until Feb. 28 to prevent settlement delays.

The relaxed lending and appraisal standards for mortgage financing giants Fannie Mae and Freddie Mac were first put into place by the FHFA in response to the COVID-19 pandemic in March 2020. They allow for alternative verifications of employment and appraisals. The standards were originally set to expire on Jan. 31.

“The changes are to ensure continued support for borrowers during the COVID-19 national emergency,” the FHFA said in a statement on Thursday. “FHFA will continue to monitor the coronavirus situation and update policies as needed.”

During the initial stages of the COVID-19 outbreak, lenders reported struggles in being able to obtain an appraisal based on a full interior and exterior inspection of the property. The government-sponsored enterprises were directed to permit drive-up appraisals or desktop appraisals in certain situations so that appraisals could move forward and not delay settlements.

Also, as businesses closed during the pandemic, lenders reported struggling with being able to verify borrowers’ employment. In response, the GSEs began accepting alternative forms of employment verification, such as a recent pay stub.

In a release, the FHFA said the extension applies to allowing alternative methods for documenting income and verifying employment before a loan closes; alternative appraisals on purchase and rate term refinance loans; and expanding the use of power of attorney to assist with loan closings.

The FHFA has issued a request for public input on policies and practices regarding the home appraisal process as it weighs a series of proposals moving forward. Read more: FHFA Seeks Comment on Overhauling Appraisal Process