3 Credit Score Myths You Should Stop Believing

You probably know that your credit score could affect your life in many ways — from the apartment you rent to the interest rate on your car loan.

But there are a few credit score myths that you — or your friends or family — may not know aren’t true. For example, marrying someone with bad credit won’t bring your own score down.

Here are the facts.

1. Myth: Checking your score always makes it go down

Requesting your score — or getting preapproved for a loan, mortgage or credit card — won’t automatically lower it. However, applying for credit, which requires a hard inquiry, could lower it by a few points. Similarly, lenders’ queries about your score can have a temporary negative impact.

You can also be proactive and check your credit score on a regular basis. You should do so at least once a year, especially since you’re entitled by law to request a free annual credit report from the three major credit-reporting bureaus every 12 months. It’s a good habit that could help you identify potential mistakes or identity theft.

2. Myth: Marrying someone with bad credit could hurt your score

Like many people these days, you might have used excellent credit as a factor in deciding whom to date in the past. Now you’re getting hitched to someone with a low credit score — but don’t worry: Your mate’s score won’t take a toll on your own. You’ll each have your own credit histories and scores, and credit lenders won’t deny you a loan because of your spouse’s credit. Of course, his or her credit could affect your finances in other ways; for example, if you’re applying together for a loan or a mortgage under both of your names.

3. Myth: A better-paying job will help your credit score

Landed a job at the company of your dreams? It might be great for your career, but a new title and higher income won’t directly affect your credit score. Losing a job doesn’t have an impact on your score, either. However, lenders may be wary of giving you a loan if you have an employment history that includes quitting jobs after just a few months.

Source: nerdwallet.com ~ By: Valerie Lai

6 Home Maintenance Tasks You Didn’t Know You Were Forgetting

In all likelihood, your home is the biggest investment you’ll make in your life. To protect that investment, turn to regular maintenance tasks to ensure that your home will be running efficiently for years to come.

Most folks are already aware of this. But if you feel like you’re mastering your home maintenance, you may be surprised to learn that there are a few you probably never realized you were forgetting. Here are six tasks that require your attention, that you may not be tending to frequently enough, or may be overlooking altogether:

Clean Your Refrigerator Drip Pan

Did you know that refrigerators have drip pans? They do, and those drip pans need to be cleaned regularly or they can be prone to mold growth. Pull it out carefully to prevent spills, and dump excess liquid and clean the pan with an all-purpose cleaner.

Flush the Water Heater

Check the temperature of your water heater to ensure that it’s set below 120 degrees Fahrenheit to prevent scalding. Test its safety relief valve once a year so that it operates properly and flush the system to remove sediment buildup which can cause system failure.

Reseal Your Grout

Grout needs to be resealed annually to protect your tile from wear and tear. Most grout is made of sand and cement; this means it can absorb water, bacteria and even stains. Resealing will help your grout look better and last as long as possible.

Test Smoke Alarms

Testing smoke alarms and changing their batteries is a vital maintenance task for safety reasons. Smoke alarms should be tested twice a year. Remember, at minimum, you should have one detector on every level of your home, and in each bedroom.

Change Your HVAC Filters

Have your heating system inspected, serviced and cleaned annually. Proper maintenance can extend the life of your furnace, postponing an expensive replacement. Change air filters seasonally to monthly, depending on your home’s needs, to protect against major HVAC issues.

Block Out Pests

Prevent against pests setting up camp in your home by caulking small holes or cracks to deter bugs. Also, use hardware cloth to cover any larger areas.

Mastering home maintenance tasks can be a chore, but by ensuring that you’re not missing these all-too-often ignored jobs, you’ll be able to rest easy knowing your home is that much more protected.

Source: blog.rismedia.com ~ By Brentnie Daggett

13 Simple Steps to Prep Your Home for the Best Summer Ever

Take care of your home’s hot-weather needs now, and you’ll have more time for fun in the sun.

Summer will be here before you know it, and you know what that means: Heat, hornets and yard work.

If you’re starting to miss spring already, fear not. Here are some quick projects to make your home and garden more comfortable and cost-effective this summer.

Inside the house

  • Service the air conditioning. Nothing can ruin your day like a broken A/C unit on a summer day, so keep it running smoothly by servicing it every spring. Every three months, change the filter, flush out drain lines with cup of bleach, and ensure that the outdoor unit has room to breathe by keeping vegetation about an arm’s length away.
  • Replace smoke detector batteries. You’d be surprised at how much peace of mind you’ll get after knocking out this one little chore. Change all the batteries on the same day and remind yourself to do it again in six months. If your smoke alarms were manufactured 10 or more years ago, replace them entirely.
  • Rotate ceiling fan blades. Your ceiling fan may have a switch that changes the direction in which the blades turn. If so, make sure that the blades are spinning counterclockwise and pushing air down, rather than up.
  • Clean behind appliances. You’ve been putting it off for far too long. You’re terrified of the horrors that await in the shadows of your kitchen, but it’s time to put on some gloves, arm yourself with disinfectant cleaner and roll out the oven with a brave face.
  • Clean dryer vents. If your clothes come out of the dryer damp and musty lately, it’s probably because the vent is clogged with lint — not only wasting energy, but posing a significant fire risk. To do it right the first time, purchase a vent-cleaning kit. Its flexible rod and brush attaches to your drill and will extract a puppy-sized mass of lint in no time.
  • Upgrade your thermostat. Replacing your existing thermostat with a ‘smart’ model does more than save you money. They respond to your voice, divert cool air to occupied rooms, can be operated from your phone and might even give you a weather forecast at a glance before work.
  • Repot houseplants. Give houseplants fresh potting mix in spring when they’re actively growing. Slip the mass of roots and potting mix out of the pot, gently tease apart the roots, remove rotted pieces and replace it with fresh and fertile potting mix. If the leaves are turning pale from too much direct summer sun, move them to a slightly shadier place.

Out in the yard

  • Patch your lawn. If you wait too long to plant new grass seeds or sod, aggressive weeds will happily fill the gaps for you. Luckily, grass will quickly establish if you remove all existing weeds beforehand, amend with topsoil and keep the area irrigated for the first week or two.
  • Inspect gutters and downspouts. Fall isn’t the only time to clean out the gutters, especially if you have messy trees nearby. Make sure that the gutters are soundly attached to your roof, seal any gaps with silicone caulk and remove any obstructions at the base of the downspout.
  • Inspect sprinklers. If you notice any clogged or broken sprinkler heads, shut off the water and dig a 2-inch diameter hole around the head. Unscrew the head from its riser and replace with a new one. If the head is merely clogged, remove the basket and rinse both it and the head in clean water. Reassemble the head and screw it onto the riser.
  • Get your mower up and running. Give your mower, string trimmer and other lawn equipment some TLC before the summer mowing season begins. After removing the spark plug, replace the air filters, change the oil, sharpen blades and give your equipment a good cleaning.
  • Remove hornet nests. If you have hornets, yellow jackets and paper wasps around your home, take steps to remove them now before they form a large, aggressive colony. You can play it safe by calling a professional, or spray nests at night when they’re less active. Just be sure to wear protective eyewear, a mask, pants and long sleeves.
  • Clean the grill. Prevent flare-ups and cooking fires by giving your grill a good cleaning. Ideally you’d clean after every use, but you can start fresh with a grill brush, nozzle and wet rag. Now is also a good time to stock up on charcoal and make sure your tools are ready for grilling season.

Source: zillow.com ~ By: STEVE ASBELL

10 Ways To Protect Your Home While On Vacation

Keep your home from being a target with these easy tips.

The season of long weekends and beach getaways is upon us, and the last thing any homeowner wants to imagine when they’re soaking in the sun or taking a dip at the lake is a burglar snooping around their empty home. While there is no use in being paranoid about your belongings while you’re away, home security shouldn’t be taken lightly. And it’s the right season to be wary: The U.S. Bureau of Justice Statistics has found that household burglary rates are highest in the summer.

So whether you’re getting away for the day or weekend or taking an extended vacation, put these 10 summer holiday safety tips to work and make your home less of a target for robbers this season — or any season.

1. Beef up security systems

Sure, you’ve set the alarm and have motion-activated lights outside, but there are some additional things you should consider doing to protect your home. For instance, install a heavy-duty lock strike plate on your door; it’s the weakest part and where thieves may try to break in. You can also add sash pins to double-hung windows to make them more secure.

2. Make your home look lived in

One big clue to burglars that you’ve gone away during the summer? An unkempt lawn. Be sure to mow it before you leave — or hire someone to keep it trimmed while you’re gone — so your home looks well cared for. The same precaution can be transferred to winter months — if you’re expecting a big snow, have someone on retainer to shovel your walk and driveway.

3. Don’t keep your windows open

String lights can be a great way to illuminate a deck or outdoor space during summer months, but don’t run electrical extension cords through your windows. If your windows don’t close and latch, you’re sending burglars an invitation to invade.

4. Don’t fall for door-to-door solicitations

A common way to scope out what kind of goodies you have in your home is by posing as a charity asking for donations. If someone comes to your door, don’t open it, or ask for an ID that links them to the charity — and don’t let them see inside.

5. Use the latest tech

Take advantage of a devices like FakeTV, which mimics the flickering light of a TV to make it look as though you are home. Other home automation devices, like Wi-Fi-enabled security systems or plug-in devices that allow you to turn lights on and off remotely with your cellphone, can also help ward off thieves.

6. Keep your valuables out of sight

That shiny new laptop, your favorite jewelry, or basically anything valuable you’ve forgotten to stash out of sight could tempt burglars. Before you head out of town, do a quick walk-through in each room and hide all valuables.

7. Make a record of valuables

It’s a good idea to take pictures of your stuff — particularly big-ticket items such as laptops and TVs — and keep serial numbers in a safe place. Should the worst happen, you’ll have a record of what was taken and be able to confirm your things are truly yours if they are recovered by police.

8. Do your packing out of sight

Sure, you have to make room for the bikes, load up the boogie boards, and stash away some snacks, but be smart about where you pack up the car. If possible, keep your car in the garage or out of sight, advises Heather Dodson, a real estate agent at Team Leung in Greensboro, NC.

9. Be smart about boxes

If you’ve bought new gear to bring along on your summer vacation, don’t leave the empty boxes on the curb for everyone to see. Instead, break down the cardboard and put it in your container for recycling or trash pickup.

10. Don’t publicize your vacation plans

It’s hard to fight the allure of Facebook and Instagram. But it’s probably not the best idea to share your travel plans online with your 500 closest friends. Your Facebook profile might not be as private as you think — and it’s better not to take the risk.

Source: trulia.com ~ By: Ginny Gaylor

2017 vs. 2018: What’s Different About Buying Real Estate This Year?

When you’re ready to buy a home, it’s important to take every factor into consideration. Changes in the market from year to year can have a major impact on how you purchase a home. Keep these things in mind while looking for a new home:

Millennials Are Taking Over

Even though millennials aren’t the biggest category of homeowners right now, they’re expected to be by the end of 2018. For the first time, they’ll be the majority homeowners. The fact that they’re buying more homes means there are different selling and purchase patterns coming up in the future due to the different spending habits of millennials.

Home Prices Are Going Up

Those who sell real estate see an increase in the prices of homes. In most areas, the median price is rising—an increase that may be due to greater demand from first-time homebuyers. The good news? Rising house prices is an indicator that the economy is on the rise.

Number of Sales Is Going Up

More people are buying homes now than ever before. The average number of sales real estate agents see is increasing. And, since more people are buying homes, the demand will continue increasing. It’s important for those who want to purchase a home to get in on the action now before prices go up even more in the future.

Ownership Is Stabilizing

For years, there was a lot of fluctuation in homeownership. However, for the first time ever, the homeownership rate is stabilizing. And the demand will continue increasing so people can see all the different options they have for purchasing a home no matter what area they’re in.

Anyone looking for a home should consider market conditions, the things that are happening with homes and the availability of homes in their area. Always consider where and when you’re buying a home!

Source: blog.rismedia.com ~ By: Hannah Whittenly

9 Home Improvements That Can Help (and Hurt) Value

Home improvement can be taken as very demanding action, but there are also some ways of home improvement you can do yourself. Therefore, before you start with any, see what improvements are the most needed in your home. Nowadays, a big attraction is an energy-efficient home which saves a lot of energy and reduces energy costs. On the other hand, maintenance problems and pest or bug infestations are a major turn off and should be looked into ASAP.

We bring you several great pieces of advice you can use to improve your home’s value and feel more comfortable and cozy.

1. Water Filtration System

A water filtration system in your kitchen is a small addition that will appeal to many home buyers and is used for purifying the water. When you have a water filtration system installed in your house, you don’t have to buy bottled water anymore. The best thing is that it’s not expensive at all, and everyone can afford it.

2. Removing Old Carpets

Besides looking old, old carpets might also be hiding contaminants and allergens which means you have bad air quality in your home. Sometimes the best option for testing an indoor air quality is to call a professional company because they will surely do a great job.

Wooden floors are an excellent way to bring the touch of outdoors in your home. Great examples of environmentally friendly natural products are tile or laminated floors. By replacing your old carpets with a hard surface floor, your house will be easier to clean, and you’ll have more time to do things you like.

3. Replacing Popcorn Ceiling

It is no secret that homes with popcorn ceilings are outdated so get rid of this popcorn ceiling fast. To be sure that it does not contain asbestos, it would be best to hire professionals to test it. Replacing Popcorn Ceiling is as simple as buying a solution to soften the texture from the hardware store and scraping the popcorn away.

4. Bathroom Remodeling

Remodeling bathrooms is a great way to add more value to your home. If a full rebuild is not in your budget, you can invest in many small changes that will freshen up your bathroom. Replace the dated wallpaper, old lighting, add some fancy cupboard knobs or change the faucet and shower heads.

5. Kitchen Remodeling

Just like the bathroom, a big kitchen update can do wonders. Stained sinks and old appliances are all things to look at. If replacing the kitchen cabinets is too much for you, you can always give them a new look by adding a new varnish or paint layer and swap those old doorknobs with modern ones.

6. Maintenance and Repairs

Maintenance is an ongoing process, no matter if you plan to live in your house for a long time or move soon. Repairing or replacing broken appliances or fixtures will avoid further damage. Certain things are not to be left, and for example, leak spots on the ceiling can cause great damage to your roof if not taken care of immediately. If your home is up for sale, a sign of poor maintenance will make the home seekers wonder what else is wrong with the house.

7. Water Heater Upgrade

An old water heater can be a turn off for some home buyers, but you can find water heaters that come with a tankless model. This kind of water heaters are more efficient as they only heat up the water that you need.

8. Appliance Updates

Nowadays, energy-efficiency is becoming trendy. Appliances with an energy star label use 10 to 50 percent less energy and water than other conventional appliances. New models look great, and many are stainless steel which is a bonus. If you do not have the money for buying modern devices, upgrade the lighting to energy star.

9. Update Fixtures

Fixtures in your home include curtain rods, light fixtures, doorknobs, switch plates, outlet covers, etc. Make sure that these are updated because sometimes it’s the small detail that counts. For example, outlet covers and switch plates look more attractive when made of metal. These changes are easy to do yourself and aren’t so expensive, just be sure you choose the right color which looks great combined with other furniture in your home.

Source: realtytimes.com ~ By: Matt James

Why Real Estate May Be A Big Winner In The Tax Cuts And Jobs Act

On the surface it may look like the Tax Cuts and Jobs Act is bad for real estate. The reduction in the deductibility of mortgage interest and the combined $10,000 cap on state and local tax (SALT) deductions for income, sales and property, along with the elimination of moving expense deductions would make a compelling argument. But after digging through the fine print, the outcome is that real estate may actually be the big winner.

The mortgage deduction has been reduced to $750,000 dollars for new homeowners, but the deductibility of current mortgage debt up to $1 million is still protected. The only change was that technically under the old law one could also deduct $100,000 of home-equity debt. This is no longer allowed unless an equity loan is used to substantially improve the residence.

However, let’s keep in mind that these mortgage provisions are due to sunset on Dec. 31, 2025. So, don’t run out and pay down your mortgage because you won’t be able to get the deductions back. These limits are short-lived.

Let’s delve a little deeper. How did real estate come out alright?

  • The deduction for mortgage interest on second homes survived although it initially appeared to be on the chopping block.
  • The ability to rent a primary or secondary home for up to 14 days a year and not pay taxes on the income survived.
  • A new deduction for pass-through entities benefits real estate, particularly real estate investment trusts. This will enable real estate partnerships and LLCs to get a new 20% deduction.
  • Real estate agents–unlike doctors, lawyers, financial planners and professional athletes–are not considered a service industry profession and therefore are exempt from the limit in their pass-through deductions if their income is higher than $207,500 or $415,000 for a couple.
  • Real estate professionals who work more than 750 hours a year can still deduct their real estate losses from ordinary income and lower income investors can still deduct passive income, such as real estate rentals.
  • The bill doubles the Section 179 deduction for qualifying expenses, allowing business to annually deduct up to $1 million on certain types of property expenses.
  • Land and property depreciation has been retained and the alternative depreciation system period for residential property has been shortened. This is a huge win for the industry because one of the key features to investing in real estate is depreciation because under U.S. accounting rules real estate loses value, even though it tends to rise in market value.
  • Changes in the carried interest deduction–one must now hold assets for three years instead of only one–will benefit real estate funds substantially more than other types of managed funds.
  • And finally, the lucrative 1031 tax free exchange rules that were on the initial chopping block were retained. Section 1031 allows real estate investors to defer capital gains taxes if they are using the money to purchase another property.

These are just a few of the benefits that real estate has received and only scratches the surface of the plethora of real estate strategies that continue to survive. Not only should commercial real estate benefit, but residential real estate still maintains its luster.

In the end, real estate may be the big winner but so is capitalism. After all, real estate is one of the foundations of an ownership society. As my favorite economist Hernando De Soto said in his book, The Mystery of Capital, “Real estate is why capitalism triumphs in the west and fails everywhere else.”

Source: Forbes.com  ~ BY: John E. Girouard

Get Your Home Summer Ready Now Before It Gets Scorching

Advice for spring home buyers can be found in this recently released survey from realtor.com® , a leading online real estate destination. Research highlights the reality of today’s home buying markets around the country. Advice and insights into one of the most competitive home buying markets in years can help buyers and let sellers know what to expect. Chief Economist at realtor.com Danielle Hale tells the story behind the numbers.

This year there is even less inventory than last year. According to our February 2018 data inventory is down 8.5% from last February. Days on Market (DOM) fell to 85 nationally from 90 last year.

The big news that impacts buyers according to Hale, inventory has declined for 42 consecutive months. What’s most interesting and what the research showed is buyers are getting the message that it is a tougher market this Spring. Either they have heard, or they have experienced it personally as they made offers and did not get the property, Hale adds.

Listen to Hale’s advice for buyers. You have to know exactly what your comfort zone is and the maximum price you can pay. It’s very important to be thinking about what you can afford as mortgage rates go higher especially if they move up quickly.

Take a look at the research from Toluna who in early March surveyed more than 1,000 active buyers. Clearly buyers are out there armed with as much market knowledge as possible. Many are more determined than before to strike a deal.

Here’s key research from the survey. The message is buyers are serious this Spring with 40 percent of buyers planning to put more than 20 percent down in hopes of getting ahead of the competition. Almost half (40%) of today’s buyers have been actively looking for a home for more than seven months. Many remain hopeful with 60 percent thinking they will close on a home within the next six months. Strategies to nab that dream home include checking listing websites daily, while 40 percent of buyers plan to put more than 20 percent cash down. More than a third are setting price alerts on properties. More than 25 percent will offer above asking price with  31 percent planning to put a larger earnest money deposit down.  Only 6 percent indicated they are not planning to use any tactics to cope with competition.

Boston’s David Bates, a long-time Broker Associate at William Ravis Real Estate sums it up.

“We have had a lot of strong markets, but this probably is the strongest I have seen. In my office, folks are talking about the significant competition for modestly priced properties outside the city, say around $500,000 or less. Someone had a 28-offer situation in Chelmsford, another had a 17-offer situation in Everett. I myself had a nine offer and six offer situations in Beverly. These are not the most sought-after communities in Greater Boston. Perhaps there are a number of things motivating buyers, but high on the list is the lack of affordability in and close to the city.”

If you plan on house hunting this Spring, good luck. If you plan to sell this Spring, chances are your home will sell quickly and possibly for above asking price if it’s priced right, in excellent condition and has location, location, location going for it.

Source: forbes.com ~ By: Ellen Paris, Contributor

A Glimpse at Life Without the 30-Year Fixed-Rate Mortgage

As Congress contemplates a permanent fix to its decade-long “temporary” mortgage patch, the lore of the 30-year fixed-rate mortgage is permeating Capitol Hill.

Mortgage giants Fannie Mae and Freddie Mac (known as Government Sponsored Enterprises, or GSEs) don’t issue mortgages directly. Instead, they buy certain mortgages originated by other lenders and bundle them into mortgage-backed securities that are then sold to investors. Critically, these securities are guaranteed against default by Fannie and Freddie, protecting investors and making the securities more attractive. That guarantee enables long-term mortgage products like fixed, 30-year loans to be made widely available at lower rates.

But Fannie and Freddie have been under conservatorship of the federal government since 2008, which means those guarantees are largely backed by U.S. taxpayers, not private capital. Because Fannie and Freddie play such an outsized role in mortgage finance in this country, one of the longstanding legacies of the recession is that taxpayers today back a large majority of the nation’s mortgage market. Fears around the degree to which taxpayers would be on the hook if the market soured have kept Fannie and Freddie in Congress’ crosshairs.

Hoping to reduce taxpayers’ risk, policymakers are considering changing the guarantee, which may lead to a shift toward adjustable-rate products, higher fixed interest rates and/or shorter-duration loans. Those opposed to curtailing the government’s guarantee argue that without it, today’s 30-year fixed-rate mortgage could change drastically – to borrowers’ detriment.

What exactly would lending – and, critically, borrowers’ monthly costs – look like without the venerable 30-year, fixed-rate mortgage that has become the bedrock of housing finance? The Bureau of Labor Statistics estimates roughly seven in 10 mortgages held in 2014 were 30-year fixed-rate.

The figures below provide a glimpse at mortgage alternatives, and illustrate how sensitive house payments are to changes in interest rates and loan duration (use our comparison tool to see the differences across metro areas).

30-Year Fixed-Rate Mortgage, at Current Rates

  • The most common mortgage product today is the 30-year fixed rate mortgage. Last month, to buy the typical U.S. home with a 30-year fixed rate mortgage, the monthly payments would be $777, or 15 percent of the metro’s median income.

Adjustable-Rate Mortgage, at Current Rates

  • If the terms of 30-year fixed-rate mortgages become less favorable after GSE reform, more buyers could choose adjustable-rate mortgages (ARMs). While ARMs often provide a better deal for the first few years of the loan, rates and payments eventually increase unless a borrower refinances. Last month, to buy the typical U.S. home with an adjustable rate mortgage, the first year’s monthly payment would be $736 or 15 percent of the metro’s median income. But those payments would rise when the adjustment takes place.

Non-Conforming Jumbo Loan, at Current Rates

  • Another possibility as a result of GSE reform is that interest rates could climb in response to the elimination of a government guarantee. We don’t know how much they might climb, but they could resemble rates on current loans that don’t have a government guarantee: non-conforming, jumbo loans (a relatively small market currently skewed toward the wealthy). So the exact terms of today’s jumbo loans may not scale to the larger housing market. Last month, to buy the typical U.S. home with a 30-year, fixed rate, non-conforming jumbo mortgage, the monthly payments would be $797 or 16 percent of the nation’s median income.

30-Year Fixed-Rate Mortgage, at 7 Percent Rate

  • Interest rates overall are at historic lows, but reforms to Fannie and Freddie in tandem with other trends in the economy could raise mortgages rates across the board. If they reach 7 percent, a rate common 20 years ago, monthly payments could rise substantially. Last month, to buy the typical U.S. home with a 30-year fixed rate mortgage common in the late ‘90s, the monthly payments would be $1,098 or 22 percent of today’s metro median income.

15-Year Fixed-Rate Mortgage, at Current Rates

  • Even if rates remain similar to today, more buyers may shift toward shorter-term loans as a result of GSE reform and/or other economic shifts. While today’s 15-year, fixed-rate mortgages usually provide lower interest rates, the shorter time frame makes each payment larger. Last month, to buy the typical U.S. home with a 15-year fixed ratemortgage, the monthly payments would be $1,166 or 23 percent of the metro’s median income.

15-year Fixed-Rate, Non-conforming Jumbo Mortgage, at Current Rates

  • Finally, it’s possible that rates rise and buyers move toward shorter-term loans. In that case, new loans could resemble 15-year, fixed-rate, non-conforming jumbo loans. Last month, to buy the typical U.S. home with a 15-year fixed rate non-conforming mortgage, the monthly payments would be $1,210 or 24 percent of the metro’s median income.

We don’t know what exact effects, if any, GSE reform might have on the 30-year mortgage. It’s possible any resulting dominant mortgage product would be wildly or only mildly different from what we have today. The figures in the comparison tool above provide a glimpse at mortgage alternatives and illustrate how sensitive house payments are to changes in interest rates and loan duration.

If monthly payments soar and stay elevated, at some point we’d expect home prices to fall in response to this decreased purchasing power. However, while some households may be able to absorb the extra borrowing cost, in the nearer term first time homebuyers or buyers on the margin could feel a real pinch as homeownership becomes less affordable.

Source: forbes.com ~ By: Svenja Gudell 

Housing in 2018: Where Are Home Values Headed?

Analysts are expecting even higher home prices in 2018 than originally projected, according to new research.

Zillow’s 2017 Q4 Home Price Expectations Survey reveals experts are anticipating a 4.1 percent hike in the new year, up from the 3 percent they forecasted a year ago. Over 100 experts, including economists, participated in the survey.

Their reasoning? Home-building has not panned out as planned—yet.

“The American labor market is stronger than it’s been in decades, and Americans, particularly young Americans, are increasingly feeling confident enough to buy homes,” says Aaron Terrazas, senior economist at Zillow. “Home-building has not kept pace with this surge in demand and remains well below historical norms. We don’t expect that these demand-supply imbalances will fundamentally shift in 2018. Demand will continue to grow and, though supply should increase somewhat, we still won’t build enough new homes to meet this demand, contributing to higher prices.”

Less than 20 percent of experts forecast home-building to pick up next year, the survey shows. Approximately 313,000 new homes were on the market in October, representing 4.9 months supply, according to the U.S. Census Bureau. Entry-level homes, especially, are scarce—down 20.4 percent year-over-year over the summer, reports Trulia.

Additionally, experts foresee increasing mortgage rates, with the 30-year, fixed rate ranging anywhere from 4.28 to 4.70 percent. Currently, the 30-year averages 3.90 percent, according to Freddie Mac.

“Higher mortgage rates will eat into buyers’ budgets, putting even more price pressure on the most affordable homes for sale,” Terrazas says. “Unless there is a fundamental shift in the number and type of homes for sale, this is the new normal of the American housing market.”

One factor in the health of the housing market is the homeownership rate; experts predict it, too, will rise, though slightly, to 64 percent. The homeownership rate has improved twice thus far this year, up to 63.9 percent in third quarter, according to the Census.

Beyond 2018, analysts are divided.

“Our most optimistic group of experts projects average annual home value appreciation of almost 5 percent annually through the five-year period ending in 2022, while the most pessimistic group expects an average annual rate of just 1.4 percent,” says Terry Loebs, founder of Pulsenomics, which conducted the survey in conjunction with Zillow. “I don’t foresee a stronger consensus emerging until we have greater clarity concerning tax reform and the pace of entry-level home building.”

For more information, please visit www.zillow.com.

Source: rismedia.com ~ By: Suzanne De Vita