Home Sales Fall

Friday, June 1st, 2018

Sales of previously owned homes declined in April, as inventory shortages and rising prices weigh on the market and higher mortgage rates begin to pose a threat to demand for the first time in years. Existing home sales fell 2.5% in April from the prior according to a National Association of Realtors announcement last Thursday. Compared with a year earlier, sales in April were down 1.4% — the second consecutive month sales declined on an annual basis.  Thus far the critical spring selling season — when some 40% of U.S. home sales occur each year — is off to a […]

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Rising Rates Bite Borrowers’ Budgets

Tuesday, May 1st, 2018

A recent uptick in mortgage interest rates is increasing costs for buyers already grappling with rising prices. The average monthly mortgage payment is up nearly 13% nationally over the past year, according to an analysis released by Realtor.com last month. That’s an increase of $168 per month, according to the analysis. Mortgage interest rates are about a half-percentage point higher than they were at the beginning of the year. According to the Mortgage Bankers Association, the average rate on a 30-year, fixed-rate conforming mortgage ($453,100 or less) was 4.69% in the week ending March 23. With Federal Reserve officials signaling […]

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Want The House? Write A Letter

Monday, April 2nd, 2018

Cash may be king, but words are pretty powerful, too: One of the most effective ways to win a bidding war is to write the seller a letter. All cash offers nearly doubled a buyer’s chances of trumping others, while waiving a financing contingency — effectively agreeing to forfeit the deposit if a buyer can’t get a mortgage — boosted a buyer’s odds by 57.9%, according to new data. Surprisingly, penning a cover letter came in a close third, increasing a buyer’s odds by 52.2%. The data are based on about 14,000 offers in 2016 and 2017 that involved competing […]

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Housing Has Tough Start to 2018

Thursday, March 1st, 2018

According to a recent Wall Street Journal article, the housing market is slowing, and pressures will only build as the year goes on. Sales of previously owned homes slumped last month. The National Association of Realtors (NAR) reported  that existing home sales in January fell 3.2% from December, versus the gain economists expected to see. And sales of new single-family homes fell nearly 8 percent compared to the month before, according to the data released on Monday. Sales were down almost 5% below their year-earlier level, marking the biggest annual decline since August 2014. NAR suggested tight inventories were to […]

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2018 Down Payment Strategy

Thursday, February 1st, 2018

Picking the right house is just one of the big decisions you’ll face when buying property. Deciding on the down payment is another. Low inventory continues to pressure potential buyers into making bigger down payments to gain a competitive edge. But the possibility of rate increases in the coming year and new rules on mortgage-interest deductions may also affect how much buyers put down. The median down payment for financed home-purchases in the third quarter of 2017 was a record $20,000, or 7.6% of the median sales price of $263,000, according to the Wall Street Journal. That is up from […]

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Tax Reform: What it Means for Mortgages

Friday, December 29th, 2017

The landmark tax reform bill officially passed both houses last week. The big winners appear to be people who rent, corporations, and high-earners. Real estate and mortgages were affected negatively, but it could have been much worse. The mortgage interest deduction was maintained although cut to $750,000 from $1 million. However, doubling the standard deduction will stop many homeowners from itemizing and taking the mortgage deduction. There remains a fair amount of confusion over deductibility of home equity loan interest. It appears you will not be able to deduct interest for anything other than acquisition and home improvement. You will […]

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Tax Plan Cuts Incentives to Homeowners

Friday, December 1st, 2017

President Donald Trump and Senate Republicans scrambled earlier this week to make changes to a Republican tax bill in an effort to win over holdout GOP senators and pass a tax package by the end of the year. The pending plan will reduce or eliminate virtually all of the tax incentives of homeownership, promising to reshape an industry that accounts for nearly one-sixth of the U.S. economy and drives the biggest financial transaction most Americans make in their lifetimes. The proposed legislation would cut in half the size of loans that qualify for deductions of mortgage interest, to $500,000 from […]

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Trump’s Fed Decision May Spook Rates

Tuesday, October 31st, 2017

President Trump may spook the bond market this week when he decides who will head the Federal Reserve next year.  The higher mortgage interest rates that prevailed last week were partly driven by rumors indicating that John Taylor was surging to the forefront as the President’s choice for Chairman of the Federal Reserve.  Of the four candidates under consideration, Mr. Taylor appears to be least favored by credit market participants – and the most favored by congressional Republicans. If President Trump chooses Fed Chair Yellen or current board member Jerome Powell, investors will likely breathe a sigh of relief since […]

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Equifax, Credit Freezing & More

Monday, October 2nd, 2017

Until the Equifax Inc. hack, many consumers didn’t know what a credit freeze was.  Credit freezing prevents lenders from being able to get copies of prospective customer’s credit reports. That prevents scammers from opening credit cards or other loans but also places that same limit on the legitimate customers unless they undo the freeze. Currently, lenders can call up a credit score within minutes. When a credit report is frozen, it typically requires a customer to first unlock it with a password and then verify its release via a phone call. Often, customers forget their passwords, and it can take […]

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Tapping Home Equity for Cash Is Back

Tuesday, September 5th, 2017

Rising home prices are getting borrowers comfortable again with the idea of tapping their homes for cash. Home equity lines of credit (HELOCs) and ‘cashout’ refinances, two products that let borrowers spend their equity of home ownership before selling, are back in vogue with borrowers according to a recent Wall Street Journal article. The trend reflects growing confidence and is a potential benefit to the U.S. economy as homeowners have more money to spend. The main engine driving demand: rising home prices. The median sale price of an existing home rose to $263,800 in June, the highest on record, up […]

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