4 Reasons to Buy Before Winter

 

by The KCM Crew on September 8, 2014    
                

It's that time of year, the seasons are changing and with them bring thoughts of the upcoming holidays, family get togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don't have to look much farther to find four great reasons to consider buying a home now, instead of waiting.
 

1. Prices Will Continue to Rise

 

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 11.2% (most pessimistic) and 27.8% (most optimistic).
 

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
 

2. Mortgage Interest Rates Are Projected to Increase

 

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year.
 

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
 

3. Either Way You are Paying a Mortgage

 

As a recent paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
 

4. It’s Time to Move On with Your Life

 

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.
 

Bottom Line

 

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Are Lending Standards Loosening?

by The KCM Crew on February 27, 2013

Celia Chen, an economist for Moody’s Analytics, recently reported on her projections regarding mortgage standards throughout 2013.

“The housing recovery began in earnest in 2012, despite constraints placed by a still-tight mortgage lending environment. This year promises improvements as the drivers of tough credit standards reverse. First, consumer credit quality is improving, which will help increase the number of creditworthy borrowers. Second, policymakers, regulators and courts are ironing out the legal and regulatory issues that cast a pall of uncertainty over the mortgage industry. Combined with mortgage interest rates that will remain low, mortgage credit will be more accessible to households this year, although still not back to normal. Nonetheless, a slight opening of the credit spigot is a positive for the housing outlook.”

She warns that normal credit standards will not return for some time as new QR and QRM rules are determined.

“On the supply side, easy credit is still a long way off as lenders loosen incrementally from very high standards: The share of loans originated for borrowers with the highest credit score has remained large, averaging 82% in the last two years, compared with 50% in 2005 and 2006. New rules issued by the Consumer Finance Protection Bureau in January keep mortgage standards high and credit tight, as lenders will be required to fully document every borrower’s income, employment and assets regardless of credit history. Other rules will effectively ban loans with interest only or negatively amortizing payments.”

However, she sees things improving as we move through the year because there is less risk for the banks now that house prices are again appreciating.

“Finally, rising house prices give lenders more breathing room to extend credit. Over the last 18 months, large lenders have loosened or left standards stable on prime loans that dominate mortgage originations, reports the Federal Reserve’s survey of senior lending officers.”

What Impact Will This Have on the Housing Market?

“Although mortgage supply will remain constrained, improved consumer credit quality combined with steady growth in jobs, low mortgage interest rates, and modestly rising house prices means that more households will be able to qualify for a mortgage. Greater credit availability will in turn help drive stronger home sales and stronger price appreciation and help keep the housing market and economy on an upward path.”

If you are thinking of buying a home in Westport or surrounding areas please visit www.DistinctiveHomes-NE.com for a free list of homes for sale in Westport and Bristol County MA and RI.

If you are thinking of selling your home contact me for a FREE Current Market Analysis and to learn about our Market Plan to get your home SOLD!

We work with one going in mind, YOURS!

Noemi Cardoso
Local Office. Local Agents. Local Knowledge.
William Raveis Real Estate
911 Main Rd - Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com

 

House Prices: When Will 2006 Values Return?

by The KCM Crew on February 13, 2013

There is a lot of optimism regarding house prices. The most recent Home Price Expectation Survey projects a 3% -3.5% increase in values for each of the next 5 years. We concur that most parts of the country will see varying levels of appreciation over that time. However, we must realize that we will not see 2006 values any time soon.

Barclays’ U.S. residential credit strategy team recently predicted that 2006 values would return in 2021. From an article in DSNews:

“While the floor appears to have materialized, they stress that home prices are likely to recover slowly over the next 4 to 5 years.  

“We expect on average a 3-4 percent annual increase in home prices [nationally] in coming years,” they said in an updated market outlook.

At that rate, Barclays’ analysts explained, home prices will be slightly below their 2006 peaks even in 2020, finally returning to pre-crisis peak levels in June 2021.
 

In an article for CNNMoney, the analytics firm Fiserv projected that 2006 prices would not return until 2023:

“Fiserv forecasts prices will bounce back an average of 3.7% a year for the next five years — a rate that would still leave prices 20% below the peak. At that forecasted growth rate, the national average high of $238,000 would not be hit again until 2023.”

If you are waiting for 2006 values to return before selling your house, realize it will take years.

If you are thinking of buying a home in Westport MA visit www.DistinctiveHomes-NE.comfor a free list of homes for sale in Westport MA.
 

If you are thinking of selling your home contact me for a FREE Current Market Analysis and to learn about our Market Plan to get your home SOLD!

We work with one going in mind, YOURS!

Noemi Cardoso
Local Office. Local Agents. Local Knowledge.
William Raveis Real Estate
911 Main Rd - Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com