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  • Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)

    If you're thinking of buying a home, you've probably been thinking a lot about your credit score as well. Credit scores control so much of what we do in the world of finances, but what does your credit score really have to do with your mortgage? Here are three ways that your credit score could impact your mortgage application. Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)

    Your Credit Score Affects Your Ability To Get A Mortgage

    The first thing your credit score tells a lender is whether they should lend to you at all. In some cases, if you have a very low credit score, you may not be able to obtain a mortgage at all.

    Different lenders will have different criteria for determining safe and unsafe lending situations. Typically, if you have a score below the 600 mark, you'll have trouble obtaining a mortgage.

    If you're worried about a low credit score, don't despair - you can still get a mortgage, you just might have to work a little harder to get one. Some lenders will still lend to people with lower credit scores (just make sure you're approaching legitimate lenders and not mortgage scam artists). Or, if time is on your side, you can work toward building up your credit score so that when it comes time to take out a mortgage, your score will be more appealing to lenders.

    Your Credit Score Affects What Types Of Mortgages You Can Obtain

    The second thing a lender learns from your credit score is which types of mortgages you qualify for. If a lender sees you as a higher risk, they won't necessarily be willing to offer you just any old mortgage.

    In most cases, if you have a credit score of less than 620, you won't qualify for a conventional mortgage. In addition, if you have a lower credit score, you may have to make a larger down payment in order to qualify for the type of mortgage you want.

    Your Credit Score Affects Your Interest Rate

    The final thing that a lender learns from your credit score is what type of interest rate they're willing to offer you. As a general rule, the higher your credit score, the lower the interest rate.

    However, just because you have a high credit score, that doesn't mean you'll automatically get a great mortgage rate. There's more that goes into the price of a mortgage than just the interest rate, so watch out for additional factors like extra fees, mortgage insurance, lock-in periods, and so on.

    Your credit score tells a lender a lot about what type of borrower you are. Ultimately, a higher credit score means that you'll be able to borrow money at a lower interest rate. But if your score is low, don't worry - there's a lot you can do to bring up that score before you apply for a mortgage, so don't throw in the towel just yet!

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - July 28, 2014

    FHFA Home Prices Grow at Slower Rate, Existing Home Sales Higher than Expected 

    The Federal Housing Finance Agency (FHFA) reported that the average sale price of homes associated with mortgages owned or backed by Fannie Mae and Freddie Mac grew by.40 percent in May with year-over year growth of 5.90 percent. While national home price readings continue to rise, they are doing so at a slower pace since 2013's rapid appreciation of average home prices. Home cooling costs

    Sales of previously owned homes reached their highest level in eight months in June. Existing home sales surpassed expectations and May's reading in June, with sales of pre-owned homes at a seasonally adjusted annual rate of 5.04 million units. Analysts forecasted sales of existing homes at 5.00 million against May's reading of 4.91 million existing homes sold.

    New Home Sales Fall Short in June

    New home sales did not achieve the expected volume for June. The reading of 406,000 new homes sold was less than the expected reading of 475,000 new homes sold. Projections were based on the original May reading of 504,000 new homes sold, but this was downwardly revised to 442,000 new homes sold in May. Builders were said to be cautious about over-extending themselves are focused on new home construction in high-demand areas where home prices are higher. Homes are less affordable in such areas, which impacts lower sales volume.

    Freddie Mac: Mortgage Rates Steady for 30-year FRM

    The average rate for a 30-year fixed rate mortgage was unchanged at 4.13 percent with average discount points also unchanged at 0.60 percent according to Freddie Mac's weekly survey of mortgage rates. The average rate for a 15-year fixed rate mortgage rose by three basis points to 3.26 percent with discount points higher at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was two basis points higher at 2.99 percent with discount points ten basis points higher at 0.50 percent.

    Weekly Jobless Claims Lowest since 2006

    A major consideration for home buyers is stable employment. Recent reports suggest that the labor market is expanding; the Weekly Jobless Claims report continued this trend with a lower than expected reading of 284,000 new jobless claims filed against expectations of 310,000 new claims and the prior week's reading of 303,000 new jobless claims. Analysts found the declining number of new jobless claims consistent with lower unemployment rates, but cautioned that sustained weekly jobless claims readings lower than 300,000 are more consistent with a national unemployment rate of 5.00 percent or less.

    What's Ahead

    This week's scheduled economic news will add further insight to housing market trends with the release of Pending Home Sales for June and the Case-Shiller Home Price Index report for May. The Bureau of Labor Statistics will also release July's Non-Farm Payrolls report and National Unemployment report. The Federal Reserve is set to release its customary statement in the aftermath of the Federal Open Market Committee (FOMC) meeting that concludes on Wednesday.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • National Association of REALTORS Existing Home Sales Exceed Projections

    According to the National Association of REALTORS®, existing home sales surpassed both May sales and expectations for June. Sales of previously owned homes increased by 2.60 percent in June and reached a seasonally adjusted annual level of 5.04 million sales. June's reading was the third consecutive monthly increase in sales of existing homes and was the highest reading for existing home sales in eight months. Existing home sales remain 2.30 percent below the June 2013 reading of 5.16 million sales of existing homes. National Association of REALTORS

    Analysts projected sales of 5 million existing homes for June against May's initial reading of 4.89 million sales of previously owned homes; the May reading was later revised to 4.91 million sales. Lawrence Yun, chief economist for the National Association of REALTORS® said that market conditions are becoming "more balanced," and noted that inventories of existing homes are at their highest level in over a year and that price gains have slowed to much more welcoming levels in many parts of the country.

    Housing Market Headwinds Declining

    After a particularly harsh winter and lagging labor reports, analysts forecasted lower annual sales of existing homes for 2014 than for 2013. Labor markets are stronger according to recent labor market reports and a declining national unemployment rate. Steady work is an important factor for families considering a home purchase; as labor markets improve, more would-be homeowners are expected to become active buyers.

    Housing markets are not without challenges. In recent unrelated reports, the Federal Reserve has noted higher than anticipated inflation may cause the Fed to raise its target Federal Funds rate in the next several months. Gas and food prices, important components of consumers' household budgets continue to rise and could slow save toward a home for some families. Steve Brown, president of the National Association of REALTORS®, said that first-time and moderate income buyers continue to deal with affordability due to increased FHA costs and tight mortgage credit. Relief may be in sight as a slower pace of home price growth suggests that more buyers may be able to afford homes.

    FHFA House Price Index Reports Gain in May Home Sales

    FHFA released its May index of home sales connected with mortgages owned or backed by Fannie Mae and Freddie Mac. The index posted a month-to-month gain of 0.40 percent in May and a year-over-year gain of 5.90 percent year-over-year. FHFA said that increased sales were driven by a 9/60 percent increase in sales in the Pacific region and that average home prices remain 6.50 percent below April 2007.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Understanding the 'Qualified Mortgage' or QM and Why It's Important to New Home Buyers

    Are you shopping for a home or a new mortgage? If you are interested in finding the best possible financial product, it is important to consider the benefits of selecting a Qualified Mortgage. With so many different types of loan products to choose from and financial terms to learn, schooling yourself on the mortgage market before you buy your first home or apply for your first refinance mortgage may seem like a daunting task. Understanding the 'Qualified Mortgage' or QM and Why It's Important to New Home Buyers

    Luckily, there are resources that are designed to help you learn the basics of products and terms so that all consumers have the power to inform themselves before securing a loan.

    What is a Qualified Mortgage?

    There are many different categories of home loans that individual loan products can fall into and one of these categories is simply referred to as a Qualified Mortgage. Qualified Mortgages, also referred to as the QM in the industry, is a product that has been approved as a qualified product because it has stable features that benefit you as a borrower.

    All lenders who are interested in offering a Qualified Mortgage must make a good-faith effort to assess your income and your debt-to-income ratio to ensure that you are able to repay the loan before you take the loan out. All lenders must meet a long list of certain requirements that are free of harmful features that could affect a borrower's ability to pay.

    Common Requirements of Qualified Mortgages

    The main purpose of a qualified mortgage is to protect borrowers from forms of predatory lending. The standards that the loan must meet are set by the Federal government. In addition to assessing the borrower's ability to pay before approving an application, lenders must meet loan product requirements that are very specific in nature. Some of the harmful features that a QM product is not permitted to have include:

    Negative Amortization: This feature affects consumers by allowing principal to increase over time.

    Interest-only Periods: Where payments are only applied to interest on the money borrowed.

    Balloon payment requirement: A requirement where borrowers must pay a large payment at the end of the loan term.

    Long Terms: Loans cannot have terms longer than 30 years.

    A Large Debt-to-Income Ratio: There is a limit in how much income that can go to monthly debt payments. This limit is 43% for a QM.


    How Can a QM Benefit a New Home Buyer?

    As you can see, there are safeguards built into a Qualified Mortgage that are designed to protect you from entering into a long-term binding loan contract that puts you in an unfair position. There are also legal protections that are designed to protect lenders who are committed to designing qualified mortgage products. You can sign a loan that you can afford to repay, have payments applied to your principal as well as interest, and become a homeowner without unnecessary stress. 

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - July 21, 2014

    Last week's economic news offered a variety of indications that the economic recovery continues, but some readings missed their expected levels. The Philadelphia and New York branches of the Federal Reserve Bank reported higher than anticipated manufacturing for their respective regions and new jobless claims were lower than expected. Mythbusters: 5 Reasons Why Diet Sodas Might Not Be as Healthy as You Think

    Fed Chair's Senate Testimony Hints at Coming Interest Rate Hike

    Federal Reserve Chair Janet Yellen testified that the Fed might have to raise interest rates sooner than expected if the economy continues to outperform the Fed's projections. Ms. Yellen said that the central bank presently estimates that the first rate increases will take place approximately one year from now.

    The Federal Open Market Committee (FOMC) of the Fed has repeatedly stated that members will continue to review data and economic conditions changing monetary policy. Ms. Yellen said in last week's remarks that this holds true whether economic conditions improve or decline.

    In other Fed-related news, the Philadelphia Fed released its manufacturing index for July with higher than expected results. The Philly Fed's reading for July was 23.90 as compared to expectations of 16.50 and June's reading of 17.80.

    The New York Fed reported a similar trend for July with a reading of 25.60 as compared to an estimated reading of 17.50 and June's reading of 19.30. This is good news after the Northeast's economy was slammed by severe weather last winter. Weather conditions stalled area housing and labor markets.

    Weekly jobless claims were lower at 303,000 than expectations of 310,000 new jobless claims and the prior week's reading of 305,000 new jobless claims.

    Home Builders Post Positive Confidence Reading for July

    The National Association of Home Builders posted its highest builder confidence reading in six months for July with a reading of 53 against the expected reading of 50 and June's reading of 49. Numbers above 50 indicate that more builders surveyed have a positive outlook than not.

    Housing Starts for June were reported lower than expected at an annual level of 893,000 against an expected reading of 1.02 million and May's reading of 985,000 housing starts.

    Mortgage Rates Lower

    According to Freddie Mac's weekly survey, average mortgage rates were slightly lower last week. The average rate for a 30-year fixed rate mortgage fell by two basis points to 4.13 percent. Discount points were 0.60 as compared to the prior week's reading of 0.70 percent. The average rate for a 15-year fixed rate mortgage was 3.23 percent as compared to the previous reading of 3.24 percent.

    Discount points for a 15-year mortgage averaged 0.50 percent against the prior week's reading of 0.50 percent. The average rate for a 5/1 adjustable rate mortgage dropped by two basis points to 2.87 percent with discount points unchanged at 0.40 percent.

    The University of Michigan's Consumer Sentiment Index for July fell just short of expectations at 81.3. Analysts expected a reading of 83.0, based on June's reading of 82.50. Analysts said that although labor markets are improving, consumers continue to face rising costs for gasoline and food, which likely explained the dip in confidence for July.

    What's Ahead

    This week's economic news releases include Existing Home sales from the National Association of REALTORS®, New Home Sales from the Department of Commerce and the FHFA House Price Index. The Chicago Fed is set to release its National Activity Index. Freddie Mac mortgage rates and New Jobless Claims will be released Thursday as usual.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • A Quick Guide to Assessing Your Home's Foundation for Cracks - And What to Do if You Find Them

    When purchasing a home, there are a number of considerations that need to be taken into account. One of those considerations is the foundation of the home. No matter how perfect or suitable a property looks, taking the time to properly inspect the property for foundation problems can save homeowners thousands of dollars in repairs later on. A Quick Guide to Assessing Your Home's Foundation for Cracks - And What to Do if You Find Them

    While foundation cracks are usually present in older homes, that does not mean that newer and even brand new homes aren't prone to them. When choosing a property, the following tips can help homebuyers find signs of foundation problems and take the right action if any are found.

    Concrete Weakness

    One of the easiest ways to check for a damaged foundation is to check the concrete of the home. When the foundation is strong and safe, the concrete is not brittle and breakable. To test this, when trying to poke the foundation with a screwdriver, the foundation should be rock solid. If it isn't, then there may be a foundation issue.

    Posts Should Be Sturdy

    If the house has a basement, then the posts that hold up the basement and crawl space should stand firmly in place. The bottom of the post should be unmovable and the post should stand straight and tall. If the posts do not do so, then there is a problem with the foundation.

    Uneven Floors

    The next component of the house that should be inspected is the floors. All of the floors within the house must be solid, straight, and not slanted. If the floor is slanted or separates from the wall in any place, then the foundation is unable to support the home properly and there is a serious issue.

    Exterior Cracks

    The walls are also a way to examine for foundation issues. Take a tour around the outside of the home and inspect for any cracks to the exterior. Each wall on the outside of the home should be smooth, solid, and free of any cracks. However, if there is a crack, this may mean that the foundation has shifted and the home is uneven.

    Windows and Doors

    Next, inspect every window and door on the property. Each should be attached to the surrounding wall and they must also open and close without any difficulty. If there is a difficulty in opening and closing windows and doors, there may be a foundation problem like shifting or uneven ground that is unable to support the property.

    Moist Ground Around the Property

    Lastly, another sign that there is a foundation problem is if the ground around the property is moist. A strong foundation will usually be set upon ground that is completely solid. When the ground is moist, the dirt particles are porous and unable to bind together, leading to shifting, cracks, and major damage to the home.

    Choosing the right home is not a difficult process and making the right assessments of the property can save thousands of dollars in future repairs. To help with assessments, foundation repairs, and to get the right information about how to deal with a cracked foundation in a potential property, then contacting a trusted and professional real estate agent is the best solution when purchasing a property.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Getting Ready to Retire? Six Tips for Downsizing from Huge House to Efficient Condo

    If you're getting ready to retire, you may be thinking about downsizing. Having a large house makes sense when you're raising kids, but once you reach your golden years, it usually makes sense to move into a smaller, more efficient condo. While downsizing may seem impossible, these six tips will help you reach your goal. Getting Ready to Retire? Six Tips for Downsizing from Huge House to Efficient Condo

    1. The Six-Month Rule

    If you're finding it hard to figure out what to keep and what to get rid of, stick to the six-month rule - if you haven't used an item within half of a year, you probably don't need it. Seasonal items aren't used as much, but if you haven't used them within a year or two, it's safe to get rid of them.

    2. Measure Twice

    Measure your furniture, your current room sizes and your future room sizes. After you've done that, do it again. Nothing's worse than wrestling with your heavy sofa for hours on end to find out that it won't fit in your new living room after all.

    3. Pre-Arrange Big Items

    Once you know where your new home is going to be, get the floor plan or draw one up yourself. Use measurements from your furniture and other big items to figure out where you're going to put things. If it looks crowded on paper, it will probably look even more crowded in person, so make sure your plans look okay before you decide to hire a mover or move everything yourself.

    4. Get With The Times

    With all the new technology coming out, it's easy to transfer almost all of your physical media to electronic form. While you might want to keep your all-time favorite books and movies in physical form, you can put most of your reading material on an e-book reader and most of your movies on a computer or external hard drive.

    5. Multiples Multiply Headaches

    Yes, you need to have a soup ladle, but you don't need five of them. If you have more than one of the same item, consider getting rid of the multiples. You'll probably find that your kitchen is the biggest culprit as far as multiples go, but you may also find that you have three tops that are very similar in color and style or four laundry baskets even though you only do one load at a time.

    6. Use Your Resources

    If you're moving to a neighborhood with a great library, plan to use it instead of bringing all of your books and movies with you. If you're going to have a gym virtually next-door and can afford a membership, it may be time to give away your home gym equipment.

    Don't forget that your real estate agent can be an invaluable resource when downsizing, so be sure to get in touch with them before you make the jump. In summary: moving is hard enough, but downsizing is even harder. By following these tips, though, you should be able to pare down your belongings so that you will be able to live comfortably in your new home during the best years of your life.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • The 7 Most Unaffordable Cities for Real Estate in the USA (And 3 Affordable Gems!)

    As prices continue to rise across the board with everything from food to gas, it's no wonder that real estate prices are high in many cities across the USA. While this is the case for a large number of cities, there are also certain areas in which prices are decidedly low. Here's a small look at the most affordable and unaffordable cities within America. The 7 Most Unaffordable Cities for Real Estate in the USA (And 3 Affordable Gems!)

    The Seven Most Unaffordable Cities

    Oakland, CA - Though Los Angeles and San Francisco are 2 California cities that may first come to mind, Oakland is also highly expensive when it comes to real estate, with a median home value of nearly $450,000, which is over 100 percent more than the national average.

    Los Angeles, CA - Los Angeles is another city in California that is particularly unaffordable. With a median household income of just under $50,000, the exceedingly high median home value of nearly $470,000 is largely galling in its expensiveness.

    Boston, MA - The Boston real estate market becomes more unaffordable with each passing year. The median home value within the city is set at well over $350,000. This, combined with the relatively high cost of living, can make for a bleak outlook.

    New York City, NY - As one of, if not the most, unaffordable cities in America, NYC is also the most populous city in the United States. While the borough of Manhattan is the most expensive for real estate prices, Brooklyn and Queens aren't much better, while the median home value of the entire city is just over $500,000.

    Washington, D.C. - Though the median household income within the city of Washington D.C. is higher than the national average, the median home value sits at a substantial $443,000, with a cost of living over 40 percent above the national average.

    San Francisco, CA - Living in San Francisco is extremely unaffordable, though mitigated a bit by higher household incomes. The median home value is likely the highest in the nation, at just over $750,000.

    Honolulu, HI - As the capital city of Hawaii, Honolulu is much higher than the national average in everything from utilities to transportation, with the median home value sitting at $547,000.

    Three Affordable Alternatives

    Cleveland, OH - Though there are a surprising amount of affordable cities in Ohio, Cleveland has a median home value of just over $75,000, well below the state average of $129,000.

    Knoxville, TN - Knoxville is a city in Tennessee that combines a generally low median home value of $140,000 with a median household income of just over $60,000, which is much higher than the national average.

    Syracuse, NY - If you want to live in New York, but can't afford the high real estate prices of NYC, the city of Syracuse has a low median home value of just under $80,000.

    If you're searching for the perfect city to buy your next home in, call your real estate agent today for all of the latest information.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - July 14, 2014

    Last week brought news from the Fed as two Federal Reserve Bank Presidents made speeches and the Federal Open Market Committee (FOMC) of the Fed released the minutes of its last meeting. The minutes reveal the Fed's intention to wrap up its bond-buying program in October with a final purchase of $15 billion in mortgage-backed securities (MBS) and Treasury bonds. No economic news was issued Monday following of the 4th of July holiday. What's Ahead For Mortgage Rates This Week July 14 2014

    Further indications of a strengthening labor market were seen. May job openings reached their highest level since June 2007, and quits and layoffs fell from April's reading of 4.55 million to 4.50 million. Weekly jobless claims fell to 304,000 against expectations of 320,000 new jobless claims and the prior week's reading of 315,000 new jobless claims.

    Fed Speeches Address Inflation, Banks Too Big to Fail

    Tuesday's speech by Minneapolis Fed Bank president Narayana Kocherlakota calmed concerns over inflation; Mr. Kocherlakota said that the Fed expects inflation to remain below its target rate of two percent for several more years. He tied low inflation to the unemployment rate and said that the nation's workforce is not fully utilized in times of low inflation, and cautioned that June's national unemployment rate of 6.10 percent "could well overstate the degree of improvement of the U.S. labor market."

    Stanley Fischer, the Fed's new vice-chairman, spoke before the National Bureau of Economic Research last Thursday. Mr. Fischer addressed the issue of breaking up the nation's largest banks to eliminate the government's exposure to banks too big to fail. He said that it wasn't clear that breaking up the largest banks would end federal bailouts of banks considered too big to fail. Mr. Fisher also said that breaking up the biggest banks would be "a complex task with an uncertain payoff."

    Mr. Fischer also said that any efforts to prevent a housing bubble should focus on the supply side and cautioned that "measures aimed at reducing the demand for housing are likely to be politically sensitive."

    FOMC Minutes Reveal End Date for Bond Purchases

    The minutes of the Fed's last FOMC meeting indicate that the Fed plans to continue bond purchases at the rate of $10 billion per month with a final purchase of $15 billion in October. FOMC members re-asserted their oft-stated position that the Fed's target interest rate of 0.00 to 0.25 percent will not change for a considerable time after the bond purchase program ends.

    Mortgage Rates Rise

    Average mortgage rates rose across the board last week. The average rate for a 30-year fixed rate mortgage increased by three basis points to 4.15 percent; discount points were also higher at 0.70 percent. The average rate for a 15-year fixed rate mortgage rose by two basis points to 3.24 percent with discount points higher at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage rose by one basis point to 2.99 percent with discount points unchanged at 0.40 percent.

    What's Ahead

    This week's scheduled economic news includes retail sales and retail sales without the auto sector, Fed Chair Janet Yellen's testimony, the Fed's Beige Book report and the NAHB Homebuilder's Market Index. Housing Starts, Consumer Sentiment and Leading Economic Indicators round out the week's economic reports.

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  • What's Ahead For Mortgage Rates This Week - July 7, 2014

    Last week's economic news was mixed, but economic reports for Non-Farm Payrolls and the National Unemployment rate suggest a strengthening labor sector. Pending Home Sales surpassed expectations in May and conversely, construction spending was lower than expected. Here are the details. What's Ahead For Mortgage Rates This Week July 7 2014

    Pending Home Sales Reach Highest Level in Eight Months

    The National Association of REALTORS® reported that pending home sales in May rose by 6.10 percent over April's reading. May's reading was 5.20 percent lower than for May 2013. The index reading for May reached 103.9 as compared to April's index reading of 97.9. Results for all regions were positive for May:

    - Northeast: 8.80%

    - West 7.60%

    - Midwest 6.30%

    - South 4.40%

    An index reading of 100 for pending home sales is equal to average contract activity in 2001; pending home sales are a gauge of upcoming closings and mortgage activity.

    CoreLogic Home Price Index Reflects Slower Price Gains

    National home prices rose by 1.40 percent in May and 10 states posted new month-to-month highs, while year-over-year reading slipped from 10.00 percent in April to 8.80 percent in May. Home prices remain about 13.50 percent lower than their 2006 peak.

    The overall rate of construction spending slowed in May to an increase of 0.10 percent from April's reading of 0.80 percent and against expectations of 0.70 percent. Residential construction spending dropped by 1.50 percent in May.

    Freddie Mac's weekly survey of average mortgage rates brought good news as the rate for a 30-year fixed rate mortgage dropped by two basis points to 4.12 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.22 percent, as was the average rate for a 5/1 adjustable rate mortgage at 2.98 percent. Discount points were unchanged at 0.50 percent for a 30-year fixed rate mortgage and 15-year fixed rate mortgages. Discount rates rose from 0.30 to 0.40 percent for 5/1 adjustable rate mortgages.

    Jobs Up, Unemployment Rate Lower

    ADP payrolls, which measures private-sector job growth, reported 281,000 new jobs in June as compared to a reading of 179,000 new private-sector jobs in May. The Bureau of Labor Statistics' Non-Farm Payrolls report for June surpassed expectations of 215,000 jobs added with an increase of 288,000 jobs against May's reading of 224,000 jobs added.

    The national unemployment rate fell to 6.10 percent against predictions of 6.30 percent and May's reading of 6.30 percent. 

    No news was released on Friday, which was a national holiday.

    What's Ahead

    This week's scheduled economic is lean with no events set for Monday. Job Openings, the minutes from the most recent FOMC meeting, along with regularly scheduled weekly reports on mortgage rates and new jobless claims round out the week's economic news.

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  • What's Ahead For Mortgage Rates This Week - June 30, 2014

    Last week brought several economic and housing sector reports including Existing Home Sales, Case-Shiller and FHFA home prices for April, as well as New Home Sales. Freddie Mac's weekly mortgage rates survey and the weekly report on new jobless claims were released on Thursday, and Consumer Sentiment for June rounded out the week on Friday. What's Ahead For Mortgage Rates This Week June 30 2014

    Existing Home Sales Stronger than Expected! 

    Good news came from the National Association of REALTORS® Existing Home Sales report for May, which reported 4.89 million previously owned homes sold on a seasonally-adjusted annual basis. Analysts had projected a seasonally-adjusted annual figure of 4.75 million existing homes sold based on April's reading of 4.65 million existing homes sold; April's reading was later adjusted to 4.66 million. May's reading represented a monthly increase of 4.90 percent over April's reading and was the second consecutive monthly increase in previously owned home sales.

    The median sales price for existing homes sold in May was $213,400, which represented a 5.10 percent increase year-over-year.

    May's reading for existing home sales was the highest in seven months, and mortgage rates trended down during May, but strict lending standards were cited as a significant obstacle to first-time homebuyers.

    Federal Reserve Chair Janet Yellen recently said in a press conference that mortgage lenders "need more clarity" as to their potential liability for failed mortgages. Mortgage lenders and loan servicing companies can be required to repurchase defaulted loans or to reimburse Fannie Mae and Freddie Mac for losses associated with mortgage defaults and foreclosures.

    Case-Shiller, FHFA Report Slower Pace for Home Price Growth

    The S&P Case-Shiller Home Price Index and FHFA's House Price Index for April documented slowing rates of home price growth. Case-Shiller reported a 10.80 percent year-over-year growth in home prices for April, and FHFA reported a year-over-year gain of 5.90 percent rate of appreciation for home sales associated with mortgages owned by Fannie Mae and Freddie Mac.

    Analysts noted that home price growth is leveling out after last year's steep appreciation in home prices. While homeowners may disagree, economists say that a slower rate of home price growth can actually bode well for housing markets. More buyers can afford a home, which adds stability to housing markets. First-time buyers provide a foundation for home sales; if they cannot buy homes, then homeowners can't sell existing homes and buy new homes. A slower but consistent rate of home price growth allows homeowners to build home equity, but won't likely lead to housing "bubble."

    New Home Sales Blast Past Expectations, Mortgage Rates Fall

    The U.S. Department of Commerce reported that new home sales for May reached a six-year high with a reading of 504,000 new homes sold on an annual basis. April's reading exceeded expectations of 440,000 new homes sold as well as April's adjusted reading of 425,000 new homes sold. The month-to-month increase in new home sales from April to May was the largest monthly increase in home sales in 22 years.

    Although analysts caution that month-to-month seasonally-adjusted sales reports are volatile, this uptick in new home sales may help bolster builder confidence in housing markets. May prices for new homes also rose with the median home price at $282,000. This reading represents a year-over-year increase of 6.0 percent for new home prices.

    The Northeast led regional results for new home sales with its reading of 54.50 percent; The West reported an increase of 34.00 percent. New home prices in the Southeast rose at an annual rate of 14.20 percent, and the Midwest region reported a 1.40 percent increase in new home prices. While analysts characterized the Northeast region's May reading as exaggerated, overall results for new home prices indicate a comeback for new home prices.

    Freddie Mac put some icing on the good news cake with its weekly mortgage rates report. Average rates for a 30-year fixed rate mortgage dropped to 4.14 percent with discount points lowered to 0.50 percent. The average rate for a 15-year fixed rate mortgage fell by eight basis points to 3.22 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.98 percent with discount points lower at 0.40 percent.

    Thursday's Weekly Jobless Claims Report reading fell by 2000 new claims to a seasonally adjusted reading of 312,000 new claims filed. Analysts had expected a reading of 310,000 new jobless claims. 214,000 per month have been added to the economy from January to May 2014.

    Positive economic developments were not lost on consumers. The Consumer Sentiment Index for June posted a reading of 82.5 against an expected reading of 81.9 and May's reading of 81.2.

    This Week's News

    Scheduled economic news includes Pending Home Sales, Construction Spending, the ADP Employment report, and the Non-farm Payrolls Report. The National Unemployment Rate report along with Freddie Mac's PMMS and Weekly Jobless Claims round out the week. No news is scheduled for Friday's Independence Day holiday.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Dos And Don'ts Of Buying Distressed Real Estate

    Distressed real estate is real estate in need of serious repairs. These properties are often called "handyman specials." If you have the skill or the money to complete the repairs, you can often find great deals. Here are some dos and don'ts of buying distressed real estate. How to Build the Ultimate Tree House for Your Children in Just Seven Steps

    DO Get A Home Inspection

    Distressed homes need repairs. Some of these repairs, like broken floor tile, are easy to see. Others, like water damage in the attic, can be easily hidden. The only way to know for sure what you're buying is to have the property inspected by a professional home inspector.

    DO Pay Attention To The Home's Market Value

    You don't want to buy a home and spend your hard-earned money for repairs only to find out the home is worth less than you paid for it. Have your agent complete a comparative market analysis so you know what the home is worth.

    DO Have An Estimate For Repairs

    There's no point buying a distressed home if you can't afford the cost of the home and the repairs. Get an estimate from at least three contractors before you buy. Knowing the cost of repairs beforehand will help you make the best decision.

    DON'T Think About Potential Profit

    You've probably heard countless stories about people who bought distressed properties and sold them for outrageous profits. However, the reality is that most distressed homes are sold for a small profit or no profit.

    DON'T Buy A Home Just Because The Price Is Low

    When you buy distressed homes, you have to consider more than just the asking price. Add together the cost of repairs, insurance, and what you can realistically expect to make from the sale. This will tell you if the home really is a good investment for you.

    DON'T Buy If You Don't Have The Money

    No matter how good a deal you find on distressed homes, they aren't worth it if they will stretch your budget too far. The last thing you want to deal with is damage to your credit score and the risk of foreclosure in the event you can't pay for the home.

    Looking for a great deal on distressed real estate? Contact your trusted real estate professional today.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - June 23, 2014

    Last week's scheduled economic news included the National Association of Home Builders/Wells Fargo Housing Market Index, Housing Starts and Building Permits. The Fed's Federal Open Market Committee (FOMC) issued its usual statement at the conclusion of its meeting, and Fed Chair Janet Yellen also gave a press conference. What’s Ahead For Mortgage Rates This Week June 23 2014

    Home Builder Confidence Improves, but Housing Starts Slow

    NAHB released its Housing Market Index report, which reached its highest reading in five months. The index moved up from 45 to 49; a reading of 50 indicates that more builders are confident about housing market conditions than those who are not. David Crowe, NAHB chief economist, said that builder confidence is in line with consumer confidence; he noted that consumers are waiting for a stronger economic recovery before buying homes and that builders didn't want to build more homes than markets would bear.

    According to the latest figures from the Department of Commerce, May housing starts fell to 1.00 million from April's reading of 1.07 million on a seasonally adjusted annual basis, and missed the consensus reading of 1.02 million. Building permits issued in May fell by 6.40 percent to 991,000 permits issued for single and multi-family construction. In recent months, permits for single family homes have fallen, while permits for multi-family units are increasing. This concerns economists as single-family homes generate sales of retail goods including furniture and home improvement supplies, while multi-family housing is often occupied by renters and yields fewer home related purchases.

    Warmer weather was expected to add to the pace of housing starts, but this did not occur during May.

    Fed Reduces Asset Purchases, Mortgage Rates 

    FOMC members reduced the Fed's monthly asset purchases by $10 billion, for a monthly volume of $35 billion in Treasury securities and MBS. The meeting minutes noted FOMC concerns that inflation has not yet reached the committee's benchmark of 2.00 percent inflation as a benchmark of economic recovery.

    The minutes reflected FOMC's position that it will maintain the target federal funds rate at between 0.00 and 0.25 percent for a considerable period after the asset purchases under the current quantitative easing program have ended. While analysts previously associated "considerable period" with a time frame of six months, Fed Chair Yellen stated during her press conference that there was no formula for determining the Fed's actions; she emphasized that the Fed and FOMC would monitor a wide range of economic indicators, economic reports and developments in support of any decisions to change current monetary policy.

    In response to a question about tight credit, Chair Yellen cited banks' reluctance to lend to all but those with "pristine" credit scores as a factor contributing to slower recovery in the housing sector.

    Mortgage Rates, Jobless Claims

    Freddie Mac reported lower mortgage rates on Thursday. The reading for a 30-year fixed rate mortgage was 4.17 percent, a decline of three basis points. Discount points were also lower at 0.50 percent. The average rate for a 15-year fixed rate mortgage was lower by one basis point at 3.30 percent; discount points were unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell to 3.00 percent from last week's reading of 3.05 percent. Discount points were unchanged at 0.40 percent.

    New jobless claims were higher than expected at 312,000; analysts had predicted a reading of 310,000 against the prior week's reading of 318,000 new jobless claims.

    No economic reports were released Friday.

    What's Ahead

    This week's economic calendar includes several housing-related reports. Existing home sales, the Case-Shiller Housing Market Index and New Home Sales will be released along with multiple consumer-related reports and weekly updates for mortgage rates and new jobless claims.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Discover Why Your Home Isn't Selling This Summer

    Just when you think you've done everything you need to do to get your home ready for the market, months pass and your home doesn't sell. Consider a few factors that can effect your goal of selling your home. Discover Why Your Home Isn't Selling This Summer

    Priced Too High-If your home has an excessive asking price, it will be harder to sell. With so many homes available today, a big price tag may turn buyers off.

    And, your competition down the street may have the same home but a better price.

    The Market - No longer can you simply put a home on the market and watch the offers roll in. Nowadays, you have to be diligent and knowledgeable in your approach.

    Research the market value of homes in your neighborhood and know what kind of competition you're up against. And, understand today's buyers and what they need in order to make a good offer on a home.

    Unfavorable Location - No matter how gorgeous a home is a bad location can hurt sales. Although you can't change the location, you can be creative in figuring out ways to appeal to buyers. Offer incentives to attract buyers or lower your asking price.

    The Appearance - Does your home need some work? If so, you want to attack those issues first before putting your home on the market.

    Things like dirty carpets and broken appliances can turn buyers off. Try staging your home. This will help to ensure your home dazzles potential buyers.

    You Didn't Consult A Professional - Trying to sell a home yourself can be an extremely daunting task. That's why you need a real estate professional who knows the ins and outs of the industry and can market your home in the right way.

    The good thing is that you can make changes that will improve the situation. Go over all the points listed and address any problems. Once that's done, you'll have a better chance of watching your home sell.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Three Easy Ways to Make Your Home More Inviting

    Many home owners putting up their home for sale on the market don't have a lot of available cash to spruce it up. While staging houses is a definite plus, it can cost a fair amount of money, as do many of the other suggested "to-dos." Here are a few inexpensive and easy ways to make your home look more inviting to buyers. Three Easy Ways to Make Your Home More Inviting

    Put Up Your Personal Stuff

    Not every buyer looking at a home for sale appreciates the fact that someone still lives there. Putting away the your personal things can help the buyers' see themselves in the home.

    You will want to put your pet's things (toys, litter box, bowls) away and out of sight. The same goes for your medications, toothbrushes and toilet accessories.

    Clean up your kids' rooms and put away any toys around the house. Minimize or put away knick-knacks and personal pictures. Remember that you want the buyer to imagine themselves in the home.

    Create More Space

    Small, closed-in spaces are major turnoffs for buyers. Create the illusion of more space by putting up out-of-season clothes or clothes you don't wear very often to make your closets look bigger. A good way to make your bedrooms look bigger is by taking one piece of furniture out of each bedroom.

    Packing up the small appliances in your kitchen is a great way to make your countertops seem larger. You can also take out all but four chairs in your dining room, as well as extra table leaves to give that illusion of space.

    Touch On The Trends

    Chances are that some of the buyers are paying attention to celebrity trends. Feng shui is a big one, and you can do your part with just a few touches like adding a fresh bowl of fruit to the kitchen. Put a comfortable couch or chair on the east side of your living room or den. Place a green welcome mat on your porch to symbolize opportunity. Go through your house and get rid of reds.

    Whether you see or feel a difference doesn't matter. Keep in mind that you're trying to appeal to potential buyers of your home, not make the home more livable for you. If it helps, pretend that you're the buyer, seeing the house for the first time.

    If you're trying to get your home ready to sell, I can help. Get in touch with me for more information.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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