The kids are headed back to the classroom and it got me thinking that a lot of adults could use some schooling as well. So much has changed in mortgage and real estate in the last few years and recent numbers from Black Knight Financial Services show evidence of housing market recovery:
- Home prices are up 5.3% year-over-year
- Prices as of June rose for the 50th consecutive month
Interest rates are still low, but a lot of young people grew up during a time of great real estate distress and haven’t experienced the strong markets that propelled the worth and wealth building of their parents. They also haven’t experienced the evolution of interest rates and how high they’ve been to know anything other than the “historic lows” we’ve had for years. They won’t last…it’s time to get schooled up on the current market and what’s involved in buying a home to make an educated decision as to whether homeownership is possible and the right decision for the long run. The GCS Title team and I work with many outstanding, experienced real estate and mortgage professionals who can “teach” you what’s involved in the process and “instruct” you on your options. We’re happy to introduce you! ~Charlie
Home prices are up again according to the latest figures from CoreLogic. In June, U.S. home prices saw a 5.7% year-over-year increase. Anyone looking for a home in the Twin Cities Metro – whether it’s a first home, a move up or a down-size – has probably experienced the fast pace of the market due in part to low housing inventory. Some of that could be attributed to supply and demand, but CoreLogic’s Chief Economist Frank Nothaft says, “Mortgage rates dipped in June to their lowest level in more than three years, supporting home purchases. Local markets with strong economic growth have generally had stronger home-price growth.”
We did a blog recently explaining how home appreciation outpaced a leading investment index in 2015, and this year looks equally strong. If you have questions about whether or not real estate is a sound investment, now is a great time to talk to a real estate professional about the home you have – or the one you want. A conversation with a loan officer is also a great idea – CoreLogic’s chief economist mentioned interest rates and you should find out what they mean to you. At GCS Title, our team helps home buyers and sellers get to the “closing finish line” – but, we’re here for you at other times as well. What does the housing market news mean to you? We can help you get the answers you need – let’s talk! ~Charlie
…when a house goes on the market these days! Zillow’s June Market Report says properties are selling one week faster than they did a year ago and there are 5% fewer homes on the market. The average time on market for a home is 78 days nationwide – including the time it takes to close! Here are some things people need to know about these fast-paced market conditions: Both home buyers and home sellers need to get ready – because things are going to move quick once the sale is set in motion. If you’re buying your first home – or if you’re a seller moving to another home – make sure you have your financing lined up and that you’re pre-approved (that’s different from pre-qualified). If you haven’t found an experienced, professional Realtor and lender to work with – we can help!
Also, GCS Title is all about the customers. We understand the pressures buyers and sellers are under and what how important the transaction we are closing for you is. You can count on us to “bring the hustle” and make sure you can keep up with the market, your closing date and your goals. We’re here to help! ~Charlie
Seems like you can’t look, watch or listen to anything without hearing something about mortgage interest rates, the impact of Brexit an rates and even “more historic lows” and a possible refi boom. There’s a ton of articles, information, speculation and opinion about what homeowners can do and gain during times of low interest rates and a lot of it is interesting and helpful. Here are a couple highlights:
- Save thousands of dollars on the life of their loans by getting a lower rate or shorter term (15 vs. 30 year)
- Pay of a home equity line of credit
- Consolidating debt
- Get rid of mortgage insurance
These can all be great things…the problem is, you can’t know for sure if any of these things are possible and if they make sense for you personally when it comes to costs/fees/savings without getting specific, professional advice. While it looks so available online, it’s not necessarily personalized…a mortgage calculator just doesn’t tell the whole story. At GCS Title, we work with many, many incredible mortgage loan officers. These people are licensed, experienced – and they’re actual, local people who you can reach without going through an automated system – which is a big deal when you’re making choices and decisions that affect such a big part of your finances. Loan officers are happy to discuss your situation and let you know if you have options you didn’t know you had and their findings will be geared to what’s right for you – no obligation. Let us know if we can introduce you to a loan officer who can answer your questions…a refi boom could be a great thing – as long as it doesn’t blow up in your face. ~Charlie
The Spring-Summer market is underway and everywhere you read and watch, you’ll find comments about the real estate market, interest rate movement, shortages of homes for sale in certain areas and price ranges. People outside the real estate and mortgage industries may wonder what it all means – and if they don’t, they should. It’s so easy to draw a conclusion about how the market’s doing, whether or not it’s a good time to buy or sell, if mortgage interest rates are good and so on. The problem with that is, it’s virtually impossible to know whether or not that conclusion is true without information from a real estate and mortgage professional that was researched and prepared specifically for an individual or family. Here are some questions consumers should NEVER try to answer by reading the news or surfing the net alone:
- Can I afford and qualify for a home?
- Can I get enough money for my home to buy a different one?
- Are interest rates good or should I wait to see if they’ll go lower?
- Is it a good time to buy a home or are prices going to hold steady or go down?
These are just a few typical questions that should be verified with a review of your personal situation. Drawing the wrong conclusion based on general information or statistics can cause you to miss an opportunity. Don’t worry – you don’t have to “sign your life away” to get a professional, specific opinion. We at GCS Title work with many experienced professionals and can connect you with people who can answer your questions with no obligation or pressure. Let us know what questions are on your mind – we’re happy to help you get them answered. ~ Charlie
On the House
Charlie Lawson – GCS Title
Recent figures from the government might be a bummer for home builders, but they’re keeping a stiff upper lip. There are so many numbers about what’s going on month-over-month and year-over-year, but there’s a couple of quotes from big brains in the industry that I think explain the fact that builder confidence hasn’t wavered much even though reports indicate their progress has hiccupped a little:
“We still expect strong housing demand and low inventory in the market for previously owned homes to lift single-family housing starts, later in the year.” – Genworth Mortgage Insurance Chief Economist Tian Liu
We mentioned tight inventory in some market areas and price ranges in last week’s blog, so Mr. Liu’s assessment seems right on and a good reason for home buyers to check out new construction. The next quote also touches on something we mentioned in last week’s blog – the fact that rates dropped to a three-year low:
“Solid job creation and low mortgage interest rates will sustain continued gains in the single-family housing market in the months ahead.” – National Association of Home Builders Chief Economist Robert Dietz
Whether you’re looking for a brand new home – or just a home that’s brand new to you – the same things are important: Planning and professional help. Anyone thinking of buying a home needs to get a personal consultation regardless of what your timeframe is. Competition for existing homes can be tough, so pre-approval for a mortgage and great representation will help you make the most of what’s available. We work with many experienced professionals and would be glad to refer you to someone who can help. We also have many builder partners, so let us know if we can help! ~Charlie
On the House
Charlie Lawson – GCS Title
Different aspects of the housing market are going in different directions. But the latest “ups and downs” are pretty favorable. RE/Max is out with its latest National Housing Report and it shows we’ve got a healthy market that’s really picking up:
- The U.S. housing market has gone 50 months without a drop in the median sales price
- Home sales jumped 33.4% from February to March – that’s also a 3.6% year-over-year increase
- Forty-four of the 53 metro areas included in the report experienced home price increases
More homes have sold, prices are holding steady and rising in most areas; we’re also finding that the time it takes a home to sell is decreasing:
- March marked the 36th consecutive month where time on market was fewer than 80 days
- The average days on market in March was 71 – down four days from February and seven days year-over-year
As we’re seeing a jump in market activity, we’re simultaneously seeing a crash in mortgage interest rates. We’ve got the lowest interest rates since May 2013 according to the Primary Mortgage Market Survey from guarantor Freddie Mac. This “crash” is a good thing for a lot of people! Lower rates will make it possible for more people to qualify for mortgages and can stimulate buying activity, allowing more homeowners to be able to move up, downsize or move on. One thing to be concerned about is low housing inventory in some housing areas and price ranges; however, your professional real estate and lending professionals can help you be prepared to compete for the home of your dreams in a fast-paced marketplace. Getting pre-approved for a mortgage (and talking to a lender even if you’re not quite ready to buy) and discussing your goals and preferences with a Realtor will help you navigate the market conditions and take advantage of interest rates that won’t last forever. ~Charlie
I’m not asking where you were born and raised, but rather where your Fixed Rate Mortgage (FRM) is. There are three groups of people I’m talking to here: 1) People who have a mortgage – there are questions you need to be asking, 2) Renters – there are questions you too need to be asking and if you don’t – well, you may regret that later and 3) Our Realtor and Loan Officer partners to gather their support in communicating the following important news.
To satisfy the regulators, I will note that there are serious rules about quoting mortgage interest rates in publications and marketing materials, so I won’t do that directly here. But the Primary Mortgage Market Survey from government-sponsored enterprise Freddie Mac as of February 18 shows interest rates for 30-year FRMs at under four-percent and rates for 15-year FRMs at under three-percent. See for yourself: http://www.freddiemac.com/pmms/
GCS isn’t a mortgage company, so you may be wondering why I’m blogging about this. The reason I – and all of my amazing staff – are in this business is because we love helping people make their dreams of homeownership come true, being there to help them through the process and seeing them enjoy all the benefits from making that important investment. Ask anyone at GCS why they do and like their jobs and they will tell you the same.
Time to tie all this together: A time will come when mortgage interest rates will rise and it will become more expensive to purchase or refinance a home. This will limit options for people across the board – whether they’re buying their first home, moving up, moving on, downsizing, buying a vacation home or even wanting to reorganize their assets for other purposes. I think it’s so important for renters and homeowners to talk to experienced real estate and lending professionals and ask questions about their current situation and what they would like to do in the next 1, 5 and 10 years. It’s highly likely that rates will change (not in a good way!) and there will be fewer choices. Professional Realtors and Loan Officers are not in business to make a sale no matter what…they believe their job is to help you be successful over the long term and be your advisors whether or not you’re buying, selling or refinancing at a specific time. Choosing and checking in with trusted real estate and lending professionals should be part of your routine. We at GCS happen to know quite a few of them and can help you connect.
Most people in California’s Bay Area don’t have the income necessary to afford homes there. The “U.S. Sustainable Home Price Report—Fourth Quarter-2015” from Fitch Ratings says that home prices in San Francisco are “unsupportable by area incomes.” The report mentions parts of Florida and Texas that have the same issue, though not as severely. While we certainly don’t have that problem here in Minnesota, there does seem to be a constant challenge with regard to what people know and *think* they know about qualifying for a mortgage and how owning versus renting benefits one’s overall financial picture.
It’s easy to see why the public may be suspicious of Realtors’ and Loan Officers’ motives when they tout the benefits of homeownership when following up on a lead – it’s human nature to conclude someone is just trying to sell you something and discount what they’re saying. That’s why we as industry professionals have to be talking about this every day to everyone. Questions that can start conversations and really reinforce the benefit of owning over renting are things like:
“Do you think it’s better to put money in the bank or spend and never see it again?”
“What if your biggest monthly cost also doubled as savings?”
We certainly hope homeownership doesn’t exceed people’s reach here in our neck of the woods or anywhere for that matter. Starting these dialogues with the public is never a bad idea – whether or not they have decided they are “in the market for a home.” Naturally, we’re always trying to build and increase business, but part of our job is sharing the understanding of how important the product we deal with (homes) is to the benefit of the clients – past, current or “eventual” – we serve.
Eleven months may sound like a long – or short – period of time to you, but when it comes to buying a MN home, it’s a pretty good number. The Chief Economist for mortgage guarantor Fannie Mae has some interesting news that should get renters’ attention: Doug Duncan believes “…mortgage rates will edge up only gradually, ending the year around 4.2%.” If this prediction proves true, that gives people almost an entire year to get in position to buy a MN home and still take advantage of interest rates that will most likely not be this low again in their adult lifetimes.
This is an important message that can have huge, long-term positive impact on the financial future of people who take advantage of this low interest rate opportunity. Most industry professionals and experts agree that it’s unlikely interest rates or home prices will go down, so the old phrase “buy low, sell high” applies to today’s market climate.
Let’s make sure the public knows the benefits of homeownership and how it’s key to how most Americans build worth and wealth. I think it’s also important to educate consumers about the fact that the home buying process isn’t confined to just a month or two. We know that people should talk with a lending professional to make a plan to get ready to buy, but the public doesn’t realize that getting qualified can be a process involving different steps over a few months rather than a yes or no answer at a single point in time. We’ve got eleven whole months to get people in position to become homeowners – let’s do this!