12,575 Houses Sold Yesterday!

 

by The KCM Crew on April 23, 2014 


If you read certain headlines, you might be led to believe that the housing recovery has come to a screeching halt. Naysayers are claiming that rising mortgage rates and a lack of consumer confidence are keeping Americans on the fence when it comes to purchasing real estate. That is actually far from reality.


After all 12,575 houses sold yesterday, 12,575 will sell today and 12,575 will sell tomorrow. 12,575!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. According to the report, annualized sales now stand at 4.59 million. Divide that number by 365 (days in a year) and we can see that, on average, over 12,500 homes sell every day.

If you are considering whether or not to put your house up for sale, don't let the headlines scare you. There are purchasers in the market and they are buying - to the tune of 12,575 homes a day.

So, if you are ready to sell give me a call and let's get started.

Noemi Cardoso
William Raveis Real Estate
Cell: 508-558-1945
www.DistinctiveHomes-NE.com

Money Magazine: Buy Now Not Later

by The KCM Crew on March 24, 2014 in For Buyers

We have often suggested that potential home buyers consider rising interest rates when thinking about the true cost of a home. Remember, cost is not determined by price alone but by price and mortgage rate. The longer a buyer waits, the higher the mortgage payment will be if rates continue to increase (as is projected by Fannie Mae, Freddie Mac, the National Association of Realtors and the Mortgage Bankers Association).

Money Magazine, in its latest issue, agreed with our analysis as they also warned their readership of the same ramification if they waited to buy a home.

Here is what they said:

"BE MINDFUL OF RATES. The average interest rate on a 30-year fixed loan is predicted to climb from the current 4.4% to 5.3% by the 2015 spring buying season, according to Freddie Mac. For a $250,000 loan, that means that a borrower who waits would pay $136 more per month and an additional $49,090 in interest over the life of the loan. Will you need a big loan? Better to act soon before rates tick up."

And the monthly increase Money mentioned did not take into consideration that prices are also projected to increase over the next year. Here is what the additional cost would be if prices rise by the 4.5% projected by the latest Home Price Expectation Survey and interest rates go to 5.3%.

When Will Mortgage Rates Hit 5%?

by The KCM Crew on November 26, 2013 in Interest Rates 

The big question for homebuyers is when interest rates will begin to rise to the 5% mark. The effect of a rise in mortgage rates could be a dramatic increase in the monthly mortgage payment when purchasing a home. In an article last week, HousingWire quoted two different sources regarding this issue.

Most experts are projecting that rates will rise when the Fed decides to taper the purchase of bonds which has acted as a stimulus to the housing market by keeping long term mortgage rates at historic lows.
In the article, Sterne Agee’s managing director and chief economist Lindsey Piegza pointed out:

"Federal Reserve officials said they might reduce their monthly bond buying program from $85 billion 'in coming months' as the economy continues to improve."

The article also quotes Frank Nothaft, chief economist with Freddie Mac:

“By the end of 2014, rates will probably approach and perhaps touch 5%. A reason we see the uptick in rates is that I do think some point the Federal Reserve will start to taper and scale back its very active purchase on long-term Treasuries and mortgage-backed securities.”

Rates will hit 5% sometime in 2014. It might be better to buy sooner rather than later.

If you are ready to make a move before you only think about the good old days call me and let's start looking for you dream home.

Noemi Cardoso
William Raveis Real Estate
Cell: 508-558-1945
www.DistinctiveHomes-NE.com

Mortgage Rates after the Bernanke Announcement

by The KCM Crew on September, 2013 in Interest Rates

Last week, Bernard Bernanke startled many by announcing that the Fed will not wind down their bond buying program right now. The program is part of an overall stimulus package geared at bringing back the national economy. The Fed’s purchase of these bonds over the last few years has driven mortgage rates to historic lows. The assumption that there would be a reduction in bond purchases has caused 30 year mortgage rates to spike upward over the last few months.

Surprisingly, Bernanke revealed the Fed will continue bond purchasers at the current pace. What happened and what does it mean to mortgage interest rates?

What would have happened if they reduced bond purchases?

 

According to Bankrate.com:

“The Fed could have caused rates to shoot up this week if it had announced the tapering of its bond-purchasing program.”

Why did the Fed decide not to start winding down bond purchases?

 

Moody’s Analytics reported that there were three reasons:

1. Subpar economic data
2. Tighter financial conditions
3. Uncertainty surrounding fiscal policy

What does this mean to a buyer applying for a mortgage?

 

Those at Bankrate.com explain:

“For now, borrowers have dodged another spike in rates. The Fed's announcement might even cause rates to drop in coming days, says Paul Edelstein, director of financial economics at IHS Global Insight.
‘Mortgage rates should fall back -- not massively, but to some extent,’ he says.
That doesn't mean homebuyers and homeowners should wait for lower rates, mortgage professionals say.
Eventually, once the Fed lets the mortgage market and the economy start walking on their own, rates will probably head back to the 5 percent or 6 percent range, says Scott Schang, manager for Broadview Mortgage Katella in Orange, Calif."

When will the Fed begin winding down bond purchases? 

 

According to an article in the Wall Street Journal:

“Federal Reserve policy makers decided this week that the economy isn't in the right place for them to start winding down their bond-buying program. By the time they meet in December, it might be.
The decision to not start winding down the bond-buying program now was close… The economy only needs to get a little bit better over the next few months for the central bank to get its nerve back. That should be an easy bar for the economy to clear.”

Bernanke himself has not ruled out that the Fed could still scale back the stimulus this year. He stated:

"If the data confirms our basic outlook, then we could move later this year.”

Bottom Line

 

Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, IL had a great quote in the Bankrate article:

"Remember that rates go up like a rocket and fall like a feather."

Still, Bankrate.com itself probably put it best: Grab the gift before it's gone!

Noemi Cardoso
William Raveis Real Estate
Serving MA & RI
www.DistinctiveHomes-NE.com

3 Financial Reasons to Buy a Home NOW! (Part II)

by The KCM Crew on March 26, 2013

 

This week, we are going to look at the three financial reasons to buy a home now instead of waiting: prices are rising at an accelerated rate, interest rates are increasing and rents are skyrocketing. – The KCM Crew

Part II – Interest Rates Are Increasing

A big component in the cost of a home is the mortgage interest rate a purchaser pays. Understanding where rates are headed will help in making a decision whether to buy now or wait.

So, Where Are Rates Headed?

No one can know for sure. The Fed has been artificially holding rates down to stimulate the economy. However, as the economy improves, many experts expect rates to creep up. As an example, HSH Associates, the nation’s largest publisher of mortgage and consumer loan information, recently explained:

“The stronger the economy becomes, the higher rates may grind; the Federal Reserve is keeping them low to goose the economy, but an economy responding to the Fed’s medicine will soon see less of a need for it in order to function. If not otherwise manipulated, higher rates are the natural result of a growing economy, as rising demand for available credit supply and concerns about inflation allow costs to rise.”

The Mortgage Bankers Association (MBA) agrees. They were quoted in HousingWire late last year regarding their thoughts on where rates would be headed in 2013.

“After reaching record lows in 2012, mortgage rates are expected to creep up slowly in 2013, the Mortgage Bankers Association predicted.”

In the MBA’s latest Mortgage Finance Forecast they forecast that the 30 year interest rate will be 4.3% by the end of the year. This represents an increase of almost a full percentage point from the 3.4% rate available at the end of 2012.

For example, we show the impact a one percent increase in rate will have on the monthly principal and interest payment on a $200,000 mortgage.

Freddie Mac’s Weekly Primary Mortgage Market Survey reveals that rates have increased by 2/10ths of a percentage point already this year.

As we mentioned, no one knows for sure where rates will be a year from now. But, many experts think they may be as much as a point higher. With rising residential real estate prices and the possibility of higher mortgage rates, waiting to buy a home makes no sense in our opinion.

Tomorrow, we will look at skyrocketing rents.

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 

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