Yajnesh Rai

Mortgage Rates Sink to Three-Month Lows | Realtor Magazine

Home shoppers and refinancers saw some relief in mortgage borrowing costs this week. The 30-year fixed-rate mortgage moved to its lowest average since mid-September, Freddie Mac reports.

“Mortgage rates have either fallen or remained flat for five consecutive weeks and purchase applicants are responding with an uptick in demand given these lower rates,” says Sam Khater, Freddie Mac’s chief economist. “While the housing market softened in response to higher rates through most of this year, the combination of a low unemployment and recent downdraft in rates should support home sales heading into the early winter months.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 13:

·       30-year fixed-rate mortgages: averaged 4.63 percent, with an average 0.5 point, falling from last week’s 4.75 percent average. Last year at this time, 30-year rates averaged 3.93 percent.

·       15-year fixed-rate mortgages: averaged 4.07 percent, with an average 0.5 point, falling from last week’s 4.21 percent average. A year ago, 15-year rates averaged 3.36 percent.

·       5-year hybrid adjustable-rate mortgages: averaged 4.04 percent, with an average 0.3 point, falling from last week’s 4.07 percent average. A year ago, 5-year ARMs averaged 3.36 percent.

 

Why You Shouldn’t Put a Home Search on Hold in December | Realtor Magazine

December is typically the slowest month in the housing market, but it can be a great month for home buyers who have been sidelined to finally make their move. This month may be busier than previous December’s for that reason, too, economists say. Some buyers may be looking to take advantage of steadier mortgage rates—which are still averaging below 5 percent—and home prices that are easing somewhat.

“I see more people buying right now because they’re afraid rates will be higher in 2019,” Lynn Fairfield, a real estate professional with RE/MAX Suburban in Chicago, told CNBC.

DodgertonSkillhause – MorgueFile

Mortgage rates are still nearly a percentage higher than they were a year ago, but they are still under 5 percent. Freddie Mac reported last week that the 30-year fixed-rate mortgage averaged 4.75 percent. Rates are largely predicted to move higher in 2019.

Housing affordability has become a mounting issue in the housing market, but home prices are showing signs of easing. Home prices usually are lower in the winter months, and housing reports are showing more properties are seeing price cuts. Nearly 29 percent of listings in major markets during the month ending Oct. 14 saw price reductions, according to the real estate brokerage Redfin.

But house hunters in search of a deal may also find lower inventories of homes for sale during this time of year.

“Though the holiday season is not going to give you plenty of options to choose from, there are reasons why you should not put your home search on hold for the holidays,” says Danielle Hale, realtor.com®’s chief economist. “Chief among them, December is the best time of year if you want to avoid competitions.”

According to realtor.com®, views per property are 21 percent lower in December than the rest of the year.

Motivation can be high for buyers to make a move before the end of the year. “Either they have a lease expiring Jan. 1 or they have saved enough money for their down payment, so they are motivated to buy,” Fairfield told CNBC. “A lot of people are motivated price-wise from the selling standpoint too, because they too want to get to their next location.”

 

Buyers Aren’t Giving Up, But Their House Hunts Are Lasting Longer | Realtor Magazine

Buyers are spending significant time trying to find the perfect home. Fifty-four percent of active buyers say they’ve been trying to find the right home for three months or longer, according to the National Association of Home Builders’ Housing Trends Report poll.

Buyers say the biggest delays that are stretching out their home search is they can’t find a home at an affordable price (49%), followed by not being able to find a home with the desired features they want (40%) or in their ideal neighborhood (38%).

 

© National Association of Home Builders

But most of the prospective buyers surveyed say they refuse to give up and will keep looking until they find the right home. The NAHB survey found that buyers who are unable to find a home over the next few months plan to do the following:

·       61% will continue looking until the “right” home opens up in a preferred location

·       37% will expand their search area

·       23% will accept a smaller/older home than originally intended

·       18% will give up trying to find a home until next year or later

·       16% will buy a more expensive home than they originally intended.

 

Where First-Time Buyers Need the Most Guidance | Realtor Magazine

Home buyers who are navigating a purchase for the first time face several points in the transaction process that are unfamiliar to them and can leave them with regrets if they don’t receive proper guidance, says real estate mogul Barbara Corcoran. “The faster you buy your first home, in my opinion, the better,” Corcoran told CNBC’s “Making It.” The process can be difficult, confusing, and expensive, she notes. Corcoran says these are some of the biggest mistakes she sees from first-time home buyers.

 

© Francesco Carta fotografo – Moment/Getty Images

Failing to factor in closing costs. “The biggest mistake that first-time home buyers make is they forget that they need closing costs—not just the down payment of, say, 10 or 20 percent,” Corcoran told CNBC. Closing costs can add up—typically an extra 2 percent to 5 percent of the total cost of the home. On a median-priced home, that could be more than $13,000.

Focusing on the house at the expense of the neighborhood. Too often, first-time buyers fall in love with a home and don’t pay enough attention to the block, Corcoran says. The surrounding area plays a large role in determining a property’s value. “It’s going to be 85 percent determined by the block in the town you’re living in,” Corcoran says. “So you’re much better off falling in love with a rickety old house on a good block than a lovely, pretty house on the wrong block.”

Not getting pre-approved for a mortgage. The most important thing to do before shopping for a home is to get qualified from a lender for a mortgage, Corcoran says. Pre-qualification is an estimate of how much you can borrow from your lender, but pre-approval is the extra step. Lenders analyze your creditworthiness to determine whether you qualify for financing and for exactly how much. Those who are pre-approved can essentially “walk in and say, ‘My bid is an all-cash bid,’” Corcoran says. “What ‘all-cash’ really means is your bid’s not contingent on you getting financing from a bank. You’ve already cleared that with the bank, so you’ve got all cash to close on the property.”

 

8 Easy Ways to Save Money and Reduce Energy | Realtor Magazine

A typical American household spends $2,060 a year on electricity, according to the U.S. Department of Energy. Unfortunately, if a home isn’t efficient, a lot of that energy goes to waste—possibly as much as three-quarters of it, according to Renewable Nation, a Washington, D.C.-based non-profit focusing on affordable and clean energy. If your clients are contemplating money and energy-saving updates to a house they’re planning to buy or sell, offer them these suggestions from Renewable Nation’s app for homeowners.

 

© seksan Mongkhonkhamsao – Moment/Getty Images

1. Start by getting a home energy audit. Whether through the Building Performance Institute or the Residential Energy Services Network, certified professionals can conduct a home or building assessment that will help shed light on where energy is being lost and which systems are operating below par. The findings can be used to identify cost-effective improvements to make the property more comfortable and efficient.

2. Seal air leaks. Homebuyers are willing to pay a $7,095 more for a home that will reduce energy costs by $1,000 a year, according to the National Association of Home Builders. Sealing leaky windows, doors, and electrical outlets with caulk, expandable sealant, and weather stripping will help. Hiring a professional to insulate and seal ductwork in forced-air heating and cooling systems can also help lower energy bills by as much as $400 a year, Renewable Nation says.

3. Consider water usage and the water heater. Heating water is typically the second-largest energy use in a home, and can alone cost $600 or more a year, according to Renewable Nation. A homeowner can cut those costs in half by switching to a hybrid water heater that combines a standard water heater with a heat pump. If that’s not an ideal option, simply washing clothes in cold water can save $63 a year in energy costs.

4. Get a smart thermostat. Heating the overall space of a home or property is the largest energy expense, accounting for about 45 percent of residential energy bills, according to the U.S. Department of Energy. An owner can save 10 percent each year on heating bills by turning down the thermostat 7 to 10 degrees (Fahrenheit) for eight hours a day. A programmable thermostat can help accomplish that.

5. Avoid the “phantom” menace of energy drains. Electricity used by electronics when they are turned off or in standby mode are a major source of energy waste. Smart power strips can help eliminate the problem of phantom loads by shutting off the power to electronics when they are not in use.

6. Upgrade the fridge. If a refrigerator or freezer is more than 15 years old, it may be so inefficient that a new one would pay for itself in energy savings in just a few years. The American Council for an Energy-Efficient Economy says modern refrigerators and freezers consume 20 to 25 percent less energy than older models.

7. Flip the switch on smart lights. Replacing your home’s five most frequently used light fixtures or bulbs with Energy Star models could save $75 per year.

8. Look for the Energy Star label. If your clients are considering appliance upgrades, remind them that using products with the Energy Star label can help save up to 30 percent on related electricity bills.

Mortgage Rates Are Easing | Realtor Magazine

 

© REALTOR® Magazine

Home buyers may be finding a window of opportunity to lock in lower rates. Mortgage rates fell this week, after several weeks of moderating, Freddie Mac reports.

“Mortgage rates declined this week amid a steep sell-off in U.S. stocks,” says Sam Khater, Freddie Mac’s chief economist. “This week’s rate reaction to the volatile stock market is a welcome relief to prospective home buyers who have recently experienced rising rates and rising home prices.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 6:

·       30-year fixed-rate mortgages: averaged 4.75 percent, with an average 0.5 point, down from last week’s 4.81 percent average. Last year at his time, 30-year rates averaged 3.94 percent.

·       15-year fixed-rate mortgages: averaged 4.21 percent, with an average 0.4 point, falling from last week’s 4.25 percent average. A year ago, 15-year rates averaged 3.36 percent.

·       5-year hybrid adjustable-rate mortgages: averaged 4.07 percent, with an average 0.3 point, a decrease from last week’s 4.12 percent average. A year ago, 5-year ARMs averaged 3.36 percent.

 

3 Ways to Spruce Up a Home in the Winter | Realtor Magazine

The colder months can make selling tougher. The home’s exterior can look dreary against a gray sky backdrop and buyers may want to go into hibernation rather than shop for homes in the chilly weather. But real estate and staging professionals say there’s still plenty you can do to make your listing stand out in the wintertime. Realtor.com® spotlighted a few of their ideas, including:

Pay attention to curb appeal.

Don’t let the colder months be an excuse to not pay attention to your yard maintenance, even if mounds of snow are covering your lawn. Make sure buyers always have an easy path to the front door by shoveling the driveway and paths. Clean out the gutters of any leaves so ice doesn’t back up and lead to any roof damage. Give the front door a fresh coat of paint. Consider some winter-themed outdoor decor, too. “I love putting evergreens next to the door and on the porch,” Rebekah Scott, a real estate broker for Atlas Real Estate Group in Denver, told realtor.com®. “Everyone knows how elegant evergreens look with snow on them, so it’s a good way to really showcase the snow.” Read more about additional ways to create a warm and inviting winter listing.

Heat it up.

Make the home cozy by turning up the thermostat and fixing drafty spots. “A cold house can hurt a sale,” says Scott. “When a buyer enters the house and wants to hurry up and get out of there because it is so chilly, it probably means they are going to have a bad memory associated with the home, no matter how great it is. You want to provide a warm and inviting environment so buyers will want to take their time and linger.” If the home has a fireplace, consider firing it up—not only can that help make a home feel warmer, but it’s also a great way to highlight this selling feature.

Appeal to the senses.

Pay attention to the home’s smell. In the winter months, you might consider adding in some seasonal scents, such as oranges, cloves, and cinnamon on the stove. Or, freshly baked holiday cookies on a cooling rack in the kitchen, Scott says. Also, consider playing some soft seasonal music, like holiday-themed jazz. Suit their flavor tastes, too, by offering up some hot cocoa or coffee. It can be a great warming treat in the cold and it can boost potential buyers’ moods, Dale Schaechterle, broker-owner at Realty Executives Integrity in Milwaukee, Wis., told realtor.com®.

5 Millennial Real Estate Trends in 2019 | Realtor Magazine

More millennials are pursuing homeownership now than ever before. The national homeownership rate rose to 64.4 percent in the third quarter this year—an increase of half a percentage point over a year ago, according to the U.S. Census Bureau. That’s largely attributed to the rise in new, first-time home buyers.

© yacobchuk – iStock/Getty Images Plus

As 2018 comes to a close, Dana Bull, an agent with Sagan Harborside Sotheby’s International Realty who has significant experience working with millennial clients, shares five trends to expect from this generation of buyers in the coming year.

1. Rising Interest Rates Will Prompt Buyers to Change Strategy
Just last week, mortgage rates rose to a seven-year high, with 30-year fixed-rate mortgages averaging 4.94 percent. It’s more than likely that rates will climb over 5 percent in the new year. This will cause many buyers to pause and reevaluate their purchasing power and strategy, Bull says. “Even a quarter point has a real impact on housing affordability,” she says. This means you’ll need to take more time to help clients analyze deals and understand what their money can buy in this shifting market.

2. Increased Competition From Baby Boomers for Properties
As millennials age and grow in their careers, they are acquiring more purchase power. According to the 2018 National Association of REALTORS® Home Buyer and Seller Generational Trends Report, 30 percent of millennials purchased homes for $300,000 and higher in the past year, up from 14 percent in 2013. That means millennials and boomers are going head-to-head for the same homes today. That trend is only going to continue to grow in 2019, Bull predicts. Both groups also seek similar amenities, including walkable neighborhoods and smaller home sizes with more upgrades, she points out. “Buyers in different generations—with wildly different points of view—are competing for the same homes,” she says. “For sellers and agents, catering to two different generations in marketing homes will also be a challenge.”

3. Willing to Put In Sweat Equity
Millennials are becoming more savvy to renovations and repairs, and they may have HGTV to thank for that, Bull says. “Millennial buyers are still far more aware of the work, costs, and implications of a renovation than their parents would have been,” she says. “Popular TV shows mean a more educated millennial buyer who knows what to look for in terms of red flags. But also has more confidence around renovating a home to make it their own and the ability to see past outdated wallpaper or a wall that can be easily removed.” Keep this in mind as interest rates continue to rise in 2019 (re: trend number one) and you’re helping clients who want to get creative while staying in their price range.

4. Clients Who are Well-Researched and Prepared 
Millennial buyers are doing their online research and are entering the market well-prepared. Show your value as a REALTOR® in other ways, Bull recommends. “They are relying on real estate professionals not to introduce them to homes, most of which they can find online, but to show them what can’t be researched: neighborhoods that are up and coming, which properties stand to gain value in the coming years, and guidance when it comes to negotiations and inspections.”

5. Social Media’s Continued Impact
Social media will continue to influence millennials’ homebuying habits, Bull says. This generation relies heavily on online reviews and social media presence to make purchasing decisions. A strong online reputation for real estate professionals is a must in catering to this market, she adds. Showcasing homes on social media—particularly Instagram—is essential for appealing to millennial clients.

 

Forecasters: Home Buyers, Sellers May Have Tough Road Ahead | Realtor Magazine

Rising mortgage rates and home prices may prove a bigger thorn to home buyers in 2019 as buying a home gets more expensive in the new year. Meanwhile, as more homeowners list their homes, sellers will face greater competition, possibly increasing the need for concessions.

Mortgage rates are forecast to reach 5.5 percent by the end of the year, and monthly mortgage payments will increase 8 percent. That could put homeownership more out of reach to first-time home buyers, realtor.com® researchers predict.

“Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years,” says Danielle Hale, realtor.com®’s chief economist. “Unfortunately for buyers, it’s only going to get more costly to buy, especially the most-demanded entry level real estate. To be successful, buyers should think through how they’ll adapt to higher rates and prices.”

 

2019 Predictions for Home Buyers

Buyers who are able to stay in the market will find less competition as more would-be buyers get priced out, realtor.com® notes. But home shoppers likely will still feel a sense of urgency as buying a home gets more expensive.

“Their largest struggle next year will be reconciling wants, needs and budget versus the heavy competition of 2018,” realtor.com® notes in its report. “Although the number of homes for sale is increasing, which is an improvement for buyers, the majority of new inventory is focused in the mid- to higher-end price tier, not entry-level.”

2019 Predictions for Home Sellers

The market is largely expected to remain a “seller’s market” in 2019, but homeowners will start to see greater competition from others looking to sell. They “shouldn’t necessarily expect to name their price and get it in full—a change from the past few years,” realtor.com® notes. “Above-median priced sellers may find it will take longer to sell and require offering incentives, such as price cuts or other offerings.” But for those sellers who price their homes competitively, they’ll “still walk away with a handsome amount of profit,” just not with the price jumps seen in previous years, realtor.com® notes.

The following is a chart from realtor.com® of sales and price forecasts for the 100 largest markets.

Mortgage Loan Limits to Rise in 2019 to Keep Pace With Home Prices | Realtor Magazine

Conforming loan limits got a boost for 2019 in nearly every part of the U.S. The Federal Housing Finance Agency, a regulator for mortgage financing giants Fannie Mae and Freddie Mac, announced that conforming loan limits will rise in 2019 to $484,350 in most parts of the country. That marks a 6.9 percent increase over this year’s $453,100.

The FHFA limits set the maximum single-family mortgage amounts that Fannie Mae and Freddie Mac will finance, as well as limits for the Federal Housing Administration program.

 

 

 “These limits are important for funding home sales in high-cost coastal markets like California, Virginia, and Maryland, but are increasingly important in other markets like Nashville and Denver, along with those in Utah and Wyoming,” the National Association of REALTORS® notes in a release.

The FHFA also announced an increase to loan limits in “high-cost areas,” where 115 percent of the local median home value is higher than the baseline loan limit. The new limit for one-unit properties in most high-cost areas will be $726,525 in 2019, rising from the current $679,650.

This is the third consecutive year that the FHFA has increased conforming loan limits. Justifying the rise, the FHFA notes that home prices are still increasing.

NAR applauded the FHFA’s decision to raise limits again. “Today’s decision reflects rising or near record high home prices in many U.S. markets, and the move helps keep the American dream within reach for countless families working with Fannie Mae and Freddie Mac,” says NAR President John Smaby. “Without this assurance that loan limits keep up with home price growth, borrowers across the country risk being pushed out of the market altogether as mortgage rates and rising home prices continue to hold back potential home buyers.”

The increase, in all but 47 counties or county equivalents across the country, takes effect on Jan. 1, 2019, the FHFA said.