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Wednesday, April 29, 2015

The Deal of the Century??

The Deal of the Century?? | Keeping Current Matters

Recently, Freddie Mac published a blog post titled Mortgage Rates: Still the Deal of the Century

They explained that, if you are planning to purchase a home, now may be the time:

“If you are in the market to buy a home, today's average mortgage rates are something to celebrate compared to almost any year since 1971.”

And they let their readers know that there is no guarantee that rates will remain this low:

“Over the past few years, we've enjoyed a long run of historically low mortgage rates. While no one expects them to change dramatically overnight, they are expected to head up. Most experts agree that mortgage rates will drift up in the coming months to end the year approaching 4.50%...Buying a home is a big investment – perhaps the biggest one you'll make in your life. So, it's important to be sure you are ready to make that purchase. If you are ready, today's rates are not to be missed.”

The article went on to calculate what the principal and interest payment would be based on a $200,000 fully amortizing mortgage at different times in history.

Mortgage Payments | Keeping Current Matters

Here is a look at rates over the decades:

Historic Mortgage Rates by Decade | Keeping Current Matters

Here is a look at rates over the last four years and what Freddie Mac projects for next year:

30 Year Fixed Rate Mortgage Rates | Keeping Current Matters

Bottom Line


If you are thinking of buying your first home or looking to move up to your dream home, now may be the time to do it

Tuesday, April 28, 2015

There’s No Place Like Home

There’s No Place Like Home | Keeping Current Matters

Last week, we reported on the financial reasons purchasing a home in today’s market makes sense. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.

The top 4 reasons to own a home cited by respondents were not financial.

1. It means having a good place to raise children & provide them with a good education

From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.

2. You have a physical structure where you & your family feel safe

It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.

3. It allows you to have more space for your family

Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.

4. It gives you control over what you do with your living space, like renovations and updates

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:

5. Owning a home is a good way to build up wealth that can be passed along to my family

Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?

Bottom Line


Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.

Thursday, April 23, 2015

Home Sales Skyrocketing!!

Home Sales Skyrocketing!! | Keeping Current Matters

Yesterday, the National Association of Realtors (NAR) released their Existing Home Sales Report. The numbers shocked many analysts as they revealed a 10.4% increaseover the same month last year.

This is the highest number of sales since September 2013. Sales have increased year-over-year for six consecutive months and the 10.4% increase is the highest annual increase since August 2013. March's sales increase was the largest monthly increase since December 2010.

Lawrence Yun, NAR’s chief economist, explained:

"After a quiet start to the year, sales activity picked up greatly throughout the country in March. The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years."

Here is a graph showing home sales so far this year:


An increase in sales occurred in every region of the country even the Northeast that experienced one of their roughest winters in years:


Bottom Line


Houses are flying off the shelves. This may be the perfect time to sell yours.

Tuesday, April 21, 2015

We Need You(r House)!!

We Need You(r House)!! | Keeping Current Matters
Though the real estate market has improved, we still have one item holding it back from a full recovery – a robust supply of homes for sale. Demand has increased dramatically. At the same time, housing inventory is decreasing especially at the lower price points.

The National Association of Realtors (NAR) recently revealed that there is a pent-up seller demand caused by the uncertainty created by the housing crisis of the last decade.

What does that mean to you?

Houses listed today sell quickly. With prices still below peak values of 2007 in many parts of the country and mortgage interest rates at historic lows, this may be the perfect time for your family to make the move to the dream house you always wanted – whether that’s a larger home or that vacation/retirement home you have been looking at.

What does that mean to the economy?

Housing has always been an essential part of the U.S. economy. As we have reportedbefore, real estate not only provides housing for families. It is often the greatest source of wealth and savings for many. The recent increase in real estate sales has led to an increase in real estate prices. This has increased the value of everyone’s' home, whether they are selling or not. This leads to an increase in consumer confidence which in turn leads to an increase in consumer spending. Plus, each home sale automatically puts money into the economy.

NAR compiled data from research conducted by the Bureau of Economic Analysis & Macroeconomic Advisors on the economic impact of a home purchase.

After reviewing the data, they concluded that the total economic impact of a typical home sale in the United States is an astonishing $52,205.

The more homes that sell, the better the economy.

Bottom Line

In order for the U.S. economy to get better, we need to sell more homes. Perhaps, it makes sense for one of those homes to be yours.
If you have considered selling but are still a little nervous, now might be the time to sit down with a real estate professional familiar with your market and see what your options truly are.

Monday, April 20, 2015

Housing Market: Freddie Mac Remains Optimistic

Housing Market: Freddie Mac Remains Optimistic | Keeping Current Matters

The April 2015 U.S. Economic & Housing Market Outlook from Freddie Mac revealed that they are optimistic about the real estate market in 2015. As a matter of fact, the sub-title of the report was “Great Expectations”.

What made Freddie Mac so optimistic? Here are a few highlights from the report:
“For the remainder of the year we should see a resumption of solid economic growth and acceleration in housing activity. Notwithstanding a disappointing March jobs report the acceleration is already underway.”

“With spring upon us, housing markets are poised to accelerate and we expect the best year for home sales since 2007. Despite harsh winter weather to start the year, home sales through February are only off from the 2013 pace by 7,000 sales... Pending home sales were up 3.1 percent in February to the highest level since June 2013. This marked the fourth consecutive month for rising pending home sales showing positive momentum in general for the housing market.”

Their projections…

“By the end of the spring home buying season in June, we should be well above the pace of home sales for any year since 2007.”

“We are as optimistic about trends in housing markets moving forward as we have ever been since the depths of the Great Recession.”

Regarding prices…

“Due to strong growth, we are expecting house prices to increase 4.0 percent in 2015.”

But there were some warnings…

On available supply:

“With low mortgage rates, improving labor markets, and rising demand, one key issue for housing over the next two years will be the lack of supply of for-sale and for-rent homes.”

“Many metro areas that have seen robust job growth and population increases are facing shortages of available for-sale inventory.”

On interest rates:

“However, by the end of the year long-term interest rates should only increase modestly, ending the year at about 4.3 percent for the 30-year fixed rate mortgage.”

Note: Freddie Mac worded this as being not that crucial. However, a 4.3% mortgage rate is about a .75 increase over current rates.

Bottom Line


Things are looking good for the real estate market. If you are thinking of selling, contact an agent to discuss how this applies to your neighborhood.

Friday, April 17, 2015

Does Homeownership Make Sense Financially?


Everyone knows the social advantages of home ownership. However, some question the financial benefits of owning a home. Three recent studies shed some light on the issue.

RealtyTrac recently released a report comparing home price appreciation to wage growth over the last two years. The study revealed that home price appreciation has outpaced wage growth in 76% of U.S. housing markets during that time period. By how much? Here is a graph showing their findings:


And we all know the importance of home appreciation in determining the net wealth of most American families. Merrill Lynch just issued a report covering the issue. Their findings are shown here:

Average Home Equity | Keeping Current Matters

It obviously makes financial sense to be a homeowner.

But, does it make sense to buy now?

The survey company Pulsenomics just issued their findings on the cost of owning versus the cost of renting. They compared historical averages to the cost you can expect to pay today.

Buying vs. Renting | Keeping Current Matters


The cost of buying is far below historical averages. Renting is another story.

Wednesday, April 15, 2015

Selling Your House in 2015? Don’t Miss this Opportunity

Selling Your House in 2015? Don’t Miss this Opportunity | Keeping Current Matters

Every seller wants to get the best price for their house. We learned in high school that the best price for any item will be determined by the demand for that item relative to the supply of that item.

We have reported that the inventory of houses for sale is well below normal numbers.

There is historical evidence that the demand for housing is about to increase dramatically. Each year, more homes sell in May, June, July and August than any other four months of the year. Here is a graph of home sales last year by month:

2014 Home Sales | Keeping Current Matters

Bottom Line


You want to make sure your house is available for sale during peak selling season. If you are thinking of selling this year, contact your Rebe Homes real estate professional today.

Tuesday, April 14, 2015

3 Questions to Ask Yourself Before Buying A Home

3 Questions to Ask Yourself Before Buying A Home | Keeping Current Matters
If you are debating purchasing a home right now, you are surely getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home.

There are 3 questions you should ask before purchasing in today’s market:

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances.
A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money:
  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of the space
What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

When looking at future housing values, Home Price Expectation Survey provides a fair assessment. Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Here is what the experts projected in the latest survey:
  • Home values will appreciate by 4.4% in 2015.
  • The cumulative appreciation will be 19.3% by 2019.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 11.7% by 2019.
3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by an increase in mortgage rates.

The Mortgage Bankers Association (MBA), the National Association of Realtors andFreddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage over the next twelve months.

Bottom Line


Only you and your family can know for certain the right time to purchase a home. Answering these questions will help you make that decision.

Tuesday, April 7, 2015

Pending Sales Surge: Great Sign for the Housing Market


Pending Sales Surge: Great Sign for the Housing Market | Keeping Current Matters
The most recent Pending Homes Sales Index from the National Association of Realtors revealed that homes going into contract in February increased to their highest level since June 2013.

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The Index is now 12.0 percent above February 2014. The index is at its highest level since June 2013, has increased year-over-year for six consecutive months and is above what is considered “the average level of activity” – for the 10th consecutive month.

Here is a graph showing the Pending Sales numbers:


Here is a chart showing the Pending Sales increases by region:


Bottom Line

In an article from Investors’ Business Daily, Lawrence Yun, Chief Economist at the National 
Association of Realtors, explained what these numbers will mean to the overall market:


"It looks like the buyers want to come out to the market and they are eager to find the right home and make an offer. Therefore, I expect the second quarter of this year to be easily ahead of last year in terms of sales activity. Pending contracts are implying that the closing activity in coming months will be quite solid."

Thursday, April 2, 2015

Selling Your House? Price it Right Up Front


Selling Your House? Price it Right Up Front | Keeping Current Matters

In today’s market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.

There is no “later.”

Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.

John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Pricepublished in Real Estate Economics revealed:

“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”
Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.

Don’t build “negotiation room” into the price.

Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.

Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!

A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.

Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?

The Price is Right


Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home. You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.

Wednesday, April 1, 2015

Industry Experts Agree: Housing Supply Too Low



Industry Experts Agree: Housing Supply Too Low | Keeping Current Matters
Last week, we reported on the lack of housing supply and how that was impacting the real estate market. Today, we want to let you know what other industry experts are saying.


“It’s kind of a seesaw right now between supply and demand. One of the reasons for fewer sales is not so much a lack of demand but a lack of supply, especially in the price range the majority of buyers were looking for.”


“Total sales are still running below expectations for the year. Don't blame winter weather, though. Blame the lack of supply.”


“Inventory is still very low (down 0.5% year-over-year in February). This will be important to watch over the next month at the start of the spring buying season.”


“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels. Stronger price growth is a boon for homeowners looking to build additional equity.”


“The National Housing Trend Report shows that inventory has decreased 10.9 percent year over year.”

And some experts are actually calling it a “seller’s market”


“Tight inventory is a main reason the ball is still in the sellers' court.”


“We’re a bit low on the supply-side which could force prices up for buyers, further hammering home that we’re in a seller’s market.”

Bottom Line


If you are debating putting your home on the market this year, now may be the time. The number of buyers ready and willing to make a purchase is at the highest level in years. Contact a local professional in your area to get the process started.