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Mortgage Rates in Free Fall, After Fed's Vote

by Melissa Dierks

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 25, 2015
The 30-year fixed-rate mortgage averaged 3.86 percent this week, dropping lower after the Federal Reserve's decision last week to hold off on raising the Federal funds rate.

Read more: Fed Votes to Hold Off on Rate Hike, For Now
"Global growth concerns and lackluster inflation convinced the Fed to defer a hike in the Federal funds rate," says Sean Becketti, Freddie Mac's chief economist. "In response, Treasury yields fell about nine basis points over the week, with some larger day-to-day swings along the way."

That marks nine consecutive weeks that mortgage rates have now remained below 4 percent.

"These low mortgage rates have supported strong home sales, and 2015 is on pace to have the highest home sales total since 2007," Becketti says.

However, on Thursday, Federal Reserve Chair Janet Yellen said the U.S. central bank was on track to raise interest rates this year for the first time in nearly a decade. The Fed's benchmark short-term rate has stayed near zero since December 2008, which has also helped to keep mortgage rates low ever since.

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 24:

30-year fixed-rate mortgages: averaged 3.86 percent, with an average 0.7 point, dropping from last week's 3.91 percent average. Last year at this time, 30-year rates averaged 4.20 percent.
15-year fixed-rate mortgages: averaged 3.08 percent, with an average 0.6 point, dropping from last week's 3.11 percent average. A year ago, 15-year rates averaged 3.36 percent.
5-year hybrid adjustable-rate mortgages: averaged 2.91 percent, with an average 0.5 point, dropping from last week's 2.92 percent average. Last year at this time, 5-year ARMs averaged 3.08 percent.
1-year ARMs: averaged 2.53 percent, with an average 0.2 point, dropping from last week's 2.56 percent average. A year ago, 1-year ARMs averaged 2.43 percent.
Source: Freddie Mac and "Fed's Yellen Gets Medical Attention After Struggling With Speech," Reuters (Sept. 24, 2015)

Property Taxes Are on the Rise

by Melissa Dierks

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 25, 2015
Property tax collections have increased nearly $13 billion or by nearly 3 percent over the past year, according to a new analysis by the National Association of Home Builders.

Property tax collections – including commercial real property taxes and personal property taxes – totaled more than $503 billion over the last year. Property taxes are critical to communities' financials, making up 38.9 percent of state and local tax receipts.

Read more: Where Owners Pay the Most in Property Taxes
"Gains for state and local non-property tax collections have outpaced increases in property tax receipts in recent years because such non-property taxes experienced the greatest declines during the recession," NAHB notes on its blog, Eye on Housing. "The impact pushed the property tax share of total receipts from the four major sources from a high of 44.9 percent in the third quarter of 2010 to just below 39 percent for the second quarter of 2015."

NAHB economists point out that the current share is close to the pre-housing boom (2001-2003) average of 38 percent.

Find out where owners pay the most in property taxes nationwide.

Source: "Property Tax Collections Increase," National Association of Home Builders' Eye on Housing blog (Sept. 22, 2015)

Rising Mortgage Rates Won't Spook Buyers

by Melissa Dierks

Mortgage rates are likely to rise in the coming weeks and many housing analysts have warned that the rises will likely shake the housing market as borrowing costs get more pricey. But the fear of rising rates isn't concerning home buyers yet, according to a new consumer survey by the real estate brokerage Redfin.

Rising mortgage rates barely appeared in list that ranked the top buyer concerns. In fact, just five percent of consumers surveyed said their buyer concern was that "mortgage rates will go up before I can buy." But buyers showed much more fear over home prices rising too high (27 percent); too much competition from other buyers (17 percent); not enough for-sale homes to choose from (14 percent); having to sell a home first (8 percent); and not having enough saved for a down payment (6 percent).

Read moreHow High Will Mortgage Rates Actually Climb?

Nearly 72 percent of buyers recently surveyed say they expect interest rates to rise in the next six months. But fewer than 7 percent of potential home buyers said they were in a hurry to purchase a home before mortgage rates rose, according to the Redfin survey. Instead, buyers said they were more motivated to buy because of a new child, marriage, or other life event (26 percent); rent fatigue (13 percent); and a belief that real estate is a good investment (10 percent).

If mortgage rates rise to 5 percent or more, consumers say they may just adjust what they're looking for but it won't make them not buy. Forty-four percent of consumers surveyed say that rates spiking to 5 percent or more would make them want to look for a cheaper house or 21 percent say they would save for a larger down payment then. Only 15 percent said mortgage rates that rose by that much would make them no longer want to buy a home. 

Source: "A 5 Percent Mortgage? No Big Deal, Homebuyers Say," Forbes.com (Sept. 11, 2015)

 

How Sellers Irk Home Buyers

by Melissa Dierks

Home sellers can do lots of things that drive home buyers nuts, from playing mind games to taking things in the home when they move out that they shouldn't have, says McKay Price, assistant professor of real estate finance at Lehigh University.

Read moreThe Pain of Fixture Feuds

Bankrate.com recently highlighted a few ways that sellers are getting on the nerves of buyers. Among those top offenses:

  • Playing mind games. "What drives a buyer crazy? Falling in love with a house that's not really for sale," according to the Bankrate.com article. "Or one that has problems that a seller refuses to fix." Buyers are getting annoyed at homes that need repairs that sellers refuse to make. When a home inspection reveals a home needs a new water heater or roof, for example, sellers often make the repair or adjust the price. But some stubborn sellers insist on doing nothing, says Justin Knoll, president of Madison & Co. Properties and past president of the Denver Board of REALTORS®. For buyers who go ahead, the question becomes: "Where's that money going to come from down the road?" he notes.

Relationship Management3 Ways a First-Time Home Buyer Can Drive You Nuts

  • Fixture feuds. Some sellers may take more from the home than they're allowed, including the chandeliers and maybe even the toilets. Price says one family showed up on moving day to find that sellers removed every single light bulb in the house. Another couple noticed on their final walk-through the sellers had stripped away all the window coverings, even though they were included in the sales contract. (Read more: The Pain of Fixture Feuds.)
  • Becoming offended. Buyers look at comparables with their real estate agents and look at the asking price – which they agree is too high – and then submit a solid offer. But the offer then gets ignored and the seller appears offended.

"Are they really that thin-skinned? Is it a tactic? And to a serious buyer, does it even make a difference?" the Bankrate.com article notes. Pat Vredevoogd Combs, vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich., says that it's never smart for a seller to ignore an offer. "Even though it's your home, it's a financial transaction,” she says. "I'd rather have a lowball offer and be able to negotiate than no offer at all. … I tell my clients, look, this is a starting point."

Read more ways that sellers irk buyers at Bankrate.com.

Source: "Ugh! Here Are 6 Things That Home Sellers Do That Drive Buyers Nuts," Bankrate.com (September 2015)

 

Why September Is The Best Month for Buyers

by Melissa Dierks

 

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 03, 2015
Buyers who are willing to close on a home purchase during the off-peak seasons – like fall and winter – tend to have the upper-hand, according to Jonathan Smoke, realtor.com®'s chief economist. September, in particular, is the best month of this year to sign a contract to purchase a home, according to his analysis.

Read more: Homes Still Selling Fast Heading Into Fall
For one thing, supply is rising, providing home buyers with more choices of homes for sale than they've had in the past 10 months. In the third week of August, inventory was at 1.91 million units, an increase from 21 percent since January, according to realtor.com®.

"Normally inventory peaks in August and begins to slow as the nights grow longer," Smoke says. "But this year the typical seasonal decline will start a bit later. There will be more choices in September than any other month in 2015."

Also, he says that overall demand is down now that the school year has started so buyers will provide less competition this month too.

"And, of course, with less competition for the most listings all year, pricing power weakens as inventory takes longer to sell," Smoke says.

As an added incentive to home buyers, mortgage rates are remaining low, for now. The 30-year fixed-rate mortgage ended the week under 4 percent due to recent stock market turbulence. In June, 30-year rates were averaging 4.2 percent, but have since fallen.

Source: "Is This September the Perfect Month to Buy a Home?" realtor.com® (Sept. 1, 2015)

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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
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