All posts by Steve Cook
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April 11, 2018

Market Update: Shortages Continue and Prices Keep Rising

If you liked 2017 real estate markets, you will love 2018. Buyers will need time, patience and persistence to find the right home this year. Owners who have been waiting for the right moment to sell might make their move now. Prices are leveling off in markets where home prices have outdistanced.

The three-year shortage of homes for sale is continuing this year, driving prices even higher. In many markets, they have reached a tipping point where hard-working, dual-income families cannot afford to become homeowners. Steadily rising mortgage rates coupled with prices driven by shortages are making conditions more difficult for buyers.

2018 Opened With a Whimper

Through [...]

 
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April 6, 2018

Retired? Qualifying for a Mortgage May Be Easier Than You Think

Retirees are the wealthiest demographic in America. More than 60 percent of households headed by people over 65 have assets worth at least six figures and more than 10 percent are into the seven figures. Many aging workers fear they can’t buy a home after they retire because they will be living on a fixed income. Some downsize before they are ready, selling the home they have lived in for many years and rushing the decision to buy a retirement home while they are still bringing home paychecks.

Qualifying for a mortgage after retirement is a little different than it is for buyers who are employed full-time. Retirees need to demonstrate to lenders that they can access [...]

 
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April 3, 2018

You Can Use Your IRA to Buy a Home−but Should You?

You can access your retirement account, whether it is an IRA or a 401K plan, for the hard cash you need to make a down payment on a home, but there will be costs. Most plans will penalize you if you withdraw funds before you reach the age of 59 and a half. You will also be required to pay income tax on the funds you take out.

Are you better off in the long run buying a home now even though you have not saved enough for a down payment and have to access your retirement savings, or should you wait until you have enough to make a down payment, even if it takes a year or more? These days both mortgage interest rates and home values are rising steadily, putting pressure on [...]

 
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March 13, 2018

Do Adjustable Rate Mortgages Make Sense Today?

Adjustable rate mortgages are mortgages where the interest rate changes during the life of the loan. The most popular structure consists of a short period where the rate is fixed and attractively low−sometimes much as a full percentage point below comparable fixed-rate mortgages. At a date in the future − usually five to ten years − the interest rate resets. Often rates are linked to an index, like the prime rate, or the S&P 500, and after the reset, rates are usually significantly higher.

Adjustable-rate mortgages, or ARMs, were popular during the housing boom twelve years ago. Lenders created a variety of ARM structures to meet the demands of a buying public that had [...]

 
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March 6, 2018

Good News for Buyers with Less Than Great Credit

The three greatest barriers keeping renters from becoming homeowners are financial: saving for a down payment, finding an affordable house, and qualifying for a mortgage loan.

The down payment problem is less pressing since nearly 3,000 state and local governments offer low down payments as well as FHA, Fannie Mae and Freddie Mac. Some conventional lenders are offering mortgages with down payments as low as 1 percent for buyers with good credit. Hopefully, the supply of affordable homes for sale will improve this year as more new homes are built and the improving economy helps move-up buyers buy larger homes and put their old ones up for sale. Getting approved for a mortgage [...]

 
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March 2, 2018

Will 2018 Be a Good Year to Sell?

Virtually every real estate market in the nation has experienced buyers’ markets over the past three years. Since 2014, the median home price has risen 11 percent, and 5.8 percent in 2017 alone. With that kind of momentum, will the best sellers’ market since the housing boom continue through 2018? Or will this be the year that demand sags and conditions favor buyers?

In the first half of 2017, competitively priced homes attracted multiple offers quickly. In many markets, buyers battled each other in bidding wars to win contracts on homes that were on the market only a few days. However, during the last two quarters of the year, demand slowed and for several months [...]

 
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March 1, 2018

Forecast for the Year to Come: Can 2018 Do It Again?

With top economists like Freddie Mac’s Leonard Kiefer calling 2017 “the best housing market in a decade,” how can 2018 compete?

While 2017 exceeded expectations in the two most important categories, sales and prices, it has its weaknesses. Now that the results are in, here’s a quick review of 2017’s accomplishments and disappointments.

2017: Great for sellers, not so great for buyers

Home sales increased by 1.1 percent in 2017 to a 5.51 million sales pace and surpassed 2016 (5.45 million) as the highest since 2006 (6.48 million). NAR’s chief economist Lawrence Yun noted that market conditions were far from perfect and sales would have [...]

 
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February 15, 2018

How Much Will Interest Rates Rise in 2018?

The dawn of a new year brings with it the new chairperson of the Federal Reserve, Jerome Powell. In one of Janet Yellen’s final acts before leaving office in early February, she presided over the Fed’s decision not to raise mortgage interest rates during the first quarter of the year.

Powell is expected to continue the Federal Reserve’s conservative policy of raising rates gradually if the economy remains strong. Should inflation increase, we can expect the Fed to act more aggressively and raise rates faster. During the current economic boom, inflation has been low but may increase as the economy grows.

Other factors besides the Federal Reserve’s [...]

 
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February 8, 2018

How the New Tax Law Impacts Homeowners

Big changes for homeowners take effect this year as a result of the tax reform legislation enacted in December and it’s not too early to plan for changes that affect homeowners on their 2018 tax returns. The biggest issue may not be chances for specific deductions and exemptions, but the cumulative impact on individual taxpayers when they decide whether to itemize or take the standard deduction. Income levels, the state they live in, and whether or not they own a vacation home are some of the issues that arise with individual taxpayers’ tax liability. Many people may alter their behavior or their lifestyles to achieve lower taxes in April 2018.

Below is a brief [...]

 
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February 6, 2018

Forecast on the Year to Come: Can 2018 Compete?

With top economists like Freddie Mac’s Leonard Kiefer calling the past year “the best housing market in a decade,” how can 2018 compete?

While 2017 exceeded expectations in the two most important categories, sales and prices, it had its weaknesses. Now that the results are in, here’s a quick review of 2017’s accomplishments and disappointments.

2017: Great for sellers, not so great for buyers

Home sales increased by 1.1 percent in 2017 to a 5.51 million sales pace and surpassed 2016 (5.45 million) as the highest since 2006 (6.48 million). NAR’s chief economist Lawrence Yun noted that market conditions were far from perfect and sales [...]

 
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January 12, 2018

Why Boomer Homeowners Aren’t Selling

Until very recently, a growing number of retiring homeowners have downsized by selling their family home and have either bought or rented something smaller. Downsizing can make their golden years easier and more enjoyable by making upkeep more manageable and reducing the costs of utilities and taxes. For retirees suddenly living on a fixed income, their houses may provide the financial cushion they need to enjoy their retirement.

Now that baby boomers, a generation second only to millennials in size, are reaching their late sixties and seventies, they are not doing as expected. Demographer Arthur C. Nelson, professor of Urban Planning and Real Estate Development at the [...]

 
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January 3, 2018

New Policies Help Home Buyers with Student Loan Debt

The soaring costs of getting an undergraduate or graduate degree has driven thousands of college graduates into debt for years after they cross the stage. Ironically, those who worked hard for their degrees and are on their way to well-paying careers can’t get approved for a mortgage: they are too deeply in debt, and the problem is worsening. Graduates in 2015 with student loans left school with about $34,000 of debt, up from $20,000 ten years ago. A recent study by the National Association of Realtors and American Student Assistance found that 83 percent of prospective buyers cite student loan debt as the most important factor delaying them from buying a home. The average [...]

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