Where Are Mortgage Rates Headed?

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The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to look at where rates are headed when deciding to buy now or wait until next year. 

According to a recent article in Kiplinger, 30 year mortgage rates are about to increase: 

“Now around 4.1%, rates will edge slowly toward 4.4% by the end of this year. Then they’ll follow the Treasury bond rate’s upward move in early 2015. Thirty-year home loans should end 2015 at around 5.1%, still low by historical standards.” 

Here is a graph created by using interest rate projections in Freddie Mac’s August 2014 U.S. Economic & Housing Market Outlook:

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How will this impact a mortgage payment? 

Research released this month by Zillow reveals: 

“We examined how a 1 percentage point rise in mortgage rates would impact monthly payments for the typical home in 35 metro areas, and found that the difference this year versus next year varies dramatically from market to market. In the San Jose/Silicon Valley area, for example, potential buyers should expect to see a monthly payment increase of more than $700 if they waited a year to buy the same home they were considering today. By contrast, in St. Louis, the difference is only $65 per month.” (Emphasis added) 

Bottom Line: 

Again, we turn to the Zillow research: 

“As rates rise, new home buyers will confront higher financing costs and monthly mortgage payments. For many, this will mean tightening their budgets and sacrificing some luxuries they may take for granted today.”

 The question one must ask themselves is, “Is it really worth it to wait?” You’ve missed the bottom of the rates, don’t get snowed under by the rising home prices and interest rates. Contact me immediately in order to professionally list your home for sale and find you your next castle! (214) 609-7123, jtrump@kw.com or find me at http://www.JimSellsFlowerMound.com 

Still A Great Time To Buy A Home, But Hurry!!

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Kevin Kelly, Chairman of the National Association of Home Builders (NAHB), recently explained that: 

“With interest rates near historically low levels and strengthening job growth, now continues to be a great opportunity to buy a home.”

I couldn’t agree more. However, we must realize that, with prices and interest rates both projected to increase, waiting could cost you. 

There are two organizations that look at the affordability of purchasing and actually measure it over time. The National Association of Home Builders has their Housing Opportunity Index (HOI) and the National Association of Realtors’ has the Housing Affordability Index.

Both indexes are reporting the same thing. The cost of buying a home is beginning to increase leading the affordability indexes to dip. Both indexes say we passed the bottom of the housing market.

According to NAHB’s HOI housing affordability dipped slightly in the second quarter of 2014. NAHB’s Chief Economist David Crowe explains: 

“The second quarter HOI reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom.”

According to NAR in a recent Economists’ Outlook post, home affordability is down from both one month ago and one year ago in all regions. 

Michael Hyman, Research Assistant at NAR said: 

“At the national level, housing affordability is down for the month of June due to higher prices and qualifying income levels despite the lowest mortgage rates of the year.”

In a recent article, the Wall Street Journal also revealed that the cost of home ownership is higher than any time in over five years: 

“Housing affordability hit its lowest level in nearly six years in June as home prices continued to climb.” 

Bottom Line: 

If you were waiting for the bottom of the market, you missed it. Yet, with prices below values of seven years ago in most parts of the country and interest rates near historic lows, it is still a great time to buy a home…but hurry! 

For professional real estate service, contact me at (214) 609-7123 or jtrump@kw.com

Does The Car Make The Agent?

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It used to be that real estate agents; and sales people in general; were judged on how successful they were based upon the car that they drove.

First Impressions

Although I never bought into this notion, I knew a lot of sales people and real estate agents who did, and still do. I was sometimes asked why I didn’t drive a luxury car or “when are you going to buy a new car?” And just recently the issue of “cars” came up at a training session. Newer agents working hard just to get a few transactions under their belt are concerned that they don’t look successful enough. It is true that when people first meet us we have just a few seconds to make a good first impression. Like it or not, when we enter a room or drive up in our car, we get judged- instantly.

I Love a New Car

As a car lover I get it. A new, sleek and shiny new car is wonderful, and the smell…I love it! But cars aren’t a good investment, especially for the busy REALTOR. The minute you drive away from the car dealership, the car loses value. Plus, after the “thrill” and smell of a new car fades all you are left with is a car payment that seems to last forever.

Your Car Should Be Clean

Whether or not you buy a new car is completely up to you, but a new car won’t make you a more successful real estate agent. Many of our clients will meet us at properties, real estate agents and their clients generally drive their own vehicles or simply meet at the property and your client never even sees your car. If you are driving your clients around you do need to have a car that is presentable. It needs to be dent free and clean inside and out. That’s pretty much it.

You Won’t Be a Better Agent

After that first impression your client wants to work with an agent who knows what they are doing. If they see that you know what you are doing, they’ll pay less attention to your older car. While driving a luxury car and wearing designer clothes may make you look and feel better, they don’t make you a better real estate agent.

For professional service, call me at (214) 609-7123 or jtrump@kw.com

 

5 Reasons To Hire A Real Estate Professional

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Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can “For Sale by Owner” (FSBO). The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened in recent months due to the projections of higher mortgage interest rates & home prices as the market continues to recover. 

What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality. 

Okay, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream? 

Are you a good negotiator? 

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process. 

What is the home you’re buying/selling really worth? 

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.” Get the most out of your transaction by hiring a professional.

Do you know what’s really going on in the market? 

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer? Dave Ramsey, the financial guru advises: 

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear. 

Bottom Line:

You wouldn’t hike up Mt. Everest without a Sherpa, or replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Jim Trump is a Realtor, and a Certified Negotiation Expert in the state of Texas. Less than 2% of licensed agents nationwide receive this designation, so to get the most out of your home selling it, or to get the best deal in purchasing your next home, call (214) 609-7123 of jtrump@kw.com

 

 

 

The Hottest Trends In Residential Flooring

In the flooring world, carpeting is getting softer. Wood is getting more roughed-up. And vinyl is getting more luxurious.

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Yes, you read that right. “Luxury vinyl” isn’t a contradiction in terms — it’s the phrase du jour among those who pay close attention to the materials home buyers are eager to walk on.

“It’s the fastest-growing portion of the industry in the past two years,” according to Scott Humphrey, chief executive of the World Floor Covering Association, a trade group based in Anaheim, Calif., who said this flooring category has developed thanks to extraordinary photo technology that mimics wood (or just about any other material) so closely that you have to look twice to see that it’s vinyl.

But luxury vinyl is far from the only flooring product that’s drawing consumer attention. Here’s the NewHomeSource guide to what’s hot underfoot:

Carpeting

It’s getting more environmentally friendly and a few manufacturers are creating fiber combinations that take softness to a whole new level, Humphrey said. “Everybody is making carpet that’s green,” he said. “They have factories that do this all across the United States. Shaw Floors is the only one that recycles nylon into carpeting, but a lot of companies melt down polyester and make new fiber over and over.”

Humphrey, who grew up in a carpet-manufacturing family, said he regards the development of softer textures as the cutting-edge trend in the business. “The thing that has been most surprising to me is the return of luxury carpet,” he said. “Some of it is the softest carpet I’ve ever felt.”

He particularly cited Shaw’s Caress line (nylon, with a new way of processing the fiber) and Mohawk Flooring’s SmartStrand Silk line (a nylon product that the company says uses three times the number of fibers of other carpet). Humphrey said the carpet industry was likely to follow suit.

In terms of carpet styles, the current favorite probably is a broad genre called cut-and-loop, in which the pile is partly cut and partly looped to create a sculpted look or pattern, he said. “They’re ‘heathered’ and multi-tonal,” explained Amber Shay, vice president of the design studio for Standard Pacific Homes’ Denver operation, which works with homebuyers to choose the features and finishes of their new homes. “The trend is more toward the patterned carpet, with a cleaner finish, and some personality to it.”

Shay said Standard Pacific customers in her area (flooring preferences tend to vary by region) who favor carpeting tend to use it in bedrooms and on stairs.

Wood

With the advent of the “great room” concept that unites kitchen and family rooms into one expansive space, it’s become common to see hardwoods on kitchen floors, Shay said. “We’re almost always doing woods in kitchens,” she said. “With the great room plan, having consistent flooring is a big part of that picture, having the space ‘roll.’ ”

A popular route to take with wood floors are the laminate versions, she said. “(Laminate) is a thin piece of wood on a core that’s made of something else,” Shay explained. “It creates structural stability, so you have less movement in the floor and it’s less expensive than solid hardwood.”

Preferences in hardwoods are leaning toward darker stains, with a growing interest in gray tones, she said. “The trends are also toward larger planks or toward using multiple-sized planks and toward more exotic species — hickory, cherry, walnut.”

Look for more wood floors that have been hand-scraped and hand-textured, Shay said. Humphrey concurred: “People are willing to pay for a new floor, but they want it to look old.”

And in a related (and greener) vein, a growing segment of the market is interested in reclaimed woods, which have been salvaged from older residential flooring or even from old barns. “Or, a lot of companies are taking new hardwood and making it look old,” Humphrey said. “It’s like what happened with blue jeans — making them look worn.”

Bamboo flooring made a big splash in the industry some years back because it comes from an easily renewable resource, but the category gradually met with some resistance because some early versions were known to have shrinkage issues. “Bamboo is getting better,” Humphrey said of the recent incarnations. “I haven’t heard much about the shrinkage issue in a couple of years.” Look for bamboo to be produced in an array of colors and plank widths.

Luxury Vinyl

The “luxury” angle may be a bit of a stretch, but technology unquestionably has given some vinyls a whole new look. At its most basic, the process of producing it amounts to taking a photo of wood and printing it into the significantly less expensive vinyl flooring, usually in the form of squares or planks.

“But anything you can take a picture of, you can make it into vinyl tile,” Humphrey said. “It can go into various rooms — some of it looks like marble and people put it in bathrooms.”

Tile

Ceramic tile is getting bigger — literally. Tile in formats larger than the standard 12-by-12 inches are growing in popularity, though there’s a lot of variation in regional preferences, Humphrey said.

“And those digital prints that you see on laminate countertops and vinyl tile — they’re also doing that on ceramic tile, so that you might also see tiles that look like hardwoods,” he said.

In the Denver area, Shay said the biggest trend is toward “modular” sizes — rectangular tiles or 12-by-24-inch sizes. “We’re seeing lots of tile that looks like a fabric, or like wood,” she said. “Some of them have a concrete kind of look.”

Freelance writer Mary Umberger has covered real estate and home-related products for publications such as The Chicago Tribune, Inman News and other leading print and online publications.

Contact me for professional real estate services (214) 609-7123 or jtrump@kw.com

Any Way That You Slice It, You Are Paying For A Mortgage!

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There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord’s. As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.

And, as an owner, the mortgage payment is a ‘forced savings’ which will allow you to have equity in your home you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity.

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are still at bargain prices.

Contact me for professional real estate services @ (214) 609-7123 or jtrump@kw.com

You’ve Played The Housing Market Perfectly. Don’t Blow It Now!!

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Many people suffered through the housing crisis. We realize that most of the heartache was the result of a housing and mortgage market gone wild. Many consumers were swept away by the waters of a frenzied real estate market that resulted in a crisis even the experts didn’t see coming.
However, some of the suffering was caused by home buyers and home owners simply making bad decisions. NOT YOU! You didn’t buy that house that stretched your family finances past the point of sustainability. You didn’t take out a home equity loan and buy new water skis. You didn’t do a cash-out refinance for the maximum amount possible.

Instead, you bought a home your family could enjoy – and afford! You waited for interest rates to drop to historic lows and then refinanced your mortgage; not for the sake of taking cash out but instead to lower your monthly payment. You have equity in your house and a nice, low mortgage payment. You played the housing market perfectly.

Don’t Miss the Last Move

Yet, there is one more move many should consider. With interest rates still at historic lows, and prices projected to increase by almost 20% over the next four and a half years, this may be time to buy a new home.
Whether you are a growing family ready to move-up to that waterfront home you always wanted or an empty nester downsizing to a home that makes more sense, now may be the time to buy. If you have considered buying a vacation/retirement home, there may never be a better time to move forward with that plan.
You have been fiscally astute enough to navigate the treacherous waters of a housing market that sank many a homeowner. Now, that the seas have settled, don’t think there aren’t even greater opportunities on the horizon.

Contact me at (214) 609-7123 or jtrump@kw.com