Fed raises interest rates by .25%

I am sure by now you have heard that the Federal Reserve has raised the interest rate by .25%.  This is the first increase since June of 2006 and is their first move since the financial crisis.  This move shows that the Fed has confidence in the economy and that it will have a positive effect on the economy as a whole.

How will this effect the housing industry?   This most likely will have a negative impact on the mortgage side with people who have an adjustable rate mortgage and equity lines of credit.  It should however, move many people off the fence who have been considering buying a home, which is good news for both sellers and the housing industry as a whole.

Experts say this will be a slow change and not have an immediate impact.  They also expect several more rate hikes in 2016, which will be very gradual so as not to harm the industry or the economy.

A quarter of a percentage point increase in rates adds about $43.00 a month with a $300,000 mortgage and a rate of 3.75%.  Hopefully this puts it into perspective regarding the increase.  This is a good time to check with your lender about the amount of increase and how this effects your loan payments.  Its always smart to discuss these details with your lender and any fluctuations in rates so you know exactly what you will be paying monthly.  We have great lenders that we would be happy to refer to you if you have any questions.

Here is a link for more information on the Federal Reserve:

Federal Reserve

Take care

Michelle and Heidi

www.bellacasateam.com

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This Week in Real Estate

Good Morning!

Home values received significant attention nationally This Week in Real Estate. Many outlets reporting that home values have now eclipsed the peak values reached during the mid-2000 boom. Below are a few of the highlights from the last week in October that influence the real estate market:

Home Values Climb Beyond Last Decade’s Best, Then Keep Going. After 8 years, home values hit new record. U.S. home values rose through the summer months and have now eclipsed the nation’s peak home valuations, set in early 2007. The Home Price Index, which is published by the Federal Housing Finance Agency (FHFA), shows U.S. property values up another 0.3 percent in August, adding to consecutive month win-streak which has now reached 21 months nationwide. Home values are up 5.5% from last year and market fundamentals remain strong. In August 2015, the Home Price Index climbed to 224.9, the highest published reading of all-time, eclipsing last decade’s peak of 224.0 set in April 2007. Full Story… http://themortgagereports.com/18387/fhfa-home-values-hpi-mortages

U.S. Home Values and Rents Defying Global Slowdown. Home values and rental prices are steadily rising, fueled by strong demand and a tight supply of available properties, a pair of reports Tuesday showed. The Standard & Poor’s/Case-Shiller 20-city home price index climbed 5.1 percent in the 12 months that ended in August – a level many economists view as more sustainable than the sharp double-digit gains at the start of 2014. For now, homes in tech hubs with a high concentration of good-paying jobs appear to be the main beneficiaries of rising prices. S&P reported that San Francisco and Denver both enjoyed a 10.7 percent year-over-year jump in home values, the largest of any city. Portland, Oregon’s annual gain of 9.4 percent was the third-largest. “Prices are rising the fastest in markets where job growth and net migration are the strongest and inventories are the tightest,” said Mark Vitner, an economist at Wells Fargo Securities. Full Story… http://abcnews.go.com/Business/wireStory/strong-sales-lift-us-home-prices-51-percent-34759996

* Housing Recovery to Pick Up Steam in 2016, but Challenges Remain. Steady employment and economic growth, pent-up demand, affordable home prices and attractive mortgage rates will keep the housing market on a gradual upward trend in 2016. However, persistent headwinds related to shortages and availability of lots and labor, along with rising material prices are impeding a more robust recovery. “This recovery is all about jobs,” said NAHB Chief Economist David Crowe. The good news, Crowe added, is that total U.S. employment of 142 million is now well above the previous peak of 138 million that occurred in 2008. Meanwhile, home equity has nearly doubled since 2011 and now stands at $12.5 trillion. The NAHB is projecting 719,000 single-family starts in 2015, up 11 percent from 647,000 units produced last year. Single-family production is projected to increase an additional 27 percent in 2016 to 914,000 units. Full Story… http://www.nahb.org/en/news-and-publications/Press-Releases/2015/october/housing-recovery-to-pick-up-steam-in-2016-but-challenges-remain.aspx

* Revised 2015 Origination Totals Equal Good News For Mortgage Lender. The mortgage market is still showing subtle signs of strength, beating original expectations for the year. For starters, the $253 billion in purchase originations in the second quarter of this year represents the strongest single quarter for industry originations since 3Q07. The Mortgage Bankers Association (MBA) recently forecasted a 7% increase in mortgage originations in 2015, growing to $1.19 trillion, with purchase originations rising 15% to $731 billion in 2015, and refinance originations decreasing 3% to $457 billion. As for next year, during a press conference at its annual meeting in San Diego, the MBA said it expects a 10% increase in purchase mortgage originations next year compared to 2015. Full Story… http://www.housingwire.com/articles/35494-revised-2015-origination-totals-equal-good-news-for-lenders

If you want to have a conversation about the local market contact us at mmarlahan@bhhsnw.com or 360-907-7707.

Michelle Marlahan & Heidi Gowing

http://www.bellacasateam.com

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First Time Home Buyers, Millennials, Ready to Buy?

The year is starting off very positive in the Real Estate industry. On a local level, clark county is seeing healthy growth. Listings are up around 10% and pending sales up 24.4% and closed sales 23.7% compared with 2014! We are working with many buyers who are having a difficult time finding a home because of the low inventory levels. According to this article from Fiscal Times, by Marine Cole, the buyer activity has improved compared with last year:

Agents at the real estate brokerage Redfin report seeing some positive signs. In the first three weeks of January, the RSVPs to the company’s home-buying classes were up 27 percent, compared to the same period last year.

Also, in the week of January 12th, 57 percent of Redfin home tours were taken by potential first-time buyers. That’s up from 31 percent the week before and from 48 percent during the same week in 2104.

Related: The Most Expensive Condo Ever Sold in New York: $100.5 Million

“It’s the highest rate of first-timers touring we’ve seen since the end of 2012,” a Redfin spokesperson said.

Certainly many first-time homebuyers (most of whom are millennials) are in better financial shape than they were a year ago. The job market improved significantly in 2014, with three million new jobs created (700,000 more than the previous year), and employment among those between the ages of 25 and 34 has gone up.

Yet many millennials are still struggling to make ends meet, with large student debt loads hanging over their heads. Flat income growth has also been a problem, as has fierce competition for homes in the entry-level price range. This group is also more likely to remain single longer – which potentially reduces their purchasing power.

Related: Obama’s Housing Programs Still More Hype Than Help

Still, many admit to feeling more financially stable than they did a year ago, a report released Monday by Bankrate said. “Millennials have the highest instance of all age groups of noting improved conditions,” the company noted in a release.

Regulators pushed hard last year to pass measures that make it easier to obtain a mortgage, especially for young first-time buyers. Down payment requirements for first-time buyers were lowered from 5 percent to 3 percent – with the caveat that loans acquired through Fannie Mae and Freddie Mac require the borrower to take part in an education program. There are additional requirements as well, including having private mortgage insurance.

The White House also said at the beginning of 2015 that it plans to reduce government mortgage insurance premiums to make homeownership more affordable for low-income Americans.

Interest rates, of course, continue to be low. The rate on a 30-year fixed-rate mortgage has been hovering between 3.58 percent and 3.83 percent, which is near 20-month lows, Zillow Mortgage Rate Ticker reports. Even if the Federal Reserve starts hiking rates later this year, experts say the impact on mortgage rates would be slow and gradual.

Homebuilders are also making first-time buyers a priority: To cater to this group, builders are constructing slightly smaller homes in 2015, helping the affordability issue at least a little for newbie buyers.

Please contact us about any questions regarding the market. We are happy to help! If you are a seller thinking of selling, please go to www.BellaCasaTeam.SmartHomePrice.com for a value on your property. We can then provide a detailed, custom report if you are thinking of selling.

Sincerely,
Michelle Marlahan
Heidi Gowing
http://www.bellacasateam.com

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Housing survey outcome

A recent survey by Zillow that interviewed 107 panelists about when they expect the U.S. housing market to normalize. 30% of panelists said they expected the market to stabilize one to two years from now, 40% said it would take 3-5 years and 20% said it will within the next 12 months.

According to a recent survey by Zillow (Z) that interviewed 107 panelists, shifting demographics and would-be first-time homebuyers financially ill-prepared to buy will continue to hold back the housing market over the next several years.

“We’ve reached a point in the recovery where the only real cure-all is time,” said Zillow Chief Economist Stan Humphries. “The market remains very challenging for younger, first-time homebuyers who face an uphill battle saving for a down payment, qualifying for a mortgage and finding an affordable home to buy.”

Then at the other side of the age spectrum, many older homeowners are trapped underwater or are unable to find buyers for their homes.

But Humphries noted that it is not all bad news. “The landscape is slowly changing, as incomes begin to grow, negative equity fades and new households start to form. These shifts won’t occur overnight, but they are happening. Patience will be a virtue over the next few years as we wait for these traditional fundamentals to more fully take hold in the market,” he explained.

Additionally, panelists said they expect U.S. median home values to rise 4.8% in 2014, on average, to $176,760, and another 3.7% in 2015.

“The expert consensus calls for only a marginal increase in home values nationally for the remainder of 2014, and a leveling-off of annual increases through 2019,” said Terry Loebs, founder of Pulsenomics, which conducted the survey.

“The 3.7% average annual appreciation rate expected by the panel for 2015 represents a 20% drop from the rate expected for this year. Although this projected decline is significant, it’s a less dramatic call compared to that made by our panelists one year ago, when they correctly anticipated a much larger change from 2013’s 7.3% home value appreciation rate by projecting 4.3% for 2014,” Loebs explained.

On a local level, Clark County saw a 9.4% price increase for the 10 month period, with a average price of $273,900. It was the strongest October in closed sales since 2005! Overall, there is a 3.4 month worth of supply for the month of October.

If you would like a area specific analysis, please contact us at 360-907-7707 or mmarlahan@bhhsnw.com or http://www.bellacasateam.com.

Housing Wire, Brena Swanson, November 11, 2014

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Getting the most for your money when buying a home

Visit http://www.bellacasateam.com for more articles like this.

Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

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Mortgage rates increase

Mortgage rates moved away from last week’s yearly lows and slightly increased across the board, Freddie Mac’s Primary Mortgage Market Survey said.

The 30-year, fixed-rate mortgage averaged 3.98% for the week ended Oct. 30, barely up from last week’s 3.92%. A year ago, the 30-year, FRM came in at 4.10%.

In addition, the 15-yr, FRM jumped from 3.08% last week to 3.13% this week, but still is down from 3.20% a year ago.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage increased to 2.94%, up from 2.91% a week prior and 2.96% a year ago.

The 1-year Treasury-indexed ARM slightly escalated to 2.43%, compared to 2.41% the previous week. In 2013, the 1-year, Treasury was 2.51%.

“Mortgage rates grew across the board this week, rebounding from the lowest rates of the year. New home sales grew at an annual rate of 467,000 sales in September, the fastest rate observed during the recovery,” said Frank Nothaft, vice president and chief economist with Freddie Mac.

“Meanwhile, the National S&P Case-Shiller House Price Index grew at a seasonally adjusted annual rate of 0.4 percent in August,” he added.

Bankrate also reported a rise in rates, with the 30-year, FRM rising to 4.10%, up from 4.05% last week.

The 15-year, FRM grew to 3.27%, up from 3.21%, while the 5/1 ARM increased to 3.17%, up from 3.14%.

If you want to discuss the interest rates and housing market further,  please don’t hesitate to contact us.

Michelle & Heidi

Bellacasa Team

http://www.bellacasateam.com

October 30, 2014
Housing Wire
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Fall Maintenance Checklist

  • Here’s an informative article about the maintenance items that need to be done on your home before winter.  Get out there while the weather is still nice!

  • Fall Maintenance Checklist

    You’ll be ready for winter’s worst and head off expensive repairs when you complete this checklist of 10 essential fall maintenance tasks. Read

Visit www.bellacasateam.com for more articles like this.

Copyright 2014 NATIONAL ASSOCIATION OF REALTORS®

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