1. Interest rates are still low. 30 year fixed rate loans are averaging 4.16%. Many economists are predicting 5% rates next year. Higher interest rates mean higher monthly payments and less homes that you can qualify for.
2. There’s more inventory as the fall market heats up. And as more property enters the market, prices stabilize.
3. Home Prices are going up.
4. Rents are Sky-High. You have to pay a mortgage, whether it’s yours or your landlord’s. Home ownership forces you into saving. Your mortgage payment stays the same year after year. Your rent goes up year after year.
5. Employment is on the rise. This lends financial stability. If your employment prospects look good, it just may be the right time to buy a home.
When placing your home on the market, some will advise you to strip your home of all personality and instill a “beige” feeling. BORING! It’s actually more important to instill a bit of personality into your home. It is important to depersonalize a space by removing deeply personal items. And it is important to declutter to enhance spaciousness.
To really make your home stand out to buyers, it’s important to make it memorable so it doesn’t blend in with every home they have viewed. This means creating spaces that buyers can imagine living in. Imagine who your buyer is likely to be and staging accordingly. To read more about this go here: Dressed to Sell | Realtor Magazine.
Listing Price Drops Will Help Drive a Fall Surge in Home Sales, according to Redfin’s Research Center. They predict that buyers will move into the market as we are seeing some price drops. “There’s blood in the water.” In other words, the market is shifting from a sellers market to a market favoring the buyer in some areas. In Washington, DC of homes for sale in July 2014, 31% had a drop in the listing price. Fewer homes are selling above their listing price. Prices here are flattening out. Redfin expects price increases to slow down. This helps buyers as they should regain some of the bargaining power lost last year.
Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and DC Metro housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general. The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau and Realtor.org reports, videos, key market indicators and real estate sales statistics, a video message by a nationally recognized economist, maps, mortgage rates and calculators, consumer articles, plus local neighborhood information and more.
If you are interested in determining the value of your home, click here.
Fear and finger-pointing are gumming up the system according to this Washington Post story: Credit scores remain a high hurdle for many mortgage applicants as banks stay gun-shy. Homeownership is now at 64.8 percent, its lowest level since 1995, in part because so many consumers can’t get past lenders’ severe underwriting tests. Lenders are looking for scores no lower that 740 in many instances.
One way to be sure your credit score is high, especially if you are younger, is to be sure your monthly rental payments are included in your score. For many this can make the difference and raise your score to desirable, lendable levels. Talk with me about this. I’d be happy to share insights on how to be sure you have a strong score.
Mortgage rates have remained steady in recent weeks, keeping borrowing costs near 2014 record lows. Freddie Mac reports the following national averages for mortgage rates ending July 31st.
30-year fixed-rate mortgages averaged 4.12%. Last year at this time rates averaged 4.39%.
15-year fixed-rate mortgages averaged 3.12%. Last year at this time rates averaged 4.39%.
According to John Paulson, a billionaire hedge fund manager, the BEST INVESTMENT POSSIBLE is home ownership. He recently spoke at the “Delivering Alpha” conference presented by CNBC and Institutional Investor, Paulson said “I still think, from an individual perspective, the best-deal investment you can make is to buy a primary residence that you’re the owner-occupier of. Today, financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent. And if you put down, let’s say, 10 percent and the house is up 5 percent, which is the latest data, then you would be up 50 percent on your investment. And you’ve locked in the cost over the next 30 years. And today the cost of owning is somewhat less than the cost of renting. And if you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed.”
Debt ratios, not credit scores, are the most worrisome factor for mortgage applicants – The Washington Post.
For some home purchasers, qualifying for a mortgage is a tough road to travel and sometimes ends unhappily with rejection. These rejections are typically from low credit scores, inadequate documented income and little or NO savings.
What really causes a mortgage lender to say no? It’s usually not your income or savings or even a less than ideal credit score. It’s your DTI; your “debt-to-income ratio.” This is the most reliable indicator in whether you’ll be able to repay the loan.
To learn more about DTIs and to discover yours, go to Fannie Mae’s “Know Your Options” site: www.knowyouroptions.com. You’ll find helpful tools here.
The TODAY Show on NBC featured real estate expert Barbara Corcoran discussing 5 easy fixes you can do that will help sell your home. This is great advice! Check out the video.
Today Show – Corcoran
I have some other useful tips as well that can prepare your home for selling in the future (and take the stress out of rushing to do everything at the last minute). Just email me at john@stagesre.com to request more info.
According to RealtyTrac® a leading source for housing data, DC is one of the top 25 best markets for buying residential property rentals.
They just released their Q2 2014 Residential Property Rental Report, which ranks the best markets for buying residential residential rental properties along with the best markets for renting to baby boomers and the best markets for renting to millennials.
With interest rates still at historic lows, this is the time to explore real estate as an investment.
