Blog – Page 140 of 321 – DiversiFund Texas, LP

03 Jun 2021

In The Current Housing Market, Prospective Buyers Must Remain Patient

Homebuyer Tips

In The Current Housing Market, Prospective Buyers Must Remain Patient The housing market has been through many ups and downs during the past 12 months. Now, buyers are facing a unique challenge as they try to find the right house in the perfect seller’s market. Right now, real estate is extremely competitive, as low inventory has continued for several months.

As mortgage rates remain low, more people are looking for homes, increasing the competition. Some people are reluctant to sell because they know they will face the same challenges of trying to find a new home themselves. As a result, the housing market has record-low inventory making it difficult for buyers to find the right house in their budget.

Builders Have Not Constructed As Many New Homes

While a reluctance to sell is one reason why the housing market has become competitive, it is not the only one. There has also been a lack of new homes built during the past decade. From 2000 to 2010, builders constructed more than 12.6 million new homes, creating more inventory for those looking to buy. From 2010 to 2020, only 6.5 million new homes were constructed.

This number is significantly lower than the rate of new household formation, which has continued to go up. The result is an extremely competitive market for anyone looking to purchase a house in the current market. While builders are working hard to keep up with demand, it will take some time for them to catch up.

Buyers Must Remain Patient During This Challenge Time

Because the housing market is so competitive, many buyers find themselves facing bidding wars, where multiple buyers make offers on the same home. This drives up the sale price of the house, increasing property values in the surrounding area. This simply makes it more competitive for those still looking to buy.

Therefore, buyers need to remain patient. Low inventory will not remain at a low forever, and builders continue to construct new homes. It takes between four and eight months to build new homes, and more houses will come on the market as families consider moving in the wake of the pandemic. Patience is the key to finding the right home in the current market.

02 Jun 2021

By Kevin Gahagan

Case Shiller: Home Prices Rise at Fastest Pace Since 2005

Financial Reports

Case Shiller: Home Prices Rise at Fastest Pace Since 2005 March readings for S&P CoreLogic Case-Shiller Home Price Indices rose to their highest level since 2005 in March. National home prices rose by 13.20 percent year-over-year as compared to February’s reading of 12.00 percent growth. The Case-Shiller 20-City Home Price Index reported average year-over-year home price gains of 13.30 percent in March. Phoenix, Arizona continued to lead the 20-City Index with a year-over-year home price growth of 20 percent. San Diego, California followed with home price growth of 19.10 percent; Seattle, Washington reported year-over-year home price growth of 18.30 percent.

How the Covid Pandemic Impacted Home Prices

Real estate pros said that the Covid epidemic continued to impact housing markets as homeowners were more willing to list their homes as Covid cases decreased. Demand for single-family homes increased as homebuyers shopped for larger homes in less-congested metro areas. The pandemic opened more opportunities for working from home, which increased buyer interest in larger homes with amenities including home offices.

According to the Federal Housing Finance Agency, home prices for single-family homes owned or financed by Fannie Mae and Freddie Mac rose by 12.60 percent from the first quarter of 2020 through the first quarter of 2021.

As Covid cases fall more Americans will either return to their workplaces or re-evaluate their employment and housing situations. Demand for homes will exceed the supply of available homes for the foreseeable future, but the current high demand for homes may soften as families return to work and school and covid-related fears ease.

Home Price Growth May Slow, but Prices Unlikely to Drop

Rapid home price growth is likely to slow as more home sellers and buyers enter the market in the aftermath of the pandemic. Analysts don’t see major dips in home prices as demand continues to exceed supplies of new and previously-owned homes. Homebuilders face ongoing obstacles including labor shortages and rapidly rising materials prices that impact their ability to provide enough homes to meet demand.

Affordable homes are in short supply as pre-owned homes are often subject to bidding wars and cash sales due to buyer competition for fewer available homes. First-time and moderate-income buyers are joined on the sidelines by buyers who depend on mortgages to buy homes; they typically can’t compete with cash sales. As real estate markets return to pre-pandemic conditions, home prices may gradually plateau, but there isn’t much relief in sight for homebuyers needing to finance their home purchases.

01 Jun 2021

By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – June 1, 2021

Financial Reports

What's Ahead For Mortgage Rates This Week - June 1, 2021 Last week’s economic reports included readings on home price growth, new and pending home sales, and inflation. Weekly readings on mortgage rates and jobless claims were also released.

Case-Shiller Reports Highest Gains in Home Prices Since 2005

March home prices grew at a seasonally-adjusted annual rate of 13.20 percent according to S&P Case-Shiller’s National Home Price Index for March. National home prices gained 12.00 percent year-over-year in February; the corresponding 20-City Home Price Index reported that Phoenix, Arizona held the top spot for home price growth for the 22^nd consecutive month; home prices rose by 20.00 percent year-over-year. San Diego, California followed with 19.10 percent growth in home prices, and Seattle, Washington posted year-over-year home price growth of 18.30 percent for third place in the 20-City Home Price Index.

All cities participating in the 20-City Index reported faster growth in March home prices than in February. Rapidly rising home prices pressed new home sales down from the March reading of 917,000 new homes sold to a seasonally-adjusted annual pace of 863,000 new homes sold in April. The inventory of new homes for sale dipped to a 3.80 month supply in April as compared to a 4.60 month supply of new homes available in March. Builders faced continuing obstacles including high materials and labor costs that reduced their ability to produce the volume of homes needed to meet ongoing demand.

Pending home sales were -4.40 percent lower in April as compared to expectations of a 1.00 percent increase in pending sales; Pending home sales rose by 1.70 percent in March. High competition for homes and fewer available homes along with higher prices sidelined prospective buyers as affordability concerns increased.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by five basis points to 2.95 percent. Rates for 15-year fixed-rate mortgages averaged 2.27 percent and were two basis points lower. Rates for 5/1 adjustable rate mortgages were unchanged at 2.59 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.20 percent.

First-time jobless claims fell to 406,000 initial claims filed as compared to the previous week’s reading of 444,000 new claims filed. Continuing jobless claims fell to 3.64 million claims filed from the prior week’s reading of 3.74 million continuing jobless claims filed.

Inflation rose by 0.50 percent in April, which matched analysts’ expectations. Core inflation, which excludes food and fuel sectors, rose by 0.70 percent and exceeded expectations of 0.60 percent growth.in April. The March reading for core inflation showed 0.40 percent growth. The Federal Reserve has an annual goal of two percent inflation; current readings indicate that inflation may rise above the two percent benchmark if the current pace of inflation continues.

What’s Next

This week’s scheduled economic news includes readings on construction spending and readings on public and private-sector jobs growth. Weekly reports on mortgage rates and jobless claims will also be published.

28 May 2021

By Kevin Gahagan

Buying a Home Where Someone Passed Away

Homebuyer Tips

Buying a Home Where Someone Passed Away A key factor that often drives the sale of new homes versus existing ones tends to be cultural. Rather than being financially-driven or associated with location factors, many homebuyers will steer clear of existing homes where someone has passed away. The primary fear tends to be concerns about a leftover spiritual residual in the home that could affect the new homeowners. Despite the abundance of TV shows about ghost-chasers and similar, the stigma of a dead person’s home has been around for centuries and is still alive and well today.

Understanding Property History

While sellers of existing homes will tend to try to limit or omit discussion about the former occupants, focusing on the property description and details instead, it is never a bad idea to have a grip on the history of a home and the related surrounding location. This applies heavily to homes in older neighborhoods that have been around for decades and may have had already more than one long-term owner. Local news and property records can be searched easily online, providing a basic review of whether anything newsworthy happened at the location, most notably crime.

Crime-affected properties are probably the most challenging given that crimes don’t just close neatly. Details could be hidden that can trigger new investigations decades later and would be very disruptive to the homeowner finding them after a sale. The issue isn’t so much that someone died as the law enforcement process ripping apart everything again looking for evidence. Avoidance is probably a good idea in these cases.

Sickness or Age are Common Cases

The high majority of homes with someone passing away, especially older homes when people passed away with families present, tend to be the usual situation. In these cases the big factor is to make sure you’re comfortable with the home personally. In most cases the house has been emptied, cleaned out, restored and make salable again, so the stigma is not really physical but more about personal preference and comfort. While this article won’t tread into the realm of arguing whether spiritual presence is real or not, how comfortable you are in the home with a past is really what matters the most.

Homes Aren’t the Only Locations With History

Note as well, homes are not the only places with history. If you’ve ever stayed in older hotels, apartments or condominiums, you’ve likely stayed or lived in a location temporarily that may have had an assortment of activity in it before you arrived. Homes have a stigma because it involves a long-term commitment in one place, but people regularly stay in rental locations and vacation spots where life just happens on a regular basis, including someone passing away.

Existing Homes Are Not Perfect, But They Have Character

At the end of the day, if there is a presence in a home you’re uncomfortable with, choose a different location to buy. Trust your gut when walking through a home if you feel something off; chances are you may be picking up something with your senses versus logic and sight. On the other hand, if you like history, an existing home could be an interesting adventure into a life before yours to explore, find out about, and learn more about your community as well. And it could be a rewarding pastime to chase.

27 May 2021

By Kevin Gahagan

Is Now The Time To Refinance Your Mortgage?

Mortagage Tips

Why Refinance

To refinance a mortgage means to pay off your existing loan and replace it with a new one.

There are many reasons why homeowners opt to refinance, from obtaining a lower interest rate, to shortening the term of the loan, to switching mortgage loan types, to tapping into home equity.

Each has its considerations.

Lower Your Mortgage Rate
Among the best reasons to refinance is to get access to lower mortgage rates. There is no “rule of thumb” that says how far rates should drop for a refinance to be sensible. Compare your closing costs to your monthly savings, and determine whether the math makes sense for your situation.

Shorten Your Loan Term
Refinancing your 30-year fixed rate mortgage to a 20-year fixed rate or a 15-year fixed rate is a sensible way to reduce your long-term mortgage costs, and to own your home sooner. As a bonus, with mortgage rates currently near all-time lows, an increase to your monthly payment from a shorter loan term may be negligible.

Convert ARM To Fixed Rate Mortgage
Homeowners with adjustable-rate mortgages may want the comfort of a fixed-rate payment. Mortgage rates for fixed-rate mortgages are often higher than for comparable ARMs so be prepared to pay more to your lender each month.

Access Equity For Projects, Debts, Or Other Reasons
Called a “cash out” refinance, homeowners can sometimes use home equity to retire debts, pay for renovations, or use for other purposes including education costs and retirement. Lenders place restrictions on loans of this type.

A refinanced home loan can help you reach specific financial goals or just put extra cash in your pocket each month — just make sure that there’s a clear benefit to you. Paying large closing costs for small monthly savings or negligible long-term benefit should be avoided.

Many lenders offer low or no closing costs options for refinancing. Be sure to ask about it.