Why Low Rates Aren’t Always Good for Housing – Had to share

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Why Low Rates Aren’t Always Good for Housing

DAILY REAL ESTATE NEWS

Mortgage rates are near historic lows, which is great news for home owners and buyers. But the situation could prove to be a big thorn in the side of the recovery.

More than one-third of homes with a mortgage have a mortgage rate below 4 percent, according to estimates provided by CoreLogic, a real estate data provider. Many home owners have taken advantage of low rates recently, fueling a refinance boom. Some home buyers were able to snag a record low of 3.3 percent interest in 2012.

As such, many home owners may be more inclined to stay put, unwilling to swap out a low mortgage rate for a new mortgage that could carry a rate up to one percentage point higher or more in the coming months. Those who can’t stay put may decide to keep their home and rent it out.ย In any case, the number of homes for-sale could continue to be low and contribute to slower home sales, housing analysts note.

Mark Fleming, chief economist at CoreLogic, estimates that up to 3.6 million home owners will be unlikely to sell this year because they do not want to give up a lower mortgage rate.

“They got the deal of the century,” Glenn Kelman, CEO of Redfin, a real estate brokerage, told The Associated Press. “I don’t think in 100 years anyone will be lending money at 3.5 percent. How do you walk away from a deal like that?”

Indeed, The Associated Press reports that this marks a significant shift from the way the housing market has worked in the past three decades. โ€œFor most of that time, whenever a home owner decided to trade up to a better home, mortgage rates usually were lower than the last time they had bought,โ€ The Associated Press reports. โ€œThat helped make a new purchase seem more attractive.โ€

Economists say โ€œrate lock-inโ€ is a contributing factor for why so few homes are for sale. The housing market has faced a shortage of homes since late 2012. For every $1,000 increase in a home ownerโ€™s annual mortgage payment, the likelihood that the home owner would sell dropped as much as 16 percent, according to a 2011 study by the Federal Reserve Bank of New York.

Source: โ€œRecord-Low Mortgage Rates Now Haunt the Housing Market,โ€ The Associated Press (July 11, 2014)

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Curb Appeal, Staging Rated as Best Home Improvement Projects for Sellersโ€จ

Curb Appeal, Staging Rated as Best Home Improvement Projects for Sellers

 

Today’s home sellers should focus on curb appeal and home staging above larger-scale home renovations, according to a new survey from Zillow Digs. Zillow asked real estate agents and interior designers nationwide to identify the most valuable home improvements for sellers, and the experts agree that minor improvements like landscaping and painting walls in neutral colors save money and attract buyers faster.โ€จโ€จAgents agree that sellers should avoid costly projects prior to listing their home, as the increased sale price may not outweigh the time and money spent on the remodel. Instead, agents and designers recommend spending money on minor renovations that will bring the home up to current market standards while also appealing to the broadest number of potential buyers.โ€จโ€จAccording to the survey, the top 5 projects for sellers are:

  • Curb Appeal: Creating a strong first impression is imperative as buyers begin making assumptions about a home well before they step inside.
  • Staging: A home stager can skillfully identify ways to highlight a home’s best features and compensate for its shortcomings.
  • Invest in Small Home Improvements:ย  Both agents and designers agree that sellers should never invest in a major renovation before selling.
  • Declutter: This sounds simple, but according to experts, it’s the one of the most important things a homeowner should do before selling. A clean house feels more spacious and helps buyers easily envision themselves in the home.

Granite Countertops and Stainless Steel Appliances: Most buyers are still requesting granite countertops and stainless steel appliances. Sellers should keep in mind that most high-end finishes don’t equal high-end returns. However, incorporating granite and new appliances can help catch a buyer’s eye.

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help. ย 

Email Sabrina & Susan at:ย  Info@TheCatonTeam.com

Call us at: 650-568-5522ย  Office:ย  650-365-9200

Want Real Estate Info on the Go?ย  Download our FREE Real Estate App:ย ย http://thecatonteam.com/mobileapp

Visit our Website at:ย ย  http://thecatonteam.com/

VISIT OUR NEW INSTAGRAM PAGE:ย  http://instagram.com/thecatonteam

Visit us on Facebook: ย ย http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:ย  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn:ย  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading โ€“ Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008