Why Are Mortgage Interest Rates Increasing?
According to Freddie Mac, 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.
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.
Any increase in interest rate will impact your monthly housing costs when you secure a mortgage to buy your home. A recent Wall Street Journal article points out that, “While still only roughly half the average over the past 45 years, according to Freddie Mac, the quick rise has lenders worried that home loans could become more expensive far sooner than anticipated.”
Tom Simons, a Senior Economist at Jefferies LLC, touched on another possible outcome for higher rates:
“First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there’s less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit.”
Bottom Line
Interest rates are impacted by many factors, and even though they have increased recently, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.
Homes Across the Country Are Selling Fast!
Some Highlights:
- The National Association of REALTORS® surveyed their members for the release of their Confidence Index.
- The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.
- Homes sold in 60 days or less in 42 out of 50 states, and Washington D.C.
- Homes sold in 30 days or less in 17 states
Why Waiting Until After the Holidays to Sell Your Home May Not Be the Best Decision
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:
1. Relocation buyers are out there. Companies are not concerned with holiday time and if the buyers have kids, they want them to get into school after the holidays.
2. Purchasers that are looking for a home during the holidays are serious buyers and are ready to buy.
3. You can restrict the showings on your home to the times you want it shown. You will remain in control.
4. Homes show better when decorated for the holidays.
5. There is less competition for you as a seller right now. Let’s take a look at listing inventory as compared to the same time last year:
6. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge reaching new heights in 2017, which will lessen the demand for your house.
Bottom line waiting until after the holidays to sell your home probably doesn’t make sense.
Running out of Kitchen Space? 5 Storage Hacks That Will Help You Do More with Less
With all of the things that you need to fit into the kitchen, being economical with how you use your space can be a very important part of making it work. If you’re looking for some new ideas for how to use your space to maximum capacity, here are some hacks that might just make a marked difference!
1. Make Use of Magnets
Using magnets to hold up some kitchen essentials will not only be effective and functional, it will make for a quirky, modern space with personality. Whether you decide on a magnetized knife block for the side of the fridge or purchase some magnetized spices for easy access, this is a simple trick for storage that goes beyond the fridge.
2. Cue The Cutting Board Cover
One of the biggest problems with a small kitchen is the minimal counter space, but this is an easy problem to solve with a cutting board made to fit over your sink. Instead of having to move around items to make room on your counter, you’ll always have a convenient place to do your chopping that will be handy when you need it.
3. Maximize Your Ceiling Space
Pots and pans can take up a lot of cabinet space, but the purchase of an overhead rack can easily free up some of your shelves for a different use. By hanging pots, pans and even kitchen utensils from a rack, you’ll have a neat modern look that will add a twist on the traditional kitchen.
4. Arrange Your Drawers With Inserts
Everyone is familiar with the kinds of kitchen drawers that are in shambles, full of bottomless utensils that are hard to find when they’re needed. By purchasing a drawer insert, you will be able to organize your utensils according to type and utilize all of the drawer space that’s available.
5. Reconsider The Wine Rack
It’s generally the case that a wine rack is filled with wine bottles, but to add a funky and useful twist to your old rack, consider keeping all kinds of bottles in it. By adding in water bottles, soda, and even certain perishables, you can save room on your shelves and create a statement piece!
It can often seem impossible to make room for everything in a small kitchen, but there are lots of hacks that will free up more space for the items that are required. If you’re currently perusing kitchens on the real estate market, you may want to contact your local real estate professional for more information.
Avoiding Home Buyer Remorse: 5 Tips for a Happier Homeowner
The rush of excitement that comes with finding the home you’ve been looking for is ideal, but just because it seems like the perfect place, it doesn’t mean there aren’t other factors to consider. Instead of getting hit with buyer’s remorse, here are some tips so that your home purchase doesn’t become something you’ll regret.
Forget About The Competition
If you’re contemplating a house and happen to be dragged into a bidding war, it’s important to take a step back and determine if it’s really the right home for you. It can be easy to get carried away and up your offer, but make sure you determine what the home is really worth to you.
Take A Second Look
If you’ve been to a lot of home viewings and have finally found a place you feel good about, it can be easy to overlook the minor details. Instead of trusting your memory, make sure you visit the home a couple of times before putting in an offer so you’ll be aware of any major flaws you might have missed the first time around.
Visit The Neighborhood
The instant appeal of a home that seems perfect for your family can be unexpected, but it’s worth considering the neighborhood you’re going to be living in to ensure it’s livable. A home is one thing, but local amenities and an area your family feels comfortable will come to be equally important.
Avoid A Fixer-Upper
The kind of home you can fix up might make for a fun project for the DIY person, but biting off more than you can chew in an effort to save can be a mistake. A few small renovations may not be a big issue, but a home that needs a lot of changes will likely end up being more of a burden once the deal is sealed.
Stick To Your Purchase Price
Many people get so overwhelmed when they find a unique place to settle that their price point flies out the window. However, instead of making allowances for a purchase price you can’t really swing, keep what’s affordable in mind and be sure you don’t veer too far above it.
It can be exciting to find the kind of home you’re looking for in a center you love, but it’s important to pay a price that’s affordable and get the home you really want. If you’re currently looking for real estate options in your area, please contact myself or someone on our team for more information.
Knocking down Walls: Why Investing in an Open Concept Could Increase Your Home’s Value
While home design concepts go in and out of style all the time, the open home concept has remained an elegant go-to for those who enjoy the simplicity of the modern aesthetic. If you’re ready to take the sledgehammer to your walls and swing into an open concept space, here are a few reasons this may make your home look better to potential buyers.
A Hotspot For Family And Friends
It’s great to take the whole family out for dinner or meet your friends at the pub, but a home with an open concept kitchen can be an even better way to get everyone together. With all of the flexibility and space that this type of layout affords, it can attract many types of buyers who will look forward to using it for barbecues, dinner parties and many other fun events.
The Perks Of Natural Lighting
There are few things that will impact the overall look of a room like lighting, and with a little less wall your home will easily draw the best of natural light in. While you’ll want to choose your furnishings and decorations carefully to effectively enhance the look of your space, an open concept space that’s illuminated perfectly will surprise you with the kind of positive response it will get.
A Designer Look
Open concept can come to mean many different things depending on who’s designing it, but with the appropriate flooring and right lighting, this type of home can go from accessible to elegant without too much fuss. With the clean lines and simple approach that can push open concept into architectural piece, this can easily bump up the price that potential buyers are willing to pay.
It’s Left Up To Imagination
Many homeowners expect their dream home to reach out and grab them, but there are also those who won’t mind letting their imagination run wild with the possibilities. While a house with many walls can put a damper on creative thought, an open concept space may be the ideal purchase for those who are interested in reimagining your home for themselves.
There are differently designed homes available for every kind of homeowner, but an open concept can be the kind of real estate purchase that never goes out of style. If you’re on the market for an open concept and are curious about your options, please contact us today for more information or to get a tour pf property’s that meet this criteria in your desired location.
Understanding Valuations and How a Real Estate Agent Can Determine Your Home’s Value
If you are thinking about listing your home for sale, one of the biggest factors that may be holding you back from pulling the trigger on this decision is the value of your home. You may have a decent idea about the value of your home by researching other listings in your community, but you may not be able to pinpoint a fair asking price that would get your home sold quickly without leaving money on the table. The only true way to determine the valuation of your home is to do extensive research of 15-25 Active, Pending and Sold homes in your property’s general area. Once the homes have been selected, upwards of 150 adjustments will be made by your experienced Real Estate professional to arrive at the fair market value opinion. There are no shortcuts and you must have an agent who understands this process to complete the report with precision and to ensure you sell for the most money. The fact is that by choosing a knowledgeable real estate agent, you will receive an accurate valuation up-front, and this can help you to make a more informed decision. There are several components to the valuation which help determine your homes value that you may need to know more about. Here are a few.
The Layout Of The Home
When a real estate agent is preparing a market valuation, he or she will initially tour your home to get a feel for the layout. Factors like the number of bedrooms and bathrooms, the size of the living areas, if the kitchen is closed off or open to the home and more will all impact desirability and therefore value. Because of this, it is not always easy for a homeowner to determine value with accuracy, and the insight of a knowledgeable and experienced agent is important.
The Square Footage Of The Home
Your real estate agent will know the average price per square foot of homes in the area, and this price per square foot can be applied to your own home. However, keep in mind that there is a difference based on one or two-story homes. Generally, one-story homes will have a higher price per square foot than two-story homes. Other factors such as the condition of the home and special features will come into play.
The Condition And Special Features
When you receive a valuation for your home, the real estate agent will give you additional value for special features that have broad market appeal or for an improved condition over other homes in the community. For example, if your home is in an older community and you have recently updated the kitchen, you may have a value based on a higher price per square foot than other homes in your area.
The fact is that the average price per square foot of similar homes in the area will come into play for your valuation, but there are several adjustments both positive and negative, made for different features and for the condition of the home. For a FREE full market analysis and pricing report, please contact me at your convenience to schedule a time that I can view your home. Whether you are planning to sell your home now or not, I am happy to complete the report for you so you can feel confident in whatever decision you choose.
A Guide to Financing Home Improvements and How Mortgage Refinancing Can Help
If you’re planning to remodel or renovate your home in the near future – whether to provide a better living environment or as part of a house flip – you’ll need to find a way to pay for your home improvements. There are several different possible sources of renovation money, each with their own advantages and disadvantages. One option that is gaining popularity is mortgage refinancing.
How does mortgage refinancing work, and how does it compare to other renovation financing options? How can you use a mortgage refinance to get the most out of your renovation? Here’s what you need to know.
Home Improvement Investments: Which Renovations Generate The Best Returns?
If you’re considering a mortgage refinance in order to fund your home improvements, you’ll want to concentrate on doing renovations that increase your home’s value. Otherwise, you’ll be taking on more debt without gaining anything in return.
If you want to max out your return on investment, re-finishing your kitchen is your best strategy. Remodeling Magazine’s annual cost-to-value renovation analysis shows that new appliances, a new coat of paint, and new surface finishes in the kitchen generate the biggest returns. Meanwhile, swimming pools and home offices tend to generate the lowest returns because they appeal only to a select group of buyers.
Your Options For Financing Home Improvement Projects
Financing for a home improvement project is a critical consideration. Unless you can afford to pay $20,000 out of pocket for a remodeling project, you’ll need to secure financing of some sort.
Your options for home improvement financing include home equity lines of credit, renovation mortgages, and refinancing. A HELOC may not be an ideal solution, as repayment requires discipline, while a renovation mortgage (or home renovation loan) is typically used only for foreclosures and other properties requiring major renovation work.
Mortgage Refinancing: A Smart Option For Savvy Borrowers
If you’re looking to simply make improvements to your existing home, a mortgage refinance is likely your best option. A straight refinance gives you a lump sum of cash that you can use to pay for renovations upfront.
There’s also a “refinance plus improvements” arrangement, which can provide you with extra capital as you need it. Under this model, you can get up to 80% of your home’s post-renovation appraisal value – however, you’ll only get the money as the renovations are completed and inspected. With a straight refinance, you’re not out of pocket for any length of time.
Making smart home improvements is a great way to boost your home’s value and improve your living conditions. An experienced mortgage professional can help you to find financing for those renovations without a hassle. For more information on what renovations can be done to increase the value of your home and to be connected with a trusted and excellent mortgage professional to help you secure your financing, please contact me.
Home Staging: How to Stage Your Home to Appeal to Your Buyer’s Senses
Home Staging: How to Stage Your Home to Appeal to Your Buyer’s Senses
There are many great ways to stage your home that will immediately interest viewers, but some have the power to engage the senses and impress potential buyers all the more. Whether you’ve already put your home on the market or are looking for insider tips when you do, here are some ways to sway the eyes, ears and noses of the buyers you’re looking for.
Textures And Fabrics That Compliment
There is probably a certain kind of buyer you’ll have in mind when deciding to stage your home, so it’s important to keep in mind how your house might appear to them. While differing textures and fabrics can certainly add depth and character to a home, you’ll want to ensure that they are also flattering to each other and compliment the style already apparent in your design aesthetic.
Keep It Clutter Free And Clean
Few things are more likely to assault the eye of a potential buyer than a house that is full of trinkets and general clutter. Instead of leaving it up to the viewer to unearth what’s great about your property, be sure to do a cleanup beforehand and walk into your house as if you’re seeing it for the first time. If your eye gets caught on a pile of magazines or the gadgets left in the front entrance, it may be a good idea to clear some of it away.
Whip Up A Batch Of Baked Goods
Most buyers will be drawn into a home if they can imagine themselves in it, and few things will have a more positive effect than the way that it smells. Instead of using an air freshener, go for the naturally baked scent of a batch of cookies or muffins to provide the sense of something homemade. If your potential buyers are bakers, they will instantly be able to imagine themselves in your home; if not, they’ll be tempted by it either way.
It certainly helps the market value of your home to have an organized exterior and an up-to-date kitchen, but drawing a potential buyer’s senses into the mix can have a particularly positive impact on their interest level. It may even lead to a sale at the price you were looking for! If you would like to know more about staging or preparing your home for sale, please contact us for more information. Information is always FREE and we are always happy to help!
$500 Renovations That Will Boost Your Home’s Value and Speed Up Your Sale
$500 Renovations That Will Boost Your Home’s Value and Speed Up Your Sale
The idea of home renovations when you’re selling your home can be unpopular because of the cost and time that can go into sprucing up a place you’re about to leave behind. However, making a few simple, economical touches can go a long way to capitalizing on your home’s value and making a difference in dollars. If you’re curious about cheap options for an easier sale, here are a few that may make the deal a little sweeter.
Kick Up The Kitchen A Notch
With all of the time that a family spends in the kitchen, it’s unsurprising that it is fast becoming one of the most important features that go into a potential buyer’s interest in a home. For less than a thousand, you may want to consider an upgraded appliance that will serve as a sparkly new selling feature or even some slightly revamped cabinet fronts that will keep the price down and the look up-to-date.
A Little Bathroom Fix-Up
With the bathroom being one of the smallest spaces in any home, it can be hard to know how to properly enhance this minimal space for maximum effect. Instead of re-doing the floor or the tub, consider the basic cost of a new light fixture and an updated mirror. Simply updating these two items will completely shift the look of an aging bathroom.
Clean Up The Carpet
With carpet making a bit of a comeback, it’s certainly not going to be worth your while to replace any damage it’s incurred before leaving your home. Instead of leaving things to chance, though, consider a relatively economical carpet cleaning that will drastically improve the look of your carpet and may convince potential buyers it’s less worn than it is.
Lighting Is Everything
There are few things that can lend or detract from the look of a room more than the lighting you choose. While you may want to consider a new, nice fixture to change up your living room, kitchen or foyer area, a shade of light that is complimentary to the space it’s illuminating will have more of an impact than anything on how your home is viewed.
Renovations may seem like unnecessary work if you’re planning on selling your home in the near future, but some minor upgrades can make a huge difference on the price tag that your home sale will pull in. If you’re wondering about home upgrades and other factors that will be considered in selling your home, please contact me anytime to discuss what can be done to your home to maximize the marketability and final sales price.