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REinventing MLS
Category Archives: KCM Blog
3 Graphs That Scream List Your House Today!
In school we all learned the Theory of Supply and Demand. When the demand for an item is greater than the supply of that item, the price will surely rise.
SUPPLY
The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 4.8-month supply. This is significantly lower than the 6 months inventory necessary for a normal market.
DEMAND
Every month NAR reports on the amount of buyers that are actually out in the market looking for homes, or foot traffic. As seen in the graph below, buyer demand this year has significantly surpassed the levels reached in 2014.
Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream home (if they even are able to find a home they wish to purchase).
Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.
HOME EQUITY
Many homeowners underestimate the amount of equity they currently have in their home. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their home. In reality 69% of homeowners actually do!
Many homeowners who are undervaluing their home equity may feel trapped in their current home, which may be contributing to the lack of inventory in the market.
Bottom Line
If you are debating selling your home this year, meet with a local real estate professional that can evaluate the equity you have in your home and the opportunities available in your market.
Blog Post via KCM Blog
The Cost of Waiting to Buy a Home
The National Association of Realtors (NAR) recently released their July edition of the Housing Affordability Index. The index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national level based on the most recent price and income data.
NAR looks at the monthly mortgage payment (principal & interest) which is determined by the median sales price and mortgage interest rate at the time. With that information, NAR calculates the income necessary for a family to qualify for that mortgage amount (based on a 25% qualifying ratio for monthly housing expense to gross monthly income and a 20% down payment).
Here is a graph of the income needed to buy a median priced home in the country over the last several years:
And the income requirement has accelerated even more dramatically this year as prices have risen:
Bottom Line
Some buyers may be waiting to save up a larger down payment. Others may be waiting for a promotion and more money. Just realize that, while you are waiting, the requirements are also changing.
Blog Post via KCM Blog
5 Reasons to Love Using a Real Estate Professional [Infographic]
![5 Reasons to Love Using a Real Estate Professional [INFOGRAPHIC] | Keeping Current Matters](https://i0.wp.com/www.keepingcurrentmatters.com/wp-content/uploads/2015/02/5-Reasons-to-Love.jpg)
Infographic via KCM Blog
The Truth About US Homeownership Rates [Infographic]
Infographic via KCM Blog
Why Have Interest Rates Dropped?
The headlines agree mortgage interest rates have dropped substantially below initial projections. Many who are considering purchasing a home, or moving up to their dream home, might think that they should wait to buy, because rates may continue to fall.
A recent article on the Economists’ Outlook blog by the National Association of REALTORS® (NAR) provides insight into one major factor in the decline in interest rates, the crude oil price.
“As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about $ 4/gallon in May 2011.”
You may have noticed that filling your gas tank has become substantially less expensive in recent months. A welcome change from the close to $5 a gallon that many Americans were paying this time last year. The average US household is projected to save around $550 in 2015.
So what does that have to do with Interest Rates?
NAR explains the correlation like this:
“Lower oil prices mean lower inflation rate, which pushes down mortgage rates.”
Based on Freddie Mac’s weekly mortgage survey as of January 22, 2015, the 30-year fixed rate averaged 3.63% and the 15-year fixed rate averaged 2.93%.
“The decline in oil prices is generally positive to households by way of the gas savings and lower mortgage payments. That savings will boost consumer spending in other areas. But there may be some layoffs in oil-producing states.”
How long will rates stay low?
No one really knows how long oil prices will continue to support low mortgage rates. In a New York Times article, the author points to the fact that “adding hundreds of billions of dollars to consumer spending” could start to have a “counter effect” on rates as the economy continues to strengthen.
“If firms start hiring again, and wages increase — that’s when the level of all interest rates in the U.S. would increase.”
Don’t wait too long
The low interest rates we are currently experiencing are not going to stay around forever. The current projections from Freddie Mac, Fannie Mae, NAR and the Mortgage Bankers Association all agree that interest rates will increase to between 4.3-5.4% by the end of 2015.
Bottom Line
NAR reports: “At the median home price of $205,300, a 0.75 percentage point drop in mortgage rates will yield savings of about $1,000 annually.”
If you are in a position to buy a home make sure that you meet with a local real estate professional with their finger on the pulse of what’s going on in the market. Don’t let a delay in purchasing impact your family’s financial future.
Blog Post via KCM Blog
NAR’s Existing Home Sales Report [Infographic]
![NAR'S Existing Home Sales Report [INFOGRAPHIC] | Keeping Current Matters](https://i0.wp.com/www.keepingcurrentmatters.com/wp-content/uploads/2014/12/Existing-Home-Sales-December.jpg)
Infographic via KCM Blog
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