Mid-Year Housing Market Update: Three Things to Know Today

Article Courtesy of Keeping Current Matters/The KCM Blog

Shifting trends and industry-leading research are pointing toward some valuable projections about the status of the housing market for the rest of the year.
If you’re thinking of buying or selling, or if you just want to know what experts are saying is on the horizon, here are the top three things to put on your radar as we head into the coming months:

1. Home prices are appreciating at a more normal rate: Home prices have been appreciating for about ten years now. Experts at the Home Price Expectation Survey, Mortgage Bankers Association, Freddie Mac, and Fannie Mae are forecasting continued growth throughout the next year, although it should be leveling-off to normal appreciation (3.6%), as we move into 2020.
2. Interest rates are low: Over the past 30 years, the average mortgage rate in the United States has been 8.27%, and rates even peaked as high as 18% in the 1980s. Today, at 3.81%, the rate is considerably lower than the historical 30-year average. Although experts predict it may climb into the low 4% range in the near future, that’s still remarkably lower than our running average, suggesting a great time to get more for your money over the life of your loan.
3. An impending recession does not mean there will be a housing crash: Although expert research studies such as those found in the Duke Survey of American CFOs and the National Association of Business Economics, are pointing toward a recession beginning within the next 18 months, a potential recession isn’t expected to be driven by the housing industry. That means we likely won’t experience a devastating housing crash like the country felt in 2008. Expert financial analyst Morgan Housel tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

In fact, during 3 of the 5 last U.S. recessions, housing prices actually appreciated:

Bottom Line With prices appreciating and low interest rates available, it’s a perfect time to buy or sell a home. Reach out to a local real estate professional to see how you can take the next step in the exciting journey of homeownership.

What Experts are Saying About the Current Housing Market

Article Courtesy of Keeping Current Matters / The KCM Blog

We’re halfway through the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the experts predict for the second half of 2019.

Here’s what some have to say:

Danielle Hale, Chief Economist at realtor.com

“Lower mortgage rates, higher wages and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.”
“Our outlook implies 4% growth for the remaining months of the year, predicated on…more supply than last year, the decline in mortgage rates, moderating home price appreciation and improving affordability.”

Lawrence Yun, Chief Economist at NAR

“Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good reason, are anxious to purchase and lock in at these rates.”

Doug Duncan, Chief Economist for Fannie Mae

“Moderating home price appreciation and attractive mortgage rates continue to support affordability, particularly as home builders are now paying more attention to the entry-level portion of the housing market.”

Kaycee Miller in a Realtor Magazine article

“At the moment, some observers suggest the housing market is indeed headed for a slowdown. But no need to panic — experts say the financial and economic factors that were in play during the big crash a decade ago don’t exist today.”

Bottom Line

The housing market will be stronger for the rest of 2019. If you’d like to know more about your specific market, contact a local real estate professional to find what’s happening in your area.

The Cost of Waiting: Interest Rates Edition

Infographic Courtesy of Keeping Current Matters/The KCM Blog

Some Highlights:

• Interest rates are projected to increase steadily heading into 2020.
• The higher your interest rate, the more money you will end up paying for your home and the higher your monthly payment will be.
• Rates are still low right now – don’t wait until they hit 5% to start searching for your dream home!

You Don't Need 20% Down to Buy a Home

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Should I Refinance My Home?

Article Courtesy of Keeping Current Matters / The KCM Blog

With the recent lower interest rates, many homeowners are wondering if they should refinance.

To decide if refinancing is the best option for your family, start by asking yourself these questions:

Why do you want to refinance? 

There are many reasons to refinance, but here are three of the most common ones:

1. Lower your interest rate and payment– This is the most popular reason. If you have a 5% interest rate or higher, it might be worth seeing if you can take advantage of the current lower interest rates, hovering below 4%, to reduce your monthly payment and overall cost of the loan.
2. Shorten the term of your loan– If you have a 30-year loan, it may be advantageous to change it to a 15 or 20-year loan to pay off your mortgage sooner.
3. Cash-out refinance– With home prices increasing, you might have enough equity to cash out and invest in something else, like your children’s education, a vacation home, or a new business.

Once you know why you might want to refinance, ask yourself the next question:

How much is it going to cost? 

There are fees and closing costs involved in refinancing, and Lenders Networkexplains:

“If you were to refinance that loan into a new loan, total closing costs will run between 2%-4% of the loan amount.”

They also explain that there are options for no-cost refinance loans, but be on the lookout:

“A no-cost refinance loan is when the lender pays the closing costs for the borrower. However, you should be aware that the lender makes up this money from other aspects of the mortgage. Usually pay charging a slightly higher interest rate so they can make the money back.” 

If you’re comfortable with the costs of refinancing, then ask yourself one more question:

Is it worth it? 

To answer this one, we’ll use an example. Let’s assume you have a $200,000 home loan. A 4% refinance cost will be $10,000. If you want to lower your interest rate from 6% to 4%,  then refinancing is going to save you $244 per month. To break even ($10,000/$244), you need to continue owning your home for over 40 months.
Now that you know how the math shakes out, think about how much longer you’d like to own your current home. If you plan to stay for more than 3 years, then maybe it is advantageous for you to refinance.
If, however, your current home does not fulfill your present needs, you might want to consider using your potential refinance costs for a down payment on a new move-up home. You will still get a lower interest rate than the one you have on your current house, and with the equity you’ve already built, you can finally purchase the home of your dreams.

Bottom Line

There are many opportunities for growth in the current real estate market. To find out what’s right for your family, meet with a local real estate professional who can help you understand your options and guide you toward the best decision.

SCCL Mid-July Update

Photo Courtesy of Dan Peters

UPDATED 7/25/19

Interactive charts have the most current stats available from CMLS.
They can be found by clicking on the "UP-TO-DATE STATS" link at top of this page and scrolling down to the interactive charts. 
These charts are current through the end of the previous month. 
Click on any graph to see stats at a given point in time.  
Each data point is 1 month of activity.  

 Home Inventory Determines What Kind of Market We Are In
Months of supply is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5 month supply of homes for sale. 

• Less than 6 months of inventory = Seller's Market with upward pressure on prices
• More than 6 months of inventory = Buyer's Market with downward pressure on prices

Months of Supply at the End of June

 Single Family Homes:       3.9 months

Carriage Homes & Villas:  1.3 months

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For Current MLS Listings Click HERE.
The info you receive in your mail tube is only current through the day it was printed.  
To receive daily updates on the SCCL market, contact me.

Independence Day Message

 
What It Means to Be an American
Author Unknown

To believe in the promise
of a better tomorrow,
and stand united in our efforts
to give a peaceful nation
to our children...
 
To honor each other's differences
and cherish the richness of our history,
even as it continues to unfold
from sea to shining sea...
 
To love deeply
our friends and family, day by day,
and never take for granted
the privilege of calling ourselves American.


Wishing you a Safe and Happy 4th of July!