Mortgage Rates Remain Near 2016 Lows | Realtor Magazine

Mortgage Rates Remain Near 2016 Lows

Mortgage rates showed little movement this week, holding near the lows for the year.

“Although there was minimal change in rates this week, the hawkish tone of Wednesday’s Fed minutes release had an immediate impact on Treasury yields, and could possibly shake up next week’s survey results,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending May 19:

Source: Freddie Mac

More New Homes Are Entering the Pipeline | Realtor Magazine

Nationwide housing starts climbed 6.6 percent last month to a seasonally adjusted annual rate of 1.17 million, according to Commerce Department data released Tuesday. Permits, a gauge of future construction, also jumped 3.6 percent month over month, showing the uptick will likely stay.

“Though housing construction data is relatively flat for the beginning of 2016, we anticipate a ramping up of housing production during the rest of the year, given a strengthening job market, low mortgage interest rates, and favorable demographics,” says Robert Dietz, chief economist for the National Association of Home Builders.

Single-family and multifamily starts both saw gains in April. Housing starts on single-family homes jumped 3.3 percent to a seasonally adjusted annual rate of 778,000 units. Multifamily starts, a more volatile sector, rose 13.9 percent to 394,000 units, the Commerce Department reported.

The bulk of the increase in single- and multifamily housing stats was in the Midwest and South. The Midwest saw a 22.2 percent month-over-month increase in housing starts, while the South saw a 14.1 percent boost. On the other hand, the Northeast saw starts drop 7.6 percent last month, while the West posted a 10 percent loss.

Housing permits, however, were up in all four regions in April, led by the largest gains in the West with a 4.7 percent month-over-month permit gain. The Midwest and South both registered 3.3 percent increases in permit issuance, and the Northeast saw a 3 percent increase.

7 Tips for Downsizing in Retirement | On Retirement | US News

Couples often start their married life in a tiny starter home, upgrade to a slightly larger home to raise a few kids, and then stay in that hopefully mortgage-free home in retirement. But many retirees no longer need a several bedroom home. And even if your spacious home is paid off by the time you retire, which is increasingly unlikely, your costs for maintenance and utilities are inherently higher.

This is why downsizing before or during retirement can be a good move for many retirees. If you think downsizing might improve your retirement finances, here are some tips to reap the biggest benefits:

1. Look at your total homeownership costs. If the point of downsizing is to save money, you’re going to have to run the numbers. Sit down and figure out what your current home costs you, including the mortgage, taxes, insurance, utilities, maintenance and other costs. Then, look at some scenarios for a smaller house to see how much you might save.

 

While you’re running the numbers, be sure to account for where you plan to buy your smaller home. Downsizing within the same neighborhood is likely to save you money. But moving from an affordable area to a city center or a more expensive state could actually cost you more.

2. Consider non-financial costs. There’s an emotional cost to parting with a place you’ve called home for decades, especially if you have plenty of good memories tied to that place. And if you’re considering moving away, say to a sunnier climate, think about the relational costs of being further from family and established friendships. How much you will save by downsizing may outweigh these emotional costs, but it’s important to consider them.

3. Don’t expect to double your nest egg. You may dream of selling your current paid-off home for big bucks, buying a smaller home in cash and investing the rest. This could happen and might give your retirement savings a big boost. But remember that the housing market is still in recovery mode. You may find that your home isn’t worth as much as you think, or that it’s hard to find a smaller home that meets your needs. Before you come to a final decision, it’s wise to talk to a realtor about how much you can expect to sell and buy for.

4. Calculate the cost of selling and buying again. Don’t forget to factor in the selling and buying costs of this process. Even a paid-off home can’t be sold for free. Ask your realtor about how much you can expect to pay when you sell your current home. Then, calculate the closing costs of buying a smaller home with the profits. You should also estimate how much it will cost to pack and move your belongings. If these costs significantly eat into your profits, you might want to rethink downsizing altogether.

5. Evaluate other potential options. Downsizing is not the only way to save on housing costs. You could also turn some of your home’s space into a money-maker by renting out a room or even creating a studio apartment above your garage. This could be especially lucrative if you live in a high-demand area. Steps like this could allow you to keep your home, but actually come out on top financially.

6. Sketch out how you actually use your space. If you’re not sure if downsizing is right for your lifestyle, take some time to think about how you actually use the space in your current home. Will you rent out a room? Do you have family and friends overnight often, host huge dinner parties or run a business from your home? These activities may justify the extra space if you can afford it, and you might not be able to do them in a smaller home.

However, if you plan to live a quiet life, downsizing might be a better fit for your lifestyle. If you go out to spend time with family and friends and your children aren’t likely to move back home, you might not need the extra space.

7. Consider a rental. Don’t write off the idea of renting when you’re thinking about downsizing your home in retirement. Renting could reduce your overall housing costs, and can make those costs more predictable since you aren’t on the hook for potential repairs.

Renting isn’t the right option for every retiree. You could face a rent increase you can’t afford or be asked to move. But a good rental situation could allow someone else to take care of repairs and yard work you aren’t equipped to deal with. So, don’t take renting off the table when you’re deciding what to do with your home during retirement.

Once you can get the down payment figured out then, buying is better choice over renting in most places.

Homeowners Share: 5 Secrets To Selling Your House – Real Estate 101 – Trulia Blog

Hindsight is always 20-20: Heed these secrets to selling your house from those who’ve successfully sold before.

Shopping for your next dream home seems like a blissful idea, until you realize you have to sell your current home first. And as many a homeowner can attest, even if you’ve purchased a home before, there’s a lot to learn when it comes to selling your house.

Here’s what sellers around the country say they wish they’d known about the home-selling rigmarole before they listed their home for sale.

1. How much is your home really worth?

“I didn’t do my homework about comp prices, so I had an unrealistically high number in mind,” says Jack, who recently listed his Miami, FL, home for sale. “I also wish I knew more about trending prices.”

In robust markets, it’s easy to get excited about your potential listing price, especially if you’re planning to put all that newfound equity into your next home purchase. But the worst thing you can do is have an unrealistic expectation about your home’s value — you’re only setting yourself up for disappointment. So do your research to find out what your home is worth: look at local comps, consider nearby home sales over the last six months, and then really narrow it down to properties that most closely resemble your own. If you suspect there’s something wrong with your foundation or that termites might be in the picture — the kind of thing you’ll most likely have to pay to fix later on in the selling process — it might be worth it to get a presale inspection (or at least fix some of the larger, known issues so you don’t have to tackle them on someone else’s timeline).

2. How important is your listing agent?

“There are several things I wish I had known, but far and away the biggest was to interview more than one real estate agency,” says Suzanne, who sold a home in Los Angeles, CA. “I went along with a relative’s advice: ‘This is the only agent who really has your best interest at heart, plus he’s only handled the more expensive properties in the area’— and my place sold for easily $25,000 less than it could have.”

Once you’ve decided to list your home for sale, the biggest decision you’ll make is choosing a real estate agent. Choosing a listing agent can be challenging, especially if you’ve never hired one before, but working with a recommendation can have its own pitfalls. Interview several real estate agents, and do it before you need to list your place so that you have plenty of time to make a decision. Judge them for their knowledge of the local market rather than their flashy presentations, and be wary of both pie-in-the-sky promises and a lack of enthusiasm for your place.

3. Does anyone even read listing descriptions?

“I wish I’d known that I really should have just written the description for the listing myself, because my real estate agent’s spelling and grammar errors were so egregious that as a buyer, I would never have looked at a house that was so poorly described,” says Dana in Portland, OR.

Just because your real estate agent is a professional doesn’t mean they’re also a professional writer or photographer. If you otherwise love your agent but cannot handle the typos in the listing (or the glare in those all-important listing photos), gently ask for revisions to the listing.

4. What’s the best home-staging tip?

“I wish I’d known that to sell a family home to another family, you have to declutter it of anything a family would ever use. Which means every toy, baby bouncy seat, and stroller has to get shoved in the back of your car for every showing,” says Hadley, who had a home for sale in Boston, MA. And don’t overlook the small details either. “Get the windows professionally cleaned!” says Kerry, also selling in Boston, MA. “Man, it made a world of difference. It also made me mad we lived with dirty windows for so long!”

Obviously, you want your home to be tidy. But when your home is for sale, it should be pristine. That means gleaming refrigerators, organized closets, sparkling surfaces, and nary a piece of clutter anywhere. In fact, sellers are often best off throwing as much as they can into storage bins and living an austere life until the place goes under contract. And don’t forget: You have to keep it clean. So you might want to put a cleaning service on speed dial.

5. Should I make plans for the pets during home showings?

“When I sold my first place, I had two cats and a dog. Somehow I had it in my head that it wouldn’t be hard to hustle them out before a showing. Of course, that was ridiculous — potential buyers stopped by during the workday all the time, which meant I had to leave my office, dash home, bundle all three pets into the car, and then drive around for an hour with the cats yowling before dumping them back at our place,” says Dan in Denver, CO.

In the rush to get your house listing-ready, the pet factor can be easily overlooked. But it’s a big one! For starters, no matter how clean your place is, pets can often find (creative) ways to undo your hard work. And a smelly litter box is no seller’s friend. Never mind that some potential buyers might be allergic to pets; that would be a terrible way to lose a sale. Your best strategy is to find a place for your fur children to stay while your place is on the market, then shower them with apologetic treats later. If that’s not in the cards, make it as easy as possible to remove the pets and all of their things from your home quickly so you can do one final sweep (literally) — and take that litter box with you!

Too much water unhealthy for plants and house – Daily Press

The word “drainage” is a word you either hate or love. Excessive water around a house and garden is bad for everything — plants and home.

Poor drainage around a house is often the contractor’s failure to properly grade the structure once construction is finished.

Your lot should be graded to drain surface water away from foundation walls, according to Jamison Brown of Home Inspections by Jamison & Co. in Poquoson.

A good grade slopes a minimum of six inches within the first 10 feet; when that’s not possible, drains or swales can be constructed to get the job done.

“Faulty or reverse lot grade allows roof water run-off to flow back toward the home where it can wash out the soil around the foundation and lead to foundation failure, over the long term,” says Brown, who has been inspecting homes for 28 years.

“During the short term, water that gains access to the soil in the crawl space allows wood-destroying fungi to form. A wet crawl space can lead to distorted framing and flooring and creates an environment conducive to termite infestation.”

Sometimes, poor drainage is the result of too much clay, which is dense and holds water during heavy rains. Wet clay swells, and feels slick. During hot, dry weather, clay gets hard and shrinks — helping to cause a destructive condition called shrink-swell soil that can wreak havoc on foundations.

“I have seen a number of homes over the years with serious drainage problems that could have been averted had the builder raised the foundation by one or two rows of concrete block,” says Peggy Krapf of Heart’s Ease Landscape & Garden Design in the Williamsburg area.

“A simple and inexpensive fix at that stage — much more costly and complicated later.”

Crawl space woes

Ground water is the main cause of moisture-related problems in the crawl space, according to Kimberly Houston, president of Colonial Exterminating in Newport News.

“High moisture leads to fungal growth and damages,” she says. “It also invites many pests, including termites.

“And, 40 percent of the air in the crawl space is circulated into the house through the ‘chimney effect,’ which could bring hazardous fungus spores and insect debris with it.

“Some good options to improve drainage around your home include: install gutters and downspouts, keep gutters and downspouts clean of debris and grade soil away from your home’s foundation.”

Simple solutions

Sometimes, a French drain is all that’s needed to get water into the ground where it can quickly dispense. I used this technique effectively, making only a huge, deep hole filled with rock, next to back steps where water puddled too much.

For a more complicated situation, I hired a specialty contractor to do an interior French drain under a foundation’s low crawl space. Water caught by the drains fed into a sump pump that emptied into another drain basin in the yard. In this situation, regular pump inspections insure the system keeps working.

I’ve also had exterior French drains done with pervious pipe, and eventually sediment filled the drains, making them worthless.

Final fix

For a 3,000-square-foot, one-story house we just bought, Ken and I attacked a too-wet yard early on, knowing the expansive roof was dumping hundreds of gallons of water per one-inch rainfall. Each time heavy rains happened, the downspouts carried rivers of water onto soggy soil. Unbelievably so, for every one inch of rain that falls on a 1,000-square-foot roof, expect 600 gallons of water on your yard.

Steve Nassan of A-1 Lawn and Landscaping Services in Virginia Beach installed a Speedy Basin Drain System with a collection box located in the lowest area of the yard. It collects water and sends it underground by gravity to the street through a hole created in the curbing. PVC connectors on five of our six downspouts feed the water into four-inch flexible pipes with no holes in them. The pipes also lead to pop-up drains at the rear of the property, giving the water two directions to flow and empty quickly.

“More than 80 percent of my business is drainage systems,” says Nassan.

“Standing water around a house is bad for the foundation. It can cause the house to settle, compromising the foundation and possibly leading to cracks. Too much water around plants can cause roots to rot and kill plants.

“The Speed Basin Drain System takes care of all that.

“French drains work in the beginning but dirt, grass clippings, etc., start to get into the gravel, causing the water to slow down going into the pipe.”

In addition to downspouts, our AC drain line also feeds into the underground pipes. Central air-conditioning systems can easily collect 10 to 15 to 20 gallons of water daily, depending on the size of the house and system cooling it. Consider directing that water away from your foundation, at least to a gardening area where moisture-loving plants can drink it up.

Rain gardens & barrels

Water from gutter downspouts or an AC drain pipe also can be directed to planting areas called “rain gardens.” Simply put, a rain garden is a special spot that collects water for plants to drink. Usually, any clay or bad soil is excavated to a depth of about 30 inches. A shallow layer, or about six inches, of gravel is placed in the bottom. Fill the area with good, porous soil, install your moisture-loving plants and mulch generously.

Rain gardens can also be used to collect water from low-lying hard surfaces like driveways and walkways.

Rain barrels attached to downspouts are the easiest and most effective ways for catching rainwater from your roof. Water collected in those barrels can be used to water plants, wash off garden tools or moisten your compost pile.

Barrels with spigots can be purchased at local garden centers and hardware stores.

Build your own rain barrel with directions from AskHRgreen.org, a public awareness of 17 Hampton Roads city and county governments and the Hampton Roads Planning District Commission, at http://askhrgreen.org/how-to-build-a-rain-barrel.

Learn more about rain garden design and usage with AskHRgreen.org at http://askhrgreen.org/rain-gardens and the Hampton Roads Agricultural Research and Extension Center in Virginia Beach at arec.vaes.vt.edu/hampton-roads/gardens/rain-garden/index.html.

10 moisture-loving perennials

These plants are ideal for rain gardens and low-lying, moisture-rich spots:

•Bee balm

•Buttonbush

•Cardinal flower

•Dwarf swamp sunflower

•Geranium Rozanne

•Joe-pye weed

•Leafcup

 

•Swamp milkweed

•New England aster

•Virginia blue flag

5 moisture-loving shrubs

•Encore azalea

•Scarlet swamp hibiscus

•Summersweet

•Sweetspire

•Wax myrtle

3 moisture-loving trees

•Eastern redbud

•Sweetbay magnolia

•White fringe tree

Even though all these plants are labeled as “moisture-lovers,” they do not like to sit in standing water. Organic compost or finely shredded hardwood mulch worked into the planting soil around them will help the area drain better.

Trying to buy a house? Keep personal data off financial statements – The Orange County Register

If you’re trying to buy a house today, you know the importance of having a current pre-approval letter from a direct lender, if you are planning to take out a home loan.

What you also need to have handy is a bank statement or other type of financial statement that shows you have the money to cover the initial deposit, the remainder of the down payment, and the closing costs.

If you are planning to buy a house with cash, you need to show that you have the money to cover the entire amount of the purchase price, with a little bit more to cover the closing costs.

This is called the proof of funds. Here are some important things to keep in mind when you provide your proof of funds.

1. Take off your account numbers from the statements you provide. You want to protect your personal account information by using a black Sharpie to coverthe number before you scan in your statement. Or use a PDF editor to erase the account number before you email it to your agent.

2. If you have the money spread across multiple accounts, after you take off the account numbers, make sure the sum of all the different balances is enough to cover the amount you need.

Better yet, go one step further and put together a spread sheet of all the accounts by the type (not by account number) and add them all up. Make it easy for the seller, who will be checking, to see that you have all the money you need.

3. If some of the money you need is coming from a gift from your parents, grandparents or other family member, make sure you can provide the amount and the source of the funds.

A letter is usually a good idea to document how much of the money will be gift funds. And you will want to include a bank statement from your generous relative showing they have the money to give to you. Take off their account numbers before you scan or email it. Definitely review this source of funds with your lender.

4. Try not to give away too much with your proof of funds. You are certainly not required to show accounts balances for more than what you need, even though you may have it. It is best to show only what you need to have.

If you are drawing on funds from an account that has significantly more money than you need, it may cause the seller to question why your offer was lower than the list price for the house.

This might be the time for you and your agent to go back over the comps for the house in an effort to keep the sellers eyes on the market value of his house and not your deep pockets.

Mortgage rates dip to lowest in three years: good news for homebuyers? – CSMonitor.com

Rates for longterm mortgages in the US continued dropping this week, likely an encouraging sign for people considering buying a home.

The average 30-year fixed-rate mortgage dipped to 3.57 percent from 3.61 percent last week, reaching a three-year low, the mortgage buyer Freddie Mac said Thursday. For 15-year mortgages, the average dropped to 2.81 percent from last week’s 2.86 percent.

But the numbers come as the number of middle class Americans – for whom owning a home was long a symbol of success – has been steadily declining for more than a decade in urban areas, while home ownership rates have dipped significantly since the 2008 financial crisis.

 

Meanwhile, the share of income many Americans pay in housing costs has also increased, dramatically in some cases, in the past 15 years.

 

The percentage of Americans living in a middle-income household fell from 55 percent in 2000 to 51 percent in 2014, according to a study released Thursday by the Pew Research Center.

The low mortgage rates are also impacted by a mixed jobs picture. “Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8 percent since late March,” said Sean Becketti, chief economist of Freddie Mac, in a statement. “Prospective homebuyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks.”

Increasingly, Americans are migrating across class lines, into either upper-income or lower-income brackets, Pew found, a trend that’s impacted by decreasing wages and growing levels of wage inequality between the wealthiest Americans and the 99 percent.

“Because of the economic downturn, employment took a huge hit, and there is still a fair amount of slack in the labor market, [which is] going to keep income on the lower side,” Rakesh Kocchar, Pew’s associate director of research, told The Christian Science Monitor.

Despite the changing economic circumstances, particularly for younger Americans, aspirations to own a home haven’t diminished, writes The Daily Beast’s Joel Kotkin:

“Millennials may be staying in the city longer than previous generations, but their long-term aspirations remain fixed on buying a single-family house,” he writes. “This trend will accelerate in the next few years, suggests economist Jed Kolko, as the peak of the millennial population turns 30.”

But these low rates have sparked only a slight increase in mortgage applications, according to the latest data from the Mortgage Banker’s Association.

Sky-rocketing rents, which have forced many middle-class and low-income families out of urban areas, would seem to make buying a house a more attractive option.

Low-income renters spent nearly 50 percent of their income on rent in 2014, a Pew analysis of government data found, while low-income families who owned their homes spent nearly 20 percent. A year earlier, by contrast, those renters spent just over 30 percent of their income on housing.

For middle-income families, who spent 25 percent of their income on housing regardless of whether they owned or rented a house in 2014, the distinction wasn’t as dramatic, though middle-income owners spent less of their incomes than renters.

Some mortgage companies have particularly tried to seize on this trend, with Quicken Loans airing an ad during this year’s Superbowl with the slogan “Push Button, Get Mortgage” that some argued was reminiscent of pre-2008 home-lending practices.

Executives from Quicken dismissed those concerns. “I don’t see any harm in those who qualify getting a mortgage more easily,” Quicken Loans President Jay Farner told CNET in January. “We think the American dream is an important thing. And our research tells us it’s an important thing. All we’re trying to say is, that’s good.”

Rental Costs Eat Up 70% of Your Income Here | Realtor Magazine

Soaring rental costs are taking a big dent out of some renters’ paychecks, and creating hardships for entry-level employees in particular.

In New York City, the average entry-level employee earns $47,000 per year. That means affording the rent of an average one-bedroom apartment at $3,000 per month will take up 77 percent of the average employees’ monthly income, according to RadPad, which recently analyzed more than 150,000 apartment listings to judge affordability for entry-level employees. In San Francisco, employees’ have 79 percent of their incomes eaten up by rental costs – the highest percentage in the nation of any metro studied.

Renters in Houston have it easier. Houston renters spend 29 percent of their incomes on rents, which falls under the 30 percent threshold that most financial planners say is healthy for a budget.

Here are 10 popular cities ranked from highest to lowest in terms of the percentage of starting monthly income that goes towards rent:

1. San Francisco: 79%
2. New York City: 77%
3. Los Angeles: 61%
4. Boston: 56%
5. Seattle: 51%
6. Chicago: 47%
7. Orlando: 44%
8. Atlanta: 36%
9. Austin: 36%
10. Houston: 29%

What Does ‘TLC’ Mean in a Listing? You’d Better Take Care | Fox News

You’ll often see the phrase “needs TLC” in real estate listings, but what does “TLC” mean? Well, the use of that acronym for “tender loving care” is code for “this home needs work” — and odds are, it needs a lot of work. And that, of course, could jack up your spending on what might initially appear to be a bargain home.

“‘TLC’ is when a home needs an extensive amount of remodeling,” says Fort Myers, FL, Realtor Lloyd Nichols. And we’re not talking about slapping down a fresh coat of paint, but major work that will take time and a chunk of money.

A new roof will cost you an average of $6,600, according to HomeAdvisor.com, whereas an AC system will cost about $5,238. More than likely, your fixer-upper will need more than one repair done. Nichols estimates that buyers could spend an extra “$20,000 and up” on repairs.

“Hot buttons for most buyers will be the foundation, roof, [HVAC] system, and plumbing,” says Nick Moomaw, owner of TLC Home Inspections in Marble Falls, TX. “They’re the ones that are potentially the most expensive to repair.”

Why would anyone want a house with all that hassle? Because these ugly ducklings can be bargains. Even if you factor in the extra money you’ll have to pour into renovations, you may ultimately be getting a deal — particularly if you’re handy around the house and can take care of some of the renovations yourself (which explains another euphemism you may see in such listings, “contractor’s delight”). Experts say that as long as the home’s foundation, roof, and structure are sound, the property can be a solid investment.

 

“You can do extremely well,” says Nichols. “You can even flip it.”

Nonetheless, if you were hoping for a home that’s “move-in ready” (translation: no renovations required), you should steer clear of those TLC listings — or, at the very least, make your offer contingent on a thorough home inspection. That way, you can assess the damage before you commit to buying the house.