The National Association of Realtors (NAR) recently released the findings of their Q2 Homeownership Opportunities and Market Experience (HOME) Survey. The report covers core topics like, “if now is a good time to buy or sell a home, the perception of home price changes, perceived ability to qualify for a mortgage, and [an] outlook on the U.S. economy.”
The survey revealed that 75% of homeowners think now is a good time to sell, compared to 70% last quarter. This is a considerable increase from more than a year ago when 66% agreed.
We previously reported how a shortage of inventory in the starter and trade-up home markets is driving prices up and causing bidding wars, creating a true seller’s market. At the same time, in the premium home market, an over-abundance of inventory has started to see prices come down and put buyers in the driver’s seat, creating the beginning of a buyer’s market.
Last week, the National Association of Realtors released their Existing Home Sales Report which shed some additional light on the impact of inventory levels on sales in each price range.
The chart below shows the year-over-year difference in sales at each price range.
The under $100K range has shown declines in recent years due to the shortage of distressed homes available for sale (just 5% of sales this past month, compared to 35% in January 2012). Sales in the next two price ranges are no doubt being hindered by low inventory as buyers compete for the same home.
NAR’s Chief Economist, Lawrence Yun, explained:
“Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”
In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”
One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow: source: Pre-Approval Should Always Be Your First Step | Real Estate with Keith Kreis
In Realtor.com’s recent article, “Home Buyers’ Top Mortgage Fears: Which One Scares You?” they mention that “46% of potential home buyers fear they won’t qualify for a mortgage to the point that they don’t even try.”
Myth #1: “I Need a 20% Down Payment”
Myth #2: “I Need a 780 FICO® Score or Higher to Buy”
Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach. Proc
Historically, the choice between renting or buying a home has been a tough decision.
Looking at the percentage of income needed to rent a median-priced home today (29.2%) vs. the percentage needed to buy a median-priced home (15.8%), the choice becomes obvious.
Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!
Historically, the choice between renting or buying a home has been a tough decision.
Looking at the percentage of income needed to rent a median-priced home today (29.2%) vs. the percentage needed to buy a median-priced home (15.8%), the choice becomes obvious.
Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!
Many real estate economists have called on new home builders to ramp up production to help relieve the shortage of inventory of homes for sale throughout the United States. The added inventory would no doubt aid buyers in their search to secure their dream home, while also helping to ease price increases throughout the country.
Unfortunately for builders, there are many forces that are making it difficult for them to do just that!
Last week at the National Association of Real Estate Editors 51st Annual Conference, CoreLogic’s Chief Economist Frank Nothaft broke down the 4 ‘L’s of New Home Construction: Lots, Labor, Lumber, and Lending.
Below is a graph showing the increase in cost of 1,000 board feet of framing lumber.
CoreLogic’s latest Equity Reportrevealed that 91,000 properties regained equity in the first quarter of 2017. This is great news for the country, as 48.2 million of all mortgaged properties are now in a positive equity situation.
Price Appreciation = Good News for Homeowners
Frank Nothaft, CoreLogic’s Chief Economist, explains:
“One million borrowers achieved positive equity over the last year, which means risk continues to steadily decline as a result of increasing home prices.”
Frank Martell, President and CEO of CoreLogic, believes this is a great sign for the market in 2017 as well, as he had this to say:
“Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.” Steps in Buying A House
This is great news for homeowners! But, do they realize that their equity position has changed?
According to the Fannie Mae’s Home Purchase Sentiment Index (HPSI), more homeowners are beginning to realize that they may have more equity than they first thought. Steps in Buying A House
“This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy.”
78.8% of homeowners have significant equity (more than 20%) in their homes today! Steps in Buying A House
This means that many Americans with a mortgage have... Continue reading - click the hyperlink below
The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The updated numbers actually show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!
Whether you are selling your home, just purchased your first home, or are a homeowner planning to stay put for a while, there is value in knowing which home improvement projects will net you the most Return On Investment (ROI). While big projects like adding a bathroom or a complete kitchen remodel are popular ways to increase a home’s value, something as simple as... Continue Reading from Top Home Renovations for Maximum ROI - Keith Kreis
As home values continue to rise, some are questioning whether we are approaching another housing bubble. Zillow just reported that:
“National home values have surpassed the peak hit during the housing bubble and are at their highest value in more than a decade.”
Though that statement is correct, we must realize that just catching prices of a decade ago does not mean we are at bubble numbers. Here is a graph of median prices as reported by the National Association of Realtors (NAR).
In a blog post published last Friday, CNBC’s Diana Olnick reported on the latest results of the FAU Buy vs. Rent Index. The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers at FAU use a “‘horse race’ comparison between an individual that is buying a home and an individual that rents a similar-quality home and reinvests all monies otherwise invested in homeownership.”
Having read both the index and the blog post, we would like to clear up any confusion that may exist. There are three major points that we would like to counter:
1. The Title
The CNBC blog post was titled, “Don’t put your money in a house, says a new report.” The title of the press release about the report on FAU’s website was “FAU Buy vs. Rent Index Shows Rising Prices and Mortgage Rates Moving Housing Markets in the Direction of Renting.”
Now, we all know headlines can attract readers and the stronger the headline the more readership you can attract, but after dissecting the report, this headline may have gone too far. The FAU report notes that rising home prices and the threat of increasing mortgage rates could make the decision of whether to rent or to buy a harder one in three metros, but does not say not to buy a home.
2. Mortgage Interest Rates are Rising
According to Freddie Mac, mortgage interest rates reached their lowest mark of 2017 last week at 3.89%. Interest rates have hovered around 4% for the majority of 2017, giving many buyers relief from rising home prices and helping with affordability.
While experts predict that rates will increase by the end of 2017, the latest projections have softened, with Freddie Mac predicting that rates will rise to 4.3% in Q4. Buy Property in Downers Grove
3. “Renting may be a better option than buying, according to the report.”
According to a recent report by Trulia, “buying is cheaper than renting in 100 of the largest metro areas by an average of 33.1%.” The report may have some people thinking about buying a home instead of signing another lease extension, but does that make sense from a financial perspective?
Ralph McLaughlin, Trulia’s Chief Economistexplains:
“Owning a home is one of the most common ways households build long-term wealth, as it acts like a forced savings account. Instead of paying your landlord, you can pay yourself in the long run through paying down a mortgage on a house.”
Here are four great reasons to consider buying a home today, instead of waiting.
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Indexreports that home prices have appreciated by 7.1% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.9% over the next year.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Surveyshows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
3. Either Way, You are Paying a Mortgage
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
Interest rates have come a long way in the last 30 years.
The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford if you plan to stay within a certain budget.
Interest rates are at their lowest in years… RIGHT NOW!
If buying your first home, or moving up to the home of your dreams is in your future, now may be the time to act!
To start the year, housing experts all agreed on one thing: 2017 was going to be the year we would see mortgage interest rates begin to rise. After years of historically low rates, and an improving economy, the question wasn’t if they would increase but instead how much they would increase. Some thought we could see rates hit 5-5.5% by the end of the year.
However, the exact opposite has happened. Instead of higher rates as we head into the middle of 2017, we now have the lowest rates of the year (as reported by Freddie Mac). Here is a graph of mortgage rate movement since the beginning of the year:
According to a recent survey conducted by Genworth Financial Inc. at the Annual Mortgage Bankers’ Association Secondary Market Conference, mortgage professionals say that first-time buyers still believe a 20% down payment is necessary to buy in today’s market. Nearly 40% of mortgage industry professionals surveyed believe that a lack of knowledge about the home-buying process is keeping potential buyers on the sidelines. Saving for a down payment is often cited as a huge barrier for first-time homebuyers to make the leap into homeownership. If homeowners believe that they need a 20% down payment to enter the market, they also believe that they will have to wait years (in some markets) to come up with the necessary funds to buy their dream homes. The greatest source of confusion cited in the survey results centered around down payments. The results are broken down in the chart below: Read more: keithkreis.com
The residential housing market has been hot. Home sales have bounced back solidly and are now at their fourth highest pace over the past year. Demand has remained strong throughout spring as many real estate professionals are reporting bidding wars with many homes selling above listing price. What about your house?
Here are five reasons listing your home for sale this summer makes sense.
1. Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home. Take advantage of the buyer activity currently in the market.
2. There Is Less Competition Now
Housing inventory is currently at a 4.2-month supply, well under the 6-months needed for a normal housing market. This means, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory could be coming to the market soon. There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market this summer. Also, builder’s confidence in the market has hit its highest mark in over 11 years. Experts are predicting that new construction of single-family homes will ramp up this summer. The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.
Whether you are selling or buying a home, the real estate agent you hire is critical to guaranteeing your family makes the right decision. Most agents can walk you through the process and explain the industry ‘lingo,’ but you should expect so much more than that. The housing crisis made everyone aware that truly understanding the real estate market is more complicated than it seems. Today, there are many questions your real estate agent must be able to answer to ensure your family is making the right decision. Here are just a few:
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If you’ve entered the real estate market, as a buyer or a seller, you’ve inevitably heard the real estate mantra, “location, location, location” in reference to how identical homes can increase or decrease in value due to where they’re located. Well, a new survey shows that when it comes to choosing a real estate agent, the millennial generation’s mantra is, “local, local, local.” CentSai, a financial wellness online community, recently surveyed over 2,000 millennials (ages 18-34) and found that 75% of respondents would use a local real estate agent over an online agent, and 71% would choose a local lender. Survey respondents cited many reasons for their choice to go local, “including personal touch & handholding, longstanding relationships, local knowledge, and amount of hassle.”
Doria Lavagnino, Cofounder & President of CentSai had this to say:
Learn more: keithkreis.com
The results of the latest 
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