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Mortgage Rates Move Lower Than Expected

by Melissa Dierks

DAILY REAL ESTATE NEWS | FRIDAY, FEBRUARY 05, 2016
For the fifth consecutive week, mortgage rates trended down, surprising even forecasters. The 30-year fixed-rate mortgage is now at its lowest average since April 30, 2015.

"Market volatility -- and the associated flight to quality -- continued unabated this week,” says Sean Becketti, Freddie Mac’s chief economist. “The yield on the 10-year Treasury dropped another 15 basis points, and the 30-year mortgage rate fell 7 basis points as well, to 3.72 percent. Both the Treasury yield and the mortgage rate now are in the neighborhood of early-2015 lows. These declines are not what the market anticipated when the Fed raised the Federal funds rate in December. For now, though, sub-4-percent mortgage rates are providing a longer-than-expected opportunity for mortgage borrowers to refinance."

Read more: Holding Firm Against the Tide
This week the market forecasted zero hikes in 2016 for the Fed’s short-term rates, which could keep mortgage rates low. Analysts are now predicting that the closely monitored Fed Futures market has nearly a 60 percent chance of no rate hikes at all this year, marking a “dramatic U-Turn from only a month ago when the market was pricing in a 75 percent probability the Fed would increase rates at least once in 2016,” CNNMoney reports.

The Fed had risen rates 0.25 in December, its first increase in nearly 10 years. But with stock markets spiraling downward and the fragile global economy, analysts believe this will likely prompt the Fed to pause in raising rates.

"Things have happened in financial markets and in the flow of economic data that may be in the process of altering the outlook for growth," Fed vice chairman Bill Dudley told MarketWatch this week.



 

Source: Freddie Mac and “Market Now Predicts ZERO Fed Hikes in 2016,” CNNMoney (Feb. 3, 2016)

Fewer Buyers Are Bringing All-Cash to Close

by Melissa Dierks

DAILY REAL ESTATE NEWS | FRIDAY, FEBRUARY 05, 2016
One in three buyers paid all-cash to close on their real estate transactions near the end of 2015, according to new data from CoreLogic. The share of all-cash transactions dropped to 33.9 percent in October year-over-year – way down from the 46.6 percent peak reached in January 2011.

Read more: Cash Sales Near 50% in These Cities
The number of all-cash transactions dropped to 33.9 percent year-over-year in October. Still, historically on a pre-crisis average, cash sales tend to make up about 25 percent of the market. CoreLogic estimates that cash sales will return to that level by mid-2018.

Sharp declines in REO sales is the main reason cash sales are steadily dropping, CoreLogic notes. REO sales comprised 7.3 percent of all residential home sales in October 2015, a third of the peak in January 2011 at 23.9 percent.

“Foreclosure completions have fallen substantially over the past few years across the nation,” says Frank Nothaft CoreLogic’s chief economist. “This has led to a drop in REO sales. Roughly one-half of REO homes are bought for all cash. Thus, the drop in REO has been an important reason for the national decline in the cash share of all sales.”

The following states continue to see cash sales remain higher than 40 percent in October:

Alabama: 51.7%
Florida: 46.7%
New York: 46.3%
West Virginia: 44.4%
Indiana: 40.8%
Source: “What’s Driving Down the Cash Sales Share?” DSNews (Feb. 4, 2016)

First-Floor Master Suites: In or Out?

by Melissa Dierks

DAILY REAL ESTATE NEWS | TUESDAY, FEBRUARY 02, 2016
As baby boomers reach retirement age, accessibility has become a popular buzzword in home design. As such, master suites on the main floor are a growing trend in new-home construction. BUILDER online recently took a look at whether that trend will stick around.

Read more: Put the Cool Back in Ranch-Style Homes
Laura Segers, vice president of sales operations at Frank Betz Associates, believes the main floor master suite has some staying power. Frank Betz Associates’ data of its top 100 floorplans shows a slight increase in the number of two-story designs with the master suite upstairs from 2013 to 2014 (14 percent vs. 15 percent, respectively) but its number of one-story floorplans rose by two percentage points. The majority of its best-selling floorplans feature accessible master suites that have no steps to enter, Segers says.

“I seem to remember this type of design appearing in the mid to late 1980’s and it has been continually growing in popularity ever since,” Russell “Rusty” Moody, president of Frank Betz Associates, told BUILDER Online. “Our in-house sales statistics prove the trend is real and here to stay- of the current top 20 best-selling designs at Frank Betz Associates, Inc. [from the last two years] 17 are one story or master-on the-main plans.”

Moody’s Analytics also suggests this design trend has staying power, given the aging population needs for accessibility; home owners’ greater desires for privacy; multigenerational demand; and demand from the second home/resort home market that tend to prefer main-level master bedrooms so they do not need to heat or cool the upper levels until guests arrive.

Source: “Trend Check: How Popular Are Main-Level Master Suites?” BUILDER Online (2015)

These Are the ‘Happiest’ States in the U.S.

by Melissa Dierks

DAILY REAL ESTATE NEWS | TUESDAY, FEBRUARY 02, 2016
Hawaii reclaims its number one spot as the “happiest” state in the country – bumping out last year’s winner Alaska. The state has held the happiness title five times since 2008, according to the latest Gallup-Healthways Well-Being Index.

Read more: A Surprising State Named Top-Moving Spot
The index measures the well-being of states across five elements: purpose, social, financial, community and physical. In 2015, financial well-being increased as well as physical fitness while there were also declines in both food and healthcare insecurity. What’s more, life evaluation – in which how Americans rate and perceive their lives – surged to a record high, according to the index.

“Well-being in the U.S. exhibits regional patterns, with the northern plains and mountain west reporting higher levels of well-being, along with some western states and pockets in the northeast and Atlantic states,” according to the report.

For 2015, here are the states that scored the highest in well-being, according to the index:

Hawaii
Alaska
Montana
Colorado
Wyoming
South Dakota
Minnesota
Utah
Arizona
California
Texas
Florida
Wisconsin
Iowa
North Dakota
Download the report to the full list to see where your state stacks up on the well-being index.

Source: “2015 State Well-Being Rankings,” Gallup-Healthways Well-Being Index (January 2016)

4 Must-Know Tips for Buying, Selling in 2016

by Melissa Dierks

DAILY REAL ESTATE NEWS | FRIDAY, JANUARY 15, 2016
What do buyers and sellers need to know to be smart about the housing market in 2016?

“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory and fierce competition between buyers,” says Jonathan Smoke, chief economist for realtor.com®. “Buyers looking to close this year need to keep an open mind and be prepared to move quickly when they find a home that meets their needs. For sellers, it’s about understanding the ins and outs of their local market so they can optimize the price of their home and close quickly.”

Read more: Trends That'll Influence Homes in 2016
Realtor.com® just released “Top Tips for Home Buyers and Sellers in 2016” to help guide house-hunters and home sellers on what’s most important for buying and selling a home this year. Here’s what they had to say.

Top Tips for Buyers in 2016

1. Don’t wait. More than 85 percent of buyers who say they plan to buy a home in the next year say they will wait until the spring or summer of 2016, shows a recent realtor.com® survey. But buyers who start their hunt early will likely face less competition and have just as many homes for-sale to consider.

2. Shop around for a mortgage. Buyers shouldn’t take the first rate-quote they receive and should talk to more than one lender. A lower interest rate could equate to thousands in savings over the life of the loan. Mortgage rates are largely expected to rise over this year. Realtor.com® is predicting mortgage rates to reach 4.65 percent by the end of this year (they’re currently just under 4 percent).

3. Don’t discount buying new. New-home construction is expected to surge this year, with an expected 16 percent increase in new home sales year-over-year. Buying new most likely means less competition and a wider selection of homes. But a caveat: New-homes typically cost more. Realtor.com® predicts the following markets will dominate with new-home sales this year: Boise City, Idaho; Charleston-North Charleston, S.C.; Salt Lake City; Nashville-Davidson-Murfreesboro-Franklin, Tenn.; and Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.

4. Buy in the Midwest or South. The Midwest and South will likely offer the most affordable options for home purchasers in 2016. Realtor.com® singles out the following markets as offering buyers high affordability, rising inventory, and some of the most favorable lending standards: Dayton, Ohio; Birmingham-Hoover, Ala.; Harrisburg-Carlisle, Penn.;Augusta-Richmond County, Ga.-S.C.; and Des Moines-West Des Moines, Iowa.

Top Tips for Sellers in 2016

1. List during prime-buying season. Realtor.com®’s data shows that the prime home buying season usually begins in April and reaches a peak in June. “Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings,” according to realtor.com®’s report.

2. Price to sell. Home prices nationwide are expected to rise 3 percent year-over-year, with a few markets like Stockton, Calif., and Las Vegas expected to see a whopping 10 percent increase this year alone. Home sellers would be wise to take their local REALTOR®’s advice to price their home adequately for the market and based on comparables.

3. Consider an incentive. Is there something extra a seller could throw in to entice buyers? Sellers who are open to negotiate beyond just price may find more success in hooking a buyer. Thirty-seven percent of all sellers offered some type of an incentive last year.

4. Sell in California. The Golden State is being singled out as having the most markets that will likely tilt in sellers’ favor this year. Job growth, rising home prices, and limited inventories are boosting housing markets in the state, most notably in Stockton-Lodi; Bakersfield, Calif.; Fresno, Calif.; and San Jose-Sunnyvale-Santa Clara, Calif., according to realtor.com®.

Source: Move Inc.

Mortgage Rates Still on a Downward Trend

by Melissa Dierks

DAILY REAL ESTATE NEWS | FRIDAY, JANUARY 15, 2016
Mortgage rates continue to defy forecasts, as the 30-year fixed-rate mortgage falls even lower this week. This marks the second consecutive week where 30-year fixed-rate mortgages declined.

"Long-term Treasury yields continue to drop, dragging mortgage rates down with them,” says Sean Becketti, Freddie Mac’s chief economist. “Turbulence in overseas financial markets is generating a flight-to-quality which benefits U.S. Treasury securities. In addition, sagging oil prices are capping inflation expectations. The net effect on the 30-year mortgage rate was a 5 basis point drop to 3.92 percent."

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 14:

30-year fixed-rate mortgages: averaged 3.92 percent, with an average 0.6 point, dropping from last week’s 3.97 percent average. Last year at this time, 30-year rates averaged 3.66 percent.
15-year fixed-rate mortgages: averaged 3.19 percent, with an average 0.5 point, falling from 3.26 percent the prior week. A year ago, 15-year rates averaged 2.98 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.01 percent, with an average 0.4 point, falling from 3.09 percent last week. Last year at this time, 5-year ARMs averaged 2.90 percent.
Source: Freddie Mac

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Melissa Dierks
Keller Williams Professional Partners
7025 W Bell Road, Suite 10
Glendale AZ 85308
Direct: (623)229-0154
Office: (623)643-1092
Fax: (623)201-7562

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