Why Are Mortgage Interest Rates Increasing?

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According to Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed rate mortgage interest rate jumped up to 3.94% last week. Interest rates had been hovering around 3.5% since June, and many are wondering why there has been such a significant increase so quickly. 

Why did rates go up?

Whenever there is a presidential election, there is uncertainty in the markets as to who will win. One way that this is noticeable is through the actions of investors. As we get closer to the first Tuesday of November, many investors pull their funds from the more volatile and less predictive stock market and instead, choose to invest in Treasury Bonds.

When this happens, the interest rate on Treasury Bonds does not have to be as high to entice investors to buy them, so interest rates go down.  Once the elections are over and a President has been elected, investors return to the stock market and other investments, leaving the Treasury to raise rates to make bonds more attractive again.

Simply put, the better the economy, the higher interest rates will go. For a more detailed explanation of the many factors that contribute to whether interest rates go up or down, you can follow this link to Investopedia.

The Good News

Even though rates are closer to 4% than they have been in nearly 6 months, they are still slightly below where we started 2016, at 3.97%.

The great news is that even at 4%, rates are still significantly lower than they have been over the last 4 decades, as you can see in the chart below. Continue reading

Posted on November 22, 2016 at 5:41 pm
Bradley Mulliner | Category: Buying/Selling Tips, Helpful Articles, new home, new home owners, Real Estate Activity | Tagged , ,

A Lack of Listings Remains ‘Huge’ Challenge in the Market

A Lack of Listings Remains ‘Huge’ Challenge in the Market | MyKCM

The housing crisis is finally in the rear view mirror as the real estate market moves down the road to a complete recovery. Home values are up, home sales are up, and distressed sales (foreclosures & short sales) are at their lowest mark in over 8 years. This has been, and will continue to be, a great year for real estate.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. According to the National Association of Realtors (NAR), buyer traffic and demand continues to be the strongest it has been in years. The supply of homes for sale has not kept up with this demand and has driven prices up in many areas as buyers compete for their dream home.

Traditionally, the winter months create a natural slowdown in the market. Jonathan Smoke, Chief Economist at realtor.com, points to low interest rates as one of the many reasons why buyers are still out in force looking for a home of their own.

“Overall, the fundamental trends we have been seeing all year remain solidly in place as we enter the traditionally slower sales season, and pent-up demand remains substantial as buyers seek to get a home under contract while rates remain so low.”

NAR’s Chief Economist, Lawrence Yun, points out that the inventory shortage we are currently experiencing isn’t a new challenge by any means:

“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”

Bottom Line

Healthy labor markets and job growth have created more and more buyers who are not just ready and willing to buy but are also able to. If you are debating whether or not to put your home on the market this year, now is the time to take advantage of the demand in the market.

https://goo.gl/ZNROnm

Posted on November 15, 2016 at 8:16 pm
Bradley Mulliner | Category: Buying/Selling Tips, Helpful Articles, new home owners | Tagged , ,

Why Waiting Until After the Holidays to Sell Isn’t a Smart Decision

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Every year at this time, many homeowners decide to wait until after the holidays to put their homes on the market for the first time, while others who already have their homes on the market decide to take them off until after the holidays. Here are six great reasons not to wait: https://goo.gl/eyosVz

Posted on November 14, 2016 at 5:36 pm
Bradley Mulliner | Category: Buying/Selling Tips, Helpful Articles | Tagged , , ,

Taking the Fear out of the Mortgage Process

 

Taking the Fear out of the Mortgage Process | Simplifying The Market

A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific cause for concern tends to be mortgage qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!

In order to qualify in today’s market, you’ll need to have saved for a down payment (the average down payment on all loans was 11% last month, with many buyers putting down 3% or less), a stable income and good credit history.

Throughout the entire home buying process, you will interact with many different professionals, all of which perform necessary roles. These professionals are also valuable resources for you.

Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

https://goo.gl/sylSJD

Posted on October 31, 2016 at 5:02 pm
Bradley Mulliner | Category: Buying/Selling Tips, Helpful Articles | Tagged , , ,

Starting to Look for a Home? Know What You WANT vs. What You NEED

In this day and age of being able to shop for anything anywhere, it is really important to know what you’re looking for when you start your home search.

If you’ve been thinking about buying a home of your own for some time now, you’ve probably come up with a list of things that you’d LOVE to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest, and start looking at the countless homes listed for sale with rose-colored glasses.

http://https://goo.gl/0PD3ql

Posted on October 19, 2016 at 4:41 pm
Bradley Mulliner | Category: Buying/Selling Tips, Helpful Articles, new home | Tagged ,

“2016” Best Real Estate Markets!

Just how strong is our real estate market? According to an article recently reported by New York Times citing the U.S. Census Burear data, the sales of new single family homes were higher this past July that in nearly the past 10 years.

In a study performed by Wallet Hub's analysts which compared 300 U.S. cities across 16 key metrics to help prospective home buyer find the most attractive real estate markets, Portland, Hillsboro and Beaverton all ranked in the top 50.

Based of the findings o

Source: WalletHub for article.

 

 

 

Posted on September 12, 2016 at 5:19 pm
Bradley Mulliner | Category: Helpful Articles

Yes Curb Appeal Matters in a “HOT MARKET”

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In todays “HOT MARKET” it is still a matter of importance before listing your home to remember – You only make a first impression once.

Many sellers are under the assumption that their home will sell as it is.  This may be so, but do you want to risk not getting the highest price possible.  This all starts with the first impression.  This first photo seen on line is usually the outside of the home, this first thing a buyers see when driving past the home is the exterior.  Why not take the extra effort in making  the curb appeal of your home the best you absolutely can before listing your home.

Here are a few simple suggestions that will not break the bank but will have a tremendous effect on the curb appeal of your home.

Entrance

  • Repaint the front door and replace the hardware
  • Update the house numbers
  • Add or update light fixtures by the entrance
  • Rinse or sweep the driveway regularly and reseal holes and cracks

Roof

  • Check your roof for any missing or badly curled or damaged shingles that need to be replaced.
  • Clear all gutters and downspouts of any debris

Landscaping

  • Trim any overgrown shrubs, remove weeds and tidy up planting areas.
  • Add colorful flowers and shrubs where possible
  • Add new barkdust if this is something that you already have in place.
  • Keep the lawn trimmed

Fence

  • Walk the fence looking for loose slats or missing components. Make sure all the latches and gate are working properly
  • repaint if necessary

Overall

  • Wash everything- the windows, front door, porch and garage doors.
  • Pressure wash the driveway and sidewalks and siding.

These are just a few simple things that will help improve the overall curb appeal of your home.

Remember Selling your home is work and buying a home is fun, make your home stand out to the buyers.

 

Posted on May 20, 2016 at 4:15 pm
Bradley Mulliner | Category: Buying/Selling Tips, Helpful Articles | Tagged , , ,

Appraisal Woes in 2016?

“The fourth quarter RESI found that title agents continue to believe that property valuation issues will be the most likely cause of title order cancellation over the coming year.”

So far this year I have already had to deal with a low appraisal and I have had other agents comment on the same issue, especially when the appraiser has been out of area appraiser. This caught both myself and the listing agent off guard as we both had supporting comps that supported both the listing price and the offer price.

“This shouldn’t come as a surprise. In a housing market where supply is very low and demand is very high, home values increase rapidly. One major challenge in such a market is the bank appraisal. If prices are jumping, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank.”

WORD FOR THE WISE

If you are listing your home and expect offers above listing price, be prepared for the conversation that the appraiser may not show the same value as the offer presented.  Make sure there is a significant down payment and that you have a plan in place for negotiation in this situation.

If you are a buyer and you not putting a significant down payment down on a home, your agent had better be sure that the offer is supported by comparable comps and as recent as possible. Another buyer beware opportunity for the buyer to avoid the pit falls of not getting the home you love because of the appraisal.

Bottom Line

“Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. ” According to an article by Keeping Current Matters.

Let’s get together and discuss how this may impact the sale of your home.

Posted on March 4, 2016 at 4:25 pm
Bradley Mulliner | Category: Buying/Selling Tips, clients, Helpful Articles, new home owners, Uncategorized

“Harvard: Why Owning A Home Makes Sense Financially”

Harvard: Why Owning A Home Makes Sense Financially | Keeping Current Matters

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership in his paper –The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study: 

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.” 

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, contact a local professional who can help evaluate your ability to do so.

 

Posted on February 17, 2016 at 10:14 pm
Bradley Mulliner | Category: Buying/Selling Tips, clients, Helpful Articles, new home, new home owners, Real Estate Activity

Did You Know?

https://bcmthekeytoyournewhome.wordpress.com/2016/01/06/did-you-know

"For years, first-time home buyers have made up around 40 percent of all buyers. However, since the recession, this percentage has been shrinking. In 2015, they made up just under 30 percent of the market share, according to the National Association of REALTORS®. "

As a Realtor in the Portland and SW Washington markets, I have realized the need to help get new buyers educated in the process of buying a home. In a market that is growing as rapidly as our's is, first time home  buyers need to know the ins and outs before even looking for a home.

This article discusses this very topic.

 The ‘Missing Link’ in Housing

Daily Real Estate News | Tuesday, January 05, 2016

 

For years, first-time home buyers have made up around 40 percent of all buyers. However, since the recession, this percentage has been shrinking. In 2015, they made up just under 30 percent of the market share, according to the National Association of REALTORS®. 

For years, first-time home buyers have made up around 40 percent of all buyers. However, since the recession, this percentage has been shrinking. In 2015, they made up just under 30 percent of the market share, according to the National Association of REALTORS®.  

As a Realtor in the Portland and SW Washington markets, I have realized the need to help get new buyers educated in the process of buying a home. In a market that is growing as rapidly as our's is, first time home  buyers need to know the ins and outs before even looking for a home.

This article discusses this very topic.

 The ‘Missing Link’ in Housing

Daily Real Estate News | Tuesday, January 05, 2016

 

For years, first-time home buyers have made up around 40 percent of all buyers. However, since the recession, this percentage has been shrinking. In 2015, they made up just under 30 percent of the market share, according to the National Association of REALTORS®. 

Read moreDos and Don'ts for a First-Time Home Buyer

The decrease of first-time home buyers will have broad economic implications, housing analysts say. Without first-time home buyers, an entire cycle of home ownership is stalled. Current home owners are usually unable to sell their homes and move up. And without move-up transactions, many older people can’t sell and downsize for retirement. 

“In terms of the real-estate recovery, the missing link is first-time home buyers,” says Rob Chrane, founder and CEO of Down Payment Resource. “They’ve been at record lows. Part of it is legitimate reasons. Part of it is just ignorance.”

It’s not that millennials don’t show an interest in home ownership: according to a survey conducted by Fannie Mae, 56 percent of respondents between the ages of 18 and 34 plan to buy a home next time they move. 

But housing analysts say that the real estate industry has an important part in bringing them into home ownership by driving home the financial benefits and teaching them about ways to make homeownership possible.

“Ignorance about the process, concern about the economic outlook, and some skepticism about ownership are all hobbling the return of first-timers,” according to a recent article by MarketWatch. 

Only 23 percent from Fannie Mae’s survey said they were familiar with low-down payment programs, such as those offered by the Federal Housing Administration. Consumers believed on average that they need 16 percent for a down payment in order to qualify for a mortgage, according to the survey. Lower-educated and lower-income consumers, renters, African-Americans, and seniors were more likely to assume they needed a higher down payment to qualify for a mortgage.

But in reality, homes can be purchased with as little as a 3 percent down payment. Rules enacted in 2015 that decreased the amount of mortgage insurance borrowers must pay on FHA loans and Fannie Mae and Freddie Mac lowering down payment minimums may have boosted first-time participation slightly, say housing analysts. 

Chrane urges the real estate industry to educate would-be buyers on the possibilities to home ownership. 

“There are more options out there than they realize, and they really need to look into them before they give up,” says Chrane. 

Source: “Why First-Time Home Buyers Are Staying on the Sidelines,” MarketWatch (Dec. 31, 2015)

If you would like to attend my home buyers seminar on January 12,2016 please contact me at http://bradmulliner.com/contact-me/.

The decrease of first-time home buyers will have broad economic implications, housing analysts say. Without first-time home buyers, an entire cycle of home ownership is stalled. Current home owners are usually unable to sell their homes and move up. And without move-up transactions, many older people can’t sell and downsize for retirement. 

“In terms of the real-estate recovery, the missing link is first-time home buyers,” says Rob Chrane, founder and CEO of Down Payment Resource. “They’ve been at record lows. Part of it is legitimate reasons. Part of it is just ignorance.”

It’s not that millennials don’t show an interest in home ownership: according to a survey conducted by Fannie Mae, 56 percent of respondents between the ages of 18 and 34 plan to buy a home next time they move. 

But housing analysts say that the real estate industry has an important part in bringing them into home ownership by driving home the financial benefits and teaching them about ways to make homeownership possible.

“Ignorance about the process, concern about the economic outlook, and some skepticism about ownership are all hobbling the return of first-timers,” according to a recent article by MarketWatch. 

Only 23 percent from Fannie Mae’s survey said they were familiar with low-down payment programs, such as those offered by the Federal Housing Administration. Consumers believed on average that they need 16 percent for a down payment in order to qualify for a mortgage, according to the survey. Lower-educated and lower-income consumers, renters, African-Americans, and seniors were more likely to assume they needed a higher down payment to qualify for a mortgage.

But in reality, homes can be purchased with as little as a 3 percent down payment. Rules enacted in 2015 that decreased the amount of mortgage insurance borrowers must pay on FHA loans and Fannie Mae and Freddie Mac lowering down payment minimums may have boosted first-time participation slightly, say housing analysts. 

Chrane urges the real estate industry to educate would-be buyers on the possibilities to home ownership. 

“There are more options out there than they realize, and they really need to look into them before they give up,” says Chrane. 

Source: “Why First-Time Home Buyers Are Staying on the Sidelines,” MarketWatch (Dec. 31, 2015)

If you would like to attend my home buyers seminar on January 12,2016 please contact me at http://bradmulliner.com/contact-me/.

 

Posted on January 6, 2016 at 7:37 pm
Bradley Mulliner | Category: Buying/Selling Tips, Helpful Articles | Tagged , , , ,