Rising Mortgage Rates: Why Buyers Should Get Off the Fence

I know it seems like all our messaging right now is about rising interest rates.  For the past 8 years we have been warning of this day and most people felt like we were crying wolf.  Well the Big Bad Wolf is here now and he is showing his gnarly teeth.  Rates have gone up and the trend is not your friend.  On the good side, in December of 2015 we were at 4.25%.  As of today we are less than that.  The bad news is that we will see 4.5% in 2017.  The question is will it be in January or some other month.  If you have been a fence sitter it is now time to get off the fence.

  Don't just take it from me, read more: Do Rising Mortgage Rates Mean Buyers Should Wait or Lock?

Is The Next Housing Crash Coming?

This is a fantastic article if you are a person who believes in trends!  As I read it, we are currently in phase II but depending upon the market next spring we could easily move into phase III.  Not only do we have the potential for hyper supply; look around you, do you see a lot of new construction?  We are also almost assured of rising interest rates.  Those are 2 of the 3 signs with a recession being the 3^rd sign.  Any significant event on the global stage could trigger the recession which would put us right back where we were in 2008.  Maybe not as drastic, but far too many homeowners are 1 paycheck away from a missed mortgage payment.

As I have the opportunity to look at borrower's balance sheets and assets regularly, there simply is NOT enough saving happening.  Too many people are trying to live the life of a wealthy person or if not wealthy, at least the life of someone they see on television.  Those that stop trying to keep up with the Joneses and live frugally will be prepared for when the next housing crash comes.

-Chris

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Do Election Years Affect Mortgage Rates?

Wherever you look, you can find opinions on both sides.  Some say an election year has no direct bearing on interest rates while others say it most certainly does.  There is evidence to back both views.  One thing that is for certain: given that this election is unlike any other election, all bets are off.

Neither candidate has intensely focused on the issue of housing so there does not appear to be a direct policy that will largely impact the industry.  But as humans we have a fear of the unknown.  So yes, during an election year buyers tend to be uneasy.  Markets & stocks do not like uncertainty either. This could, in turn, affect job creation, unemployment and the overall strength or weakness of the economy.  That of course, trickles right down to housing.

Right now Wall Street is leaning toward Hillary Clinton being elected and the market is priced as such.  If she does become president, yes there may be a slight increase in rates but Wall Street likes someone who is not likely to make radical changes.  If Trump is elected, it will be like going back to July 3rd when we saw the effects of BREXIT, which largely affected consumer and manufacturer confidence.  

Whatever will happen we will be looking at a 4-yr cycle until the next election.  So I wouldn’t hinge my decision on an election, I would hinge it on the needs of your family and your pocketbook.  One thing I can say, in looking back at rate trends we will still most likely still be enjoying the lowest rates in history.  Just look back at 1981 where the ANNUAL AVG was 16.63% (SEE HISTORY BY YEAR AT http://www.freddiemac.com/pmms/pmms30.htm)

Remodeling: Cost vs. Value

Happy New Year!

If your goal this year includes home improvement or renovations you will definitely want to ask yourself: "When the dust settles, what are the benefits of a home improvement project?" This question is answered by the 2015 Remodeling Impact Report found in Realtor Magazine.

The report has 3 major sections: return on investment, the joy the remodel brings to a homeowner, and what has the highest buyer appeal (though not necessarily the highest return on investment).

Their findings:

#1 Interior Return On Investment (105%) = New Roof

#1 Project that made owners the happiest = Bathroom Remodel

#1 Highest buyer appeal (but not the highest percentage of ROI) = Kitchen Upgrade

The overall winner? When you look at the intersection of buyer appeal, cost, return, and owner joy, a new roof appears to be the smartest remodeling investment. 

Here is an illustration of their findings:

And your best bet is to speak to a realtor in YOUR AREA who knows the local market and can give you even more detailed advice on what will be a good return on your investment.

If you have questions on how I can help you achieve your goals, please feel free to contact me anytime.

Sincerely,

Chris 

Your Residential Lending Team