What the Fed’s Rate Cut Means for Buyers

The Federal Reserve recently cut interest rates for the first time since the Great Recession took hold in 2008, though the move is not likely to deliver significant juice to an already favorable borrowing environment for home buyers. The federal funds rate, which is what banks charge one another for short-term borrowing, will now hover between 2% and 2.25%, according to news reports.

The Fed says its decision to lower interest rates, which comes after months of pressure from President Donald Trump, is designed to stave off the threat of an economic downturn. But it’s unlikely to translate into additional mortgage savings for many buyers. With the interest rate for a 30-year loan already hovering below 4%, the Fed’s move may be more meaningful for buyers with other types of financing, says Lawrence Yun, chief economist for the National Association of REALTORS®. “Many borrowers will benefit, especially those with adjustable-rate mortgages and commercial real estate loans,” Yun says. “The longer-term 30-year fixed-rate mortgages will see little change in the near future because they had already declined in anticipation of this latest move by the Fed.

“These low interest rates will partly help with housing affordability over the short-term. Both rents and home prices have been consistently outpacing income growth. The only way to mitigate housing-cost challenges as a long-term solution is to bring more supply of both multifamily and single-family homes to the market,” adds Yun.

Still, lower borrowing costs are helping buyers manage rising home prices. For example, buyers who spend $1,500 on monthly mortgage payments can afford to purchase a $402,500 home this year compared to $367,500 last year, when mortgage rates averaged 4.57%, according to realtor.com®. “Last year, buyers would have needed an additional $145 a month on top of the $1,500 to afford a $402,500 home,” says Danielle Hale, realtor.com®’s chief economist.

In some locales, buyers’ money can stretch even further. “An extra $35,000 in purchasing power, depending on where you are in the country, can really make a difference to buyers today,” Hale says. “It still counts, even with home prices up 6% nationally. That increase in purchase power is greater than the national price increase.”

Source: REALTOR® Magazine

Advertisements

Housing Options Expand in King County

King County residents will have more options for owning a home thanks to a new law championed by REALTORS®. As Seattle and King County continue to experience greater demand for housing and an uptick in home prices, a coalition of housing advocates worked with the Legislature to pass a condominium reform measure that will make condo construction more attractive across the state.

The result: More housing choices for more people in King County.

Read more…

How Cash-Strapped Consumers Can Become Homeowners and Build Equity

Anyone who has saved for a down payment for a home knows it’s tough — especially for first-time homebuyers. In 2018, the National Association of Realtors (NAR) found that 13 percent of first-time homebuyers said the most difficult step in the homebuying process was saving for a down payment.

It’s a misconception that a 20-percent down payment is required for a home purchase, when in reality, many home loan options exist that may be able to put consumers into a home for as little as three percent down. In fact, 77 percent of non-cash first-time homebuyers in 2018 purchased a property using a down payment of less than 20 percent. Buying a home may be within reach — RE/MAX and Motto Mortgage put together a list of the most popular loan options for first-time buyers.

Agents Report Sharp Declines in Bidding Wars

There will likely be less competition for home buyers this spring—a widely reported index from Redfin shows a significant decrease among real estate professionals reporting bidding wars in March, compared to a year ago. Only 16 percent of offers written by Redfin agents on behalf of their customers in the first three weeks of March faced a bidding war, down from 61 percent a year ago, according to the brokerage’s index.

San Francisco, Boston, San Diego, and Portland, Ore., are the most competitive housing markets this month, according to the report. However, even in these markets, only one in five buyers faced bidding wars; a year ago, real estate agents in these markets reported that 65 percent of their buyers’ offers faced multiple bids.

Read the full article on REALTOR® Magazine…

House hunting pet owners place high priority on spaces for pets

Real estate brokers are keenly aware of the priority home buyers and home owners give to their pets.

Recent Realtor.com research showed 89 percent of millennials who bought a home own a pet. Of this demographic, 79 percent of pet-owning buyers who closed on a property said they would pass up an otherwise perfect home if it didn’t meet the needs of their pets.

A recent pet parent who purchased a home said she even picked her Realtor® for her pet-friendly attitude, having learned the broker she chose had worked with several volunteers at a local animal shelter.

“It’s heartwarming to find that people will put their pets’ needs first, even when it comes to one of the biggest financial decisions they will ever make,” says Nate Johnson, chief marketing officer for realtor.com. “This survey shows that we really do consider pets part of the family-and that their needs are a critical part of finding the perfect home.”

While dog owners typically desire homes with large yards, cat owners have different space considerations, ranging from where to place to litter box to find ways to satisfy the feline’s curiosity and craving for exercise and environmental enrichment.

Cat owners on the move face an “indoor/outdoor” dilemma, according to Cynthia Chomos, who teaches classes for real estate brokers on various topics including “feng shui for buying and selling” and “color appeal for a quicker sale.” A few years ago, she started applying those skills to her other passion: creating safe, enriching outdoor enclosures for cats, sometimes known as catios or cat patios.

“Cats, whether living mostly indoors or allowed outside, are naturally drawn to the stimulation of the outdoors, but responsible cat owners know a variety of outdoor hazards lurk, especially for free-roaming cats,” according to Chomos. Veterinarians can confirm the consequences of unprotected outdoor time can be traumatic and expensive.

Having a safe and stimulating environment for beloved pets is paramount, but home buyers who search for pet-specific amenities also care about aesthetics.

“You can have a beautiful house and a pet, too,” says Julia Szabo, pet columnist for the New York Post and author of Animal House Style: Designing A Home To Share With Your Pets.

Chomos, who founded Catio Spaces in 2014 and is a licensed contractor, agreed, stating, “Rather than looking like an unsightly cage, catios can resemble outdoor rooms. She builds custom catios around Puget Sound and offers downloadable plans for DIYers who prefer to construct their own or hire their own carpenter.

Cat enclosures and protected perches come in a variety of shapes, sizes and styles. (Editor’s note: a Google search uncovered more than 4 million results for the keyword catio!)  PETA describes catios as being akin to “a vacation beach house for your feline friends.”

Escape-proof materials and components are essential, according to those who build them. Additional elements often include shelves for vertical and horizontal movement, perches for lounging, toys for enrichment, cat safe plants, seating and space to decorate.

From small and simple to large and luxurious, the enclosures can be an attractive addition to a home while ensuring the health and wellbeing of cats – as well as cat owners, birds, and other wildlife. Large catios provide outdoor space for feline and human bonding while enjoying the benefits of nature.

As a pet lifestyle expert, Chomos helped found “Catio Tour Seattle,” a showcase of local catios, and collaborates with others to promote the benefits of catios. The annual catio tour, is organized by PAWS as part of its Safe Cats, Healthy Habitats project and sponsored by Catio Spaces, The Humane Society of the United States, Oskar & Klaus and Seattle Audubon. This year’s event is scheduled for Saturday, July 13.

Source: Seattle King County REALTORS® Northwest REporter

How Will the Housing Market Fare This Spring?

Real estate pros often anxiously await for the spring selling season, a time known for an uptick in home sales. But will spring be as hot for the housing market this year as it has been in the past?

Since the end of last year, home sales have slowed (a decline of 10 percent in December compared to a year prior), and properties have been sitting on the market for longer (46 days compared to 30 days a year ago).

Nevertheless, Lawrence Yun, chief economist at the National Association of REALTORS®, says that “multiple data show definitively improving conditions” heading into the spring selling and buying season.

Consumer sentiment about home buying is turning more upbeat, and there have been greater reports of foot traffic at open houses, according to recent NAR surveys. The number of openings of lock boxes—which real estate pros use to access a key prior to unlocking a home for a showing—is “measurably higher” in January and February compared to the second half of 2018, according to NAR SentriLock data.

Further, the number of consumers applying for a mortgage to purchase a home is on the rise. “After the weak conditions of late last year, mortgage applications have picked up notably in 2019 with more consumers evidently searching for a home compared to one year ago,” Yun writes in his latest real estate column at Forbes.com. Also, contract signings to purchase a home rose 4.6 percent in January—another healthy sign about the market Yun points to.

With mortgage rates staying low, Yun expects more home buyers and sellers this spring. So far this year, the 30-year fixed-rate mortgage has fallen to under a 4.5 percent average. That means a typical home buyer could save nearly $100 per month due to the drop. In addition, wages are up 3.4 percent year-over-year on average, the hightest rate in a decade, .

“The slump is over” in the housing market, Yun notes. “Better times are ahead for home buyers.”

Source: REALTOR® Magazine

A Successful Move Is All in the Details

Nearly 35.5 million Americans move each year, according to data from Move.org. With so much to think about, from organizing and packing to lifting and moving heavy boxes, it’s easy to forget the little things that can make life a little easier during a move. Here are some small details that may get overlooked – tips to make any move smoother and stress free.

Unplug Carefully
Don’t just pull the plug on expensive electronics and toss them in a box – a little planning will help you protect expensive gadgets, like TVs, laptops and stereo systems. Think before dismounting that big, flat-screen TV by yourself. Follow this guide to make sure nothing is damaged. Place all user manuals in a folder so they don’t get lost in the shuffle, but don’t panic if you’ve misplaced them because you can usually find manuals on manufacturers’ websites. Consider a professional mover for your more delicate electronics. Atlas Van Lines suggests using a qualified professional to uninstall any wall-mounted AV equipment and to call in advance to schedule an appointment so you’re not scrambling at the last minute.

Food for Thought
Don’t forget about dinner – you still need to eat during a move. Packing up the kitchen is usually the last, most challenging part of the moving process, but if you make plans you won’t go hungry.

  • Donate: Think about donating canned or unopened food to your local food bank. This leaves one less thing to pack and supports your community.
  • Meal Plan: Use the foods still left in your fridge and freezer for meal planning. Take inventory of the foods you have available leading up to the big day. Home Cooking Memories has some tasty ideas.
  • Label and Organize: Don’t pack up those cooking utensils just yet. Label your moving boxes to easily access the kitchen gadgets you still need to whip up a quick dinner. Consider the packing order of appliances you won’t need, like the blender, and place everyday items, like spatulas, on top for easy access.

The Essentials
You’ve unloaded the last box and you’re ready to shower, eat and relax – only to remember that your toiletries are buried in a dozen boxes, spread across the house. Avoid this all-too-common mistake by packing one or two “essentials boxes” that contain extra clothing, towels, toiletries, medications, bedding and phone chargers that will last up to three or four days.

Know Your Limits
It may be tempting to save money by doing the moving yourself, but don’t get in over your head. Know your limits, suggests OZ Moving and Storage, “If you’re not sure if you can accomplish some part of your move without professional help, don’t try. We were called up once by a trio of college students who had gotten their couch stuck in a staircase. Getting in over your head and having to call emergency help is not ideal.” Get quotes from a few moving companies to determine what needs to be moved or packed by a professional.

A successful move is all in the details – but, with a plan in place you won’t forget the small stuff!