NAHB Housing Market Index Shows Builder Confidence Slip In March

March 20, 2013 by

Home Builder Confidence Index March 2013The National Association of Home Builders (NAHB) released its NAHB/Wells Fargo Housing Market Index for March on Monday.

The HMI measures builder confidence in the market for newly constructed single family homes.

A reading of 50 for the NAHB Housing Market Index (HMI) indicates that more builders are confident of housing market conditions for new single family homes than those who are not confident.

Home builder confidence fell for the third consecutive month with a two-point drop to a reading of 44 in March.

Several Factors Create New Home Bottleneck

An NAHB leader noted that several situations are causing a “bottleneck” in the supply of new homes as compared to those wanting to buy them:

  • Low supply of developed lots available for new construction
  • Rising costs for labor and materials
  • Stricter mortgage credit requirements for homebuyers and lowball home appraisals. (These circumstances are typically caused by some mortgage lenders taking a conservative attitude toward risk management by tightening credit requirements and appraisers erring on the side of caution when valuing single family homes.)

Would-be buyers may find themselves stuck between a lack of buildable lots and ready building supply chains and lenders reluctant to risk mortgage defaults caused by lenient loan approvals.

Keep in mind that this only one perspective; if you’re looking for a new home, don’t give up.

Future Sales Confidence Creates Bright Spot

The HMI also measures builder confidence in three categories including current sales conditions, sales conditions within the next six months and the amount of foot traffic in new housing developments.

Confidence in current sales conditions dropped from 51 points in February to 47 points in March, but the news is not all bad.

Confidence in sale conditions for the next six months rose by one point from 50 to 51, and builder confidence in buyer foot traffic rose by three points to 35.

Foot traffic will likely increase as warmer weather arrives and the peak home buying season gains momentum.

Housing Market Conditions Vary By Region And Community

The three-month rolling average of builder confidence in four geographic regions of the U.S. showed mixed results for March.

The index reading for the Northeast had no change and remained at 39.

Index readings for the Midwest and Southeast declined by one point each to 47 and 46 respectively.

The March index reading for the West came in gaining four points to 58.

If you’re ready to buy a home, check with a licensed real estate professional specializing in the area where you want to buy.

This is the best way to gain specific information on the area’s market conditions and home prices.

Filed Under: Housing Analysis Tagged With:

Great Staging Tips To Set A Buyer’s Mood At Your Home For Sale

March 19, 2013 by

Home Staging Tips And TricksStaging is the art of preparing your home for sale before showing it to prospective buyers.

The point of staging is to highlight the house’s strengths, downplay its weaknesses and make it more appealing.

With the right decorating techniques, you can win buyers over the moment they step through the door.

Below are a few staging tips to help make your house irresistible to potential buyers.

Put Everything Away

The first step is to put away anything that is not essential. This will open up the house so that it appears more spacious.

Even if you have to rent a storage unit, finding a new home for all of your family’s projects and collections should clear some space and help buyers imagine their own belongings in your home for sale.

Pay special attention to entryways and narrow hallways to improve your prospective buyer’s sense of spaciousness.

Get Rid Of Clutter

Be sure to clear off the things that gather on kitchen counters and surfaces, such as old magazines and stacks of mail.

Also, emptying out your closets of half of the things inside them will make them look much roomier.

Use this time as an opportunity to thin the number of largely unused items that your family has collected over the years.

And look on the bright side; moving into a new house will be much easier after you have donated your unneeded items to a charity.

Fresh Scents Make Sense

You would be surprised by how much the sense of smell comes into play when buyers are viewing a house.

To avoid turning buyers off with pet or smoke odors, make sure you give each room a deep clean, including the air vents and carpeting.

Just covering up stale odors with air fresheners won’t do the job.

Let In The Light

Buyers are looking for spacious rooms with a lot of natural light, so make sure you open the blinds and turn on all the lights.

If you have rooms that are a bit dark, you can add floor lamps to make them brighter or flowers to suggest sunlight.

Home staging can make a big difference in how potential buyers see your home for sale, so make sure you set the mood to make it as attractive as possible.

Filed Under: Around The Home Tagged With:

What’s Ahead For Mortgage Rates This Week: March 18th, 2013

March 18, 2013 by

Mortgage Rate Update March 18 2013Last week’s positive employment reports were good news for the economy, which typically causes mortgage rates to rise, but mortgage rates ended the week lower.

As of Thursday, Freddie Mac reports that the average mortgage rate for a 30-year fixed rate mortgage was 3.63 percent with borrowers paying their closing costs and 0.8 percent in discount points.

The average mortgage rate for a 15 year loan was 2.79 percent with borrowers paying their own closing costs and 0.8 percent in discount points.

Strong Retail Sales Show Consumer Confidence Improving

In other economic news, retail sales for February surpassed Wall Street expectations and grew by 1.1 percent against predictions of 0.5 percent and January’s reading of 0.1 percent.

Retail sales account for 70 percent of the U.S. economy and growing retail sales are a strong indicator of economic recovery, which generally causes mortgage rates to rise as bond prices including Mortgage Backed Securities fall.

With this strength in the retail sector, it may be a good time to consider locking interest rates for purchase and refinance transactions.

Results of Treasury auctions held Tuesday, Wednesday and Thursday were mixed.

Tuesday’s auction of 3-year notes saw average demand, Wednesday’s auction of 10-year notes was strong, and Thursday’s auction of 30-year bonds drew a weak response.

Financial Reporting Strong Across Multiple Indices

The Producer’s Price Index (PPI) for February met expectations at 0.7 percent and exceeded January’s level of 0.2 percent.

The Consumer Price Index (CPI) for February came in at 0.7 percent and exceeded expectations of 0.5 percent and January’s reading of 0.0 percent.

The Core CPI, which excludes food and energy sectors, demonstrates the impact of high fuel prices on the CPI with its lower numbers.

The Core CPI for February is 2.0 percent higher than for February 2012.

Upcoming Federal Reserve Meeting May Bring Interest Rate Changes

The Federal Reserve is not likely to modify its bond purchase program until the inflation rate reaches 2.5 percent.

Next week, the Federal Reserve will meet on Wednesday; investors will be waiting to see how the Fed responds to recent positive economic news in terms of potential changes to its bond purchase program, which is helping to keep mortgage rates lower.

As the deadline of March 27 for funding the Federal government approaches, investors will be following legislative talks to see how or if funding will be approved by the deadline.

Filed Under: Mortgage Rates Tagged With:

5 Quick Tips To Get A Better Price On Your Home Purchase

March 15, 2013 by

Negotiating Tips For Your Home PurchaseWhen you are looking to buy a home, it is important to keep in mind that no real estate price is set in stone.

There is always room for negotiation, and with the right techniques you may end up saving thousands of dollars on your dream house.

However, it can be tricky to get the right reaction when you are negotiating.

Here are a few tips that will help you to haggle your way to the best deal.

Find Out The Seller’s Motivation

If they really need to move and sell the property, it will be easier to convince them to negotiate on price or other deal points.

For example, they might be relocating for a job or the house might be close to foreclosure, which would give them the motivation to sell quickly at the price you offer.

Investigate How Long The Property Has Been On The Market

If the seller has been trying to sell the home for several months or longer, they will be much more receptive to competitive offers than a seller who just put their house up for sale last week.

Research Comparable Properties

Find out the price of recently sold properties in the same area that are comparable to your prospect.

This will give you an idea of how much you should bid on the house.

Knowledge is power in any type of negotiation, so arm yourself with as much information as possible.

Keep Your Cool

Even if you are absolutely head-over-heels in love with a property, refrain from showing your excitement to the seller.

You could lose any advantage you might have in negotiation if you let the seller and their agent know how much you really want the property.

Don’t Offend

Be careful not to bid too low. Sometimes sellers are offended by low ball offers and will refuse to work with you afterward.

Even when you are just attempting to get the home for a great price, the seller may become offended, which will leave you disappointed and empty-handed.

These are just a few tips to keep in mind for getting a great deal on your dream house.

If you’d like more help negotiating the price of a home, please contact a licensed real estate professional for more information.

Filed Under: Real Estate Tips Tagged With:

4 Critical Tips When Purchasing Foreclosure Real Estate

March 14, 2013 by

Buying A Home In ForeclosureBuying a foreclosed property can be different than buying other types of real estate.

In many cases you will be able to get a fantastic deal on a home, but you will need to go through quite a bit of work and negotiation.

Here are four tips to help you navigate the foreclosure buying process:

Find the right real estate agent

The first thing to keep in mind is that your real estate broker will deal directly with the bank that owns the foreclosed property.

The bank has the final say in whether they’ll accept your bid – so you want an agent who has developed a good relationship with them.

Know that cheap doesn’t mean good value

Sometimes the tiny price tag on a foreclosed property can be very tempting, but make sure you are asking questions about the value and the potential expenses of the house.

Will it require extensive repairs?

Will you be able to find a tenant?

Does the property have potential for appreciation over time?

Perform a house inspection

If the previous owners were foreclosed on because they couldn’t make their mortgage payments, it’s possible they didn’t have enough money to give the home the proper maintenance it needed.

Make sure you have the property inspected by a professional to spot any problems.

Take extra care if the house has been empty for a while, as there could be problems with plumbing, insects or mold.

Look for intentional damage

Keep in mind that many owners were forced out of their property by the bank, so they might have removed as many appliances, light fixtures and other items as they could which usually means the house is stripped bare.

The previous owners might have been angry and felt justified in damaging the property.

Make sure to do a thorough inspection to find out what appliances you’ll need to buy and messes you’ll need to clean up.

If you are considering buying a home in foreclosure, you could possibly get a great deal on a house with a lot of potential.

Make sure you follow these tips and contact your licensed and trusted real estate professional for more information about buying a foreclosed property.

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Surprisingly Strong Jobs Report May Affect Mortgage Rates

March 13, 2013 by

Jobs Report In FocusLast week’s jobs report — a combination of the Department of Labor’s Non-farm Payrolls Report and Unemployment Rate — provided investors and job seekers with unexpected good news.

Job growth for February handily exceeded most economists expectations of 160,000 by adding 236,000 new jobs.

According to the Bureau of Labor Statistics, employment increased in business and professional services, construction and healthcare:

  • Business and professional services added 73,000 jobs
  • Construction added 48,000 jobs. Of these, 17,000 jobs were for residential construction.
  • Healthcare added 32,000 jobs

Since September, construction employment has risen by 151,000. This increase in construction jobs may point to a strengthening in the home building sector.

Stronger home building numbers may lead to increasing home prices for sellers and property appreciation for home owners.

Strong Jobs Numbers Help Stock Market Rally, May Spur Higher Mortgage Rates

Retail has added 252,000 jobs over the past year. Hiring in retail suggests that consumers are spending more, which is a strong indicator of economic growth.

These figures demonstrate a trend toward economic recovery and added a last-minute boost to last week’s stock market rally.

Rising stocks generally cause bond prices including MBS to fall and mortgage rates to rise.

The seasonally adjusted employee participation rate declined by 0.40 percent year over year; in February 2012, the seasonally adjusted was participation rate was 63.9 percent; in February 2012, the participation rate was 63.5 percent.

The Unemployment Rate for February came in at 7.7 percent; this was lower than Investor expectations of 7.8 percent and January’s unemployment rate of 7.9 percent.

The seasonally adjusted unemployment rate has decreased by.60 percent from 8.3 percent in February 2012.

Unemployment Rate Lowest Since December 2008

Long-term unemployment of 27 weeks or more accounted for 40.2 percent of February’s unemployed.

8 million workers are employed part time due to scheduling cutbacks or because they could not find full time work.

The Fed has benchmarked an unemployment rate of 6.5 percent as a sign of sufficient economic recovery that could allow the Fed to curtail its monetary easing program.

Given this perspective, the Unemployment Rate remains high, but appears to be declining gradually.

Economic indicators and recently climbing interest rates suggest that mortgage borrowers may want to lock in their best mortgage rates now.

Filed Under: Housing Analysis Tagged With:

3 Top Tips To Selecting The Right Home For Your Family

March 12, 2013 by

New Home With FamilyWhether you are moving to a new house with children or you are buying your first home with the intention of raising future little ones there, many factors will come into play when making your decision.

You will want to find a house with the right size and layout, that has a suitable number of bedrooms and bathrooms, is in an excellent neighborhood and has all of the local amenities your family will need.

Here are three important factors to consider during your new home search:

Location

Take a look at the area where the property is located.

Is it close to a school that your kids can attend when they are old enough?

Is there a playground where they can play with their friends?

Are you near any convenient shopping areas or stores for picking up groceries?

Location is one of the most important factors to consider when choosing a place to raise your family.

Neighbors

Take a look at the demographics of the neighborhood.  You may want to spend some time walking the neighborhood and learning about the surrounding area.  

Taking evening walks in the neighborhood might allow you the opportunity to meet other people who are living there and learn what they think is important about the area.

If it has mostly young families around the same age as you, your children will likely have plenty of neighbors to play with as they grow up.

Affordability

You may think that spending as much as you can possibly afford on an expensive home is the best thing for your kids, but you might be wrong.

In fact, you could end up stressed out from working too hard to make your mortgage payments and feel like you never get enough time to spend with your family.

Another option would be to buy a more modest house that you can reasonably afford and have more time with your children.

Choosing the right place to live is difficult. It might take a while to find the right house, but when you do, it will be worth it.

When you do, you will have a wonderful place to fill with love and memories, where your children can grow up in peace and happiness.

If you’ve been seriously contemplating purchasing your first home, or possibly the next home, the best thing you can do is contact a licensed real estate professional to determine what is available in the market that would fit your needs.

Filed Under: Real Estate Tips Tagged With:

What’s Ahead For Mortgage Rates This Week: March 11th, 2013

March 11, 2013 by

What's Ahead For Mortgage Rates This WeekMortgage rates and the major stock market indices rose last week in response to a strong jobs report and lower national unemployment rate.

The Department of Labor’s Non-farm Payrolls report for February surpassed expectations with 236,000 new jobs reported against expectations of 170,000 new jobs expected by Wall Street.

This stronger than expected showing in jobs numbers points to a stronger economy and may lead to less pressure to hold mortgage interest rates lower.

The Dow Jones Index also reached record levels last week. This strong stock market performance is to be expected with better than expected employment reports.

February’s numbers also exceeded January’s reading of 157,000 new jobs added to the economy.

Lower Unemployment Rates Help Economy, May Push Interest Rates Higher

The Unemployment Report for February also provided good news as February’s reading dropped to 7.7 percent from January’s unemployment rate of 7.9 percent.

While good news, it’s important to bear in mind that the Fed has established and unemployment rate of 6.5 percent as a benchmark for ceasing its monetary stimulus program.

The Federal Reserve released its Beige Book Report for March on Wednesday, and summarized reports from its 12 districts by noting modest to moderate economic improvement in 10 districts and slower economic growth in 2 districts.

Residential real estate markets are improving in most districts with home prices rising and inventories of available homes shrinking.

This news, coupled with last week’s rising mortgage rates is further emphasizes the upward trend in home prices in many areas and the rising cost of financing or refinancing a home.

While rising home prices are good for the economy, they impact affordability of homes, particularly for first-time home buyers.

Busy Upcoming Week In Financial News

Next week has a busy calendar of scheduled economic news; here are a few highlights:

  • Tuesday, Wednesday and Thursday: Treasury Auctions
  • Wednesday: Retail Sales, and Retail Sales without Auto Sales
  • Thursday: Producers Price Index (PPI) and Core PPI (PPI without volatile food and energy sectors)
  • Thursday: Weekly Jobless Claims, Consumer Price Index (CPI) and Core CPI (without food and energy sectors)
  • Friday: Consumer Sentiment

It will be interesting to see how or if Consumer Sentiment reacts to recent signs supporting progress toward economic recovery.

If you’ve been watching interest rates to see when the best time is to lock in, this may be a good opportunity.  

As the economy continues to improve, mortgage interest rates will continue an upward climb.

Filed Under: Mortgage Rates Tagged With:

3 Tips To Get The Best Results On Your Mortgage Application

March 8, 2013 by

Home Loan Approval TipsAlthough the financial markets have tightened lending guidelines and financing requirements over the last few years, the right advice when applying for your loan can make a big difference.

Not all loans are approved. And even when they aren’t approved immediately, it doesn’t have to be the end of your real estate dreams.

There are many reasons why a mortgage loan for the purchase of your real estate could be declined.

Here are a few things to understand and prepare for when applying for a mortgage:

Loan-to-Value Ratio

The loan-to-value ratio (LTV) is the percentage of the appraised value of the real estate that you are trying to finance.

For example, if you are trying to finance a home that costs $100,000, and want to borrow $75,000, your LTV is 75%.

Lenders generally don’t like a high LTV ratio. The higher the ratio, the harder it normally is to qualify for a mortgage.

You can positively affect the LTV by saving for a larger down payment.

Credit-to-Debt Ratio

Your credit score can be affected negatively, which in turn affects your mortgage loan if you have a high credit-to-debt ratio.

The ratio is figured by dividing the amount of credit available to you on a credit card or auto loan, and dividing it by how much you are currently owe.

High debt loads make a borrower less attractive to many lenders.

Try to keep your debt to under 50% of what is available to you. Lenders will appreciate it, and you will be more likely to get approved for a mortgage.

No Credit or Bad Credit

Few things can derail your mortgage loan approval like negative credit issues.

Having no credit record can sometimes present as much difficulty with your loan approval as having negative credit.

With no record of timely loan payments in your credit history, a lender is unable to determine your likelihood to repay the new mortgage.

Some lenders and loan programs may consider other records of payment, like utility bills and rent reports from your landlord.

Talk to your loan officer to determine which of these issues might apply to you, and take the steps to correct them.

Then, you can finance the home of your dreams.

Filed Under: Mortgage Guidelines Tagged With:

Look For Improvements In The Real Estate Market In 2013

March 7, 2013 by

Home Prices Improving March 2013The previous couple years’ doom and gloom outlook is looking like it is turning more upbeat and robust for the rest of 2013.

Home Prices Climb Nearly 10% Over Past Year

In fact, a recently released report by CoreLogic stated that home prices were up 9.7 percent from one year previously.

That kind of increase is a very good sign that the momentum may be building for a strong real estate market this year.

Many other economic experts are predicting that things might be improving this year, including increases in both home prices and sales.

Here are some of the ways that these positive changes may impact home buyers and sellers this year.

For Buyers:

Attractive Financing Options

Interest rates could remain at the lowest levels they have been in years, which can make purchasing a home more affordable.

Stiffer Competition

More buyers will be competing for the homes that are available which could mean bidding wars on homes with more than one interested party.

Be sure to take this into consideration before making your offer, and have a licensed real estate professional representing you in your purchase negotiations.

Great Home Prices

Housing remains affordable in many areas of the country. Although home prices are rising, the cost of real estate is well below what it was ten years ago.

And For Sellers:

Marketing Is Vital

Working with a skilled property professional is imperative to ensure the best advertising and marketing for your listing.

Real estate agents have access to the Multiple Listing Service (MLS), which is where other agents and buyers look for properties that are listed and available for purchase.

Contract Negotiations Prevalent

Multiple offers will become more commonplace. Do your research on how to best handle contract negotiations.

Maximize Your Selling Price

Make sure you get the most for your home. Know what other properties are selling for in your neighborhood, and consider hiring a designer to stage your home for showing.

With the real estate market shifting, both buyers and sellers need to be aware of how the changes could affect them.

Whether you’re looking for your dream house or wanting to get the highest return on your home for sale, a great next step would be speaking with a qualified real estate professional.

Filed Under: Housing Analysis Tagged With: