Feb 5, 2014 | Homebuyer Tips
You’re ready to purchase a home, but you’ve looked at everything on the market and can’t find the perfect place. You’ve researched the school districts, neighborhoods and nearby amenities, and you know exactly in which area you want to live.
However, anything that comes on the market in that part of town gets snapped up immediately.
It’s time to get creative when it comes to buying a home. Start looking at places that are not currently for sale. You might have driven past your dream home, but you never thought of going the unconventional buying route.
Well, take a look at the tips below to see how you can close on a home without any other buyers knowing.
Look At Previously Listed Homes
Search homes that were on the market, but the owners took them off. Many homeowners let their listing expire and are waiting until the market improves. This is fortunate for you, because you know they are already interested in selling.
Research Online County Records
If you see your perfect home, but you don’t want to just walk up to the door and demand they sell their house, you can find their contact information online. Property records include the owners’ name, address, and, sometimes, their contact information. This will allow you to go through the proper channels of proposing an offer.
Consider A Real Estate Agent
A seller is more likely to take you seriously if a real estate agent brings the offer to them. Agents deal with sellers all the time and will be able to gage if the homeowners are interested.
They’ll also be able to tell you the right price to offer and how you should go about it. You’ll also have piece of mind that all the paperwork that comes with buying a home is completed correctly.
Write A Personal Letter
While all the guidelines say to keep personal feelings out of the home selling process, it’s practically impossible. A home is the place where you raise your children and make memories.
So write the homeowners a heartfelt letter about how you’d like to build a life in their current house. If they think you’ll care for their place as much as they do, they might entertain an offer.
Offer A Fair Price
Many homeowners are ready to upgrade, but hate the idea of getting their current residence ready to sell. They’d have to clean, clear clutter, stage and keep everything looking spotless until they close the deal — which can be quite a hassle.
So, make it convenient. Offer a price that won’t offend and will have them thinking how this could be a stress-free transition.
Feb 4, 2014 | Federal Reserve
According to a statement provided by the Federal Open Market Committee of the Federal Reserve, the committee has approved another reduction of the Fed’s monthly asset purchases.
The adjustment will be made in February and cuts monthly purchases of mortgage backed securities from $35 billion to $30 billion and monthly purchases of Treasury securities from $40 billion to $35 billion.
FOMC began reducing its asset purchase under its quantitative easing program in January, when the monthly purchases of mortgage-backed securities and Treasury securities was reduced from $85 billion per month to $75 billion.
Citing its goals of maximum employment and price stability, the FOMC said that it has seen consistent improvement in the economy and specifically mentioned a lower, but still elevated unemployment rate. The statement also indicated that the FOMC expected labor markets to improve.
FOMC Asset Purchases: How They Impact Mortgage Rates
The Fed initiated the QE program in an effort to control rising long-term interest rates, which include mortgage rates. Yesterday, the FOMC statement said that Fed expects its purchases of longer-term assets will continue to control long-term interest rates and mortgage rates while supporting mortgage markets.
FOMC’s statement reported that it sees the risks to its economic outlook and the labor market as having become nearly balanced. The FOMC is still looking for inflation to reach its 2.00 percent goal.
Fed Monetary Policy To Remain “Highly Accommodative”
The Fed intends to maintain a highly accommodative stance on monetary policy after the QE asset purchases end and the economy is significantly stronger. The current Federal Funds Rate of between 0.00 and 0.250 percent will be maintained at least until the national unemployment rate drops below 6.50 percent.
FOMC members reaffirmed their commitment to monitoring economic indicators as part of any decision to alter current QE measures or the Federal Funds Rate.
Indicators Mentioned In The FOMC Statement Include:
- Additional indicators of labor market conditions
- Inflationary pressures and expectations
- Readings on financial developments
FOMC statements have consistently included the committee’s assertion that no arbitrary benchmark alone will be sufficient for the committee to change either QE asset purchases or the Federal Funds Rate.
FOMC stated that it will seek a “balanced approach consistent with its longer-run goals of maximum employment and inflation at two percent.”
Although fears of tapering the Fed’s monthly asset purchases may persist, it appears that each FOMC decision to reduce asset purchases under the QE program indicates economic growth.
Feb 3, 2014 | Mortgage Rates
Last week brought mixed news; while the Department of Commerce reported a dip in new home sales, mortgage rates also fell. The Federal Reserve’s FOMC statement revealed that quantitative easing would be further reduced by an additional $10 billion monthly.
New Home Sales: Y-O-Y Reading Best Since 2008
December’s reading of 414,000 for new home sales fell short of November’s revised reading of 445,000 new homes sold as well as expected sales of $455,000. The consensus figure was based on November’s original sales reading of 464,000 new homes sold.
The inventory of new homes available rose from last month’s level of 4.70 month supply to a 5 month supply in December. Cold weather was cited as a cause of lower new home sales.
New home sales increased by 4.50 percent year-over-year; this was the highest reading since 2008. The median price of a new home rose by 0.60 percent in December to $270,299.
The national median home price was $265,800 in 2013, an annual growth rate of 8.40 percent and the highest annual growth rate for median home prices since 2005.
Economists cited rising mortgage rates, new mortgage rules and a lagging labor market as signs that slower home sales could be expected in 2014.
Pending home sales echoed the slowing trend in home sales; the index reading fell by -8.70 percent to a reading of 92.4 in December.
All Four Regions Reported A Drop In Pending Sales As Compared To November:
Northeast -10.30 percent
West -9.80 percent
South -8.80 percent
Midwest -6.80 percent
This was the lowest reading for pending home sales since October 2011.
Case-Shiller: Home Prices Up 13.7%
The Case-Shiller 10 and 20 city home price indices for November reported a 13.70 percent gain in home prices year-over-year. This was the fastest annual growth rate in home prices since 2006. Further evidence of slower growth in home prices was evident as nine of 20 cities tracked reported lower home prices.
Fed Continues Stimulus Reduction
Wednesday’s FOMC statement confirmed expectations that the Fed would continue tapering its monthly asset purchases made under its quantitative easing program.
Monthly purchases of mortgage-backed securities and Treasury securities will be reduced from January’s level of $75 billion to $65 billion in February. Economists expected this reduction to occur.
Freddie Mac’s Primary Market Survey reported lower average mortgage rates. The rate for a 30-year fixed rate mortgage fell by 7 basis points to 4.32 percent with discount points unchanged at 0.7 percent.
15-year mortgage rates also fell to 3.40 percent with discount points lower at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage fell by 3 basis points to 3.12 percent with discount points unchanged at 0.50 percent.
This was welcome news as homebuyers and mortgage lenders have felt the effects of higher home prices and new mortgage rules that became effective January 10.
New Jobless Claims Higher
Weekly jobless claims jumped to 348,000 from the prior week’s 339,000 new jobless claims. This was the highest level of new jobless claims in six weeks. Reasons for increased claims were unclear, but were possibly caused by lingering influences of the holiday season or a sinking labor market.
Consumer confidence rose in January to a reading of 80.7 as compared to December’s reading of 77.5 as compared to January 2012’s reading of 58.4.
This Week
This week’s scheduled economic and housing news includes construction spending, non-farm payrolls and the national unemployment rate. Freddie Mac’s PMMS report and weekly jobless claims will be released as usual on Thursday.
Jan 31, 2014 | Around The Home
Everyone wants their pipes to last as long as possible, but there are a couple of simple problems that might be sucking the life out of your plumbing. Long-term stress is the enemy when it comes to your water system.
The three most common enemies are high water pressure, mineral-laden hard water, and grease. Avoid these three mistakes, and your water system will last years longer.
Take The Pressure Off Your Pipes
You might enjoy high water pressure when you’re taking a shower, but your pipes aren’t enjoying it at all. Over time, this high pressure stresses your plumbing system and can lead to leaks.
Is your high-pressure shower worth an expensive plumbing leak? To test your water pressure, you’ll have to hire a professional. Proper pressure should be somewhere between forty and eighty pounds per square inch.
To have a plumber reduce your water pressure should cost no more than about three or four hundred dollars. That sounds expensive, but it’s a lot cheaper than a leak.
Soft Water Is Good Water
If your water has a lot of minerals dissolved it, then it’s known as hard water. If you don’t already have a water softener you should consider it, because over time, those minerals will build up in your plumbing.
Eventually this will lead to a leak, so nip the problem in the bud, and look into getting a water softener. A good water softener should cost around five hundred dollars.
Hard water also makes soaps and detergents less effective. Soft water will get your clothes, your dishes, and even your hair cleaner.
Cease The Grease
Don’t ever pour cooking grease down the drain. It might be liquid when you pour it, but after a while, it will cool and solidify in your pipes. This won’t break the plumbing and cause a leak, but it will clog it all up.
The water that goes down afterward won’t do anything to wash away the sticky grease. You don’t want your pipes backing up, trust me. That is one messy problem.
Instead pour your grease into containers and throw it away in the garbage. Even better, go ahead and save it in the pantry and cook with it later.
Indoor plumbing is one of the most convenient technologies we have. So don’t take it for granted. Take care of your plumbing, and get the most out of it.
Avoid excessive water pressure, get a water softener, and don’t pour any grease down the drain. A little care now will go a long way. No one wants to deal with a plumbing leak. They’re expensive and a huge hassle.
Jan 30, 2014 | Housing Analysis
According to the S&P/Case-Shiller 10 and 20-City Home Price Indices released Tuesday, the U.S. Housing Market is on a roll based on year-over-year increases in average home values, but month-to-month results were mixed.
The 10 and 20-City Home Price Indices showed year-over-year growth of 13.80 and 13.70 percent respectively.
Highlights Include:
- Dallas, Texas posted its highest rate of annual growth since 2000.
- Chicago’s average home price rose by 11.00 percent, its highest annual gain since December 1988.
- The 10 and 20-City Indices posted their best November home prices since 2005.
Top year-over-year gains in home prices included Las Vegas, Nevada at 27.30 percent, San Francisco, California at 23.20 percent, Los Angeles, California at 21.60 percent and San Diego, California at 18.70 percent. Atlanta, Georgia rounds out the top five cities with a year-over-year increase in home prices of 18.50 percent.
The annual readings for the S&P/Case-Shiller 10 and 20-City Housing Market Indices in November suggests that U.S. markets are strong enough to sustain momentum in spite of rising mortgage rates. The month-to-month results show that both indices decreased by an incremental 0.10 percent in November, 2013.
Keeping in mind the traditional slump in home sales during the winter and holiday season, lower month-to-month readings were neither unexpected nor disappointing.
Eight of the nine top cities posting the highest month-to-month growth in home prices were located in the Sun Belt. San Diego, California and Minneapolis, Minnesota home prices remained nearly flat after decreasing in October.
Nine of the 20 cities surveyed posted positive month-to-month growth in home prices. Of the nine cities, only Boston, Massachusetts and Cleveland, Ohio were not located in the Sun Belt.
S&P/ Dow Jones Index Committee Chairman Expects Slower Growth In 2014
David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, noted that November’s month-to-month readings for the 10 and 20-city home price indices indicated that Phoenix, Arizona, Los Angeles California and Las Vegas, Nevada had each posted 20 or more consecutive months of rising home prices.
While positive in his remarks about increasing home prices, Mr. Blitzer also noted that indicators suggested a slower rate of growth during 2014.
This aligns with previously released economic news citing uncertainty about mortgage rates that may continue to rise as the Federal Reserve continues tapering its monthly asset purchases under its quantitative easing program.
The Fed’s FOMC meeting is scheduled to end Wednesday, January 29, at which time the committee’s customary statement will indicate whether or not the Fed’s monthly asset purchases will be reduced from their current level of $75 billion.
On the positive side, Chairman Blitzer said that the low inflation rate (1.50 percent in 2013) and rising home prices are helping homeowners accumulate home equity at a faster pace.
