Tag Archives: mortgage rates

Why Is It Important to Use a Professional to Sell Your Home?

 

Why Is It Important to Use a Professional to Sell Your Home? | MyKCM

When a homeowner decides to sell their house, they obviously want the best possible price for it with the least amount of hassles along the way. However, for the vast majority of sellers, the most important result is actually getting their homes sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. According to the National Association of Realtors’ 2016 Profile of Home Buyers & Sellers, the first step that “…44% of recent buyers took in the home buying process was to look online at properties for sale.

However, the report also revealed that 96% of buyers who used the internet when searching for homes purchased their homes through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their homes directly from a seller whom the buyer didn’t know.

Buyers search for a home online but then depend on an agent to find the home they will buy (50%), to negotiate the terms of the sale (47%) & price (36%), or to help understand the process (61%).

The plethora of information now available has resulted in an increase in the percentage of buyers who reach out to real estate professionals to “connect the dots.” This is obvious, as the percentage of overall buyers who have used agents to buy their homes has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.  Please reach out to me for great referral to great Real Estate Pro!!

Sellers: Your Home is an Oasis in an Inventory Desert

 

Sellers: Your Home is an Oasis in an Inventory Desert | MyKCM

First-time homebuyers are flocking to the real estate market by the thousands to find their dream homes in order to make their dreams of homeownership a reality. Unfortunately for many, the inventory of starter and trade-up homes in the US has struggled to keep up with demand!

According to the National Association of Realtors (NAR), the inventory of homes for sale dropped 7.1% year-over-year to a 4.3-month supply and is down for the 25th consecutive month.

Some homeowners may be hesitant to list their homes for sale because they are worried that they will also have a problem finding a home to buy and move in to. This is a legitimate concern; no one wants to sell their home quickly and not have anywhere to live.

But there is good news! If you are thinking of moving up to a luxury or premium home, there is more inventory available in these markets and you may even get a great deal on a home that has been on the market for a while.

If you are the owner of a starter home and you are looking to move into a trade-up home, or if you are just looking to relocate to a new area in a home of the same size, there is still hope!

In many markets, homeowners are building contingency plans into their contracts. This means that the homeowner builds in extra time before they close in order to find their dream home and they are upfront about the contingency with any buyers who come to see the house.

Your home is an oasis to buyers who are searching for homes in today’s market. The right buyers will sympathize and wait for you and your family to find your next home.

Bottom Line

Don’t let the fear of not finding a home to move in to stop you from moving on with your life. Let’s get together to discuss ways to set expectations with potential buyers from the start.

Homes Are Selling Quickly Nationwide

 

The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report, which revealed that homes were on the market for an average of 28 days in June. This is a slight increase from the 27 days reported in May, but down from 34 days reported a year ago.

54% of homes across the country were on the market for less than a month in June!

Among the 27 states with homes selling in 30 days or less are Washington, Utah, California, and Colorado. The map below was created using results from NAR’s Monthly Realtors Confidence Index Survey.

Homes Are Selling Quickly Nationwide | MyKCM

Bottom Line

Buyer demand is increasing as the inventory of homes available for sale remains low. If you are thinking about listing your home for sale this year, let’s meet up so I can help you take advantage of current market conditions!

Hey, Millennial Homeowners!! It May Be Time to Sell

 

Hey, Millennial Homeowners!! It May Be Time to Sell | MyKCM

Contrary to what many believe, Millennials are not the ‘renter’ generation. Millennials purchased a larger percentage (34%) of homes in the U.S. than any other age group in 2017 and the most recent Census Bureau report shows that the homeownership rate among Millennials is finally on the rise.

Many Millennials took advantage of post housing crash prices and the First-Time Homebuyers’ Tax Credit and jumped into homeownership in 2010. If you are one of these buyers, now may be the time to sell for many reasons. Here are a few:

1. Equity Build-Up

Home prices have been on the rise since the beginning of 2012 and your house may have appreciated by more than you think. ATTOM Data Solutions, in their Q2 2017 U.S. Home Sales Report revealed that:

“…homeowners who sold in the second quarter realized an average price gain of $51,000 since purchase — the highest average price gain for home sellers since Q2 2007, when it was $57,000.

The average home seller price gain of $51,000 in Q2 2017 represented an average return of 26 percent on the previous purchase price of the home, the highest average home seller return since Q3 2007, when it was 27 percent.”

2. Projected Home Price Increases

If you just got married or just found out you are about to become a parent, you may have plans to move up a bigger home or perhaps move to a different area. Waiting to buy a more expensive home in this market probably doesn’t make sense. The experts contacted for the Home Price Expectation Survey are projecting home prices to increase by nearly 5% over the next year. Yes, your house’s price will increase but not as much as a home currently valued higher than yours.

3. Projected Interest Rate Increases

The Mortgage Bankers’ Association, Freddie Mac, Fannie Mae and the National Association of Realtors are each projecting mortgage rates to increase over the next year.

Higher PRICES + Higher INTEREST RATES = LARGER MORTGAGE PAYMENTS.

Bottom Line

If you are lucky enough to be one of those Millennials who purchased a house in 2010 (or even later), now might be the perfect time to move up to the home of your dreams!

Housing Inventory Hits 30-Year Low

 

Housing Inventory Hits 30-Year Low

Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

CoreLogic’s President & CEO, Frank Martell added,

“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

Real estate is local.

Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

Bottom Line

Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, let’s get together to discuss the exact conditions in our area.

Thinking of Selling? You Should Act NOW!

 

Thinking of Selling? You Should Act NOW! | MyKCM

If you thought about selling your house this year, now more than ever may be the time to do it! The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.

Lawrence Yun, Chief Economist at the National Association of Realtors, recently commented:

“Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”

Yun goes on to say:

“Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction, including the inspection, appraisal and financing contingencies.

Bottom Line

As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.

Rates Are Actually Much Higher This Week. Here’s Why

After spending more than a month holding fairly steady near 8-month lows, rates are moving quickly higher this week. Not only are the underlying reasons somewhat opaque but there are multiple media outlets reporting the “lowest mortgage rates of the year.” What’s really going on here?

The discrepancy between actual mortgage rate movement and certain news stories is easy to explain (as seen in a past newsletter), so let’s start there.  At issue is the fact that Freddie Mac’s weekly rate survey is a longstanding industry benchmark for mortgage rates.  It’s heavily relied-upon by analysts working in the secondary mortgage market as well as journalists who simply use it as their one source for a weekly mortgage rate update.

Because the report is released at 10am on Thursday morning, we tend to see a glut of news stories offering similar conclusions about mortgage rate movement.  This seemingly unified message only adds to the confusion.  After all, if all these big news organizations are telling us that rates are at the lowest levels of the year, it must be true, right?

WRONG!

Freddie’s data is GREAT for long-term analysis of general mortgage rate trends but it does a GREAT DISSERVICE to prospective borrowers keeping an eye on day-to-day changes.

The reason is strikingly simple: rates can move every day, but Freddie’s survey only covers the first 3 days of any given week.  Moreover, most of the responses tend to come in on Monday and Tuesday.

In other words, Freddie’s survey is best described as “Monday/Tuesday rates vs last Monday/Tuesday’s rates.” This creates obvious problems if rates are making bigger moves in the second half of any given week–especially if they moved in the opposite direction during the first half of the week.

Here’s how all of the above played out this time around.  Mortgage rates were indeed in line with the year’s lowest levels on Monday (only June 14th was any better as far as individual days are concerned).  But the next 3 days all saw rates move convincingly higher.  Freddie’s survey responses–being weighted toward the start of the week–simply didn’t capture the magnitude of the rate spike (it will be reflected in next week’s numbers unless we get a friendly bounce between now and then).

The bottom line is that rates are definitely not at 2017’s lowest levels.  In fact, in terms of day-over-day changes in actual lender rate sheets (remember, humans respond to surveys, and they might not all be cross-checking actual rate sheets before firing off their responses to Freddie), rates are as high as they’ve been since May 16th.

A major caveat is that the recent range of mortgage rates has been exceptionally narrow by historical standards.  It’s also been holding fairly close to the lowest levels in 8 months.  Still, the amount of movement over the past few days adds up to hundreds, even thousands of dollars for some borrowers’ loan quotes.  That could be quite the surprise if they’ve just heard about the “lowest rates of the year” on the evening news.

2017-6-29 nl1

What’s Moving Markets?

Now that we know WHAT mortgage rates have actually been doing, let’s talk about WHY.  If you remember the so-called “taper tantrum” in 2013 (the market reaction to the Fed signalling its intent to buy fewer bonds), then you’re halfway there.

This time around, the focus is on the European Central Bank (ECB), whose bond buying puts it in the same league as the Fed in terms of impact on financial markets.  Whereas the Fed has long since stopped expanding its balance sheet (they may even begin shrinking it later this year), the ECB continues adding more bonds to its balance sheet every month.

Given the huge impact of the taper tantrum in the US, investors are on guard for any indication of tapering in the EU.  ECB President Mario Draghi gave just such an indication in a series of comments earlier this week.  He spoke of deflation being replaced by reflation, above-trend growth, and the need to gradually adjust bond-buying parameters.

ECB Officials would subsequently try to explain that Draghi was aiming for comments that balanced positive developments with the ongoing need for substantial bond buying.  But the takeaway for market participants was that the ECB is moving closer and closer to tapering.

Why should rates in the US care about what’s going on with the European Central Bank?  To make a long story short, global bond markets (which drive interest rates) are interconnected and interdependent to a certain degree.  US rates might not respond to European rates in lock-step, but they definitely respond.  As such, it’s no surprise to see European benchmark rates surging and US rates following with a more measured version of the same move.

2017-6-29 nl2

Is this the end of low rates forever?  Not by a long-shot.  First of all, we’re only a few days into a move that took several months to play out in the US.  We can’t yet know if European rates are embarking on a similar journey.

Even if that happens, it’s good to keep in mind that rates generally move higher when central banks are actually in a bond-buying cycle.  True, that sounds terribly counterintuitive (after all, if the Fed/ECB are buying bonds, rates should be going down), but the following chart with QE time-frames in the US doesn’t lie.

2017-6-29 nl4

Don’t read too much into this chart because it could be competently argued several ways.  The point of posting it is to offer perspective.  What might seem like a surefire reason for rates to move higher could merely be the catalyst for a temporary correction in the bigger picture.  After all, most economists and analysts thought low rates were a thing of the past by the end of 2010 and 2013.  The subsequent years were the best 2 years of the recovery.
Housing-Specific News

There were several interesting developments in housing this week.  2 weeks after comments on a potential “housing emergency” due to tight inventory, The National Association of Realtors (NAR) now says the perception of a seller’s market could provide motivation for owners to list their homes, thus relieving some of the inventory pressure.

As for the month of May, there was no such relief in sight.  The NAR blamed lopsided supply and demand for the lowest Pending Home Sales levels since January.  Despite the justification, it’s worth noting that this index hasn’t been able to get back above its current range since the meltdown.

2017-6-29 nl3

Both Black Knight and Case-Shiller released their monthly home price indices.  Both set record highs at the national level, and both reports agree that the national numbers are being dragged higher by several outstanding regional markets.  Of the two, the Case-Shiller report did more to provide a counterpoint to the positivity, citing some signs of deceleration.