Is It Last Call for Low Mortgage Rates?

All good things come to an end—even low mortgage interest rates. They've been steadily rising and are poised to 

climb even higher this year.
When they do, the cost of buying a home will rise as well. This could make the challenges of today's buyer's market even worse for some prospective purchasers—particularly first-time buyers, having to settle for smaller abodes, fixer-uppers (in the real sense, not the TV sense), and homes farther out where real estate is cheaper.

Some may even be priced out of the market altogether thanks to a toxic combination of soaring home prices and increasing mortgage rates.

After hitting historic lows, average mortgage rates have now reached their highest levels in more than four years. They hit an average 4.43% for 30-year, fixed-rate loans as of March 1, according to Freddie Mac data. This was the highest they've been since Jan. 9, 2014, when they were an average 4.51%.

They're expected to go up even more after the Federal Reserve raises short-term interest rates. The new Fed chairman, Jerome H. Powell, says the Fed is likely to gradually increase them this year. It is expected to bump up rates at least three times this year, in 0.25% increments, beginning this month.

'For the bulk of buyers, it's not going to kill their decision to purchase a home. If anything, it will get them off the fence by creating a sense of urgency,' Higher rates are 'a kick in the pants for you to start thinking seriously [about buying].'

Even a fraction of a percentage point rise quickly adds up. On a $300,000 house with a 30-year fixed mortgage and 20% down payment, the difference between 4% and 5% is $142 a month. That's more than $51,000 during the life of the mortgage.

'Buyers thought they could wait forever because rates were going to stay low forever,'says Palacios. 'They're starting to realize if they're going to buy they should probably buy now.'

It's important to note that mortgage rates are still low. They averaged around 7% from the 1990s through the financial crisis, falling from a high of 18.63% on Oct. 9, 1981.They ped below 5% for the first time in March 2009, before bottoming out at 3.1% on Nov. 21, 2012.

And while they may not return to the 3% range anytime soon, it's also unlikely they'll go into the double digits.

“You should be paying close attention to what is going on in the marketplace,because those rates can move pretty quickly in a short amount of time,” says Freddie Mac's Kiefer. “

Source Realtor.com

Housing Markets Need Landlords to Sell

Buyers Are on the Hunt But They’re Not Buying

Contract signings posted a major setback in January, sinking to the lowest level in more than three years.

But it’s not from a lack of interest. Buyer traffic is reportedly up in most areas of the country in January, according to the latest housing report released by the National Association of REALTORS® on Wednesday.

Landlords own thousands of single-family homes across the U.S. With housing shortages abounding, some are calling on landlords to start selling. A slowdown in rent growth may convince more to finally unload their inventories.

“As new multifamily supply catches up with demand and slows rents, some large investors may begin putting their holdings of affordable single-family homes up for sale, which would be great news, particularly for first-time buyers.” 

Last week, NAR reported that contracts to buy previously owned homes dropped to their lowest level in more than three years in January. They cited low inventories of homes for sale to blame.  

In Supply-Starved Home Market, Can Wall Street Landlords Help?

A jump in apartment construction has slowed rent growth for many multifamily buildings across the country, but single-family landlords are still mostly reaping profits. Invitation Homes Inc., the nation’s largest single-family landlord, owns more than 80,000 properties.

It is forecasting its revenue growth to be about 4 percent to 5 percent in 2018, which far outpaces rent-growth projections for apartments, according to Green Street Advisors LLC, a research firm.

“Single-family rental top-line growth should continue to fare much better than that of apartments due to steady demand and limited impact from competitive new supply,” Green Street Advisors note in a recent report.


Source: Bloomberg (February 28, 2018)

Could Deregulation lead to Manufactured Housing Boom?

Can Manufactured Housing Ease America’s affordable, 

The federal government may increasingly be eyeing manufactured housing as one potential solution to ease shortages of affordable homes across the country. 

Mortgage financing giants Fannie Mae and Freddie Mac announced plans in January to purchase more manufactured housing loans over the next three years.

Further, the U.S. Department of Housing and Urban Development recently announced it is reviewing regulations surrounding manufactured housing. 

Manufactured homes are built in a factory and then relocated to a home site. They differ from prefab homes, which have parts made in a factory but are then mostly constructed on-site. Manufactured homes, once referred to as mobile homes, often cost a fraction of median price of a new single-family home, such as $45,000 versus $323,000, respectively.

“There’s clearly an affordable housing gap that’s growing and growing and growing,”  “Manufactured housing is every bit as good as site-built housing in most cases. Why has the number of manufactured housing units not gone up to where it was before?”

Financing a manufactured housing has grown more difficult since the 1990s. Defaults on manufactured housing loans piled up in previous years, and lenders faced the difficulty of repossessing a manufactured home. The sector has largely struggled to recover ever since.

Mobile homes are classified as either a real estate property or personal property.Buyers can finance a purchase through a traditional mortgage if the property is classified as real estate. However, the majority of manufactured loans are financed as personal property with a chattel loan, which usually come with high rates and shorter loan terms.

Further, a challenge of mobile homes is that they tend to depreciate in value, unlike site-built homes. Also, zoning restrictions and the “not in my backyard” attitude hampers the growth of these communities.

Fannie Mae plans to purchase around 30,000 manufactured housing mortgage loans over the next three years. It is also working on developing a pilot program for purchasing chattel loans and supporting the financing of manufactured housing communities.

A professor of land use law at Washington University in St. Louis, also believes HUD’s review of building regulations with manufactured housing could play a role in possibly helping to destigmatize the housing sector.  

“If they start working on a model state [zoning] law and start funding pilot projects, that would bring some attention,”  “I think that would be very helpful.”

Ways to Bungle Selling a Home

Selling a home might not seem like rocket science, but rest assured, there's a lot to consider—and a lot of money on the 

line. As such, home sellers can really sabotage their own efforts in so many ways.

Curious about what could go wrong? Check out these six classic ways home sellers bungle their prospects so you don't become the next victim.

1. You priced your house too high
Even when you’re in a seller’s market (where inventory is in short supply and buyers are bidding up a storm for homes), you should set a reasonable listing price for your house. Unfortunately, “some people have unrealistic expectations of the market,” 
Many sellers overestimate the value of their house because they’re emotionally attached to the place. Others overprice as a sales tactic.

“A lot of people price high because they want room to negotiate, but that strategy can backfire, since you might not get any offers.

So, to set the right asking price for your house, you'll want to trust your real estate agent to do a comparative market analysis, a process that assesses the value of a home by comparing it to similar properties that recently sold nearby.

2. You skimped on professional photos

You can have the most sought-after home on the block, but if you don’t take good listing photos you may have trouble even getting buyers in the door. Hence, it’s worth hiring a professional real estate photographer to snap pictures instead of taking them yourself on your smartphone.

Most real estate photographers are reasonably priced—a basic shoot generally costs between $95 and $300, says FitSmallBusiness.com—and the payoff can be huge. Studies have shown that professionally photographed homes sell faster and for more money than homes listed with point-and-shoot cameras.

3. You tried to make home repairs yourself

Before putting your house on the market, you may have to do some repairs. Doing repairs yourself can save you money, but it can also create expensive problems if you make mistakes.

Indeed, “you can wind up damaging your house if you don’t know what you’re doing,” Lejeune says.

Consequently, it’s worth hiring a handyman or certified contractor, depending on the nature of the work, to make important home repairs.
“Problems with hot water heaters, plumbing, duct work, and electrical issues should always be handled by a licensed professional,” Lejeune adds.

4. You stuck around during showings

Having the seller present during a showing or open house can be a huge turnoff to a home buyer.

“Even if you don’t say anything to the buyer, it’s just awkward,”  “When the seller is there, buyers don’t feel comfortable to speak freely or open closet doors and look closely at the house.”

The solution is simple: Just vacate the premises when buyers view the house.
“Let your agent represent you and handle all interactions with potential home buyers,” Lejeune advises.

5. You withheld information from buyers

Sure, you want to show your home in the best light, but not disclosing any flaws you're aware of—like, say, a previous flood or termite damage—could come back and haunt you. For one, a home inspection might reveal this info anyway and your home buyer will be none too pleased that you kept your lips zipped. 

Not disclosing certain flaws is also illegal in some areas so it might even open you to a lawsuit.

Therefore, make sure you fess up to home buyers on any issues you're aware of—which should all be provided to the home buyers in a document known as the property disclosure statement. Sure, it might scare off home buyers, but probably not—and it's way better than getting caught hiding info afterward.

6. You let your ego get in the way

Some home sellers get so fixated on getting their full list price, they simply turn down offers that are below the bar. But that closed-minded approach can have big repercussions.

“If you’re not willing to make counteroffers, you’re probably not serious about selling your house,” Baxter says. Granted, “if you’re comfortable with your house sitting on the market for a while, you could try to hold out for a full-price offer. But if you want to sell your house in a reasonable period of time, you need to entertain offers that are below list price.'

Bear in mind if your house sits on the market for a while, it can make it more difficult to sell.

'If a home is on the market for more than four weeks, prospective buyers are going to assume that there is something wrong with it,”  In other words, time is a-ticking! Any offer is worth considering, so try not to take it personally.

Are you selling your home soon, or staying put?
To begin, consider whether you're planning a move in the near future. If a sale is on your mind,  Precision Realty & Assoc. LLC can answer any questions or if your ready to see homes in person, give us a CALL 801-809-9866 today..
'Home staging is all about prepping your house so it will appeal to as many buyers as possible,'  

Buyers Are Bidding Up Prices

More Properties Were Sold At or Above List Price in January 2018, 

Tight inventories mixed with high demand are pressing prices higher in many markets

As such, a growing number of real estate pros say that their home sellers are seeing their properties sell beyond the asking price.

Thirty-four percent of properties that closed in January sold at or above the list price, according to the January 2018 REALTORS® Confidence Index Survey, a survey of real estate professionals about their latest transactions. That is higher than a year ago when 31 percent of properties sold at or above the list price.

Of the properties that sold at a premium price, 86 percent sold at 101 to 110 percent of the list price, according to the report.

Highlights

• Properties were typically on the market for 42 days (50 days in January 2017).
• Eighty-nine percent of respondents reported that home prices remained constant or rose in January 2018 compared to levels one year ago (88 percent in January 2017).
• First-time buyers accounted for 29 percent of sales (33 percent in January 2017).
• REALTORS® report “low inventory” and “interest rate” as the major issues affecting transactions in January 2018.

NAR’s report also showed that 75 percent of contracts in January settled on time, up from 67 percent a year ago. About 74 percent of closed sales contained contract contingencies. The most common contingencies related to home inspections (58 percent), getting an acceptable appraisal (44 percent), and obtaining financing (43 percent).

Mortgage Rates Just Got Higher Again

Source:National Association of REALTORS® Economists’ Outlook blog (Feb. 28, 2018)

Get Ready for the Spring Thaw!

March To-Do List for Homeowners, who’ve been through multiple 

winters know that this time of year isn’t a time to be slacking in home maintenance. There’s more to March madness than just basketball—in housing, it’s the time to make sure owners are staying proactive in tending to their homes through these next few springtime months. 


Are you selling your home soon, or staying put?

To begin, consider whether you're planning a move in the near future. If a sale is on your mind,  Precision Realty & Assoc. LLC can answer any questions or if your ready to see homes in person, give us a CALL 801-809-9866 today..

'Home staging is all about prepping your house so it will appeal to as many buyers as possible,' 

Patch up spots on the lawn. As spring showers start to arrive, be sure to cover any bare areas on your yard. This is a crucial task to take care of as snow and ice continue to melt away, and doing so will keep mud and water out of your house.

Use binoculars to inspect the roof and siding. It’s important to look for signs of damage on your home’s roof and siding. To save time and as a safer alternative to a ladder, use a pair of binoculars to spot these signs: loose or curling shingles, damaged gutters, peeling paint, or cracks in the foundation. Stop these signs from turning into money-sucking problems and start setting up repairs before anything gets worse.

Install window screens. Window screens last longer when removed and stored for the winter. Whether or not you removed your screens last fall, March is the time to fix any loose screens, frames, or holes. This way, windows can be opened up to let in a clean breeze and keep bugs out. 

Replace smoke detector batteries. Smoke detectors should have batteries changed once a year, so why not now? Another tip: The “test” button on detectors is meant to see if the alarm sound works, not whether it actually detects smoke. To test its functionality, light a match and blow it out near the device to see if it goes off. 




Source:  HouseLogic (March 1, 2018)

Using Tax Refund for a Down Payment

Tax Time = Saving Time? 
The average estimated tax refund is expected to be $2,840 this year, down slightly from $2,895 the previous year. 

First-time home buyers, in particular, often say saving for a down payment is their biggest hurdle to homeownership.

As such, the tax time may be the perfect moment to remind clients that their refund may come in handy ahead of the spring market.

Last year, the median down payment was 10 percent. Depending on the average prices in an area, a couple thousand dollars could make a significant dent in that amount.

However, many first-time home buyers don't realize they can buy a home with less than 20 percent down.

Twenty-five percent of first-time buyers said that saving for a down payment was the most difficult step in the buying process, according to report. Seven percent of first-time buyers say they plan to use their tax return to go toward their down payment.

Here is some insight on how Americans can invest their tax return and how first-time home buyers may look to invest long term. One of the major hurdles for potential home buyers is the downpayment. 

With a sizable tax refund, the average American would have a sizeable or partial downpayment depending on which region or market you live in.

Please feel free to explore our website at Precision Realty & Assoc. LLC, if you have any questions or would like to see homes in person, PLEASE give us a CALL 801-809-9866 today.