No Housing Recession Over Horizon

Media reports are increasingly focused on whether a  

major home sale slowdown, or maybe even a crash, is in the making, in part because many hot housing markets are seeing slackening buyer demand, and nationally 2018 is expected to end with fewer home sales than 2017.

But the possibility of a crash is unlikely, says Lawrence Yun, chief economist for the National Association of REALTORS®. 

In a piece he contributed to Forbes, Yun says hot markets are seeing a slowdown not because of weak buyer demand, which could be an indicator of a true slowdown, but insufficient supply. When homes come on the market, especially in areas like Seattle and Denver that have strong job growth and little unemployment, they are typically snapped up.

 In other positive signs, home price growth remains strong in markets across the country—about 5 percent on a nationwide basis so far this year—and there are no signs of the credit excesses that characterized the housing crisis 10 years ago. “Lending standards today are still stringent, as evidenced by the higher-than-normal credit scores of those who are able to obtain a mortgage,” Yun says.

“That is why mortgage default and foreclosure rates are at historic lows.”

In short, Yun says, today’s housing problem stems from insufficient inventory. The supply problem is driving up home prices and worsening affordability and keeping sales from matching demand. That is a serious problem and the answer is to encourage builders to increase supply, Yun says, but it is not a prelude to a crash.

Selling or Buying your home is all about the details. Pay special attention to the simple steps above and always consult your realtor if you have any questions or need some guidance. When you work with a real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to Buy your Dream home. 

Source: 'No Housing Recession Over Horizon,' Forbes.com (Aug. 2, 2018)

#RealEstateForSale #Homeownership #UtahRealEstate

Apartment Rents Jumped Higher

Apartment rents climbed in 88 percent of the 250 largest 

U.S. cities, with the national average rent reaching an all-time high in July, RentCafe reports. Seasonal demand and a rise in rental activity has offset a wave of new apartments that have opened up this year, the national rental listing service notes.

July, up 2.8 percent year over year.

• The national average rent reached an all-time high of $1,409 in July 2018, up by 2.8 percent ($39) year over year, and by 0.2 percent ($3) month over month, according to Yardi Matrix data. 

• Rents increased in 88 percent of the nation’s biggest 252 cities in July (including newly added Queens, NY and Honolulu, HI), stayed flat in 11 percent of cities, and ped in only 2 cities (Brownsville, TX and Norman, OK) compared to July 2017. 

• The Permian Basin, Florida, and Maricopa County are home to the biggest ups and downs in July.

The largest apartment rental increases were in Orlando (7.7 percent year over year); Las Vegas (6.4 percent); and Phoenix (6.2 percent). On the other hand, the slowest growing rents were in San Antonio, Texas (1.6 percent); Manhattan (1.7 percent); and Washington, D.C. (2 percent).

“The apartment industry has experience significant supply growth nationwide in cities with substantial job growth, expanding public transport and changing land use policies,” says Doug Ressler, director of business intelligence at Yardi Matrix.

“Demand is split between affordable apartments and luxury class apartments, with an increasing need for workforce housing.”
Tried of renting? The recent cooling of home price gains and slight reprieve in rising interest rates have combined to stabilize affordability in recent months. Now is the Time to Buy, When you’re working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to Buy your Dream home. 

#RealEstateForSale #Homeownership #UtahRealEstate #Rental

Home Prices Grew at a Slower Rate

Home Price Growth Slowing, With three straight months 

of decline in annual appreciation, home prices grew at a slower rate for the first time in four years. This according to the latest report released on Monday. 

Now is the Time to Sell or Buy, Working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to sell or buy your home. 

The report, which looked at data at the end of June 2018, examined the slowdown in the rate of home price appreciation between March to May 2018. It also gauged the impact of this slowdown and the slightly lower interest rates on home affordability.

The report indicated that every state saw prices increase in May, but at 0.93 percent,which is the lowest growth rate for the month in four years. Despite this slow growth, the annual appreciation in May 2018 was at 6.3 percent, about 2.5 percentage points higher than the 25-year average.

Over the past three months, the report revealed, 32 states had seen a deceleration in appreciation while it had picked up speed in 18 states. Thirty-three of the 50 largest U.S. markets 'are also experiencing slowdowns,' the report said. The housing market in California slowed more than three times the national average, with annual appreciation cooling from 10.2 percent in February to 8.8 percent in May.

Other hot housing markets to see a slow down in appreciation included Seattle (-2.3 percent); Riverside (-2.1 percent), San Diego (-1.8 percent); Los Angeles (-1.4 percent); Sacramento (-1.4 percent); and San Francisco (-0.6 percent). All these markets slowed down faster than the national average of 0.4 percent.

Inventory Decreased, but Continued to Sell at a Rapid Pace

'The question now is whether tightening affordability will end that streak and if more deceleration is on the horizon.'  'On that front, the recent cooling of home price gains and slight reprieve in rising interest rates have combined to stabilize affordability in recent months.

As rates have ticked down from 4.66 percent in late May to 4.52 percent in mid-July,the monthly principal and interest payment to purchase the average home only increased by $4 per month–significantly less compared to the $138-per-month increase we saw over the first five months of 2018. Still, the $1,213 in principal and interest per month needed to buy the average home remains near a post-recession high. While that represents a nearly $500 per month increase from the bottom of the market in 2012, it’s important to keep in mind that it’s still roughly 13 percent less than was required back in 2006.”

The report also looked at how rising short-term interest rates have impacted holders of outstanding adjustable-rate mortgages (ARMs). It found that 1.7 million such borrowers saw their monthly mortgage payments increase by an average of $70 over the past 12 months. 'This subset of borrowers were the beneficiary of downward reductions in their rates and payments following the financial crisis, but that’s no longer the case.' 

#RealEstateForSale #Homeownership #UtahRealEstate #SaltLakeCity

What Would Your Neighborhood Score

Where are the best neighborhoods for buyers and

 investors? ATTOM Data Solutions ranked more than 10,000 neighborhood housing markets nationwide using the letter grades A through F.

The real estate data firm factored in six metrics:affordability, home price appreciation, school scores, crime rates, unemployment rates, and property taxes.

ATTOM broke down the common housing characteristics and trends among each grade.

The top five neighborhood housing markets on ATTOM’s list: Pine Ridge neighborhood in the Naples, Fla., metro area (median price: $632,871); Westlake neighborhood in Mobile, Ala. ($196,179); Union neighborhood in the San Jose, Calif., metro area ($795,000); Westmoreland neighborhood in the Charlotte, N.C., metro ($326,000); and Hunters Hill neighborhood in the Denver metro ($271,000).

“While home prices are typically higher in higher-ranked neighborhoods with better schools and lower crime, there are still many top-notch neighborhoods with more reasonably priced homes,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “The top five neighborhoods in this ranking represent a diverse set of markets across the country, illustrating that great neighborhoods come in many different forms.
Now is the Time to Sell or Buy, Working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to sell or buy your home. 


#RealEstateForSale #Homeownership #UtahRealEstate #SaltLakeCity

Fed Leaves Rates Alone

How to prepare for the next hike, The Federal Reserve decided 

Wednesday to hold off on raising its short-term interest rates. But it hinted that it likely will deliver its third interest rate increase of the year at its next meeting in late September.

The Fed’s key rate does not have a direct impact on mortgage rates, but it usually influences them. However, in daily life, higher interest rates mean that you'll have to pay more to access credit.

In June, the Fed had raised its rate to a range between 1.75 percent and 2 percent. On Wednesday, it voted unanimously to keep the rate at 2 percent. The Fed has hinted at two more increases before the end of 2018.

“Economic activity has been rising at a strong rate,” the Fed’s statement read. Economic output rose at a 4.1 percent annual rate in the second quarter, which is the highest three-month increase since 2014.

“The cost of borrowing has increased, whether you are dealing with mortgage loans, auto loans, student loans, or credit cards.” “It’s more expensive now than it was a month ago and it’s projected that it will get higher still.”

Mortgage rates have already been on the rise, with the 30-year fixed-rate mortgage averaging about 4.71 percent, up from 4.09 percent in 2015.

Those with adjustable-rate mortgages or home equity lines of credit will also be affected. Greg McBride, chief financial analyst at Bankrate, recommends those with ARMs to refinance into a fixed-rate mortgage that will likely offer a lower rate than what an ARM will adjust to later this year.

Homeowners with HELOCs, McBride adds, may want to ask their lender to freeze the interest rate on their outstanding balance or consider refinancing into a fixed-rate home equity loan (note that there are caps on how much owners can access).

When it comes time to Sell or Buy, Working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to sell or buy your home. 


#RealEstateForSale #Homeownership #UtahRealEstate #Mortgage

Pros and Cons, FHA or Conventional Loans

An FHA loan—which allows the buyer to put down as little as 3.5%

— sounded like a dream come true. We found an FHA-approved lender, and in no time, we were on our way to buying our first home with a government-backed loan.

But in the middle of this process,someone asked us how much our mortgage insurance would be.

'Mortgage insurance?' I asked. 'What's that?'

Unfortunately, our lender hadn't explained much about the rules and restrictions surrounding an FHA loan. We learned the hard way—after it was already a done deal. It didn't stop us from landing our starter home. But here are four things I wish I'd known before I signed on the dotted line.

1. You're on the hook for mortgage insurance for the life of the loan

Let's get into the first thing you'll have to factor in with an FHA loan: mortgage insurance.

This is a payment that's usually required when the buyer isn't putting 20% down. (You might know it as PMI, or private mortgage insurance; the FHA's version is called MIP, or mortgage insurance premium.)

The buyer (you) must pay monthly mortgage insurance to protect the lender in case you default on your loan—it's the price you pay for landing a mortgage with such lenient qualifications.

Now, the twist: It used to be that you had to pay this mortgage insurance on an FHA loan only until you gained 20% equity in your home. But under legislation passed in 2013, you can plan on paying that extra money for the life of the FHA loan. Yikes! (You can skirt this requirement if you put at least 10% down, but that kind of defeats the purpose of the sweet, low down payment option, right?)

All is not lost, though: Eventually, your monthly payments will go down as you whack away at your loan amount.

'But for the first few years, a buyer is paying mostly interest rather than principal, so the loan amount doesn't go down for quite a while.' 

2. You can't buy just any house within your approved loan amount

As long as the bank thinks you're good for the loan, why wouldn't you be able to buy any house you want? Well, the FHA has a few more hoops to jump through than conventional loans.

To be approved for the loan, the house must pass an inspection conducted by the U.S. Department of Housing and Urban Development. A licensed, HUD-approved appraiser will determine the market value of the home and do a “health and safety” inspection to check for crucial problems such as a crumbling foundation or issues with the mechanical systems.

'Many people don't know that the guidelines can be pretty strict for an FHA loanl' 'The roof, AC unit, plumbing, and electrical all need to be fully functional and be able to last for several years if they're going to pass inspection.'

(Note: This inspection is not a substitute for a regular home inspection, which you should absolutely get, too.)

What's more, if the house requires certain repairs in order to pass inspection, they must be completed before the sale can go through.

This can create another hurdle for FHA buyers: You either fork over the money to make the repairs, or ask the seller to take on the cost—a pretty big risk, especially in today's seller's market.

In the end, you might end up having to walk away from the deal.

3. You might not be able to use your loan for renovations

I found a house that had potential but needed serious TLC. The home was under budget, so we thought we'd just tap the unused portion of the loan to make repairs. No biggie, right?

It turns out, the type of FHA loan we'd signed onto didn't allow renovations. Had we done more research upfront, we would have discovered that there is a loan out there that would have allowed us to buy and repair that fixer-upper: an FHA 203(k) loan.

With a 203(k) loan, you can dedicate up to $35,000 for home improvements. The lender will have a say in what kinds of repairs you can make, but the 203(k) loan can be a great solution for first-time home buyers who don't mind doing a little work.

4. You still need decent credit for an FHA loan

While we didn't have ultrahigh credit scores, getting an FHA loan wasn't a free-for-all: Buyers must have a 580 credit score to take advantage of the 3.5% down payment option. 

The FHA also has specific requirements about how much debt you can carry, so check current guidelines to make sure your debt is manageable in the eyes of the government.

An FHA loan afforded us a rock-bottom interest rate with a low down payment. But don't assume an FHA loan will be a slam dunk into homeownership—do your homework and weigh the pros and cons to determine whether an FHA loan is truly right for you.

When it comes time to Buy, Working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to buy your home.

 Source: 4 Things I Wish I'd Known Before I Got an FHA Loan

#RealEstateForSale #Homeownership #UtahRealEstate #Mortgage

Homeowners Stand to Save More Than Renters

Owners can often conserve more money once housing costs 

and living necessities are all covered. However, a new study shows those who rent can barely get by in some cities.

PropertyShark and RentCafe teamed up for a study on discretionary income and analyzed the top 50 largest cities where an owner or a renter can save the most money after paying living costs.

For living costs, estimates for food, health care, entertainment, and transportation were culled from the U.S. Department of Labor.

In 44 of the 50 cities, homeowners can save money each month and even apply a 50/30/20 budget (50 percent spent on needs, like housing costs, bills, and living essentials; 30 percent spent on wants; and 20 percent on savings and investments).
Owners tend to fare well in some of the nation’s largest cities, too. 

For example, homeowners can save more than $4,500 a month in Manhattan, $3,500 a month in San Jose, Calif., and even $2,600 in San Francisco, according to the study. A higher median household income of residents helps make up for the hefty price to live in some of America’s largest cities. In places with relatively low living and housing costs, like Raleigh, N.C., and Austin, Texas, homeowners can save more than $2,000 per month.

According to the study, only in cities like Miami,Detroit, and Philadelphia do homeowners need to “seriously cut expenses to make it through the month without accumulating debt.”

For example, in Miami, after paying living expenses and bills, homeowners tend to have a deficit of $1,200 in debts each month.

The study found that renters in more than half of the 50 cities could hardly make it until payday, unless they cut down on their expenses. Renters in Brooklyn and Boston struggle the most, each having a debt of about $2,000 per month.
“For single renters, saving money while earning the median household income seems impossible in most cities, and in those cases where you can save, the amount is quite low,” according to the study.

“Owners have it generally better than renters and can save in almost any city without cutting monthly expenditures—but there are a few exceptions. The tough part for a homeowner comes before he even owns a home: the moment you start saving for a down payment, which, if you’re a renter in some of the least renter-friendly cities, you’ll most definitely have a hard time saving.”

When it comes time to Sell or Buy, Working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to sell or buy your home. 


#RealEstateForSale #Homeownership #UtahRealEstate  #Rental