Oct 14, 2014 | Market Outlook
Economic news was lean last week as the first week of the month tends to be calm in the aftermath of the rush of end-of-month reporting.
Of note was CoreLogic’s report on housing markets, the release of the minutes from the most recent FOMC meeting and lower mortgage rates reported by Freddie Mac.
CoreLogic Reports Lowest Home Price Gains in Almost Two Years
August home prices hit their slowest growth rate in nearly two years according to CoreLogic data released last Tuesday. Annual home prices grew by 6.40 percent in August as compared to July’s reading of 6.80 percent. Year-over-year home price growth reached a rate of 11.40 percent in August.
Analysts have recently said that a slow-down in home price growth may increase slowing demand for homes as inventories of available homes have increased in recent months. Low inventories of available homes and high demand contributed to rapid growth of home prices in 2013.
The slower pace of home price gains is expected to continue next year; analysts predicted an annual growth rate of 5.20 percent in August 2015. Home prices remain about 12 percent below peak levels reached in 2006.
Federal Reserve Policy Makers Watch U.S. Dollar, European Markets
Minutes of the Federal Open Market Committee meeting held in September were released Wednesday. Of note were member concerns that changing the committee’s language for its oft-repeated assertion that target rates for federal funds would remain between 0.00 percent and 0.250 percent for a considerable time” after asset purchases under the QE program ended could be viewed as a fundamental policy change.
The FOMC also registered concerns over the impact of a stronger U.S. dollar on the economy and said that persistent weakening of the European economy could cause the dollar to strengthen too much. This would cause exports to decrease and could also slow inflation.
The Fed decided not change language in its forward guidance in order to avoid unintended reactions in the financial markets.
Mortgage Rates and Jobless Claims Fall
Freddie Mac’s Primary Mortgage Market Survey reported that average mortgage rates fell last week. The average rate for a 30-year fixed rate mortgage dropped by seven basis points to 4.12 percent with discount points higher at 0.50 percent.
The average rate for a 15-year fixed rate mortgage fell by six basis points to 3.30 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable-rate mortgage was lower by one basis point to 3.05 percent with discount points unchanged at 0.50 percent.
Weekly jobless claims were lower at 287,000 new claims filed against predictions of 294,000 new claims filed and the prior week’s reading of 288,000 new claims filed. This supports recent indications of stronger job markets; coupled with lower home prices, this could prompt more would-be homebuyers to buy homes.
What’s Ahead
Markets are closed for Monday’s Columbus Day holiday and no economic reports are scheduled for Tuesday. The Fed releases its Beige Book report Wednesday and the NAHB Home Builder’s Market index for October is due Thursday along with Freddie Mac’s PMMS report and weekly jobless claims.
Housing Starts and the Consumer Sentiment Index are scheduled for next Friday.
Oct 10, 2014 | Home Buyer Tips
If you’re in the process of buying a new home, you’ve likely heard the term “closing costs” in regards to the many different fees and taxes that you’ll be required to pay during the purchase process.
In this post we’ll look at a number of these closing costs and what you will be expected to pay when you buy that next dream home.
Taking out a Mortgage? There Will Be Fees Attached
If you’re taking out a mortgage to finance the cost of buying your home you’ll end up incurring a variety of fees. Nearly all lenders will charge a mortgage application fee, which covers the cost of processing your application and all of the necessary paperwork.
You’ll likely have to pay for a professional appraisal of the home as well, as the lender will want to ensure that they aren’t lending you more than the house and property are actually worth.
Inspection And Insurance Costs Will Add Up
If you’re buying a pre-owned home you’ll need to pay for a home inspection to gain an understanding of the home’s condition and if you’ll need to make any repairs in the near future. You’ll also need to purchase homeowner’s insurance on the property to protect yourself in the event that something does go wrong with the home.
If you put less than 20 percent down on the cost of the home, your mortgage lender may also require that you purchase private mortgage insurance; this will vary depending on which state or province you are buying in.
Don’t Forget About Escrow Fees and Taxes
As with any major financial transaction you’ll need to satisfy the tax man by paying various taxes on your purchase. These will vary depending on where you are buying your home, but might include sales taxes, property taxes, transfer taxes, recording fees, title transfer fees and more.
If you used a third-party escrow service to manage these fees or to hold your deposit during the closing process you’ll also need to pay escrow fees prior to signing the final paperwork.
If you have other questions about the closing process and fees or costs that you’ll need to pay when you purchase a home, contact your local real estate agent. They’ve assisted many individuals just like you with their home purchase and will be able to provide expert advice.
Oct 9, 2014 | Home Seller Tips
Whether you’re in the early stages of the home selling process or your home has been on the market for some time, you may be considering hosting an open houses or two in order to welcome potential buyers in to see your property.
Let’s take a look at three reasons you may want to pass on the idea of open houses in order to invest your time in other areas which may lead to a faster sale.
Most Buyers Start Their House Hunt Online
According to statistics from the National Association of REALTORS®, the majority of home buyers begin their house hunt by browsing through online real estate listings.
If you have had professional photos taken and have a well-designed property listing which highlights the features and amenities in your home, you may find that the time and money you would spend hosting open houses is better spent marketing your listing and conducting private viewings.
There’s Too Many Listings To Tour Them All
Depending on where you live, there is anywhere from a few hundred to tens of thousands of homes on the market at any given time.
The sheer number of houses and condos available makes the prospect of visiting so many open houses seem daunting to many buyers, so many tend to skip this step in favor of booking viewings for homes they’re interested in.
A Virtual Open House Allows Buyers To Tour 24/7
Many real estate websites offer the attach dozens of photos and videos to your listing, essentially offering you the ability to host a virtual “open house” online where prospective buyers can get a feel for your property before deciding if they would like to see more.
If you can provide a buyer with the ability to tour through your home from their mobile phone, there’s little sense in going through the preparation and expense of hosting open houses. Even if you do, you may find that few people decide to show up.
It’s important to note that the best source of advice when selling your home is a professional real estate agent who has experience with homes sales in your area. Contact your local real estate agency before you start the home selling process and they’ll be able to suggest the best approach for marketing your home to interested local buyers.
Oct 8, 2014 | Home Mortgage Tips
Buying a home is a major financial transaction, especially if you’re going to need mortgage financing to help cover the purchase cost.
The only way to know if you’re getting the best deal on a mortgage is to shop around, but with so many different lenders vying for your business it can be very tough to choose which mortgage is the best fit for your own situation.
In this post we’ll share how you can compare mortgages from different lenders or underwriters so that you can get the best possible deal on your mortgage loan.
Start By Comparing Interest Rates
The most important factor in your mortgage is the interest rate that you’ll be required to pay so this should be your starting point.
While most lenders will keep their rates competitive with one another, you may find that there are discounts available based on your credit or financial history. You might also find that some lenders are willing to adjust the rate based on how long of a mortgage term you’ll need, and how much you’re investing in your down payment.
Get An Estimate Of Your Total Closing Costs
While the number that you’re likely focused on is the total monthly payment that you’ll be making for the next few years, you’ll also want to find out how much in fees and closing costs you will have to pay in order to take out the mortgage.
Every lender charges different fees and the amounts can vary wildly, so be sure to get an estimate on these costs to find out how they’ll affect your home purchase.
Watch Out For Early Payment Penalties
Finally, you’ll want to keep an eye out for early repayment penalties as these can cause you a headache later on if you decide you want to pay your mortgage off a bit faster. The ideal mortgage is one that allows you to repay the principal amount at any time without facing a penalty, but depending on the other terms that you require you might need to shop around a bit before you find a mortgage like this.
Oct 7, 2014 | Home Buyer Tips
Are you thinking about buying a new home? Congratulations!
Buying a house, condo or townhouse is an exciting and rewarding time which tends to be a lot of fun. However, along the way you’ll need to make a number of decisions – including whether you want to buy a pre-owned home or one that has been built recently and is brand new.
Let’s take a quick look at some of the pros and cons of buying a new home versus buying pre-owned.
New Homes Tend To Have Fewer Problems
One of the major upsides of buying new is that newly-built homes tend to have very few problems within the first few years of ownership.
While you’ll still be required to make regular maintenance on a new home, when you buy pre-owned you’re buying a house that has seen years or decades of weather and regular wear-and-tear.
New Construction Allows For Customization
If you want to be able to customize certain aspects of your home, it might be better to buy brand new as the builder will be able to incorporate your requests as they’re building the home. Of course, you can always renovate and upgrade a pre-owned home but if you have significant needs you may find it easier to get them built into the home as it’s being developed.
The Major Downsides To Buying New: Cost And Location
While there are a number of upsides to buying new, there are some downsides that you’ll need to know.
First, new homes almost always cost more than an equivalent pre-owned home. Brand new homes are filled with new appliances, fixtures and modern building materials which add to the overall cost of the home. Unless the pre-owned home is on a larger lot or property, you’ll generally be able to save a bit when you buy pre-owned.
Depending on where you’re buying, you may also find that the location where brand new homes are being constructed is much further from the downtown or urban area. In many cities, the only available space for new construction is in suburban areas, which means that you may be in for a lengthy commute to and from work each day if you choose to buy new.
These are just a few of the factors that you’ll need to consider when buying your next dream home. For more information or to get your house hunt started, contact your local real estate agent and they’ll be happy to assist.
