A Million+ Boomerang Buyers about to Enter Market

A Million+ Boomerang Buyers about to Enter Market | Keeping Current Matters

TransUnion recently released the results of a new study titled The Bubble, the Burst and Now – What Happened to the Consumer? The study revealed that 1.5 million homeowners that were negatively impacted by the housing crisis could re-enter the housing market in the next three years.

TransUnion defined “negatively impacted” as…

“…those who were 60+ days past due on a mortgage loan, lost their mortgage through foreclosure, short sale or other non-satisfactory closure, or had a mortgage loan modification between the Bubble and Burst.”

Other interesting findings in the study:

  • During the mortgage bubble in 2006, 78 million consumers, or 43% of credit-active consumers in the U.S., had a mortgage
  • More than 8% of these consumers were “impacted”
  • 5 Million consumers will again be eligible for a mortgage in the next four years

Here are the numbers of consumers who will meet mortgage guidelines over the next four years:

Boomerang Buyers Re-Entering The Market | Keeping Current Matters

Bottom Line

If you are a family that experienced the impact of the last housing crisis, now may be the right time to again buy your own home.

Where Are Interest Rates Headed This Year?

Where Are Interest Rates Headed This Year? | Keeping Current Matters

With interest rates still below 4%, many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year.

If you look at what the four major reporting agencies are predicting for 2016, it may make the decision for you. The chart below averages the predictions by quarter.

Mortgage Rate Projections | Keeping Current Matters

With the exception of Fannie Mae, the experts agree that interest rates will increase by three-quarters of a percentage point, costing you more to pay back your loan.

Bottom Line

Even a small increase in interest rates can put a dent in your family’s wealth.

Existing Home Sales Rebound in December

Existing Home Sales Rebound in December | Keeping Current Matters

The National Association of Realtors (NAR) just released their latest Existing Home Sales Report on Friday. Sales of existing homes rose by the largest increase ever recorded as they rebounded 14.7% over November’s numbers and now stand at 7.7% higher than a year ago.

While this is great news for the housing market, let’s take a look at one of the main reasons why there was such a large increase in sales.

As we explained last month, the implementation of the “Know Before You Owe” (TRID) initiative delayed some closings, pushing a portion of November’s would-be transactions to close in December.

“December’s rebound in sales is reason for cautious optimism that the work to prepare for ‘Know Before You Owe’ is paying off,” says NAR PresidentTom Salomone.

Lawrence Yun, NAR’s Chief Economist, had this to say about the surge in December sales:

“While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015. Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.”

The most important realization to come out of the report is the fact that inventory of existing homes for sale dropped dramatically from a 5.1-month supply in November to the lowest figure since January 2005, at a 3.9-month supply.

A normal market, where prices rise with inflation, is defined as having a 6-7-month supply of homes for sale. As you can see in the chart below, inventory levels in 2015 were at or below a 5.2-month supply for the entire year.

2015 Months Inventory of Homes For Sale | Keeping Current Matters

If inventory levels do not recover, this could be a challenge for sales moving forward as buyer demand remains strong and competition for the homes that are on the market continues to rise.

Bottom Line

If you are considering listing your home for sale in 2016, now is the time! With inventory levels at their lowest mark in over 10 years, listing your home for sale now will give you the most exposure to buyers and allow you to get the best price for your home.

3 Charts That Scream ‘List Your Home Today’

3 Charts That Scream ‘List Your Home Today’ | Keeping Current Matters

In school we all learned the Theory of Supply and Demand. When the demand for an item is greater than the supply of that item, the price will surely rise.

SUPPLY

The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 4.4-month supply. This is considerably lower than the 6-month inventory necessary for a normal market.

3 Charts That Scream ‘List Your Home Today’ | Keeping Current Matters

DEMAND

Every month NAR reports on the amount of buyers that are actually out in the market looking for homes, or foot traffic. As seen in the graph below, buyer demand in February significantly outpaced the last six months.

3 Charts That Scream ‘List Your Home Today’ | Keeping Current Matters

Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream home (if they even are able to find a home they wish to purchase).

Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.

HOME EQUITY

Many homeowners underestimate the amount of equity they currently have in their home. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their home. In reality, CoreLogic’s latest Equity Reporttells us that 72.6% actually do!

3 Charts That Scream ‘List Your Home Today’ | Keeping Current Matters

Many homeowners who are undervaluing their home equity may feel trapped in their current home, which may be contributing to the lack of inventory in the market.

Bottom Line

If you are debating selling your home this year, meet with a local real estate professional who can evaluate the equity you have in your home, as well as the opportunities available in your market.

Thinking of Buying? Selling? 5 Reasons You Need To Hire A Professional

Thinking of Buying? Selling? 5 Reasons You Need To Hire A Professsional | Keeping Current Matters

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream.

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $210,000 compared to $245,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Are You Wondering What It Takes To Buy Your First Home?

Are You Wondering What It Takes To Buy Your First Home? | Keeping Current Matters

There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family. Others may think they are too young. And still others might think their current income would never enable them to qualify for a mortgage.

We want to share what the typical first time homebuyer actually looks like based on theNational Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first time buyer:

First-Time Homebuyer Statistics | Keeping Current Matters

Bottom Line

You may not be much different than many people who have already purchased their first home. Meet with a local real estate professional today who can help determine if your dream home is within your grasp.

Rents Still Skyrocketing

Rents Still Skyrocketing | Keeping Current Matters

Zillow recently revealed that the 43 million renter households in the US spent $535 billion on rent in 2015. Aggregate numbers like these often make it difficult to truly assess a situation. For more clarity, we want to share some points that were made in aWall Street Journal article earlier this month.

The article made two important points:

1. Rents are increasing faster than the last several years:

 “Apartment rents increased faster last year than at any time since 2007.”

2. Rent increases are accelerating

“Another report from Axiometrics Inc., a Dallas-based apartment research company, showed that rents increased 4.7% in the fourth quarter compared with the same quarter a year earlier, the strongest year-end performance since 2005”.

Here is a graph to illustrate the rate of increase over the last several years:

Average Effective Rent in the US | Keeping Current Matters

Why Do Americans Consider Moving? [INFOGRAPHIC]

Why Do Americans Consider Moving? [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • In a recent Harris Poll, Americans listed “change in climate/weather” as their top reason for wanting to relocate.
  • 41% would move for a better job opportunity.
  • Being closer to loved ones filled out 3 of the top 6 reasons why American’s move.

The Most Appealing Aspects of Homeownership

The Most Appealing Aspects of Homeownership | Keeping Current Matters

The National Association of Realtors (NAR) just released their first issue of the Housing Opportunities & Market Experience Survey (HOME). In the report, NAR revealed what Americans believe to be the most appealing aspects of homeownership.

Here is a graph showing the results:

The Most Appealing Aspects of Homeownership | Keeping Current Matters

It is interesting to see that the two most appealing aspects had nothing to do with money, but instead, addressed the non-financial benefits of homeownership.

Lack of Listings Slowing Down the Housing Market

Lack-Of-InveLack of Listings Slowing Down the Housing Market | Keeping Current Matters

The housing crisis is finally in the rear view mirror as the real estate market moves down the road to a complete recovery. Home values are up. Home sales are up. Distressed sales (foreclosures and short sales) have fallen dramatically. It seems that 2016 will be the year that the housing market again races forward.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout this winter, supply is not keeping up.

Here are the thoughts of a few industry experts on the subject:

Calculated Risk:

“Low inventory is probably holding down sales in many areas.”

Capital Economics:

“A lack of housing inventory continues to drive developments in the market. As demand has slowly recovered, low inventory levels have weighed on home sales.”

Frank Nothaft, Chief Economist for CoreLogic:

“Many markets have experienced a low inventory of homes for sale along with strong buyer demand… These conditions are likely to persist as we enter 2016.”

Doug Duncan,Chief Economist at Fannie Mae:

“Several factors point to constrained housing affordability in 2016, particularly for first-time home buyers, including slow single-family supply response and limited inventory of starter homes on the market.”

Lawrence Yun, Chief Economist at NAR:

“Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales.”

Bottom Line

If you are thinking of selling, now may be the time. Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price.