Homes Competition Cools Down

After seeing one of the most competitive home buying in 2017, 

homeowners have reported a lighter, less competitiveseason in 2018, according to a survey by ValueInsured.

According to the survey, 48 percent of hall homeowners reported noticing lighter open-house traffic and a less competitive homebuying season in their neighborhood compared to 2017.

In California, which was one of the hottest housing markets last year,  54 percent of all homeowners reported lighter homebuying demand, with 56 percent homeowners in Colorado and 53 percent in New York concurring with their counterparts in the Golden State.

The survey indicated that one of the reasons for the cooling market was that after three years of double-digit price gains in the nation's top housing markets, wage growths were not keeping pace with the prices.

'While buyers have been conditioned to hurry up and make an offer, even sight-unseen, in recent years, some may now step back onto the sidelines to wait and see if – and how far – home prices could get cut before they jump back in,' the survey said.

Citing various recent reports, the survey said that some of the hottest markets of 2017 had seen the most significant signs of cooling down this year. In San Diego, ValueInsured said, 20 percent of all listed homes had price cuts.

In Seattle, where bidding wars had become common over the past three years, home prices saw a steep decline from their median prices. It also indicated that in Dallas, 19 percent of all listed homes had seen their prices cut at least once in June.
Home prices may indeed have reached their tipping point. According to a recent report by First American, Home price appreciation is slowing and may be close to a “tipping point.”

“We’re seeing the first indications that price appreciation may be slowing, but the underlying fundamental housing market conditions support a natural moderation of house prices rather than a sharp decline,” says First American Chief Economist Mark Fleming.

Selling or Buying doesn’t have to be a huge undertaking, but it’s one where details really matter. 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 Sell or Buy your home. If you prefer a more personal touch, CALL 801-809-9866 today. 

 #RealEstateForSale #Homeownership #UtahRealEstate

Is Home Price Appreciation at the Tipping Point?

Is the Housing Market Shifting?

To Favor Buyers? In recent years, home prices have gone up, up, 

and up. In this 'seller's market,' home sellers can expectfull–price and even over–asking–price offers, and often experience bidding wars among hopeful buyers to drive their sales price even higher.

That tide may be turning for some sellers.

Approximately 14% of nationwide listings reduced their asking price in June 2018 — up from a low of 11.7% at the end of 2016. Price cuts are concentrated at the most expensive price–points in markets that have seen out sized price gains in recent years.

In fact, growth in home prices is slowing in nearly half of the 35 largest U.S. metropolitan markets, with Sacramento and Seattle reporting the greatest slowdown since the beginning of the year.

All Real Estate Is Indeed Local

Forecast for 2018 This year both household growth and net in-migration in Salt Lake County are projected to be at record levels. Net in-migration of 6,900 individuals and households growth of 8,500 are expected.

This level of growth will support strong demand for housing. Demand will also be given a boost by buyers jumping into the market hoping to beat higher interest rates.

These demand conditions will push total sales above 18,000 units, but it is unlikely that they will break the all-time record of 18,987. Strong demand will put upward pressure on prices, but another year of a double-digit increase is unlikely. Prices will be up by 7-8 percent in 2018.

The median sales price of a single-family home will be near $350,000 and the total value of residential sales will be $6.6 billion, well above the $5.9 billion in 2017. Finally, total residential real estate commissions will be close to $400 million up from $360 million in 2017.

Outlook: What Will the U.S. Real Estate Market Do in 2019?

We’ve passed the midpoint of 2018, which means some home buyers are starting to look ahead to next year. And a lot of them share the same questions: What will the real estate market be like in 2019? Will home prices keep rising, level off, or next year? Will it be a buyers’ or sellers’ market in 2019?

Tight supply and strong demand have boosted home prices in housing markets across the country, while presenting challenges for buyers. Mortgage rates rose steadily during the first part of 2018, and then leveled off during the early summer. That’s where we are now, as of July 2018. But what’s over the horizon? While no one can predict future housing conditions with complete accuracy, we can make a few educated guesses. Here are four of them.

1. We could see an increase in new-home construction.

We’ve seen a recent uptick in building permits nationwide, which could lead to a much-needed increase in new-home construction in 2019.

In a June 2018 report, the National Association of Home Builders stated: “Over the first four months of 2018, the total number of single-family permits issued nationwide reached 279,302. On a year-over-year basis, this is an 8.4% increase over the April 2017 level of 257,719.”

But there’s a pretty long lag time between the filing of a construction permit and the completion of the project. So the U.S. real estate market in 2019 will probably continue to suffer from supply shortages, with not enough homes listed for sale to satisfy demand from buyers. Which leads to item #2 below.

2. Most markets will still favor sellers over buyers.

Inventory shortages affected many housing markets across the country during 2017 and 2018. And this will likely continue, to some extent, in 2019 as well. Limited supply is also one of the reasons for prediction #4 below. An imbalanced supply-and-demand picture will continue to put upward pressure on home prices in 2019.

Of course, all of these trends can vary from one area to the next. Some real estate markets across the U.S. are more “balanced” than others, with enough supply to meet demand. Most cities, however, are experiencing low levels of inventory at present. The tightest markets are in the west — California, Washington and Oregon. But nearly every state is touched by this.

3. Mortgage rates could approach 5%, for a 30-year loan.

Here’s the short version: Mortgage rates are higher now than they were at the start of this year, and experts are predicting they’ll climb even higher by the end of 2018.

Here’s the back story: The average rate for a 30-year fixed mortgage hovered below 4% for much of 2017. Then, at the start of 2018, it began a steady upward climb that lasted for three months. When this article was published, on July 6, 2018, the average 30-year mortgage rate was 4.52%. That was an increase of 57 basis points (0.57%) from the first week of January.

So clearly, rates are higher now than at the start of the year. The question is, what might they do going forward? And what will the real estate market do in 2019 if mortgage rates climb even higher?

What might the real estate market do in 2019, in response to rising rates? Well, assuming that event actually happens, we could see a decline in home purchases in the months ahead. But we don’t expect it to have a major impact on real estate sales.

The economy is strong and employment is high, so there is steady demand for homes in most housing markets across the country. A modest rise in mortgage rates probably wouldn’t do much to dampen it.

4. Home prices will continue rising in most U.S. cities.

Given the current supply-and-demand situation, it appears likely that home prices in most U.S. cities will continue to rise throughout 2019. This would be the continuation of an ongoing trend, rather than a new development.

The median home price in the U.S. rose by 8.1% over the past year. They predicted that prices would rise by 6.5% over the next 12 months. This forecast was issued in July 2018 and therefore extends into the summer of 2019.

Of course, this too varies by region. Some cities might experience relatively small gains, while others could see a large jump in home prices. The biggest gains will likely be recorded in real estate markets with strong demand and short supply, like those in the Pacific Northwest and a few other areas.

Selling or Buying doesn’t have to be a huge undertaking, but it’s one where details really matter. 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 Sell or Buy your home. If you prefer a more personal touch, CALL 801-809-9866 today. 

 #RealEstateForSale #Homeownership #UtahRealEstate

Mortgage Rates Tick Up Again

Fannie, Freddie Start a Second Decade in Limbo, 

Mortgage rates rose  for a second week, buoyed by a selloff in the bond market, even as housing faces a grim reminder of unfinished work in the mortgage market.

The 30-year fixed-rate mortgage averaged 4.54% in the Sept. 5 week, according to Freddie Mac’s weekly survey, up two basis points. The 15-year fixed-rate mortgage averaged 3.99%, up from 3.97%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.93%, up eight basis points.

Those rates don’t include fees associated with obtaining mortgage loans.

Mortgage rates follow the path of the benchmark U.S. 10-year Treasury note. Bond prices have ticked down, pushing yields up, as the rosy economic data of the past week made safe-haven assets less attractive.

Thursday is an auspicious anniversary for Freddie and its counterpart, Fannie Mae. It’s 10 years to the day since the United States government hustled the two companies, on the brink of a liquidity crisis, into state control.

That arrangement, known as conservatorship, was meant to be temporary, until Congress found a permanent, stable path forward. But that hasn’t happened. Still, many observers of the two enterprises have argued that over the past decade, they’ve reformed themselves into the staid, dependable guarantors that the American mortgage market has long needed, with no support from Washington. Don't look now, but Fannie Mae and Freddie Mac are becoming boring utilities.

Fannie and Freddie help the housing market by buying mortgages from banks and other lenders, enabling those financial institutions to free up their balance sheets for more lending. The enterprises shed their own risk by, among other things, selling securities to investors. More certainty — and more capital — would help the two companies, and might in turn bolster the housing market, which is flagging.

In a release, Sam Khater, Freddie’s chief economist, noted that interest rate rises, even by just a few basis points, erode affordability in a market that’s already stretched thin.

The 30-year fixed-rate mortgage inched higher for the second straight week.

Borrowing costs may be slowly on the rise again in coming weeks, as investors remain optimistic about the underlying strength of the economy. It’s important to note that mortgage rates are now up three-quarters of a percentage point from last year and home prices – albeit at a slower pace.

The good news is that purchase mortgage applications have recently rebounded to above year ago levels.

Selling or Buying doesn’t have to be a huge undertaking, but it’s one where details really matter. 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 Sell or Buy your home. If you prefer a more personal touch, CALL 801-809-9866 today. 

 #RealEstateForSale #Homeownership #UtahRealEstate #Mortgage

Get Loan Approval With Lower Credit

FHA is making more mortgages available to applicants with risky 

debt profiles, Is it easier today for home buyers with a high debt ratio and subpar credit scores to qualify for a mortgage than it has been in years? And if so, what might that mean for first-time and repeat buyers who are struggling with credit and debt issues but still hope to buy a home?

New loans with FICO scores below 700 — including some in the rock-bottom 400s and 500s — have increased from 21.9 percent of the market in 2009 to just under 30 percent (29.7 percent) last year, according to FICO researchers. (FICO scores range from 300, indicating severe credit-history problems and high risk of default, to 850, where the probabilities of missed payments or default are extremely low.)

When the Federal Reserve recently polled senior bank executives on whether they’ve been loosening credit criteria for home-mortgage applicants, most bankers said, “No way, not us.” They’ve kept their rules tight to avoid the problems the lending industry experienced in the housing bust of the past decade. Studies by the Urban Institute’s Housing Finance Policy Center have estimated that lenders’ historically strict underwriting standards have prevented millions of would-be buyers from becoming homeowners. Researchers said that between 2009 and 2014, 5.2 million mortgages were “missing” — that is, they would have been made if lenders had relaxed their tough post-recession requirements.

But there’s new statistical evidence that, at least in some areas, standards have been easing. A study conducted by credit-score developer FICO and released in August found that credit scores for new mortgages have been ping.

[Frozen credit files can slow the mortgage process]

New mortgages are being approved with lower credit scores, and FHA loans appear to be leading the shift, according to studies by credit developer FICO and other entities. Underwriting criteria seems to have eased, and a broader section of consumers are obtaining mortgages as a result,” according to FICO’s report. 

So where has the easing been occurring?Conventional mortgage approval requirements haven’t budged much at the giant investors Fannie Mae and Freddie Mac, both of which were bailed out by the federal government 10 years ago. Although minimum down payments for some borrowers have been reduced in the past two years and debt-ratio rules have been relaxed a smidgen, there has been virtually no decrease in average credit scores for home-purchase loans, according to monthly data compiled by software company Ellie Mae. Nor have there been statistically noteworthy increases in applicants’ average debt ratios at Fannie and Freddie.

[FICO shows mortgage applicants how to improve their credit scores]

New loans for borrowers with FICO scores reaching as low as the 400s jumped from 21.9 percent in 2009 to 29.7 percent last year, according to the study. FICO scores range from 300 to 850. 

From January to March of this year, borrowers who were approved for FHA loans—which offer low down payment options for first-time home buyers—had an average credit score of 672, according to FHA data. During that same period in 2011, the average credit score for an FHA borrower was 701. FHA borrowers also have had higher debt-to-income ratios in recent years. Debt-to-income ratios measure monthly household income against other debt, such as credit cards, auto loans, and personal loans.

But loans insured by the Federal Housing Administration appear to be a strikingly different story. From January through March of this year, the average credit score for new-home purchase loans was 672, according to FHA data. By contrast, the average was 701 during the same period in 2011. Refinancings where borrowers replace their existing FHA loans with new ones carried average FICO scores of 709 in mid-2012; earlier this year, that had plummeted to 661.

There has also been a big increase in FHA loans with high debt-to-income ratios (DTIs) within the past several years. DTIs are a crucial measure of home buyers’ ability to repay their loans. They weigh monthly household income against ongoing bills for credit cards, auto loans, personal loans and other obligations such as child support and alimony, plus mortgage payments. The heavier your monthly debt obligations, the more likely you are to go delinquent on your new mortgage.

Between January and March of 2018, 1 of every 4 FHA loans had a DTI of more than 50 percent, according to the latest data available from FHA. As recently as 2013, just 12.7 percent of approved new FHA applications carried such a high debt load. In the first quarter of this year, almost 30 percent of new FHA borrowers had DTIs between 43 percent and 50 percent.

What does this mean for buyers who can’t meet the credit-score and DTI standards needed for most conventional loans? The good news is that you may have a path to homeownership at FHA. But if your household debts are heavy — especially if they exceed 50 percent of your income — get professional financial-counseling advice before signing up for an FHA loan. Your FICO score may meet FHA’s easing standards and your DTI may pass the test. But if you have to spend half or more of your income on your mortgage and other credit payments.

Buying doesn’t have to be a huge undertaking, but it’s one where details really matter. We realize the decision to Buy is a personal one that depends on your financial situation, future plans and lifestyle. 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 sell or buy your home. If you prefer a more personal touch, CALL 801-809-9866 today. 

 #RealEstateForSale #Homeownership #UtahRealEstate #Creditscore

Source: The Washington Post (Aug. 29, 2018)

Will a Seller’s Market Last?

“With increased interest rates and home prices, the Home Price 

Index is rising at a slower rate than it was earlier this year.”  “While markets in the western part of the country continue to experience rapid home-price growth, many of those metros are overvalued, and will likely experience a slowdown soon.”

Home prices rose both year over year and month over month,according to a recent study. July 2018 shows a 6.2 percent year over year from July 2017 to July 2018, as well as a 0.3 percent in July 2018 month over month.

The national home-price index predicts continue to increase by 5.1 percent year over year in July 2019, but expects the index to decrease by 0.2 percent month over month in August 2018.

The Market Condition Indicators found that 40 percent of metropolitan areas had an overvalued market in July, meaning home values were 10 percent below the sustainable level. According to the Indicators, while 40 percent were at value. 20 percent of the top 100 metropolitan areas were undervalued.

Additionally, 50 percent of the top 50 markets are considered overvalued. However, 62 percent of residents in these high-growth markets are holding off on selling, as they believe their home value will increase within three years. Note that 47 percent of residents in high-price growth markets and 31 percent in lower growth markets feel they are in a “sellers’ market,” meaning these buyers are holding off on selling.

“Many consumers see their homes as good investments.”  “Our consumer research indicates homeowners, especially those in high-price growth markets, are confident that by waiting to sell, they will receive a greater return on investment than they would today. In other words, sellers are largely staying put.

With fewer homes on the market, price pressure will continue to rise.” If you’re thinking about putting your house on the market, you’re probably wondering what you should do before you list it.

Getting a home ready to sell doesn’t have to be a huge undertaking, but it’s one where details really matter. We realize the decision to Sell or Buy is a personal one that depends on your financial situation, future plans and lifestyle. 

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 sell or buy your home. If you prefer a more personal touch, CALL 801-809-9866 today. 


Find the full story here.
#RealEstateForSale #Homeownership #UtahRealEstate

Things That Will Very Likely Get You Evicted

As a renter, you’re expected by abide by your

 landlord’s rules and regulations. If you don't, your belongings may end up unceremoniously dumped on the curb. What can we say? Some things in life are black and white; your lease is undoubtedly one of them.

To eliminate any confusion, we spoke with rental experts and compiled a list of the things that are sure to get you kicked out of your rental. Commit any of these malfeasances and your landlord is pretty much guaranteed to evict you.

1. Failure to pay rent

Let’s just get the most obvious reason out of the way. If you don’t pay your rent, the landlord is under no obligation to let you live in the unit for free.

“Every state has different laws on an eviction timeline that a property manager must follow.”  This is why you need to know your state’s laws, and you also need to know and understand your lease.

Each state has landlord-tenant laws posted online, and most states have a tenant-landlord handbook.

2. Criminal activity

As a general rule, doing anything that could get you arrested could also get you evicted. Having drugs or drug paraphernalia inside your unit is certainly grounds for eviction (in some states, your lease can be terminated with 24 hours' notice for drug-related activity), as is engaging in prostitution.

Your lease should have a statement regarding criminal activity and the consequences for engaging in this type of behavior.

3. Defying the HOA

It's the HOA's way or the highway! If you’re renting a home in an area with a homeowners association, you’re subject to the same rules and regulations as the homeowner. In fact, Stephens says the HOA can actually reserve the right to approve you as the tenant and review the lease agreement.

“If a tenant is causing problems within an HOA community, the HOA will begin by working with the homeowner to improve the resident's conduct.” 

If the situation doesn’t get better, he says the homeowner will be fined; in extreme cases—depending on the state—the HOA can force an eviction. However, it usually doesn’t come to this because the homeowner typically works to get the delinquent tenant out.

4. Failing to report damage

We all know trashing your rental can get you evicted. But you can also get the boot for failing to report damage to your landlord.

Whether the damage is your fault or not is irrelevant.
“Our lease states that they must report any damages to the property so that the landlord can make repairs.'

Breyer once had a particularly negligent tenant who poured so much grease down the drains that the water backed up into the house and the basement. Despite the mess, the tenant never told him it was happening.

“We did a quarterly inspection on the property to find standing water in the associated rooms.' 

The plumbers reported removing eight (yes, eight!) 5-gallon buckets of grease from the piping.

“We had to have the flooring, the subflooring, the baseboards, drywall, and three floor joists replaced, and spent over $15,000 on the repairs for this incident.” 

As you may have guessed, the tenant was promptly served a notice to vacate.
Let this cautionary tale be an extreme example of why speaking up about damages is important.

5. Being on a month-to-month lease

As a renter, sometimes you'll find yourself in an unlucky situation. If you're on a month-to-month lease and your building is purchased by new owners, there's a chance you'll be asked to leave. The owners may decide to renovate the units in the building to increase the property's value.

“We knew that the tenants did not meet our standard tenant screening criteria and we would be doing a renovation on the property,” about one of his properties. “We decided to keep them on the month-to-month agreement and gave them a 30-day notice to vacate when we were ready to begin renovations.”

Stop Renting? Buying doesn’t have to be a huge undertaking, but it’s one where details really matter. 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 Sell or Buy your home. 

 #Rents #Homeownership #UtahRealEstate

What Is MIP? Mortgage Insurance Premium

If you're a first-time mortgage borrower, you might be asking 

yourself, 'What is MIP?' Home buyers considering getting a loan from the Federal Housing Administration will find MIP, or mortgage insurance premium, especially relevant because all FHA loans require insurance.

Here's what you need to know about MIP, including the rate you can expect to pay and how these fees actually benefit home buyers who qualify for FHA loans.

What is MIP?

Essentially, MIP is an insurance policy required by the government on an FHA loan. Since the down payment on FHA loans can be as little as 3.5% of the total price, the government requires added financial protection.

'The purpose of mortgage insurance is to protect the lender, not the borrower,' says Brian Sullivan, the supervisory public affairs specialist for the FHA. 'With FHA loans, the insurance is to protect the federal government in the event a borrower defaults on the mortgage.”

How does MIP work?

When you receive approval for a loan, the FHA will require you to pay an upfront MIP (UFMIP) at the time of closing and an annual MIP, which is calculated every year and paid once a month.

Currently, the UFMIP rate is 1.75% of the amount of your FHA loan. For example, if you borrow $250,000, your upfront costs would be $4,375. The current annual premium rate is 0.85% for most FHA loans
The UFMIP will be part of the total closing expenses, which include your mortgage principal, interest, property taxes, and homeowners insurance. You can also roll the cost of the UFMIP into your escrow payments.

How does MIP benefit the homeowner?

The MIP protects the lender, but this fee is also what allows buyers to put as low as 3.5% down on a home. Essentially, an MIP puts homeownership in reach for many who wouldn’t be able to afford it otherwise.
'Lenders are much more willing to lend money for the purchase or refinance of a home knowing they’re protected against loss,' Sullivan says.

Can you cancel an MIP policy?

In the past, you could dump your MIP once you reached at least 20% equity in your home. But the housing crisis changed a lot of things, including insurance on FHA loans. Now, you must maintain the MIP for the life of the FHA loan.

Because of this, there’s only one option if you want to cancel your MIP: You can refinance your FHA loan to a conventional loan. It’s important to note that if you don’t have 20% equity in your home, you’ll still have the requirement of carrying private mortgage insurance until you reach that threshold.

Sell or Buy doesn’t have to be a huge undertaking, but it’s one where details really matter. 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 Sell or Buy your home. 

 #RealEstateForSale #Homeownership #UtahRealEstate #Mortgage
For more smart financial news and advice, head over to MarketWatch.