Nov 4, 2019 | Financial Reports
Last week’s economic reports included readings from Case-Shiller on home prices, pending home sales data and the post-meeting statement announcement from the Fed’s Federal Open Market Committee were released.
Labor sector reports on jobs and the national unemployment rate were also released. Weekly readings on mortgage rates and initial jobless claims were also published.
Case-Shiller: Home Price Growth Slows in August
Home price growth slowed by 0.20 percent in August for the first time since August 2018. Home price growth rates typically decrease in August as peak home-buying season passes. The Case-Shiller 20-City Home Price Index showed a geographical shift away from the West and Southwest in August as two of the three cities with the highest home price growth rates were in the Southeast.
Home prices in Phoenix, Arizona held the top spot in the 20-City Home Price Index with a seasonally-adjusted annual growth rate of 6.30 percent. Home prices in Charlotte, North Carolina and in Atlanta, Georgia rose 4.50 and 4.00 percent.
Pending home sales rose 1.50 percent in September according to the National Association of Realtors®. Pending home sales gauge future closed sales and mortgage loan volume.
Fed Lowers Key Interest Rate Range
The Federal Reserve announced its third consecutive cut to its benchmark interest rate range but indicated that future rate cuts may be on hold. Fed policymakers cut the federal funds rate range one-quarter percent to 1.50 to 1.75 percent from 1.75 percent to 2.00 percent.
Federal Open Market Committee members said global economic developments and muted inflationary pressure were considerations in the decision to lower the Fed’s key interest rate range.
Mortgage Rates, New Jobless Claims Rise
Freddie Mac reported higher mortgage rates last week; rates for a 30-year fixed-rate mortgage rose eight basis points and averaged 3.78 percent. Rates for 15-year fixed-rate mortgages rose one basis point and averaged 3.19 percent.
Rates for 5/1 adjustable-rate mortgages rose three basis points to 3.43 percent. Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable-rate mortgages averaged 0.40 percent.
First-time jobless claims rose by 5000 claims to 218,000 new claims filed. The national unemployment rate rose to 3.60 percent in October as compared to September’s reading of 3.50 percent. ADP reported 125,000 private-sector jobs added in October as compared to 93,000 jobs added in September. 128,000 public and private sector jobs were added in October according to the government’s Non-Farm Payrolls report.
What’s Ahead
This week’s scheduled economic news includes readings on job openings and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will also be released.
Nov 1, 2019 | Mortgage
There are many options when it comes to taking out a loan on a new home. One of the options that people might have heard about is called owner financing. In general, the property owner takes the place of a traditional lender.
Instead of someone taking out of a loan from a bank or a credit union, they take out a loan from the owner of the property. Similar to a traditional loan, the buyer will make payments to the seller over a period of time with a certain interest rate.
The Structure Of Owner Financing
If someone elects to go with owner financing, there are several terms that will specify the repayment structure. The most common structure is called a note and mortgage.
This is a secure form of financing. It is also the closest in structure to a traditional mortgage from a bank. The seller will put together a note that specifies the size of the loan and how it will be repaid. The mortgage will secure the seller with the property in case the borrower cannot repay the loan.
The buyer is still placed on the title of the home. Then, the mortgage is recorded with public records, just as in a traditional loan. There are other types of seller financing; however, this is the most common structure.
The Structure Of Repayment
You may have questions regarding this type of financing when compared to a traditional mortgage. Just as in a traditional mortgage, the repayment terms can vary. You will still have the opportunity to negotiate the terms of the loan.
Typically, interest rates are close to that of a loan from a bank or credit union. There are still options to set up a fixed-rate or adjustable-rate mortgage as well.
The Benefits Of Seller Financing
There are several benefits for both the buyer and the seller. First, seller financing may allow the seller to avoid paying capital gains taxes on the property. This can also help the seller offload a property that otherwise might not sell.
The buyer will also be able to purchase a home without having to borrow from a bank. Often, there is less paperwork and fewer fees. Finally, a buyer that might not qualify for a traditional bank loan might be able to buy a home through seller financing.
Understanding Owner Financing
It is important for everyone to think carefully before signing up for this type of financing. This is a unique option that you should understand when looking for a home. Consult with your home mortgage professional to get the best answer for your particular situation.
If you are interested in buying a new home or listing your current property, be sure to contact your trusted real estate professional.
Oct 31, 2019 | Real Estate
When you are looking to purchase a home, you might be looking for a place for you and your family to live. It might surprise you to learn that not everyone who is looking for a house is necessarily in search of a place to live.
Real estate is also a great way for someone to grow wealth. Furthermore, real estate is actually one of the most common ways that people become millionaires.
Some of the active ways that people invest in real estate include flipping houses and renting out property. This can be time-consuming and isn’t right for everyone.
If you are looking for a way to make money in real estate without flipping houses or looking for tenants, passive real estate investing might be the answer.
An Overview Of Passive Real Estate Investing
While passive is the opposite of active in this scenario, passive real estate investing does not mean that you won’t have to do anything. There is still work to be done.
When you invest in a passive manner, this means that you aren’t playing an active role in the growth of the asset, which is property in this example.
One example of passive investing is the stock market. You need to make sure that you do your homework before you start throwing money at the real estate market.
There is a serious time commitment that comes with passive real estate investing. You will also need to monitor the property values to make sure your investment is generating a solid return.
Ways To Get Involved In Passive Real Estate Investing
There are a few common ways that you can start investing in real estate, in a passive manner.
First, one of the most common ways is through the stock market. There are businesses that make their money by investing in the real estate market for you. You can buy shares of these companies who then invest your money in real estate.
Alternatively, you can also set up a partnership with an active investor. You might own the properties and then pay the active investor to rent them out to someone else.
Finally, there is also real estate crowdfunding that has come on the scene. Those looking to invest smaller amounts of money might be interested in this method which pools smaller investments together to invest in much larger real estate projects.
It’s important to talk with your trusted local real estate and mortgage professionals to get the best information for your personal situation.
Oct 30, 2019 | Real Estate
Remodeling is a common project that homeowners take on. If you are looking to remodel your home, it is important to keep in mind that this involves more than just improving your living area. If you remodel your home, you might also be expecting to generate a return on your investment.
In prior years, a home remodel meant an increase in the value of your home. Furthermore, some people actually make money by buying homes, fixing them up, and selling them. This is commonly called “flipping.” Unfortunately, like other sectors of the economy, this market ebbs and flows. Recently, it looks like the drive to remodel homes has taken a downturn.
Why Homeowners Steer Away From Remodeling
There are financial and real estate professionals who analyze this market just as other professionals look at other areas of the economy. According to the professionals, there are a number of reasons why people might be steering away from a home remodel.
First, there has actually been a decline in home sales. This goes along with a decline in homebuilding activity.
These factors cause homeowners to hesitate when they remodel their homes. If you are looking to sell your home, this is a prime time to remodel. You might think this remodel is necessary for your home to succeed on the market. If you aren’t looking to sell your home, there is less reason to remodel. When home sales drop, the remodeling market drops as well.
Home Price Appreciation Plays A Role
Another important factor involved in the home remodeling market is the pace of home appreciation. In prior years, the growth of home prices was outpacing the rate of income appreciation. In recent years, this trend has flipped.
When home prices aren’t rising faster than wages, there is less pressure to remodel. Instead of investing this money in a remodel, homeowners are looking to invest this money in other areas that might generate a bigger return. This has led to a reduction in the remodeling market.
Considering A Home Remodel
If you are looking to remodel your home, think about these factors ahead of time. You should expect a return on your remodeling investment. Take a look at the market before the remodel begins.
As always, your trusted real estate professional can offer advice on what improvements might help the value of your home with their experience in your marketplace.
Oct 29, 2019 | Real Estate
Electricity plays an important role in your home. It helps keep you warm, allows you to cook meals, and brightens up the interior of your house. At the same time, electricity is a common hazard.
Electrocution accidents can lead to burns, serious injuries, and even death. You should feel safe in your own home. Therefore, it is a smart idea for you to remember a few important tips when it comes to electrical safety at home.
Watch Out For Damaged Power Cords
One of the most common causes of electrocution accidents at home is from damaged power cords. Over time, the wires that run through the home might start to degrade. This is a danger that is often overlooked. If the protective coating on any of your wires has been stripped away, cover the cord or replace it. If you need help doing this, call a professional for help.
Overloading The Electrical Outlets
Another common source of electrical accidents comes from outlets that have been overloaded. Your outlets have been designed to deliver a certain amount of power. If you plug too many devices into the same outlet, the circuit will become overloaded. This can lead to a fire or an explosion. If you need to plug in more devices, use a power strip. These are designed to add additional outlets in a safe manner.
An Extension Cord Is A Tripping Hazard
Extension cords are great for providing electrical power to something that is far away. On the other hand, they also should not be left out constantly. These cords are long and represent a tripping hazard. In addition to a fall injury, this can also lead to serious damage to the outlet and the cord itself. This can increase the chances of something bad happening with the home’s wiring. If you are using extension cords all the time, it is a smart idea to call an electrician who can add additional outlets to the home.
Avoiding Injuries With Electrical Safety
Other common electrical safety tips include keeping powered devices away from water and supervising children at all times. Electrical injuries are serious and should be avoided at all cost. Practicing proper electrical safety is vital to preventing injuries.
If you are looking for a new home or if you are interested in listing your current property, be sure to contact your trusted real estate professional.
