Home Prices: Past, present and future

Home Prices: Past, present and future

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CoreLogic released their most current Home Price Index last week. In the report, they revealed home appreciation in three categories: percentage appreciation over the last year, over the last month and projected over the next twelve months.

Here are state maps for each category:

The Past – home appreciation over the last 12 months

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The Present – home appreciation over the last month

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The Future – home appreciation projected over the next 12 months

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Bottom Line:

Homes across the country are appreciating at different rates. 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 help you determine your next steps. For more information, please contact The Olear Team today!

What you really need to qualify for a mortgage

What you really need to qualify for a mortgage

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A recent survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 5% or less.

Below are the results of a Digital Risk survey done on Millennials who recently purchased a home.

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2. FICO Scores

The Ipsos survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower.

Below are the numbers from the latest Ellie Mae report.

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Bottom Line

If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able,’ sit down with someone who can help you understand your true options. For more information, please contact The Olear Team today!

NAR reports reveal two reasons to sell this winter

NAR reports reveal two reasons to sell this winter

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We all realize that the best time to sell anything is when demand is high and the supply of that item is limited. The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that now is a great time to sell your house.

Let’s look at the data covered by the latest Pending Home Sales Report and Existing Home Sales Report.

THE PENDING HOME SALES REPORT

The report announced that pending home sales (homes going into contract) are up 3.9 percent over last year, and have increased year-over-year now for 14 consecutive months.

Lawrence Yun, NAR’s Chief Economist, expects demand to remain stable through the final two months of the year, and “forecasts existing-home sales to finish 2015 at a pace of 5.30 million – the highest since 2006.” 

Takeaway: Demand for housing will continue throughout the end of 2015 and into 2016. The seasonal slowdown often felt in the winter months hasn’t started and shows little signs of being near.

THE EXISTING HOME SALES REPORT

The most important data point revealed in the report was not sales but instead the inventory of homes on the market (supply). The report explained:

  • Total housing inventory decreased 2.3 percent to 2.14 million homes available for sale
  • That represents a 4.8-month supply at the current sales pace
  • Unsold inventory is 4.5 percent lower than a year ago

There were two more interesting comments made by Yun in the report:

1. “New and existing-home supply has struggled to improve, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets.”

In real estate, there is a guideline that often applies. When there is less than 6 months inventory available, we are in a sellers’ market and we will see appreciation. Between 6-7 months is a neutral market where prices will increase at the rate of inflation. More than 7 months inventory means we are in a buyers’ market and should expect depreciation in home values. As Yun notes, we are currently in a sellers’ market (prices still increasing).

2. “Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home.” As rents and prices increase, potential buyers will not able to save as much for a down payment and many may become priced out of the market.

Takeaway: Inventory of homes for sale is still well below the 6 months needed for a normal market. Prices will continue to rise if a ‘sizeable’ supply does not enter the market. Take advantage of the ready willing and able buyers that are still out looking for your house.

Bottom Line

If you are going to sell, now may be the time. For more information, please contact The Olear Team today!

Do you know the difference your interest rate makes? [Infographic]

Do you know the difference your interest rate makes? [Infographic]

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Some Highlights:

  • Interest rates have come a long way in the last 30 years.
  • The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford.
  • Experts predict that rates will increase by 3/4 a percent over the next 12 months.
  • Secure a low rate now to get the most house for your money.

For more information, please contact The Olear Team today!

Prices and mortgage rates going up in 2016

Prices and mortgage rates going up in 2016

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The monthly mortgage payment on a home is determined by two elements: the price of the house and the interest rate you pay on your mortgage. Recently released reports are revealing that the experts expect both elements to increase in 2016.

Home Prices

CoreLogic has projected a nationwide 5.2 percent home value appreciation for the next twelve months. Here is their breakdown by state:

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Mortgage Interest Rates

All four of the entities that provide projections on mortgage interest rates agree: they’re going up in 2016. Here are the predictions over the next four quarters:

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Bottom Line

With both home values and interest rates projected to increase over the next twelve months, buying (or moving-up), sooner rather than later, makes sense. For more information, please contact The Olear Team today!