Veterans Day Tribute

Veterans Day is a day we celebrate, honor, and pay our respects to those who have served our great country. Today belongs to them.  Men and women who made the decision to be “all in” for every single one of us.

We will likely never be able to comprehend the commitment required of a Veteran.  We sleep soundly in our beds, night after night, because our men and women stand ready, selflessly, to protect our freedom. They are tough and their hearts are huge.  If you know one, you know exactly what I’m talking about.

veterans_day

Several of my family members have served as well as many close friends. I am overwhelmed with gratitude and respect for what they have been willing to sacrifice, and continue to sacrifice.  It causes me to love them that much more.

Too often we take our freedom for granted.  Today, and every day, remember and be thankful.  Show honor and gratitude to  our veterans, because they more than deserve it.  When you encounter one of our military, take a moment to stop and thank them.

Our flag flies with freedom because of these brave men and women.  God bless America, and God bless our Veterans.

 
 

Honor Our Military
by Joanna Fuchs

Let’s honor our military,
The men and women who serve,
Whose dedication to our country
Does not falter, halt or swerve.

Let’s respect them for their courage;
They’re ready to do what’s right
To keep America safe,
So we can sleep better at night.

Let’s support and defend our soldiers,
Whose hardships are brutal and cruel,
Whose discipline we can’t imagine,
Who follow each order and rule.

Here’s to those who choose to be warriors
And their helpers good and true;
They’re fighting for American values;
They’re fighting for me and you.

Home Prices May Head Higher This Fall

home-fall-2016

Fall is here but home prices haven’t shown much sign of cooling off.

Home prices live in a supply & demand world.  And just a few days ago, the National Association of Realtors® Chief Economist, Lawrence Yun says there will be an expected seasonal decline in new listings in the coming fall and winter months, which could accelerate home prices.  No big surprise.

Housing Supply: Where are the Homes?

Housing supply measures how many months it would take to sell all the houses currently listed for sale, at the current pace of home sales. For example, if there are 600 homes currently listed for sale, and an average of 100 homes are selling each month, there would be a 6-month housing supply. This is because it would take 6-months to sell all the homes currently listed for sale.

A buyer’s market is anything more than 6 months. A seller’s market is anything less than 6 months. 

Housing supply has been running below 6 months across the US since 2012.  The Dallas metroplex is running an anemic 2.7 months inventory –  which indicates an extremely strong seller’s market. Buyers are competing with multiple offers… in some cases dozens of offers on the same house. This tells us that home prices are poised to continue going up in the next several months.

Housing Demand: What’s the Trend?

“Dozens of offers” on the same house gives you a clue.  Housing demand tends to slow down in the fall because most people want to move during the spring and summer while school is winding down.  Not so this year.  Housing demand is expected to remain strong because the economy is doing okay and people have jobs in most parts of the country.  

According to the Texas Workforce Commission*, non-agricultural jobs grew by 21,400 and 2900 government jobs were added in the month of August. Year to date, the Dallas metroplex has experienced a 3.5% job growth. With scores of companies continuing to move into the Dallas metroplex, demand will continue to remain hot.

Home Prices: Where are they Headed?

Home Prices NARThe national median existing-home price for all housing types was $240,200 in August, up 5.1% from a year ago. It’s even more for the Dallas metroplex market where the median home prices hit $285,000** (scratching my head, home prices that low are hard to find!).  In the South, which includes Texas, home prices are up over 6% from a year ago.

In addition, the Realtors® Buyer Traffic Index indicates Texas remains a great market.  The map below represents data collected July – August 2016 and shows an expectation of price growth for Texas at 3% – 4% over the next year.  The August report indicated more respondents viewed home buyer traffic conditions as “strong” rather than weak.  The report reflects the level of home buying demand which may result in a contract to purchase within 2 to 3 months.  Home Prices Grow

With housing supply at a paltry 2.7 supply level and likely to remain low, coupled with strong employment growth (which is the prerequisite to demand),  continued upward movement in home prices over the fall months is highly probable.

Please contact me for specific information on housing supply, housing demand and home prices in your local area.

*Texas Workforce Commission, TLMR, Sept 2016
**Real Estate Center, Texas A&M Univ, Housing Activity Report

USDA Home Loans Fees Reduced

usdaUSDA has reduced its fees on home loans.  USDA home loans are guaranteed by the U.S. Department of Agriculture. These home loans are 

Eligible homebuyers are able to obtain zero down financing for homes through the USDA program.  In addition, USDA loans have reduced monthly mortgage insurance premiums, compared to FHA loans and feature below-market mortgage rates.

And now, there’s more great news for borrowers who want to take advantage of zero down payment and  historically low home loan rates.

USDA Reduces Some Fees

The U.S. Department of Agriculture is reducing some of its fees for home purchase and refinance loans, effective October 1, 2016 and will remain in effect until September 30, 2017.

Under the new guidelines, USDA announced it will lower both its upfront fee and its annual fees (which is actually paid monthly).  As a result, this will help make payments more affordable.  The upfront fee is reduced from 2.75% to 1% of the total loan amount. The annual fee, which is paid monthly, will also be reduced from 0.50% to 0.35%.

Here’s what this looks like for a $100,000 loan amount:

usda

In this example, the homebuyers payment after the fee reduction is $750 less for the upfront fee and the monthly payment on the annual premium is provides more than a $12 monthly savings.  While that may seem small,  for many homebuyers this could make a big difference.

As a result, more homebuyers will be able to achieve the American dream of homeownership.  

USDA provides qualifying borrowers the opportunity to own a primary residence in eligible rural areas.  Find out more about the program in this article, 100% Home Financing with USDA Loans.

If you or someone you know would like to see if you qualify for a USDA loan, or if you have any other questions about home loans, feel free to call or email me today.

Home Remodeling Impacts Home Value

Homeowners thinking of selling often want to do some home remodeling before putting their home on the market.  And some homeowners are thinking of home remodeling projects for the sheer benefit of adding value and enjoyment and plan to keep their home.

If you fit in either of these categories Click here to view an interesting report that compares the economic impact of various home remodeling projects. As a hint, the highest impact remodeling projects that add value to your home are a new kitchen or kitchen upgrade, or a new bathroom, or bathroom upgrade. The lowest value items include an insulation upgrade, closet renovation or converting an attic to a living area.

Home Remodeling

The 2015 Remodeling Impact Report, is the first of its kind from the National Association of Realtors® that examines personal satisfaction from home remodeling projects.  The report assists homeowners who are preparing to sell in choosing the best projects to attract buyers, but it also helps those looking to get more personal satisfaction out of their homes.

As for a remodeling project’s impact on your happiness, according to the report, a whopping 82% of homeowners said they have a greater desire to be home since completing the project; while 75% said they have an increased sense of enjoyment when they are home.

“Remodeling projects can greatly improve both the value of and satisfaction with one’s home, which are great things no matter the reason for a project,” said Judy Mozen, president of the National Association of the Remodeling Industry.

Contact me for further information on how to finance some of the home remodeling projects that you may be considering!

Brexit and Mortgage Rates

Brexit happened and mortgage Bonds, thus mortgage rates, reacted delivering a great opportunity to homeowners and homebuyers. But what the heck is Brexit and what does it have to do with mortgage rates?

What is Brexit?

Brexit is a term coined from the withdrawal of Britain from the European Union – the British Exit. The people voted last night and the expectation was Britain would remain in the EU. Surprise, surprise…instead, the British walked out, withdrew from the union and the Prime Minister resigned.

What does Brexit have to do with Mortgage Rates?

Financial markets around the global had been expecting the Brits to remain in the union. Today, financial markets are roiled in response to the unexpected decision. Global markets are tanking. Our stock market plunged 500 points early this morning and ended the day down 611 points.

The capital markets – both stocks and bonds – hate uncertainty. As usual in uncertain times, people seek safety. As a result, money flows into the SAFE HAVEN of Treasuries, gold,and bonds, including mortgage bonds. This is what is happening today! Mortgage rates are tied to mortgage bonds, so when bonds improve, so do mortgage rates.

Low-Mortgage-RatesThere is an expression that begins, ‘be greedy when others are fearful”…meaning, today could represent a historic time to lock an interest rate on what is clearly a “fearful” day for investors. Be greedy – take advantage of this golden opportunity.

There are many things to be uncertain of…this is not one of them. Rates are incredibly low and we are in a window of the best time you may ever see again to finance or refinance.

If you’ve been sitting the fence, especially regarding a refinance, it’s a good time to make your move. Contact a mortgage planner and get a Total Cost Analysis to see if it makes sense for you to refinance.

Here’s the thing…this could disappear in a blink. Don’t wait! See if you can benefit…now.

Home Affordability: Down Payment vs Interest Rates

Home affordability is a hot topic! When considering “affordability” most people unknowingly focus on the wrong thing.

Home Affordability Study

The New Yord Federal Reserve Board conducted a study on the factors impacting housing affordability and a buyer’s willingness to pay.  The goal was to gauge the sensitivity of housing demand to specific financing conditions. Click here to read the study.

In the study, households were surveyed with the respondents to assume a hypothetical.  They are to assume a move today to a town or city similar to their current one.  Respondent are asked how much they would be willing…and able…to pay for a home similar to the one they currently live in.
 
HomeAffordability-FB

 

What is more important, down payment or interest rate?

According to the study, home affordability increases by 15% (40% among renters) when down payment requirements are reduced.   Conversely, a whopping 2% difference in interest rates has only a 5% impact on housing affordability. Can you imagine  what impact a small difference in interest rates, such as a quarter or half a point, would make? It would be an insignificant difference based on this study.

Consider This

If you were buying a home for $200,000 with 20% down, that is $40,000 of your hard earned cash.  At an interest rate of 4%, your principal and interest payment would be $764.  

If you reduced your down payment to 5%, you would only need $10,000.  At the same interest rate, your payment would be $908*, and at a 2% higher rate the payment would be $1,140*.  

It will take nearly 80 months before the $30,000 down payment difference will consume the payment difference of $376  (difference between $764 and $1140).

*does not factor in mortgage insurance.

It bears repeating!  Home affordability improves by 15% or more when down payment requirements are reduced. This is great news for homebuyers who qualify for some of the low down payment programs.  There are many available in today’s mortgage market. Today, programs are available with 3%, 3.5%, and 5% down payment options. Here is a link to a mortgage payment calculator so you can explore the various down payment scenarios.

It seems the most common question surrounding the topic of mortgage is “what is the rate?” This study shows respondents strongly increase their housing affordability and willingness to pay in response to a lower down payment rather than a lower interest rate.

When considering a home purchase, be sure to work with a Mortgage Planner who can provide analysis to demonstrate your down payment and interest rate options.  This will help you maximize your home affordability.

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