Sep 27, 2013 | Around The Home
Weather patterns across the United States seem to be getting more and more erratic. From tornadoes and earthquakes to flash floods and wild fires, there are many natural disasters that can quickly consume your home without warning.
Because you never know when disaster might strike, it’s best to be prepared.
Disaster insurance is the only precaution you can put in place to ensure compensation for your belongings and get your life back to normal as soon as possible. Below are the tips to take before misfortune strikes.
Create An Inventory
Most insurance agencies prefer if you include photographs of every room, including the insides of closets and cabinets. Shooting a video is even better. Then you can include audio of how much things cost or if they’re one of a kind.
It’s also a good idea to create a spreadsheet with a list of major items and their value by room. Be sure to email these to yourself, so that you can access them anywhere.
Double-Check Your Coverage
Once you’ve inventoried your possessions, then ensure you have enough coverage. Also, speak with your agent to see if there are any supplemental disaster insurance policies he or she would recommend for your region.
Tips To Do After A Disaster Does Strike
Contact Your Insurer Immediately
Call your agent as soon as possible and be prepared for mountains of paperwork. Be sure to ask for the claim number for your region and use it on all paperwork and in every conversation. This will help expedite your claim.
Secure Your Property
It’s your responsibility to ensure your property is secure after the disaster. Be sure to take photographs and video and then cover or stabilize any vulnerable points. You don’t want the insurance agency to have any discrepancies when determining if the damage was done during the disaster or afterward.
Keep A Correspondence Record
You are going to be completely overwhelmed after such an unfortunate event, but it’s important to maintain your wits. Keep a log of every conversation you have with insurance agents. Log the time, name, phone number and the key points of the conversation. This will help minimize the he-said-she-said accusations that can arise during these hectic times.
Hopefully you’ll never have file a disaster insurance claim. However, if you do, it’s best to be as prepared as possible. Create an inventory of your possessions and make sure you have the appropriate coverage. Then if mayhem strikes, you’ll be that much closer to putting your life back together.
Sep 26, 2013 | Home Buyer Tips
Investing in property at a young age seems like a bit of a daunting prospect sometimes. Most young people don’t have a lot of disposable income, often have poor credit and perhaps even student loans.
When you are in your early 20s, you are not likely thinking about investing in property and are probably focusing on other things. However, investing in property at a young age can bring you a lot of advantages.
It requires a different approach and style and you might be the only one of your peers who is doing so, but you will definitely reap the benefits later on in life. When you invest long-term, you will start building your financial independence.
Some might believe that it is impossible for a young person to start investing so early in life, but investing in your 20s is completely possible.
You are not “too busy”, in fact you will find that you have even less spare time as your responsibilities grow when you get older. You will need a little bit of money to get started, but often you can purchase your first property with as little as 3.5% down.
If you want to get started early, here are some tips that will help you along the way:
- Get into very good saving habits from a young age by putting aside your money from first jobs. When you want to take out a mortgage, you will typically need to be able to show savings of 3% of your purchase price.
- Maintain a clean credit history and pay all of your bills on time in order to build a great credit rating, so that you can obtain a mortgage with a good rate.
- Make the most of technology and social media to learn more about investing in property and to find the best opportunities. You have a wealth of information on investing, all at your fingertips.
- Find an older mentor – someone with successful experience who can give you tips on how to choose the right investment.
Another main advantage to investing when you are young is that if anything goes wrong, you will have more time to make mistakes and still recover without affecting your retirement. You have nothing to lose and everything to gain, so why not get started?
Sep 25, 2013 | Housing Analysis
Home prices were still gaining in July, but for 15 of 20 cities included the S&P Case-Shiller 10 and 20-city Home Price Indices, the pace of increasing home prices is slowing down. National home prices rose by 1.80 percent in July as compared to 2.20 percent in June.
Home prices grew by 0.60 percent from June to July on a seasonally-adjusted basis. This was the lowest month-to-month gain since September 2012.
David Blitzer, index committee chairman of S&P Dow Jones Indices, said that higher mortgage rates are hitting the housing market. Mr. Blitzer noted that mortgage rates rose by more than a percentage point between May and the Federal Reserve’s statement last week.
The Fed was widely expected to reduce its monthly bond purchases from $85 billion to $75 billion, but the Fed decided not to reduce its bond purchases as the economy has not recovered sufficiently.
Mortgage Rates Fall
High home prices and unemployment are making it difficult for first-time and moderate income buyers to compete; buyers sitting on the sidelines are eventually expected to add to the demand for homes.
Mortgage rates fell after the Fed’s announcement, but Mr. Blitzer said that the drop in mortgage rates would likely have a temporary impact on housing. He said that the rate of increase [in home prices] may have peaked.
Conditions contributing to the run-up in home prices include a shortage of available homes and pent-up demand among home buyers. As of July, home prices for the Case-Shiller 20-city index increased by 12.40 percent year-over-year; this was the highest annual rate of increase since home prices peaked in 2006.
Home prices in the Case-Shiller 10-city index increased by 12.30 percent annually. In spite of the rapid price gains, July home prices remained 21 percent below their pre-recession peak.
Home prices in all 20 cities included in the 10 and 20 city indices increased on a month-to-month basis, with home prices increasing by 1.80 percent for the 20 city index and by 1.80 percent for the 10 city index.
Home Prices Show Strong Recovery
Las Vegas, Nevada had the highest annual gain in home prices for July with a 28 percent increase. Las Vegas was one of the cities hardest hit by the recession. Annual home prices for San Francisco, California rose by 25 percent, and New York City had the lowest annual growth rate for home prices at 3.50 percent.
The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, released its home prices report for properties securing mortgage loans owned or backed by Fannie and Freddie. The annual growth rate for home prices was 8.80 percent as of July, but remains 9.60 percent lower than the peak growth rate reported in April 2007.
Sep 24, 2013 | Housing Analysis
Sales of existing homes reached their highest volume in almost six years in August. The National Association of REALTORS reported Thursday that sales of existing homes rose 1.70 percent in August to a seasonally-adjusted annual rate of 5.48 million existing homes sold.
This was the highest number of existing home sales since February of 2007.
August’s results exceeded estimates of 5.20 existing homes sold, which was based on July’s unrevised reading of 5.39 million existing homes sold.
The NAR also reported that the national median home price increased to $212,100 in August. This represents a year-over-year increase of 14.70 percent and was the largest annual increase in the national median home price since October 2005.
Sales concentrated in areas with higher home prices contributed to this significant increase in the national median home price.
Homebuyers Increase Despite Higher Home Rates
The reading for existing home sales in August suggests that homebuyers are not shying away from higher home loan rates; it may also indicate that the recent shortage of existing homes for sale is beginning to ease.
August’s higher number of existing home sales was attributed to home buyers anxious to lock in lower loan rates in an environment of rising mortgage rates. Also, economists had expected the Federal Reserve to begin reducing its monthly securities purchases, which did not happen.
Had the Fed tapered its securities purchases, long-term interest rates including mortgage rates, would likely have continued rising. The Fed may have decided not to reduce its monthly securities purchase in an effort to slow rising mortgage rates.
The average rate for a 30-year fixed rate mortgage has increased by more than one percentage point since May. Home buyers may respond to rising mortgage rates by delaying their home purchase to see if mortgage rates will fall, or they may rush to buy a home before rates go higher.
Mortgage Rates Affect Home Buyers In Three Ways:
1. As rates increase, monthly house payments also rise, which can impact affordability for first-time and moderate income buyers.
2. National unemployment rates remain higher than the Federal Reserve’s target rate of 6.50 percent. While home prices are increasing and other facets of the economy are showing improvement, jobless claims remain higher than average.
3. Mortgage credit requirements are strict; this keeps some would-be buyers from qualifying for a home loan.
These factors are offset by high demand for homes and short supplies of available homes and developed lots in some areas.
Sep 23, 2013 | Housing Analysis
Last week’s economic news was dominated by the Federal Reserve’s decision not to taper its $85 billion in monthly securities purchases.
Fed Chairman Ben Bernanke noted in a scheduled statement after the Federal Open Market Committee meeting that economic conditions were not yet adequately improved to withstand any decrease in the federal quantitative easing program.
The Fed also reaffirmed that the target federal funds rate would remain at 0.00 to 0.25 percent until the national unemployment rate reached 6.50 percent and inflation reaches 2.00 percent.
The national unemployment rate was 7.30 percent and the Fed projects that inflation will remain under 2.00 percent through 2015.
In both the FOMC statement and his press conference, Chairman Bernanke repeatedly emphasized that the Fed would take no action to reduce QE until the economy strengthens. No automatic reduction of QE purchases would take place without full consideration of the nation’s economy.
The QE program is intended to keep long-term interest rates low, and the announcement that QE would not be tapered brought mortgage rates down after they had increased by more than one percent since May.
Builder Confidence High, Mortgage Rates Lower
The National Association of Home Builders/Wells Fargo Housing Market Index for September revealed that home builder confidence in housing market conditions remained stable at 58; a reading of 59 was expected. Readings over 50 indicate that more builders are confident about market conditions than not.
Housing starts for August did not reflect the high level of builder confidence and fell short of expectations at 891,000. Expected housing starts were estimated at 921,000. There was good news in that August’s reading surpassed the July reading of 883 housing starts. Building permits for August also dropped to 918,000 against expectations of 955,000 and July’s reading of 954,000 building permits.
Higher labor and materials costs and concerns over tight mortgage credit and rising mortgage rates likely contributed to the lower than expected readings for housing starts and building permits.
Freddie Mac’s Primary Mortgage Market Survey reported that average mortgage rates dropped across the board on Thursday. The average rate for a 30-year fixed rate mortgage fell by seven basis points to 4.50 percent with discount points moving from 0.80 percent to 0.70 percent.
The average rate for a 15-year fixed rate mortgage fell by five basis points from 3.59 percent to 3.54 percent with discount points unchanged at 0.70 percent.
The average rate for 5/1 adjustable rate mortgage was lower by 11 basis points to 3.11 percent. Discount points were unchanged at 0.50 percent. This provides a break for home buyers who’ve been faced with rising mortgage rates and home prices amidst a shortage of available homes in many areas.
This Week
Economic news scheduled for this week includes the Case/Shiller Home Price Index for July, the FHFA Home Price Index also for July. New home sales and the pending home sales index will be released.
Freddie Mac will release its weekly summary of average mortgage rates and weekly jobless claims will also be released Thursday. The week will end with consumer related data including personal income and consumer spending for August along with the University of Michigan’s consumer sentiment index for September.
