Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates have stayed near historic lows. Sellers should realize that waiting to make the move when mortgage rates are projected to increase probably doesn’t make sense. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain budget for your monthly housing costs.
Here is a chart detailing this point:
According to Freddie Mac, the current 30-year fixed rate iscurrently around 3.75%. 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, by $10,000).Freddie Macpredicts that mortgage rates will be closer to 4.7% by this time next year.
Act now to get the most house for your hard-earned money.
Some of the housing headlines are causing concern for some consumers who are in the process of either buying or selling a home. Pundits are concerned over the lack of new construction or the month-over-month sales numbers. Let’s set the record straight; 2015 was a good year for residential real estate in the United States and 2016 is starting out stronger. Here is a graph of total homes sold (new construction and existing homes) in the first two months in 2016 compared to last year:
Will this momentum continue?
If we look at foot traffic (the number of purchasers currently out looking at homes), we can see that the spring buying market has started early and all indicators point to the fact that we may have the best spring in over a decade.
The 2016 housing market started out well and looks to be gaining steam. If you are thinking of buying or selling a home, now may be a great time.
In CoreLogic’s latest Home Price Index, they revealed home appreciation in three categories: percentage appreciation over the last year, over the last month, and projected appreciation over the next twelve months.
Here are state maps for each category:
The Past – home appreciation over the last 12 months
The Present – home appreciation over the last month
The Future – home appreciation projected over the next 12 months
Homes across the country are appreciating at different rates. As we have mentioned before, the rate of home price appreciation across the country is due to a strong housing market reacting to supply and demand, and not a new housing bubble.
If you plan on relocating to another state, and are waiting for your home to appreciate more, you need to know that the home you will buy in another state may be appreciating even faster.
Meet with a local real estate professional who can guide you through the next steps and help you decide what’s right for you.
The National Association of Realtors (NAR) just announced that the February Pending Home Sales Index reached it’s highest reading since July 2015.
What is the Pending Home Sales Index (PHSI)?
NAR’s PHSI is “a forward-looking indicator based on contract signings”. The higher the Pending Home Sales Index number, the more contracts have been signed by buyers that will soon translate to sales. February’s Index rose 3.5% month-over-month to 109.1.
What does this mean for the market?
Lawrence Yun, NAR’s Chief Economist explained:
“After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory.”“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.”
So What Does This Mean For Buyers?
There is a lot of competition out there right now for your dream home. Prices are going to continue to climb, act now before you are priced out of your future home.
What Does This Mean For Sellers?
If you are on the fence about listing your home for sale and debating whether now is the time to move on with your plans of relocating… don’t wait! There are more buyers that are ready, willing and able to buy their first, second, third, vacation, or investment property now than there has been in years! The supply of homes for sale is not keeping up with the demand of these buyers. Listing your home for sale now will give you the most exposure to buyers and the best sales price.
Whether you are planning on buying or selling a house this year, waiting to act no longer makes sense.
In today’s market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers. Here are five of those reasons:
1. There Are Too Many People to Negotiate With Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
The buyer who wants the best deal possible
The buyer’s agent who solely represents the best interest of the buyer
The buyer’s attorney (in some parts of the country)
The home inspection companies, which work for the buyer and will almost always find some problems with the house
The appraiser if there is a question of value
2. Exposure to Prospective Purchasers Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
3. Results Come from the Internet Where do buyers find the home they actually purchased?
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
4. FSBOing has Become More and More Difficult The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years. The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.
5. You Net More Money when Using an AgentMany homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission. Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.