Case-Shiller: February Home Prices Gained Before Coronavirus Outbreak

Case-Shiller February Home Prices Gained Before Coronavirus OutbreakHome prices continued to grow in February according to the Case-Shiller Home Price Indices. National home prices grew at a seasonally-adjusted annual pace of 4.20 percent as compared to national home price growth of 3.90 percent in January. Case-Shiller’s 20-City Home Price Index showed higher home price growth rates in February with average annual home price growth of 3.50 percent. January home prices grew by 3.10 percent for cities included in the 20-City Index.

The lowest year-over-year home price growth rates were posted by Chicago, Illinois with 0.70 percent; New York City posted 1.50 percent growth, and Dallas, Texas with 2.50 percent home price growth.

Phoenix, Arizona home prices grew by a seasonally-adjusted annual rate e of 7.50 percent; Seattle, Washington home prices grew by 6.00 percent year-over-year. Tampa, Florida’s home price growth was tied with Charlotte, North Carolina’s home price growth rate of 5.20 percent. Analysts said that long-standing market conditions of high buyer demand, low inventories of available homes, and mortgage rates near record lows contributed to February’s home price growth.

Gains Across 20 City Composite

Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, said February results “were broad-based with gains in every city in our 20-City Composite; 17 of 20 cities saw accelerating prices.”

February readings were based on home sales completed before the Coronavirus impacted the U.S. economy and government restrictions on all but essential activities reduced buyer traffic and slowed home sales. Areas supported by tourism and recreation were expected to see sharp declines in home prices and sales.

Fed Promises to Use All Remedies as Coronavirus Crisis Grows

The Federal Reserve’s Federal Open Market Committee said it would use all available tools to steady economic conditions destabilized by the Coronavirus pandemic. The FOMC said in its post-meeting statement that “The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook in the medium term.”

Committee members did not change the current federal interest rate range of 0.00 to 0.25 percent and pledged to hold the Fed rate steady until the economy has weathered the public health crisis and was on track to achieve the Fed’s dual mandate of full employment and price stability.

 

Why Most People Use A Real Estate Agent Or Broker To Buy A Property

Why Most People Use A Real Estate Agent Or Broker To Buy A PropertyOne might wonder if the continued improvement in the access to online information about properties for sale has removed the need for working with a qualified real estate agent or broker. It has not.

The trends reported by the National Association of REALTORS® (NAR) are interesting. Buyers are finding a home to purchase by searching online in larger numbers than before. In the NAR survey of homebuyers, the home was found online by the buyer for more than half of the homes purchased, with only 28% of the homes purchased suggested to the buyer by a real estate agent.

Even so, NAR also reports that 87% of buyers made their home purchase with the help of a real estate agent or broker. This trend is increasing. In 2001, only 69% of home buyers bought a home with the involvement of a real estate agent or broker. Why the upward trend of working with a real estate professional when buying a home?

The explanation is surprising. One is the cost of buying a home that is for sale by owner (FSBO) may be very close to the price of the same type of home bought with the help of a real estate agent. An FSBO home sale may put a little more money in the pockets of the seller but little of that savings on the real estate commission goes to the buyer. Moreover, the FSBO process creates a disadvantage when trying to market a home without a real estate professional’s help. These trends are making FSBO properties decrease.

Additionally, using a real estate professional may help the transaction go more smoothly. A real estate agent handles the buying and selling of properties all the time. A homebuyer does this less often and therefore may not have the skills to manage a real estate transaction effectively.

Summary

When buying a home, it is the preference of the vast majority of buyers to work with a real estate professional. The process is likely to be easier with less chance of costly mistakes. The price paid for the home will likely be around the same as trying to close a deal without the benefit of using a real estate agent.

For sellers of a home, working with a professional real estate agent comes along with advice about market pricing, how to stage a home for better resale value, and the benefits of using effective marketing strategies that get the home seen by more prospective buyers.

For buyers and sellers, it becomes clear that working with a real estate agent is vastly preferable. This is why so many are using the services of a licensed professional to buy or sell a home.

The ‘Golden Girls’ Strategy? Elderly Adults Share Home Ownership

The 'Golden Girls' Strategy Elderly Adults Share Home OwnershipThe “Golden Girls” trend got its name from the popular television sitcom about four elderly women who live together to share expenses. It is becoming a popular way in real life for elderly adults to share homeownership and it has many benefits.

The cost of assisted living is quite high. The median cost in the United States for assisted living is $4,051 per month. In many parts of America, that amount makes a substantial mortgage payment. Rather than pay that high price to live in an adult assisted-living community, many able-bodied elderly are choosing to pool their resources and live together in a large home that they own together.

Buying A Home To Share

The homes that work well for this are those that have many bedrooms, each with a private bath, and are on one-level. Three- or four-bedroom homes are ideal because the cost of the home and the operating expenses can be shared among three or four elderly adults to reduce each person’s cost compared to what they would spend if they were alone.

It Is Fun To Share

The communal areas for a shared-living arrangement are the main living room, dining area, and kitchen. Many find that by sharing the cost of a home, among like-minded peers, that the quality of life is very nice. The pooling of resources usually creates enough money to pay for the expenses and to pay for in-home personal assistance as needed. Most importantly, loneliness is reduced, which sometimes leads to serious depression in the elderly who live alone.

Many baby boomers are now entering retirement. Estimates are that seven out of 10 will need some form of assisted living care. Females still live longer than men on average, so that is why this trend is more about elderly women living together than men. However, the concept works just as well for both sexes.

Multigenerational living is also becoming popular for the same reasons. It costs so much to own and maintain a home that it is not as easily accomplished by households with one or two workers who contribute to pay for the expenses. Most situations benefit from having a third or a fourth contributor, which reduces the average contribution for all.

Get Competent Legal Advice

When considering any shared ownership of a home, it is very important to use the services of a competent legal counsel to draw up the ownership agreement. Shared homeownership is a type of partnership and benefits from having a “buy-sell” provision in the agreement that allows any remaining co-owners to buy out the portion held by a co-owner who dies or otherwise becomes physically unable to continue living in the home.

Summary

Most baby boomers had roommates when they went to college to share expenses. Embracing a “Golden Girls” strategy to share home ownership is like returning to a style from the younger times. It is wise to be very careful about who is chosen to form a home-ownership partnership; however, with proper legal documentation and prudence in choosing who to live with, this can be a very satisfying way to spend your golden years.

What’s Ahead For Mortgage Rates This Week – April 27th, 2020

http://data.bloggingrightalong.com/i/07-Whats-Ahead.jpgLast week’s scheduled economic news included readings on sales of new and previously-owned homes and consumer confidence. Weekly readings on mortgage rates and new jobless claims were also released.

COVID-19 Requirements Impact Home Sales

Widespread state and local requirements for sheltering at home negatively impacted home sales in March. New homes sold at an annual pace of 627,000 sales as compared to 741,000 sales reported in February. Analysts estimated 628,000 sales for March according to the Commerce Department.

The National Association of Realtors® reported lower sales of previously-owned homes in March with an annual pace of 5.27 million sales. February’s annual sales rate was 5.76 million homes. Sales of pre-owned homes exceeded analysts’expectations of 5.24 million existing homes sold annually.

Annual sales calculated for March were 8.50 percent lower than February’s reading. Lawrence Yun, the chief economist of the National Association of Realtors®, said that the organization expected home sales to fall in March and expected fewer home sales in April.

The COVID-19 outbreak impacted both home sellers and buyers as restrictions on open houses and home tours limited sellers’ability to show their homes; prospective buyers delayed their home shopping activities due to COVID-19 restrictions and job losses related to business closures.

Mortgage Rates Mixed, Jobless Claims Lower

Freddie Mac reported higher fixed mortgage rates last week; rates for 5/1 adjustable rate mortgages dropped. The average rate for 30-year fixed-rate mortgages rose two basis points to 3.33 percent; rates for 15-year fixed-rate mortgages rose six basis points and averaged 2.86 percent. Rates for 5/1 adjustable rate mortgages fell by six basis points on average to 3.28 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims remained far above average last week but were lower than the prior week. 4.43 million initial unemployment claims were filed last week as compared to 5.24 million claims filed the prior week. Analysts expected a reading of four million new claims filed last week.

April’s Consumer Sentiment Index reading fell to an index reading of 71.8 from the March reading of 89.1 Analysts expected a reading of 69.3. The University of Michigan said that the Index reading from March to April showed the steepest drop in Index history. Analysts said that April’s reading indicated an economic recession.

What’s Ahead

This week’s scheduled economic reports include Case-Shiller Home Price Indices, pending home sales, and the post-meeting statement of the Fed’s Federal Open Market Committee. Fed Chair Jerome Powell will give a press conference after the FOMC statement. Construction spending data will be released along with weekly readings for mortgage rates and new jobless claims.

 

First-Time Buyers’ Guide: How To Get A Mortgage And Buy A House

When you are in the process of buying a home, there are a lot of moving parts that need to work together. It can be hard for you to keep track of everything that has to happen, particularly if you are going through this process for the first time. With this in mind, there are a few basics that you should remember when you are looking for a home loan.

Work With A Professional 

It is critical for you to work with a real estate agent who can act as a guide during this process. A real estate agent has taken plenty of individuals and families through the process of finding a home loan and purchasing a house. Therefore, he or she will be able to work with you from start to finish as the home loan process unfolds. 

Find A Loan Officer

Once you have found a real estate agent, the next step is to find a loan officer. Your real estate agent might have connections throughout the industry and can recommend a loan officer. Many real estate agents will recommend that you use a mortgage broker. A mortgage broker often works with multiple loan companies. This means that you may have multiple home loan options at your disposal. Ideally, you will be able to leverage these options against each other and find the best deal for you.

Understand The Basics Of A Home Loan

When you are evaluating your home loan options, there are a few factors that you need to consider. The most important part of a home loan is the interest rate. You want to make sure that you get the lowest interest rate possible as this is going to impact the amount of money you pay over the life of the loan. Then, you want to make sure that you can afford the down payment required. If you can’t put enough money down, you might have to purchase mortgage insurance. You want to avoid this cost if possible. 

Work With An Experienced Real Estate Agent.

During this process, it is important for you to follow the advice of your real estate agent. Once you have found the right home loan, you will be able to complete your home purchase.