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 over the course of the next 12 months.
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.
According to CoreLogic’s latest Home Price Index, national home prices have appreciated 7.0% from this time last year and are predicted to be 4.2% higher next year.
If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.
Bottom Line Even a small increase in interest rate can impact your family’s wealth. Let’s get together to evaluate your ability to purchase your dream home.
Do You Know the Cost of Waiting? [INFOGRAPHIC]
Every homeowner wants to make sure they get the best price when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensuring you get the highest price possible.
1. Price it a LITTLE LOW This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In reality, this just dramatically lessens the demand for their house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price, but will instead have multiple buyers fighting with each other over the house.
Realtor.com gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”
2. Use a Real Estate ProfessionalThis, too, may seem counterintuitive, as the seller likely believes that he or she will net more money if they don’t have to pay a real estate commission. With that being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
Research posted by the National Association of Realtors revealed that:
“The median selling price for all FSBO homes was $185,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $163,800. However, homes that were sold with the assistance of an agent had a median selling price of $245,000 – nearly $60,000 more for the typical home sale.”
Bottom LinePrice your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.
By Keeping Current Matters 2017
According to a recent survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.
After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.
“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”
Bankrate.com recently gathered closing cost data from lenders in every state and Washington, D.C. to be able to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.
Keep in mind that if you are in the market for a home above this price range. your costs could be significantly more. According to Freddie Mac,
“Closing costs are typically between 2 and 5% of your purchase price.”
Bottom LineSpeak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.
Article by Keeping Current Matters
The National Association of Realtors recently released a study titled 'Social Benefits of Homeownership and Stable Housing.’ The study confirmed a long-standing belief of most Americans:
“Owning a home embodies the promise of individual autonomy and is the aspiration of most American households. Homeownership allows households to accumulate wealth and social status, and is the basis for a number of positive social, economic, family and civic outcomes.”
Today, we want to cover the section of the report that quoted several studies concentrating on the impact homeownership has on educational achievement. Here are some of the major findings on this issue revealed in the report:
Article by Keeping Current Matters
The latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed a direct correlation between a lack of inventory and rising prices.
We are all familiar with the concept of supply and demand. As the demand for an item increases the supply of that same item goes down, driving prices up.
Year-over-year inventory levels have dropped each of the last 18 months, as inventory now stands at a 4.0-month supply, well below the 6.0-month supply needed for a ‘normal’ market.
The median price of homes sold in November (the latest data available) was $234,900, up 6.8% from last year and marking the 57th consecutive month with year-over-year gains.
NAR’s Chief Economist, Lawrence Yun had this to say:
"Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country."
But there is good news about rising prices. More and more homeowners are recovering from a negative equity situation and learning that they are able to sell their homes and either move up to their dream home or downsize to a property that will better suit their needs. Look for these homes to come to market soon.
Bottom LineBuyer demand continues to outpace the supply of homes for sale. Listing your home in the winter attracts serious buyers who are looking to close the transaction quickly.
Written by Keeping Current Matters 2017
Going Up or Going Down? An indicator of future home prices can be found within what is currently happening in your local market. In the past month, in Sonoma County, we have seen homes in the middle to higher price ranges staying on the market for longer periods than in recent months. Many sellers are experiencing more days on market and fewer offers. To me, this is indicating a return to a more typical housing market. In the middle of summer multiple offers over asking price were the norm and this has begun to slow down, especially in the upper price ranges. Homes priced below $600,000 are still experiencing a lot of action & stiff competition if priced well. This change in the upper ranges signifies to me that a shift is beginning. Only time will tell if this is a typical leveling off of prices and moving into a more balanced market that it seems to indicate.
Have you been thinking about making a move but don't know if now is a good time? Autumn is a great time to put a home up for sale. It is second only to spring. Once school has started many people start looking to buy a home so that they can get moved in before the holidays. Fall is a wonderful time for both house hunting & house selling. The days are cooler and getting shorter. People are starting to think about settling into a cozy new house where they can hibernate for the winter. Fall is a great time to showcase those homey, sweet aspects of your home and make a transition into a perfect new place for yourself.
Are you thinking about going on vacation? Ready to relax, adventure and just get away from it all? Are you ready to take a moment away from the stress of house hunting? But are you worried about leaving in the middle of searching for the perfect home? What are you going to do? Well, if you've been hunting for a while you have really narrowed down your needs. You can do much of your home search on-line these days, making house hunting while out of town very viable. It used to be that all of the information about homes for sale was only available in print. Now you can access all you need to know from anywhere that you have wifi access. Your home search need not halt just because you are out of town. If you are working with a Realtor who has set up an automated home search for you, you will still receive notifications when homes that fit your search parameters become available. As you know, if you have looked at many homes, a listing can only show some of the attributes of a property. Myself & many realtors will happily preview a home to see if it is a good fit for you. After working with someone for a while, your realtor should be able to visit a home for you and evaluate it's suitability. ,Frequently homes are on the market for 5-7 days before the sellers will look at offers, so you will often have a small window of time to submit an offer if the perfect home comes on the market.
This summer, when deciding to go on vacation (which I badly needed!) I chose a location that is less than 2 hours away from home. I can pop back into town if something really important comes up. When packing up my laptop, I almost panicked when I realized that I didn't know if the house we would be staying in would have internet access. Luckily it does. I can still check the multiple listing service every day to see if any homes have come on the market that will work for my clients. Especially in the summer, I believe that it is very important to be available to everyone that I am working with so that their needs are met. You never know what is going to come up!
When you are actively hunting for just the right home even a fabulous vacation doesn't need to get in the way. The beautiful thing about vacation is not just the time spent with loves ones, the journeys that you take and the great food, it is also about appreciating your home. They say that distance makes the heart grow fonder. It is true, no matter how wonderful a vacation is, I am always happy to get home, sleep in my bed and go to familiars places. When you are in the midst of looking for a home, time away is great but coming home to newly listed houses to look at is exciting as well!
Heather Thurber is a Sonoma County native with a strong love for and knowledge of the local area. Running her family business for years, Paperbacks Unlimited, has given her extensive experience that she now brings to the real estate industry. She is highly skilled at working one-on-one with clients and will guide you through every step of the process, helping to make your path home as smooth and stress free as possible. A home purchase is often the largest purchase you will make in your life and Heather is 100% committed to providing excellent service and supporting you to make your best real estate decisions with confidence and clarity.