Navy Fellas Realty Group

Real Estate, Residential sales and purchase

Inexpensive Updates That Will Appeal To Buyers

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Inexpensive Updates That Will Appeal To BuyersWhile you could spend tens of thousands of dollars or more completing a home makeover, there are more than a few budget-minded ideas that you may consider.

Add Color To Molding And Trim

One cool idea in home décor and interior design is to get rid of the standard white trim and molding and to add color to these areas. Neutral hues like grays and browns have universal appeal, or you can give your space a more contemporary look by adding black to these areas. Generally, you will want a more neutral color like a creamy beige on the walls when executing a look with colored trim.

Another idea is utilizing a color consistent with your wall color as opposed to a contrasting or complimentary color. This helps the trim blend in and almost disappear. This is an especially effective concept when used in small rooms, narrow halls with several doorways or in rooms with low ceilings.

Update Light Fixtures

If you have a little more money to spend, you may consider updating your light fixtures. There are rather affordable yet stylish fixtures available in a wide range of finishes. When your rooms are empty or staged to perfection, the light fixtures can easily set the tone of the room and may be focal points. Outdated fixtures may have limited appeal to buyers who are looking for a home that is modern and current with today’s trends.

When thinking about lighting, don’t forget to consider updating your outdoor lighting. The right fixtures may add an additional element of curb appeal that many buyers appreciate.

Redefine Outdated Spaces

In some older homes, some of the rooms may have originally been built with outdated uses in mind. Today’s savvy buyers may be looking for a home with an exercise room, a media room or a study rather than a formal living or dining area. With this in mind, you may consider how you can stage your home to show that it can be used for modern purposes.

This may simply mean moving your formal dining room set into storage, adding French doors and investing in an affordable desk and side chairs for staging purposes. Murphy beds that offer space for guests that can be hidden away when not in use are a clever way to show dual purpose. Turning a closet or the area under the stairs into a small office is also a clever use of space. 

Your trusted real estate agent should be able to offer additional suggestions to help update your home and get it ready for market.

You Ask, We Answer: What is Private Mortgage Insurance or ‘PMI’ and How Does It Work?

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You Ask, We Answer: What is Private Mortgage Insurance or 'PMI' and How Does It Work? For many homeowners, their mortgage payment contains more than just principal and interest. A little something called PMI could be representing a significant portion of that payment, and it’s important for home buyers to understand this cost.

What Is PMI?

PMI stands for private mortgage insurance, or sometimes just mortgage insurance. However, it isn’t intended to mitigate risk for the homeowner, but rather the bank.

Statistics show that when a home buyer puts less than 20% down on a home, he/she is much more likely to default. So, requiring these buyers to carry PMI helps the bank hedge their losses in the event of a default.

It’s important to note that the home buyer doesn’t shop for PMI; this is all taken care of by the lender. However, the cost of PMI should be calculated out well before closing to help the home buyer be aware of his/her final mortgage payment.

Who Needs PMI?

Who will need to carry PMI depends on factors like the credit rating of the buyer and the exact mortgage being sought out. However, it’s safe to say that most home buyers with less than a 20% down payment will be required to carry PMI.

Does PMI Ever Go Away?

Eventually, PMI can be removed from a mortgage once enough of the principle has been paid down or enough years have passed.

It’s important for home buyers to fully understand the terms of their PMI requirement. Sometimes, it will be automatically removed once 20% of the house has been paid off, while other times, refinancing may be required.

Should Those Who Cannot Put 20% Down, Not Buy A House To Avoid PMI?

Unfortunately, this is not an easy question to answer. Yes, PMI is an extra cost that needs to be calculated into the cost of the home – but putting off a home purchase isn’t necessarily the right course of action.

For many families, it’s financially challenging to save up 20% of the cost of a home. After all, in 2010, the median home price of new homes sold in America was $221,800. A 20% down payment on such a home would be $44,360.

However, many find that it’s still cheaper, or just financially wiser, to buy a home with PMI than to continue renting. Each potential home buyer should call their real estate professional to get more information about market trends in their area and to decide the appropriate course of action.

NAHB: Builder Confidence in Housing Market Ticks Up in October

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NAHB Builder Confidence in Housing Market Ticks Up in OctoberHome builder confidence in national housing market conditions rose one index point for a reading of 68 in October. Readings over 50 indicate that most builders are confident about market conditions. Rolling three-month averages showed mixed results. The Northeastern region gained three points for an index reading of 57; the Midwestern region lost two index points with a reading of 57 and the Southern region posted a gain of one point with a reading of 70. The Western region held steady at 74.

Readings for sub-categories of the Housing Market index showed a one-point gain to 74 for current market conditions, Builder confidence in market conditions over the next six months also gained one point for a reading of 75 index points. Builder confidence in buyer traffic rose four points to 53. This was remarkable as historical readings for buyer traffic rarely rose above the benchmark reading of 50.

Demand for Homes Rises

The National Association of Home Builders reported that demand for homes increased regardless of high home prices, rising mortgage rates and low inventories of available homes. Labor shortages and high cost of buildable lots continued to weigh on builder confidence. Analyst predictions that home prices have peaked did not impact October’s builder confidence readings.

Home Builders Look Toward Affordable Housing

When the current housing boom started, builders concentrated on building high-end homes as cash buyers and investors fueled demand. Home prices rose quickly as inventories of homes for sale dwindled; first-time and moderate-income home buyers were sidelined as affordable homes were quickly snapped up. Strict mortgage qualification requirements presented challenges to buyers with credit problems. Consumers struggle with home price growth that exceeds inflation and wage increases.

As analysts report that home prices may have hit their peak the highest reading for builder confidence in recent months was 74 in December 2017. Slowing increases in home prices have signaled builders that favorable housing market conditions may have reached a tipping point. If another recession occurs, those who bought their homes at the top of the market and who have little equity are most at risk. Analysts cited high priced coastal areas as ripe for this risk. Meanwhile, builders are looking to create more affordable housing in response to signals of slowing growth in residential real estate markets.

Contact your trusted real estate professional to find out about about the market trends specific to your area.

What’s Ahead For Mortgage Rates This Week – October 22nd, 2018

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What's Ahead For Mortgage Rates This Week - October 22nd, 2018Last week’s economic reports included readings on home builder confidence,sales of pre-owned homes and housing starts.  The Commerce Department also issued a report on building permits issued; weekly reports on mortgage rates and first-time jobless claims were also released.

Homebuilder Confidence Rises One Point

The National Association of Home Builders reported a reading of 68 for October,which surpassed August’s reading of 67. Any reading over 50 indicates most home builders are confident about housing market conditions. Builders cited ongoing headwinds including higher prices for materials,shortages of lots and labor and rising mortgage rates. Builders sought ways to provide more affordable housing options as they faced higher costs.

Regional readings of builder confidence readings,which are tracked on a three-month rolling average,were missed. The northeastern region gained three points for a reading of 57; the southern region gained one point for an index reading of 70. The midwestern region lost two points for a reading of 57. The western region was unchanged from September’s reading of 74.

Sales of Pre-owned Homes Slip toward 3 Year Low

The National Association of Realtors® reported fewer sales of pre-owned homes in September;5.15 million sales were reported on a seasonally adjusted annual basis as compared to August’s reading of 5.33 million sales. Analysts expected a reading of 6.27 million sales for September. Faced with high home prices and slim inventories of available homes,would-be buyers sidelined their searches for homes. Housing starts were 3.40 percent lower month-to-month and hit their lowest rate since November 2015.

According to the Commerce Department,housing starts also fell in September to 1.201 million starts on a seasonally adjusted annual basis. August’s reading was 1.268 million starts. Year-over-year,housing starts were 3.70 percent higher.,but fewer housing starts were bad news for housing markets as demand continued to exceed supplies of available homes. Building permits issued also fell in September to 1.242 million permits issued as compared to August’s reading of 1.249 million permits issued.

Mortgage Rates,New Jobless Claims Lower

Freddie Mac reported lower average mortgage rates last week. Rates for 30-year fixed rate mortgages were five basis points lower at 4.85 percent; rates for a 15-year fixed rate mortgage averaged three basis points lower at 4.26 percent. The average rate for 5/1 adjustable rate mortgages was three basis points lower at 4.10 percent.

First-time jobless claims also fell last week to 210,000 new claims filed,which matched expectations but was lower than the prior week’s reading of 215,000 new claims filed.

What‘s Ahead

This week’s scheduled economic releases include readings on new and pending home sales along with weekly reports on mortgage rates and new jobless claims.

Foreclosure Rates Expected To Dip Below 12-Year Low

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Foreclosure Rates Expected To Dip Below 12-Year LowThe record-setting pace of the U.S. economy continues to positively impact the housing market and home foreclosures now stand at an astonishing 12-year low.

Coming off a GDP growth rate of 4.1 percent and a historic bull stock market run, everyday Americans appear to be benefiting from one of, if not the strongest economies in decades. According to data compiled by CoreLogic, mortgage delinquency rates continue to improve and are already at the lowest levels in 12 years.

Building on last year’s national trend, foreclosures and mortgages more than 30 days past due declined to 4.2 percent in May. Other analytics show that mortgages at some stage in the foreclosure process also dipped by.02 percent from May 2017 to 2018. With a low 5-percent national foreclosure rate, the industry enjoys its best forecast since September 2006.

Some Housing Markets Lag Behind

While the country appears to be immersed in an economic revival, areas impacted by severe weather and hurricanes have not quite shaken off their impact.

“Serious delinquency rates continue to remain lower than a year earlier except in Florida and Texas, the hardest-hit states during last year’s hurricane season, CoreLogic president and CEO Frank Martell reportedly said.

There are also regions unaffected by hurricanes that are also lagging behind the strengthening conditions, according to research by ATTOM Data Solutions.

  • Foreclosures increased in eight states and the District of Columbia through the first half of 2018.
  • The District of Columbia suffered the worst foreclosure rate in the nation with a 60-percent increase over 2017.
  • Foreclosures increased in only 28 of 217 metropolitan housing markets studied. Oklahoma City topped the list with a 22-percent uptick.
  • Through June 2018, New Jersey endured the highest state foreclosure rate, with.99 percent of all properties in foreclosure.

According to ATTOM, Atlantic City, Trenton, Philadelphia and Chicago topped the list of total foreclosures during the first half of 2018.

2019 Foreclosure Predictions

History makes an excellent teacher and the wildfires destroying California communities are expected to negatively impact home ownership.

“While the strong economy has nudged serious delinquency rates to their lowest level in 12 years, areas hit by natural disasters have had increases,” CoreLogic chief economist Frank Nothaft reportedly said. “The tragic wildfires in the West will likely lead to a spike in delinquencies in hard-hit neighborhoods.”

“As an example, the wildfire in Santa Rosa last year destroyed or severely damaged more than 5,000 homes,” Nothaft reportedly said. “Delinquency rates rose in the aftermath, and in the ensuing months we observed home-price growth accelerate and sales decline. We will likely see the same scenario unfold in fire-ravaged communities this year.”

While America’s collective hearts go out to the families displaced by the California wildfires, the positive economic trends are expected to continue in much of the country.

CoreLogic’s Nothaft predicts foreclosure and delinquency rates to decline even further. Heading into 2019, positive numbers could upstage the current 12-year low and reach levels not seen in upwards of 15 years.

Contact your trusted real estate professional to learn about the market trends in your area.

U.S. Wage Increases Could Help Home Buyers

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U.S. Wage Increases Could Help Home BuyersThe struggle to achieve the American homeownership dream often feels like it happens in a vacuum. Everyday people work hard, save money and polish up their credit to get a low mortgage rate.

But there are powerful forces at work that are far beyond each person’s control. And until recently, the gap between American wage growth and rising home prices was widening. According to data coming out of the U.S. Department of Labor, unemployment recently hit a 49-year low and wages are enjoying the greatest uptick in nearly a decade. That is good news for prospective home buyers.

American Wages On The Rise

The 2018 economic news has seemed like one long greatest hits album. Historic-low unemployment for African-Americans and Hispanic-Americans has spurred confidence among these groups and the national unemployment has been steadily under 4-percent. The stock markets are booming, and the GDP growth has been impressive.

But there has been some frustration over stubborn wages that haven’t kept pace with other metrics. A report following stagnant salaries in February pointed to no slow down between rising home prices and wallowing pay rates. The growth rate was reportedly a modest 0.1 percent gain in February and that put Americans behind the curve in terms of buying homes.

But numbers coming out of the second quarter jobs report point to a 10-year high wage increase. The Bureau of Labor and Statistics reported wages are rising as employers compete to fill positions and the 12-month increase stands at 2.9 percent through August.

These are key numbers that may put a smile on potential home buyers’ faces.

  • Wages rose 0.5 percent in the second quarter of 2018.
  • Through August, wages rose 2.9 percent over the previous 12-month period.
  • Private industry compensation increased by 2.9 percent.
  • Government compensation increased by 2.3 percent, down from 2.6 in 2017.
  • Sales jobs gained by 3.5 percent.
  • Transportation jobs increased by 3.4 percent.

Experts are also claiming that setbacks from hurricanes likely blocked wage growth from topping the 2.9 high in 2009.

Where The Housing Market Stands

There’s little doubt that the surging economy put a higher number of Americans in position to purchase homes. However, inventory has remained well behind demand and that created a seller’s market with rising listing prices. But home prices are coming within reach for more people in 2018 and possibly 2019 market.

Since bottoming out in 2102, today’s home prices reportedly stand at about 6 percent higher than they were at their 2006 peak. That is not necessarily an indication that another housing bubble exists. Rather, the uptick in home prices is a natural reaction to an inventory shortage and economic growth.

The optimistic news for prospective home buyers is that wage growth appears to be gaining on home costs. As the gap closes, it’s likely that more and more people will be financially able to secure the American Dream of owning a home.

If you are in the market for a new home, be sure to contact your trusted real estate professional!