Housing Market will have the best year in a decade per Freddie Mac

At the end of 2015, interest rates on 30-year fixed rate mortgages averaged over 4 percent, but declined at the start of 2016 and have remained below 4 percent so far this year. Low mortgage interest rates help support home buyer affordability in the face of rising house prices and stagnant income. If interest rates rise rapidly, like they did in the spring of 2013, housing market activity is likely to cool significantly. Our forecast is for mortgage interest rates to gradually rise, remaining below 4 percent for the first half of 2016, before inching higher and closing the year around 4.4 percent. On balance, the downside risks to this forecast are greater than the upside—there’s a substantial likelihood that rates could remain below 4 percent throughout 2016. The path of rates depends on global economic conditions. Many countries have negative interest rates. In Japan the 10-year government bond reached a record low of negative 0.1 percent in March. Across Europe many countries’ sovereign bond yields also have negative interest rates, some on maturities out to 10 years. Exhibit 1 compares sovereign bond yields for 2-year and 10-year maturities across several advanced economies. While we think there’s little chance the U.S. will have negative rates any time soon, negative rates abroad keep the lid on long-term rates in the U.S. We think the outlook for global growth will improve—or at least stabilize—throughout the balance of this year and the downward pressure on U.S. rates will abate. More good news on the domestic U.S. economy, and a return to tightening by the Federal Reserve, will push rates higher later this year. The Fed is likely to only raise rates twice this year, which will slow the pace of interest rate increases.

Maryland Real Estate by Pamela DuBois: Six Reasons to buy Now!!

Maryland Real Estate by Pamela DuBois: Six Reasons to buy Now!!: Is it really 2016 already? For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a who...

Six Reasons to buy Now!!

Is it really 2016 already? For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a whole lot to celebrate. Why? A variety of financial vectors have dovetailed to make this the perfect for home buyers to get out there and make an (winning) offer. Here are six home-buying reasons: Reason No. 1: Interest rates are still at record lows Even though they may creep up at any moment, it’s nonetheless a fact that interest rates on home loans are at historic lows, with a 30-year fixed-rate home loan still hovering around 4%. “Remember 18.5% in the ’80s?” asks Tom Postilio, a real estate broker with Douglas Elliman Real Estate and a star of HGTV’s “Selling New York.”“It is likely that we’ll never see interest rates this low again. So while prices are high in some markets, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.” Reason No. 2: Rents have skyrocketed Another reason home buyers are lucky is that rents are going up, up, up! (This, on the other hand, is a reason not to be thankful if you’re a renter.) In fact, rents outpaced home values in 20 of the 35 biggest housing markets in 2015. What’s more, according to the 2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016. “In most metropolitan cities, monthly rent is comparable to that of a monthly mortgage payment, sometimes more.” Reason No. 3: Home prices are stabilizing For the first time in years, prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, even in heated markets. Reason No. 4: Down payments don’t need to break the bank Probably the biggest obstacle that prevents renters from becoming homeowners is pulling together a down payment. But today, that chunk of change can be smaller, thanks to a variety of programs to help home buyers. For instance, the new Fannie Mae and Freddie Mac Home Possible Advantage Program allows for a 3% down payment for credit scores as low as 620. Reason No. 5: Mortgage insurance is a deal, too If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). A workaround to handle this, however, is to take out a loan from the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580. The fees are way down from 1.35% to 0.85% of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way. In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them? Reason No. 6: You’ll reap major tax breaks Please, Mr. Postman Send me news, tips, and promos from realtor.com® and Move. Enter your email address Sign Up Tax laws continue to favor homeowners, so you’re not just buying a place to live—you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.

#Selling#Pricing#Home#MontgomeryCounty

You raised your family there. You remember the friends, the parties, the conversations, the memories. The truth is that when it comes to selling your home, it’s a financial decision AND an emotional one, too. However, when it comes to cashing in on your most valuable asset, there are emotional pitfalls that you may want to avoid. Pricing your home for sale: The Realtor suggests a listing price—and you panic because you don’t think the listing price is high enough. After all, the improvements that you made were expensive and you think you should be able to recover 100 percent of the costs (especially the sweat and tears you put into it yourself). Work with your agent to understand the reason for the suggested listing price, how quickly you want to sell your home, and what would be your bottom line. Being emotionally attached: This is where the “memories” may cloud your thinking. Your baby took her first steps. You carried your bride over the threshold. The holiday memories. However, here are some of the “emotional attachment” signs to look out for: a. You want to list the home for more money than the market data suggests b. You ignore your Realtor’s advice to update the décor or make minor improvements c. You become irrational during negotiations or terms of the contract d. You refuse to respond to requests in a timely manner e. You refuse to show your home in a timely manner Negotiating with your heart and not your head: This is the tricky part — especially if you receive multiple offers on your home. Some agents will write an offer and ask the buyer of the home to write an accompanying letter as to why you should sell them the home. Or, you may get an offer that is higher than the listing price — you are thrilled, but when you read the fine print, the buyers wants you to pay their closing costs— which nets you less money in the long run. Or, you accept the offer, and go out and buy a new car in “advance” of closing the deal. While I totally understand the emotional attachment that you may have to your home, think about it this way—when you buy your next home, you’ll be making new memories, too!

#Home Inspection - #Listing the property

The real estate process is one that is fraught with pitfalls. The buyer or seller may get cold feet. Another buyer may swoop in with a better offer. The finances may sink the deal. Or, as often happens, the inspection may come back with some unforeseen problems that sink a deal or cost the seller an arm and a leg.

One strategy for avoiding the latter scenario is to have your home inspected even before you put it on the market. Yes, it will be some upfront expense that you won't be able to roll into closing costs, but it could help you avoid a sticky situation down the road.

On the plus side, an inspection will allow you to make sure your home is in the best possible condition before you list it - which means you can get the best possible price. It also means the buyer's inspection, which will have to happen after an offer, can't catch you off guard or seek to take advantage of you with fabricated problems.

On the downside, however, once you know about something and it's listed in a report, you are obligated to disclose the problem before you sell the house. This is annoying with small problems that you don't have time to fix, or with big problems you had no idea about - or budget to fix.

A pre-inspection gives you, the seller, a heads-up if there are problems that a potential buyer will likely want repaired. Once you know what's wrong, you can have those issues fixed before you list. The cleaner and more problem-free you can make your home, the faster it's likely to sell.

On the other hand, let's say you don't have a pre-inspection. During the process, the buyer's inspector discovers problems you didn't know about. You can be sure the buyer will try to negotiate a lower price, which will cost you money and can delay the sale. The buyer might even cancel the contract.

All that being said, the home inspection you do may not always be the same as the home inspection the buyer's inspector reveals. The pre-inspection may miss something. It's not always 100% accurate.

A pre-inspection still is a good idea to know of issues that may come up and being able to take care of those items before listing the property.

 

#Real Estate News!

The Government Wants People to Buy Homes  And to encourage that, they’ve made it a bit easier to do so. Fannie Mae and Freddie Mac offer a 97% LTV program for first-time buyers — that means only a 3% down payment, and that money can come from a gift. The 3% down program is now in competition for clients with the FHA’s 3.5% down payment program. This is actually a long-standing offer for first-time buyers, made sweeter this year by the reduction in annual mortgage insurance premiums, ultimately making home buying less expensive. Plus, FHA loans accept credit scores as low as 580 (and possibly lower, for a higher down payment). So there are several programs for Millennial first-time home buyers to choose from. But What Do Millennials Want in a Home? Location, location, location. The location of the home can be almost more important than the features of the home itself. These twenty- to early thirty somethings consider the home’s neighborhood and its proximity to their place of employment to be just as critical as the number of bedrooms. Less space but the right space. Bigger is not better; many Millennials spend little time actually in their homes, which means a smaller property is just fine for them. Because of this, it’s important that spaces in the home have multifunctional purposes. Smaller spaces are also easier to repair and keep clean, which works well with this generation’s desire to minimize upkeep and spend more time enjoying life. It’s not forever. Millennials aren’t getting attached to homes like older generations did; they look at them as a stepping stone and an investment. They don’t plan to stay in the home they’re buying now for more than five to seven years, in most cases (think repeat customer!). A first home is a chance to increase their credit scores and build their borrowing profile for the next property purchase. To these young home buyers, a home is an investment: Keep this in mind as you work with your clients. In a Nutshell  Lower credit scores and less cash for a down payment, but a high motivation factor and a willingness to start small and buy up over time are the general characteristics of the Generation Y home buyer.

Maryland Real Estate by Pamela DuBois: #Real Estate News for first half of #2015

Maryland Real Estate by Pamela DuBois: #Real Estate News for first half of #2015: Homes sold : During the first six months of 2015, homes sold at a fairly brisk pace. For the mid-Atlantic region as a whole, an increase of...