Why Have Interest Rates Jumped to a 7-Year High?

Why Have Interest Rates Jumped to a 7-Year High? | Simplifying The Market

Interest rates for a 30-year fixed rate mortgage have climbed from 3.95% in the first week of January up to 4.61% last week, which marks a 7-year high according to Freddie Mac. The current pace of acceleration has been fueled by many factors.

Sam Khater, Freddie Mac’s Chief Economist, had this to say:

“Healthy consumer spending and higher commodity prices spooked bond markets and led to higher mortgage rates over the past week.

Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.”

But what do gas prices have to do with interest rates?

Investopedia explains the relationship like this:

“The price of oil and inflation are often seen as being connected in a cause-and-effect relationship. As oil prices move up or down, inflation follows in the same direction.”

You may have noticed that filling your gas tank has become substantially more expensive in recent months. The average national gas price has climbed nearly $0.50 from the beginning of the year, leading to the highest price for Memorial Day weekend since 2014.

As rates go up, your purchasing power goes down, but don’t worry; rates are still well below the averages we’ve seen over the last four decades.

“Freddie Mac said this year’s higher rates have not yet caused much of a ripple in the strong demand levels for buying a home seen in most markets, but inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”

Buying sooner rather than later will help lock in a lower rate than waiting, as the experts believe rates will continue to climb. Even a small increase in interest rates can have a big impact on your monthly housing cost.

Bottom Line

If you are planning on buying a home this year, keep an eye on gas prices the next time you’re at the pump. If you start to feel a big jump in price, know that rates are probably on their way up too.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

How Current Interest Rates Can Have a High Impact on Your Purchasing Power

How Current Interest Rates Can Have a High Impact on Your Purchasing Power | Simplifying The Market

According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 4.61%, which is still near record lows in comparison to recent history!

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a home within the national median price range while keeping your principal and interest payments between $1,850-$1,900 a month.

How Current Interest Rates Can Have a High Impact on Your Purchasing Power | Simplifying The Market

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

Act now to get the most house for your hard-earned money.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

Is Your First Home Within Your Grasp Now? [INFOGRAPHIC]

Is Your First Home Within Your Grasp Now? [INFOGRAPHIC] | Simplifying the Market

Some Highlights:

  • According to the US Census Bureau, ‘millennials’ are defined as 18-36-year-olds.
  • According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 32.
  • More and more ‘old millennials’ (25-36) are realizing that homeownership is within their grasp now!

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

Renters Under 50 Want to Buy a Home!

Renters Under 50 Want to Buy a Home! | Simplifying The Market

Every year, the New York Federal Reserve publishes the results of their Survey of Consumer Expectations (SCE). Each survey covers a wide range of topics including inflation, labor market, household finance, credit access and housing.

One of the many questions asked in the housing section of the survey was:

Assuming you had the financial resources to do so, would you like to OWN instead of RENT your primary residence?

Over three-quarters of respondents under the age of 50 said that they would prefer to own their home, rather than rent. While only 52.6% of those over 50 would prefer to own. The full breakdown can be found in the chart below.

Renters Under 50 Want to Buy a Home! | Simplifying The Market

When renters were asked what the average probability of owning a primary residence at some point in their future was, 66.4% of those under 50 believed that they would eventually own their home, while only 23% of those over 50 did.

Renters Under 50 Want to Buy a Home! | Simplifying The Market

Bottom Line

Many had wondered if young Americans had lost their desire to own a home, but for those renting now, that dream is still alive.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

Homeownership: “A Man Is Not a Complete Man, Unless He Owns a House”

Homeownership: "A Man Is Not a Complete Man, Unless He Owns a House" | Simplifying The Market

The famous quote by Walt Whitman, “A man is not a whole and complete man, unless he owns a house and the ground it stands on,” can be used to describe homeownership in America today. The Census revealed that the percentage of homeowners in America has been steadily climbing back up since hitting a 50-year low in 2016. The homeownership rate in the first quarter of 2018 was 64.2%, higher than last year’s 63.6%.

Homeownership: "A Man Is Not a Complete Man, Unless He Owns a House" | Simplifying The Market

Chief Economist, Dr. Ralph McLaughlin, in his VUE Blog gave these new homeownership numbers some context:

“The trend is clear: the homeownership rate has been ticking up for five consecutive quarters, and the number of new renter households has fallen for four consecutive quarters. Owner-occupied households grew by 1.345 million from a year ago, while the number of renters actually fell by 286,000 households.

The fact that we now have four consecutive quarters where owner households increased while renter households fell is a strong sign households are making a switch from renting to buying. This is a trend that multifamily builders, investors, and landlords should take note of.”

In a separate article comparing the rental population in America to the homeowner population, Realtor.com also concluded that the gap is now shrinking:

“The U.S. added 1.3 million owner households over the last year and lost 286,000 renter households, the fourth consecutive quarter in which the number of renter households declined from the same quarter a year earlier. That could pose challenges for apartment landlords, who are bracing this year for one of the largest infusions of new rental supply in three decades.”

America’s belief in homeownership was also evidenced in a survey conducted by Pew Research. They asked consumers “How important is homeownership to achieving the American Dream?”

The results:

  • 43% said homeownership was essential to the American Dream
  • 48% said homeownership was important to the American Dream
  • Only 9% said it was not important

Bottom Line

Homeownership has been, is, and always will be a crucial part of the American Dream.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

3 Tips for Making Your Dream of Owning a Home a Reality [INFOGRAPHIC]

3 Tips for Making Your Dream of Owning a Home a Reality [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking much about it.
  • Living within a budget right now will help you save money for down payments while also paying down other debts that might be holding you back.
  • What are you willing to cut back on to make your dreams of homeownership a reality?

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

5 Ways Tax Reform Has Impacted the 2018 Housing Market

5 Ways Tax Reform Has Impacted the 2018 Housing Market | Simplifying The Market

Starting late last year, some predicted that the 2018 tax changes would cripple the housing market. Headlines warned of the potential for double-digit price depreciation and suggested that buyer demand could drop like a rock. There was even sentiment that homeownership could lose its coveted status as a major component of the American Dream. 

Now that the first quarter numbers are in, we can begin to decipher the actual that impact tax reform has had on the real estate market.

1. Has tax reform killed off home buyer demand? The answer is “NO.”

According to the Showing Time Index which “tracks the average number of buyer showings on active residential properties on a monthly basis” and is a “highly reliable leading indicator of current and future demand trends,” buyer demand has increased each month over the last three months and is HIGHER than it was for the same months last year. Buyer demand is not down. It is up.

2. Have the tax changes affected America’s belief in real estate as a long-term investment? The answer is “NO.”

Two weeks ago, Gallup released its annual survey which asks Americans which asset they believed to be the best long-term investment. The survey revealed:

“More Americans name real estate over several other vehicles for growing wealth as the best long-term investment for the fifth year in a row. Just over a third cite real estate for this, while roughly a quarter name stocks or mutual funds.” 

The survey also showed that the percentage of Americans who believe real estate is the best long-term investment was unchanged from a year ago.

3. Has the homeownership rate been negatively impacted by the tax changes? The answer is “NO.”

Not only did the homeownership rate not crash, it increased when compared to the first quarter of last year according to data released by the Census Bureau.

In her latest Z Report,Ivy Zelman explains that tax reform didn’t hurt the homeownership rate, but instead, enhanced it:

“We have been of the opinion that homeownership is most highly correlated with income and the net effect of tax reform would be a positive, rather than negative catalyst for the homeownership rate. While still in the early innings of tax changes, this has proven to be the case.”

4. Has the upper-end market been crushed by new State and Local Taxes (SALT) limitations? The answer is “NO.”

In the National Association of Realtors latest Existing Home Sales Report it was revealed that:

  • Sales between $500,000 and $750,000 were up 4.5% year-over-year
  • Sales between $750,000 and $1M were up 15.1% year-over-year
  • Sales over $1M were up 17.3% year-over-year

5. Will the reforms in the tax code cause home prices to tumble over the next twelve months? The answer is “NO.”

According to CoreLogic’s latest Home Price Insights Report, home prices will appreciate in each of the 50 states over the next twelve months. Appreciation is projected to be anywhere from 1.9% to 10.3% with the national average being 4.7%.

Bottom Line

The doomsday scenarios that some predicted based on tax reform fears seem to have already blown over based on the early housing industry numbers being reported.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

Real Estate Tops Best Investment Poll for 5th Year Running

Real Estate Tops Best Investment Poll for 5th Year Running | Simplifying The Market

Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks/mutual funds, gold, savings accounts/CDs, or bonds.

For the fifth year in a row, real estate has come out on top as the best long-term investment!

This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26%. The full results are shown in the chart below.

Real Estate Tops Best Investment Poll for 5th Year Running | Simplifying The Market

The study makes it a point to draw attention to the contrast in the sentiment over the last five years compared to that of 2011-2012, when gold took the top slot with 34% of the votes. Real estate and stocks took second and third place, respectively, while still in recovery from the Great Recession.

Bottom Line

As the real estate market has recovered, so has the belief of the American people in the stability of housing as a long-term investment.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

Home Inspections: What to Expect

Home Inspections: What to Expect | Simplifying The Market

So you made an offer, it was accepted, and now your next task is to have the home inspected prior to closing. Oftentimes, agents make your offer contingent on a clean home inspection.

This contingency allows you to renegotiate the price you paid for the home, ask the sellers to cover repairs, or even, in some cases, walk away. Your agent can advise you on the best course of action once the report is filed.

How to Choose an Inspector

Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. HGTV recommends that you consider the following 5 areas when choosing the right home inspector for you:

  1. Qualifications – find out what’s included in your inspection and if the age or location of your home may warrant specific certifications or specialties.
  2. Sample Reports – ask for a sample inspection report so you can review how thoroughly they will be inspecting your dream home. The more detailed the report, the better in most cases.
  3. References – do your homework – ask for phone numbers and names of past clients who you can call to ask about their experiences.
  4. Memberships – Not all inspectors belong to a national or state association of home inspectors, and membership in one of these groups should not be the only way to evaluate your choice. Membership in one of these organizations often means that continued training and education are provided.
  5. Errors & Omission Insurance – Find out what the liability of the inspector or inspection company is once the inspection is over. The inspector is only human after all, and it is possible that they might miss something they should have seen.

Ask your inspector if it’s okay for you to tag along during the inspection, that way they can point out anything that should be addressed or fixed.

Don’t be surprised to see your inspector climbing on the roof or crawling around in the attic and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace and chimney, the foundation, and so much more!

Bottom Line

They say ‘ignorance is bliss,’ but not when investing your hard-earned money into a home of your own. Work with a professional who you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!

What If I Wait Until Next Year to Buy a Home?

What If I Wait Until Next Year to Buy a Home? | Simplifying The Market

We recently shared that national home prices have increased by 6.7% year-over-year. Over that same time period, interest rates have remained historically low which has allowed many buyers to enter the market.

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 5.2% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

What If I Wait Until Next Year to Buy a Home? | Simplifying The Market

Bottom Line

If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

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If you or someone you know are thinking about buying or selling Real Estate in the Metro Atlanta, Georgia area, Please call us at 678.825.4428 or visit our website at www.HomesByUrsula.com
Keith and Ursula work to understand your motivation and your goals when you are ready to buy your next home or sell your current home.We work to ensure that the sale of your home happens smoothly and for Top Dollar. At Homes by Ursula, we understand that clients come first and your complete satisfaction is our main goal. Don’t choose the wrong Real Estate Agent – Make the Right Choice – Choose Homes By Ursula!