Archive for January, 2022

What’s Ahead For Mortgage Rates This Week – January 31, 2022

Posted in Financial Reports by Michigan Real Estate Expert on January 31st, 2022

What's Ahead For Mortgage Rates This Week - January 31, 2022Last week’s economic reporting included readings from S&P Case Shiller Home Price Indices and the FHFA on home prices, data on new home sales, and the Federal Reserve’s statement on the federal interest rate range. The University of Michigan released its monthly survey on Consumer Sentiment and weekly readings on mortgage rates and jobless claims were also published.

S&P Case-Shiller Home Price Indices: Home Price Growth Slows in November

Home prices rose at a seasonally-adjusted annual pace of 18.80 percent in November according to S&P Case-Shiller’s National Home Price Index. The 20-City Home Price Index, which is frequently used by real estate pros, reported that Phoenix, Arizona home prices rose by 32.20 percent year-over-year. Tampa, Florida home prices rose by 29 percent, and Miami, Florida home prices rose by 26.60 percent.

The Federal Housing Finance Agency, which tracks data on homes owned and financed by Fannie Mae and Freddie Mac, reported  17.50 percent year-over-year growth in home prices in November as compared to October’s reading of 17.40 percent.

New homes sold at an annual pace of 811,000 sales in December; analysts expected a reading of 757,000 sales. New homes sold at a pace of 725,000 sales year-over-year in November.

Fed Leaves Key Interest Rate Unchanged, Hints at Raising Rates in 2022

The Federal Open Market Committee of the Federal Reserve announced that it did not raise the key federal funds rate range of 0.00 to 0.25 percent, but indicated future rate increases would be used to control inflation. Combined impacts of rapidly rising home prices and mortgage rates presented challenges to first-time and moderate-income home buyers, but the median price of a single-family home fell to $377,700 in December.

Mortgage Rates, Jobless Claims Mixed

Freddie Mac reported little change in mortgage rates last week as the average rate for 30-year fixed-rate mortgages dropped by one basis point to 3.55 percent. The average rate for 15-year fixed-rate mortgages rose by one basis point to 2.80 percent. Rates for 5/1 adjustable rate mortgages averaged 2.70 percent and 10 basis points higher than in the previous week. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.20 percent.

Initial jobless claims fell to 260,000 new claims filed as compared to the previous week’s reading of 290,000 first-time claims filed. Continuing jobless claims rose to 1.68 million claims filed from the prior week’s reading of 1.62 million ongoing claims filed 

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending, job openings and quits, public and private sector jobs growth, and the national unemployment rate. Weekly reports on mortgage rates and jobless claims will also be published.

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Case-Shiller: Home Price Growth Slows in November

Posted in Financial Reports by Michigan Real Estate Expert on January 28th, 2022

Case-Shiller: Home Price Growth Slows in NovemberS&P Case-Shiller Home Price Indices reported slower home price growth in November. Rising mortgage rates and high home prices sidelined first-time and moderate-income buyers and investors who fear buying at the peak of today’s housing markets only to face lower home values when home prices cool off.

November’s National Home Price Index reported a year-over-year gain of 18.80 percent in home prices year-over-year. The 20-City Home Price Index, which, real estate pros frequently use to estimate home pricing trends, reported that U.S. home prices rose 18.30 percent year-over-year in November.

20-City Home Price Index: Arizona and Florida Post Top Gains in Home Prices

Home prices in the Phoenix, Arizona metro area rose by 32.2 percent year-over-year in November. Tampa, Florida followed with year-over-year home price growth of 29.0 percent. Miami, Florida held third place in the Case-Shiller 20-City Home Price Index with year-over-year home price growth of 26.6 percent.

The covid pandemic influenced home buying trends in multiple ways. Closures of workspaces, loss of childcare options and local restrictions and regulations designed to prevent the spread of covid caused many people to seek alternatives to commuting to work. Working from home allowed homeowners to transition from daily commutes to work to buying bigger homes to accommodate changing family and work needs.

Covid influenced many home buyers to look for homes in less-congested metro areas; Metro areas in the mountain west have grown as buyers from congested coastal metro areas bought homes in less populated areas in states including Arizona, Colorado, and Idaho.

Rising Home Prices and Mortgage Rates Impact Affordability

Rapidly rising home prices, buyer competition, and higher mortgage rates continued to challenge first-time and moderate-income home buyers, but demand for homes remains high. Analysts expect high demand and short supplies of available homes will continue to dominate housing markets in 2022.

The Naples, Florida metro area held first place in a survey of emerging housing markets; the North-Port, Sarasota, and Bradenton, Florida metro areas held second place in emerging markets. International buyers and vacation rentals are driving home sales as covid-related travel restrictions are lifted.

Metro areas including Raleigh, North Carolina, and Fort Wayne, Indiana held their own among popular vacation destinations. Foreign-born home buyers are returning to U.S. housing markets from covid-related travel restrictions. Danielle Hale, the chief economist at Realtor.com, said: “The idea that people are traveling more and that borders are a little bit more open than they were gives  international buyers the confidence to get [into the housing market.] We do see an increase in international shopping within a lot of these areas.”

Emerging real estate markets and recovery of formerly stable housing markets indicate that the worst effects of the pandemic are easing but the quick spread of covid’s omicron variant suggests that complete economic recovery from the pandemic is a gradual process. 

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Owning A Home Can Contribute To A Retirement Portfolio

Posted in Real Estate by Michigan Real Estate Expert on January 27th, 2022

Owning A Home Can Contribute To A Retirement PortfolioMany people dream of retiring one day, and there are numerous assets that contribute to that retirement goal. Social security, pension plans, and savings accounts have traditionally provided assets people use to enjoy their retirement; however, this traditional plan ignores one of the most valuable assets. Owning a home can contribute significantly to someone’s retirement goals; however, it is important to have a firm plan in place to make those retirement dreams come true. There are several ways a home can play an important role in that plan. 

The Value Of A House Traditionally Increases Over Time

Many people who purchase a home take out a fixed-rate, 30-year mortgage. Then, if they stay in their house long enough, they might have it completely paid off by the time they retire. When someone owns a house outright, they can sell it and use the value of that home to fund their retirement or purchase another house. If they don’t feel like moving, they might take out a home equity line of credit to generate more income and fund their retirement. 

Too Many People Overlook The Value Of A Home

Even though owning a home is a great way to build wealth, a lot of people overlook the value of a home with respect to retirement. Many people are taking on much more debt than they did in the past. This is making it more difficult for people to purchase a home. As a result, it might take longer for someone to pay off their home, making it harder to retire one day. That is why it is critical for people to think about purchasing a house as early as possible. That way, they have more time to build their assets, compound their wealth, and pay off the home. 

Retirement Dreams Require Diversification

Ultimately, those who dream of retiring one day need to focus on diversifying their assets. Even though traditional retirement plans are helpful, it is also critical to think about the value of real estate. It can make a significant difference to the totality of a retirement plan.

 

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What Are The Advantages Of Owning A Multifamily Property?

Posted in Real Estate by Michigan Real Estate Expert on January 26th, 2022

What Are The Advantages Of Owning A Multifamily Property?It is important for everyone to diversify their investments. One of the ways to do so is to invest in real estate. There are numerous types of properties, and one of the most attractive options is a multifamily property. Even though it might seem like a challenge to manage such a large property, there are several benefits of multifamily properties everyone should keep in mind. 

Hiring A Property Manager

One of the first advantages of purchasing a multifamily property is the potential to hire a property manager. With more families living in the building, it might be worth it to pay a property manager to handle a lot of the day-to-day tasks. Residents might have questions, and property maintenance is critical. The right property manager can handle a lot of these responsibilities. 

Generating Passive Income

By hiring a property manager, it is possible for real estate investors to generate passive income. With the property manager handling just about everything, real estate investors will be free to work another job, identify other properties, or focus on their retirement. This passive income can be used to cover mortgage payments, real estate taxes, and homeowners’ insurance. A smart investor might even use the income generated from this property to purchase another one, starting the cycle again. 

Taking Advantage Of Tax Write-Offs

It is true that there are a lot of expenses that come with owning a multi-family property. Examples include maintenance expenses, repair bills, insurance premiums, real estate taxes, and marketing costs. Fortunately, a lot of these expenses could be tax-deductible. This could save property owners a significant amount of money. Of course, anyone who is interested in exploring the tax advantages that come with owning a multi-family property should reach out to an experienced tax professional for assistance. 

Consider Owning A Multifamily Property

These are just a few of the many advantages that come with owning a multifamily property. Even though there might be a larger upfront expense, there are numerous advantages that a multifamily property might provide. There are potential tax advantages, an opportunity to delegate responsibility, and a consistent flow of passive income. Those interested in real estate investing should explore the opportunities afforded by multifamily housing.

 

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How to Determine How Big of a Down Payment You Need

Posted in Home Buyer Tips by Michigan Real Estate Expert on January 25th, 2022

5, 10, 20 Percent or More? How to Determine How Big of a Down Payment You NeedWhether or not you’re new to real estate, there’s little doubt that you’ve heard the term down payment as it relates to purchasing a home. There’s a lot of different information out there in regards to how much this figure should be and it can be hard to determine exactly what the importance of this payment is. If you’re trying to determine the ideal amount to put down, here are some things to consider.

Explaining Down Payments And Why They’re Important

The down payment is probably one of the largest single payments you’ll make for anything, and this is why so many people save for years. When you buy a home, the down payment is the amount of money that goes into the initial home investment, and this is taken off of the cost of the house. In essence, while this money qualifies as an asset, it is tied up in paying off the total cost of your home.

The Differing Amounts For Down Payments

It’s often the case that many figures are thrown around in regards to the ideal down payment percentage, and they generally vary from 3-20% of the home’s cost. If you are paying a percentage on the low side of the scale, this can unfortunately mean that you will have fewer mortgage options and will be stuck with an increased interest rate. The amount you should pay depends on your financial health and purchasing commitment, but the larger the down payment is, the more minimal your monthly payments will be.

Deciding The Perfect Percentage

Saving up 20% of a home’s total price may seem like a lot of time and effort, but this can be the ideal amount to put down. In addition to lowered monthly payments and a better interest rate, you’ll also be able to avoid Private Mortgage Insurance (PMI), which is required if you put down less than 20%. There is no right answer to the question of how much to put towards a down payment, but you may end up spending less in the long run if you can invest more in the beginning.

There are many figures thrown around when it comes to real estate, but the amount of a down payment should be economically feasible for you and enable you to make your monthly payments consistently. If you’re planning on purchasing soon and are looking for home options, you may want to contact one of our local real estate professionals for more information.

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What’s Ahead For Mortgage Rates This Week – January 24, 2022

Posted in Financial Reports by Michigan Real Estate Expert on January 24th, 2022

What's Ahead For Mortgage Rates This Week - January 24, 2022Last week’s economic reports included readings from the National Association of Home Builders on housing markets, Commerce Department data on building permits issued, and housing starts. The National Association of Realtors® reported on sales of previously-owned homes. Weekly reports on mortgage rates and jobless claims were also released.

National Association of Home Builders: Builder Confidence Falls One Point

Supply chain issues and rising inflation concerned builders surveyed about housing market conditions in January. The National Association of Home Builders reported an index reading of 83 as compared to December’s reading of 84. While any reading over 50 is considered positive, January’s dip in builder confidence was the first decline in four months.

Component readings for the Housing Market Index also showed a slowing trend. Builder confidence in current housing market conditions was unchanged at an index reading of 90; builder confidence in housing market conditions over the next six months fell two points to 83. Builder confidence in buyer traffic in new single-family housing developments also fell by two points to 69.

NAHB Chairman Chuck Fowke said, “NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19 percent since December 2020.” Softwood lumber prices rose approximately 85 percent in the last three months according to trade publication Random Lengths. Analysts said that tariffs and labor shortages have also added to the cost of residential home building.

Commerce Department readings on building permits issued and housing starts were higher in December/ 1.87 million building permits were issued on a seasonally-adjusted annual basis as compared to November’s reading of 1.72 million building permits issued. Housing starts also increased with 1.70 million starts reported as compared to November’s reading of 1.68 million housing starts. Analysts expected a seasonally-adjusted annual reading of 1.65 million single-family starts.

The National Association of Realtors® reported December’space of 6.18 million previously-owned homes sold on a seasonally-adjusted annual basis. Analysts expected 6.48 million sales, which matched November’s reading.

Mortgage Rates, Jobless Claims Rise

Mortgage rates rose last week as the average rate for 30-year fixed-rate mortgages rose by 11 basis points to 3.56 percent. The average rate for 15-year fixed-rate mortgages was 17 basis points higher at 2.79 percent. Rates for 5/1 adjustable rate mortgages averaged 2.60 percent and 31 basis points higher. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year  fixed-rate mortgages. Basis points for 5/1 adjustable rate mortgages averaged 0.30 percent. Rising mortgage rates, high demand for homes, and buyer competition continued to present challenges for first-time and moderate-income home buyers. 

286,000 initial jobless claims were filed last week and exceeded expectations of 225,000 new claims filed and the prior week’s reading of 231,000 first-time claims filed. 1.64 million continuing claims were filed as compared to the previous week’s reading of 1.55 million ongoing claims filed. 

What’s Ahead

This week’s scheduled economic reporting includes readings from S&P Case-Shiller Home Price Indices, the Federal Reserve’s Federal Open Market Committee statement, and Fed Chair Jerome Powell’s press conference. Readings on pending home sales, inflation, and consumer sentiment are also expected Weekly readings on mortgage rates and jobless claims will also be released.

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Housing Needs May Change Following Retirement

Posted in Real Estate by Michigan Real Estate Expert on January 21st, 2022

Life has changed for a lot of people during the past few years. Some people reached retirement age while other people decided to retire early due to other reasons. As the baby boomer generation reaches retirement age, millions more people are going to retire during the next few years. As a result, they might be thinking about moving to make some of their dreams come true. At the same time, retirement might change what people need in a home. What are some of the most important factors retirees need to consider when looking for a home? 

Moving Closer To Loved Ones

Location remains one of the most important factors when looking for a new home; however, retirees no longer need to live close to work if they are no longer fully employed. Therefore, it might be time to look for a home closer to loved ones. Retirees can use the equity in their current house, along with its appreciated value, to power a move closer to loved ones. 

A Smaller Home

While not all retirees want to downsize, a lot of retirees decide to purchase a smaller home. With the kids out of the house, it might be easier to take care of a smaller home. Retirees should consider the maintenance required before purchasing it. Furthermore, some retirees may not want to purchase a house with stairs in it because stairs may become more difficult as they get older. 

A House Meant For Retirees

Finally, those retiring might be looking for a house meant for retirees. For example, they might be looking for a home in a retirement community. Or, they might be looking for a house where the light switches, sinks, and toilets are a bit lower, making them easier for older people to access. Retirees might also be looking for homes with seats in the shower, grab bars next to the tub, and other features designed for elderly individuals.

Work With A Real Estate Professional

Retirement is a goal for many people, and retiring might mean that housing needs change. Anyone looking to move should work with a real estate professional who can help them navigate the real estate market and find the right house to meet their needs. 

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Condo Vs House: Which Is Best For Your Lifestyle?

Posted in Home Buyer Tips by Michigan Real Estate Expert on January 20th, 2022

Condo vs House: Which is Best for Your Lifestyle?Some people love living in condos, while others swear by detached homes. When it comes to deciding between the two, however, you can’t always rely on someone else’s word.

Sometimes it’s as simple as understanding and assessing your lifestyle to make the best choice, since condo living and home ownership are two radically different experiences, and thereby serve two very different types of lifestyles and personalities.

Here are a few considerations if you’re trying to decide whether you should invest in a house or a condo.

House: Best If You Have A Furry Friend

Do you have a furry friend or two that are an integral part of your family? Depending on their size and species, you may want to consider a detached house over a condo, simply for the amount of space available.

If you have dogs, you should consider that many condominiums don’t allow certain numbers, sizes, or breeds, and this could be just another reason you opt for a house. Having a backyard for your dogs to play in, and being able to avoid the daily elevator rides, are just more reasons to add to the list.

Condo: Best If You’re A Busy Business Person

If you’re a busy businessperson who’s rarely ever home, you may want to consider condo-style living. You will be able to save on mortgage costs, which will certainly help you reach your financial goals, and you will have fewer worries involved than you would if you owned a detached home.

Full size houses require significant upkeep, which is a major time investment. In contrast, a condo is a turnkey living space that gives you the amenities you need without the responsibilities of home ownership. If you hardly entertain and would like a space to enjoy yourself during your off time, living in a condo might be just the perfect setup for you, the busy business-minded individual.

House: Best If You Like Privacy And Control

If you’re someone who adores your privacy and likes to be in complete control of the maintenance and care of your home, a detached house is certainly the best option for you. Having your own detached house means living with added privacy, as you won’t have neighbors as close by as would be the case if you were living in a condominium.

You’ll also be pleased to be the sole decision maker when it comes to the upkeep and maintenance schedule of the various aspects of your home. Rather than ask a strata manager for permission to, say, paint your front door, you can simply paint your front door.

Condo: If You’re A Single Minimalist

Condo living can be great for single people and minimalists. If you prefer to live on the lighter side, with fewer responsibilities and chores, a condo setup can be extremely rewarding. All of the big stuff will likely be taken care of, and all you’ll have to worry about is the minimal space inside of your four walls.

If you decide to travel for an extended period, it’s much easier to find short-term tenants for condos than for houses.

It can be difficult to decide whether a house or a condo is best suited to your lifestyle. Don’t be shy to ask your friends and family what they think of your personality, and do your due diligence to discover which home is best to accommodate your daily life. Once you’ve made your decision, contact a real estate professional and find the home that fits your lifestyle.

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Flaws You Cannot Hide By Staging Your Home

Posted in Home Selling Tips by Michigan Real Estate Expert on January 19th, 2022

Flaws You Cannot Hide By Staging Your HomeWhen you sell your home, you want it look as good as possible. To do this, your real estate agent will help you stage your home or, if needed, help you find a professional to stage your home.

This means de-cluttering your home, re-arranging furniture, and de-personalizing each room.

A staged home is more appealing to buyers and helps to highlight your home’s positive features. However, staging is not meant to cover major flaws in your home. Some things just have to be repaired.

Roof Problems

It doesn’t matter how pretty your home is, your buyer is going to expect you to fix roof problems or adjust your price to cover them. Your roof is one of the most important parts of your home.

Cracked Tile

Of course, you can use throw rugs to cover cracks in your tile, but chances are your buyers are going to look under them. Then they may think you are trying to hide a serious problem like a shifting foundation. Save yourself the headache and have your floors fixed.

Broken Windows

You have to expect your buyers to walk around your home checking out the views from the windows. They’re going to notice any cracks. If you have the budget, consider upgrading your windows and making your home more marketable. At the very least, you should have the glass replaced.

Torn Screens

If you have torn screens, your buyers may think you don’t take care of your property. Yet, screens are fairly easy to fix on your own. With the right supplies from your local hardware store, you can have new, sleek screens in less than a day.

As your agent, I will make sure your home is ready to sell fast. Call your trusted real estate professional today.

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What’s Ahead For Mortgage Rates This Week – January 18, 2022

Posted in Financial Reports by Michigan Real Estate Expert on January 18th, 2022

What's Ahead For Mortgage Rates This Week - January 18, 2022

Last week’s scheduled economic reporting focused on inflation with monthly and year-over-year readings on overall and core inflation. Federal Reserve Chair Jerome Powell was confirmed for a second term as Federal Reserve chair.  The University of Michigan released its monthly survey on consumer sentiment and weekly readings on mortgage rates and jobless claims were also released.

Inflation Rises in December; Nears Fastest Growth Pace in 40 Years

Year-over-year inflation rose to a pace of seven percent in December and approached its fastest growth rate in 40 years according to the Bureau of Labor Statistics. Analysts expected year-over-year inflationary growth of seven percent as compared to November’s pace of 6.80 percent. Month-to-month inflation slowed to

0.50 percent as compared to November’s month-to-month growth rate of 0.80 percent.

Housing costs, food, and automotive sectors drove inflation in December. Shortages of computer chips used in vehicles slowed production and increased demand for vehicles. New car prices rose by one percent and used-car prices rose by 3.50 percent month-to-month.

Core inflation, which excludes volatile food and fuel sectors, rose by 5.50 percent year-over-year in December and surpassed the expected reading of 5.40 percent that was based on November’s core inflation rate of 4.90 percent. Rents rose by 0.40 percent for the third consecutive month. Food prices rose by 0.50 percent month-to-month and costs for clothing and furniture also rose.

Federal Reserve Chair Jerome Powell was confirmed for a second term and addressed the Fed’s plans for slowing inflation. Mr. Powell said, “The economy no longer needs or wants the very highly accommodative policies we’ve had in place to deal with the pandemic and its aftermath.”

Energy prices fell by 0.40 percent in December and decreased for the first time since April.

Mortgage Rates Rise. Jobless Claims Mixed

Freddie  Mac reported higher mortgage rates as the average rate for 30-year fixed-rate mortgages rose by 23 basis points to 3.4

Initial jobless claims rose last week with 230,000 first-time claims filed as compared to the prior week’s reading of 207,000 initial claims filed. Analysts expected first-time claims to decrease to 200,000 initial claims filed. Ongoing jobless claims fell to 1.60 million continuing claims filed as compared to the previous week’s reading of 1.75 million ongoing jobless claims filed.5 percent; rates for 15-year fixed-rate mortgages rose 19 basis points and averaged 2.62 percent. The average rate for 5/1 adjustable rate mortgages rose 16 basis points to 2.57 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The University of Michigan’s consumer sentiment index for January reported lower consumer enthusiasm for current economic conditions with an index reading of 68.8 as compared to the expected reading of 70.0 and December’s index reading of 70.6.

What’s Ahead

This week’s scheduled economic reporting includes readings on housing markets and sales of previously-owned homes. Readings on building permits issued and housing starts will be released along with weekly readings on mortgage rates and jobless claims.

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