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Over the last six years, we have experienced strong price appreciation which has increased home equity levels dramatically. As the number of “cash-out” refinances begins to approach numbers last seen during the crash, some are afraid that we may be repeating last decade’s mistake.

However, a closer look at the numbers shows that homeowners are being much more responsible with their home equity this time around.

What happened then…

When real estate values began to surge last decade, people started using their homes as personal ATMs. Homeowners would refinance their houses and convert their equity into instant cash (known as “cash-out” refinances). Because homes were appreciating so rapidly, many homeowners tapped into their equity multiple

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The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily throughout 2019.

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly. But don’t let the prediction that rates will increase stop you from purchasing your dream home this year!

Let’s take a

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Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. Their latest survey data covers responses from 2013-2016.

The study revealed that the median net worth of a homeowner was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

There are many who see that statistic and point toward how broad the range of respondents are for the Federal Reserve survey. Their study includes all economic and social groups and also includes all age groups. The argument is that

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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 Insight report revealed that home prices have appreciated by 5.6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.7% 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 Survey shows that interest rates for a 30-year mortgage have hovered around 4.8%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie

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Some Highlights:

  • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
  • In the report, home prices are compared both regionally and by state.
  • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!

Bottom Line:

 Talk to a REDCO Agent today about your options!

 

Source: https://www.keepingcurrentmatters.com/2018/11/30/home-prices-up-6-34-across-the-country-infographic/ 

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Home sales numbers are leveling off, the rate of price appreciation has slowed to more historically normal averages, and inventory is finally increasing. We are headed into a more normal housing market.

However, some are seeing these adjustments as red flags and are suggesting that we are headed back to the same challenges we experienced in 2008. Today, let’s look at one set of statistics that prove the current market is nothing like the one that preceded the housing crash last decade.

The previous bubble was partially caused by unhealthy levels of mortgage debt. New purchasers were putting down the minimum down payment, resulting in them having little if any equity in their homes.

Existing homeowners were using their homes as ATMs by

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In real estate, the spring is often seen as the ideal time to buy or sell a house. The term “Spring Buyer’s Season” exists for a reason, as renters and those looking to move on from their current home thaw out from the winter and hit the market ready to buy.

According to Bank of America’s annual Home Buyer Insights Report, 41% of renters surveyed agree that spring is the best time to buy a home. The surprising result, however, is that when ranking the seasons, winter comes in second at 24%.

In many areas of the country, the spring and summer are the most competitive seasons for buyers. Families with children often want to move over the summer to make sure that their kids are ready for school in the fall. This often leads those families who

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Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!

The #1 Reason to List Your Home in the Winter Months is Less Competition!

Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.

As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February). 

Temperatures aren’t the

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Many homebuyers think that saving for their down payment is enough to buy the house of their dreams, but what about the closing costs that are required to obtain a mortgage?

By law, a homebuyer will receive a loan estimate from their lender 3 days after submitting their loan application and they should receive a closing disclosure 3 days before the scheduled closing on their home. The closing disclosure includes final details about the loan and the closing costs.

But what are closing costs anyway?

According to Trulia:

“Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home.

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Some Highlights:

  • Existing home sales are currently at an annual pace of 5.22 million, which is up 1.4% over last month. This reverses the six-month trend of dips in sales every month.
  • The inventory of existing homes is still below the 6-month supply needed for a normal market and is now at a 4.3-month supply.
  • NAR’s Chief Economist, Lawrence Yun, had this to say: “After six consecutive months of decline, buyers are finally stepping back into the housing market. As more inventory enters the market and we head into the winter season, home price growth has begun to slow more meaningfully. This allows for much more manageable, less frenzied buying conditions.”

Bottom Line: 

Talk to a REDCO Agent today about your options!

 

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