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NAHB: Home Builder Confidence Highest in 12 Years

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According to the National Association of Home Builders Housing Market Index for March, builder confidence in market conditions reached its highest level in 12 years and was six points higher than February’s index reading of 65.

Housing market index readings are based on three components. Builder confidence in current market conditions for new single family homes rose seven points to 78; builder confidence in market conditions for the next six months increased five points to an index reading of 78. Most surprising was the reading for buyer traffic in new housing developments, which eight points to 54 in March. Buyer traffic readings typically don’t exceed the benchmark reading of 50, which indicates neutral builder sentiment. Builder confidence in buyer traffic for March surpassed 50 only twice since the housing bubble era.

Housing Market Index Readings Expected to Moderate in Coming Months

Robert Dietz, Chief Economist for NAHB, said that Housing Market Index readings will probably be more moderate in coming months as builders continue to face obstacles. Builders cited rising costs for materials and ongoing shortages of labor and lots. On the upside, builders surveyed said that a less regulatory environment contributed to higher confidence readings.

While home builder confidence is higher, the connection between confidence and building more homes isn’t matched by housing starts. Builders also said that rising mortgage rates are a barrier to buying new homes. The Federal Reserve’s Federal Open Market Committee raised the target federal funds rate to 0.75 to 1.00 percent on Wednesday; federal rate hikes typically influence private lenders to raise consumer rates including mortgage rates.

In a post-meeting statement, Fed officials said that the federal funds rate remains accommodative and will continue to sustain economic growth and the Fed’s goal for a long-run inflation rate of 2.00 percent. The Fed cited its dual mandate of achieving maximum employment and price stabilization as supporting its decision to raise rates, but stated that actual decisions to raise the federal funds rate are based on close readings and information about global and domestic economic developments; future decisions could be impacted by emerging economic factors.

Thinking About Refinancing Your Mortgage? 4 Ways to Ensure It’s Worth Your Time

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Thinking About Refinancing Your Mortgage? 4 Ways to Ensure It's Worth Your TimeIf you’re familiar with the real estate market, you’ve likely heard the term ‘refinancing’ and may be wondering what this can mean for your mortgage and your financial well-being. While refinancing can be a great benefit for those who are looking for a lower interest rate or a different mortgage type, here are the details on what it can offer and whether or not it will work for you.

Acquiring A Lower Interest Rate

The most common reason people consider refinancing their home is to take advantage of a lowered interest rate. While it might seem like a minimal savings each month, a lower interest rate can add up to considerable savings over time and help you pay off your home loan more quickly. It’s just important to ensure that you’re aware of all the associated costs with refinancing before pursuing this option.

Limiting Your Loan Term

Refinancing also offers homeowners the opportunity to change the term of their loan, which can offer improved financial stability much sooner than expected. Many homeowners may avoid this option because it can bump up their monthly payment, but the difference in cost can be relatively insignificant while still offering financial freedom in less time.

Changing Your Mortgage Type

There are benefits and drawbacks of adjustable-rate and fixed-rate mortgages, and that’s why many people make the decision to refinance and opt out of their rate profile. While fixed-rate mortgages offer stability since you’ll know what you’re paying, an adjustable-rate will move with the market and can actually mean more savings at the end of the day. The option that will work best for you is dependent upon how comfortable you feel with the market.

Consolidating Your Debt

For homeowners who have a high debt load, refinancing can be a means of paying less in order to pay down debt at a more rapid rate. However, it’s important before choosing this option to determine a budget plan you can stick with, as refinancing to consolidate your debt does not necessarily mean you’ll be successful at paying it down. Ensure you weigh your options and potential savings carefully before making a decision.

Refinancing may seem like a good financial decision, but there are costs that go along with this mortgage option so it’s important to crunch the numbers to ensure it will work in your favor. If you’re currently considering refinancing, contact your trusted real estate professionals for more information.

Feeling ‘Priced Out’ of Your Local Market? Here’s How You Can Still Buy a Great New Home

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Feeling 'Priced Out' of Your Local Market? Here's How You Can Still Buy a Great New HomeIf you’re trying to buy a new home, few things are more frustrating than a hot real estate market. When home prices are climbing fast it can feel like you’ll never be able to save enough for your down payment. In today’s post we’ll share a few ways that you can get in – even if you’re feeling priced out.

Start Smaller And Upgrade Later

If you’re a single professional or a young couple, it might be wise to start with a smaller starter home. While a townhouse or condo might not feel as large as a detached house, they are more affordable options. Starting small allows you to build equity in your home. This, plus your increased earning power as you work for longer, can open up more home options later.

Another benefit of starting small is that you’ll already have a home. If the local real estate market experiences a quick change, you won’t need to scramble. You can plan to buy a larger home – that ‘perfect’ house – when the time is right.

Bring In Family As Investors

Do you have family members who might be willing to provide a loan or financing? If so, start the conversation with them to see if they are willing to co-invest in your new home.

There are many ways to bring in family as investors when you buy. They can provide a straight loan of funds to increase your down payment. Or if they want to be less involved, they can co-sign your mortgage, which will allow you to borrow a larger amount. In many areas, a family member or investor can also be a legal co-owner of the house or the property it sits on.

Make Use Of Experienced Professionals

Finally, don’t forget to ask the local experts for more advice. Real estate agents and mortgage brokers are in-tune with the local market. They spend each day helping buyers like you with understanding their options. If you’re short on ideas, a real estate professional is a great place to start.

It can be tough to stay positive when you’re feeling priced out of the local real estate market. But with a little ingenuity and planning, you can get out of the rental market and into a great new home.

What’s Ahead For Mortgage Rates This Week – March 13, 2017

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Last week’s economic readings included reports on construction spending, Case-Shiller Home Price Indices and pending home sales. Fed Chair Janet Yellen said in a speech that federal interest rates would “likely” be raised. Weekly reports on new jobless claims and mortgage rates were also released.

Pending Home Sales Slump as Available Homes Dwindle

Pending Home sales fell in January as inventories of available homes declined. Prospective buyers faced with fewer choices may have chosen to wait rather than purchase homes that weren’t a good match for their needs. Analysts expected pending home sales to grow by 1.10 percent in January, but they fell by 2.80 percent to an index reading of 106.4, which was the lowest reading since January 2016. Additional factors contributing to lower pending sales, which represent sales under contract but not yet closed, include consumer uncertainty about economic conditions under the new administration and fear of rising mortgage rates. Affordability is also an issue for first-time buyers as short supplies of homes create more competition among prospective buyers.

Real estate pros have repeatedly said that the only way to resolve shortages of homes is to build more. While home builder confidence in market conditions has grown in recent months, housing starts and construction spending have not followed suit. Construction spending in January was 0.10 percent lower despite projections of 0.60 percent growth in construction spending and a positive reading of 0.10 percent in spending for December. Winter weather conditions can affect construction during winter months. Ongoing shortages of available lots and labor have also held back builders from optimum construction rat

Home Prices Rise in December

S&P Case-Shiller Home Prices rose to 5.80 percent on a seasonally-adjusted annual rate. November’s reading showed 5.60 percent growth in average home prices, Home prices continue to grow in the West as Seattle, Washington, Portland, Oregon and Denver, Colorado held on to the top three spots for fastest growth in home prices among cities surveyed.

Mortgage Rates, New Jobless Claims Lower

Freddie Mac reported lower average mortgage rates last week. 30-year fixed rate mortgages averaged 4.10 percent rate, which was six basis points lower than the prior week. The average rate for a 15-year fixed rate mortgage was five basis points lower at 3.32 percent. 5/1 adjustable rate mortgage rates were two basis points lower at 3.14 percent on average. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims were lower last week with 233,000 new claims filed as compared to expectations of 245,000 new claims filed. There were 244,000 new claims filed in the prior week.

What’s Ahead

Labor reports including ADP payrolls Non-farm payrolls and the national unemployment rate will be released along with weekly readings on mortgage rates and new jobless claims.

Did You Know: 3 Reasons Why Mortgage Pre-approval Should Be Your Very First Step

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Did You Know: 3 Reasons Why Mortgage Pre-approval Should Be Your Very First StepThere are so many details involved in the mortgage process that you may not be aware of what pre-approval is if you’ve just entered the market. However, pre-approval assesses your ability to make monthly mortgage payments and can be an important first step in the home-buying process. If you’re currently contemplating a home purchase, here’s why you may want to consider pre-approval first.

Improved Agent Attention

Real estate agents may be reluctant to spend the time or put significant effort into a homebuyer that has not been pre-approved for a mortgage. While a good real estate agent will assist you in finding a home that’s right for you, if you haven’t gone through the necessary process of determining if you’ll be approved, they may think it’s not worth their time to show you houses you may not be eligible to buy.

A Benefit For Home Sellers

In the event that you happen to come across a home that you want to purchase and make an offer prior to pre-approval, there’s a chance the buyer will not waste their time considering it. Because the pre-approval process can determine errors in your credit history and there’s a wait involved, many home sellers will not want to be held up by this process to sell their home. As a pre-approval can reveal errors and bump up your credit score, it can also be of greater benefit for you to have an accurate number going into the home purchase.

Determines Your Financial Health

While a pre-approval is not a sure sign that your mortgage application will be approved, it can provide a detailed look at your financial health. This means that if you happen to have a less flattering credit history than expected, you can go back to the drawing board, saving more money and making payments, to try and bump up your credit. While this isn’t necessarily enticing for the person who is ready to buy, it can be a benefit for the type of home you’ll be approved for.

It’s common to want to get out into the market and find the perfect house at the right price, but pre-approval is an important process that will help you determine the house you can afford. If you’re currently on the market for a new home, contact your trusted real estate professionals for more information.

Buying a Home on a Single Income? 3 Budgeting Tips That Will Make Things Easier

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Buying a Home on a Single Income? 3 Budgeting Tips That Will Make Things EasierAre you thinking about buying that perfect new home? Whether you’re buying for yourself or a new home for a family, there will be many costs involved. Let’s take a look at 3 budgeting tips that will help make home ownership on a single income easier.

Get A Full Picture Of Home Ownership Costs

Buying a home is never as simple as paying a mortgage payment each month. So, as with most budgets the first place to start is a full consideration of everything involved.

On top of your mortgage, what other monthly costs will come up? Consider utilities like electricity, phone, cable, water and others. You’ll be responsible for property taxes, so find out how much other local owners are paying. If you’re buying into a community, you may have to pay monthly fees to a homeowners’ association.

When you’re visiting open houses and talking to owners, be sure to get a full picture of their monthly costs. It will help you build a responsible budget.

Keep Your Credit As Strong As Possible

It might sound obvious, but keeping your credit or FICO score spotless is important. Buying a home on a single income means that you’ll need a mortgage. Depending on the home you’re buying, this might be significant. Your credit score is one of many factors your lender will use to assess you, but it’s the most important. So keep those bills paid on time and avoid any black marks on your credit report.

Plan Ahead For Unexpected Budget Shocks

Don’t forget to think ahead at events that — while unlikely — may shock your finances. Having one income means that you’re one negative health event away from being out of work. What happens if the income-earner gets sick, fired or laid off? Is there other work nearby, or would you need to move? Consider the different types of insurance you can get on your mortgage and home. And how much you’ll need to put away in a ‘rainy day fund’ each month.

While it might be a bit more of a struggle, it’s still possible to buy a home on a single income. For more tips and insight, be sure to contact your local real estate professional. They’ll be able to share how other single-income families have bought homes in your local market.