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Where Are Interest Rates Headed This Year?

by KCM Blog

Where Are Interest Rates Headed This Year?

Posted: 26 Jan 2016 04:00 AM PST

Where Are Interest Rates Headed This Year? | Keeping Current Matters

With interest rates still below 4%, many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year. If you look at what the four major reporting agencies are predicting for 2016, it may make the decision for you. The chart below averages the predictions by quarter.

Mortgage Rate Projections | Keeping Current Matters

With the exception of Fannie Mae, the experts agree that interest rates will increase by three-quarters of a percentage point, costing you more to pay back your loan.

Bottom Line

Even a small increase in interest rates can put a dent in your family’s wealth.

Should I Buy Now Or Wait Until Next Year?

by KCM Blog

Should I Buy Now Or Wait Until Next Year? [INFOGRAPHIC]

Posted: 22 Jan 2016 04:00 AM PST

Should I Buy Now Or Wait Until Next Year? [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac predicts interest rates to rise to 4.8% by next year.
  • CoreLogic predicts home prices to appreciate by 5.3% over the next 12 months.
  • If you are ready and willing to buy your dream home, find out if you are able to!

Ask Eartha: January is Radon Awareness month

by Summit Daily-Eartha Steward

Dear Eartha,

I keep hearing that I should test my home for radon? What is radon, and why do I need to test for it.

Joe-Blue River

Thanks for your question, Joe, and a timely one, too, because January is Radon Action month. This may be why you’ve been hearing more about it lately. To answer your question, radon is a naturally-occurring radioactive gas that can cause lung cancer. You can’t see or smell it, but it might already be a problem in your home. Radon is emitted from the breakdown of uranium in soils and can creep up through the foundation in your home, permeate your crawlspace or fill your basement, exposing you and your loved ones, putting you at risk for lung cancer.

Although radon can be found in all 50 states, certain areas of the country have a higher average indoor radon potential based on three zones: one, two and three with one being the lowest and three being the highest. Summit County is in zone three, or the highest potential for indoor radon, screening on average higher than 4.0 picocuries. Radon is measured in picocuries per liter, representing 2.2 disintegrations per minute. Even though a picocurie is very small, if you test above 4 picocuries per liter, the EPA recommends that you re-test. Regardless of whether or not you test over 4.0 pCi/L, a second test is always recommend because air-radon levels fluctuate naturally on a daily and seasonal basis. After the second testing, if your home still tests above 4.0pCi/L, mitigation is recommended.

Testing for radon is the only way to know if you’re exposed. The EPA and Surgeon General have strongly recommended that all homes get tested for radon. Radon testing should only take a few minutes of your time and can be done with a simple test kit. Winter is a great time to test your home for radon because radon tends to be higher during the colder months while windows and doors remain closed. Free test kits are available through the end of the month. You can pick up your free test kit at the High Country Conservation Center on Frisco Main St. or the Summit County Environmental Health Office.

The test kit involves a passive collector that you place in the lowest livable floor of your home for 2 to 7 days. You then send the test kit to a laboratory for analysis and are notified several weeks later of the results. If you do test high in your home for radon, you can contact the Summit County Environmental Health office for recommendations on how to lower your exposure. High Country Conservation Center has a list of radon-mitigation contractors who can help fix the problem. Radon mitigation can be done by installing radon-reduction systems that can reduce gas up to 99 percent. This is accomplished through ventilation, either collected below a concrete floor slab or membrane in the ground or by mechanically increasing the air changes per hour in the building.

HC3 energy staff recommend that, if you have completed any air sealing and insulation upgrades in your home, you test again for radon because, unfortunately, making your home tighter can exacerbate the radon levels in your home. New homes can be built with radon-resistant techniques. However, even a new home should be tested for radon after occupancy to ensure the mitigation measures are working. If you are purchasing real estate, you can delay or decline a purchase if the seller has not successfully abated radon to less than 4 pCi/L.

For more information, visit www.co.summit.co.us/radon or contact High Country Conservation Center at (970) 668-5703.

Ask Eartha Steward is written by the staff at the High Country Conservation Center, a nonprofit organization dedicated to waste reduction and resource conservation. Submit questions to Eartha at [email protected]

Obstacles to Homeownership: Perceived or Real?

by KCM Blog

Obstacles to Homeownership: Perceived or Real?

Posted: 07 Jan 2016 04:00 AM PST

Obstacles to Homeownership: Perceived or Real? | Keeping Current Matters

Yesterday, we discussed the belief Americans have in homeownership and their desire to partake in this piece of the American Dream. We also discussed some of the obstacles preventing them from attaining that goal. However, studies have shown that that many of the obstacles mentioned are perceived, not real. A recent study by Fannie Mae, What Do Consumers Know About The Mortgage Qualification Criteria?, revealed that many consumers are either unsure or misinformed regarding the minimum requirements necessary to obtain a mortgage. Let’s break down three such challenges.

Down Payment

Perceptions

Many renters have mentioned that the lack of an adequate down payment is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

  • 40% of all renters don’t know what down payment is required
  • 15% think you need at least 20% down
  • An additional 4% think you need at least 10% down

The Reality

There are programs offered by Fannie Mae, Freddie Mac and FHA that require as little as 3-3.5% down. VA and USDA loans offer 0% down programs. According to the National Association of Realtors, the typical down payment for a first time buyer is 6%.

Credit Score

Perceptions

Many renters have mentioned that the lack of an adequate credit score is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

  • 54% of all renters don’t know what credit score is required
  • 5% think you need at least a 740 credit score

The Reality

Many mortgages are granted to purchasers with a credit score of less than 700. According to Ellie Mae, the average credit score on a closed FHA purchase is 687 and the average credit score on all loans is 722.

Back End Debt-to-Income Ratio (DTI)

Perceptions

Many renters have mentioned that they carry too much debt which is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

  • 59% of all renters don’t know what DTI is acceptable
  • 25% think you need at under 25%
  • 7% think you need under 39%

The Reality

Lenders like to see a back-end ratio that does not exceed 36%. Fannie Mae’s maximum total DTI ratio is 36% of the borrower’s stable monthly income. The maximum can be exceeded up to 45% based on credit score and other requirements.

Bottom Line

Don't let a lack of knowledge or misinformation keep your family from buying a home this year. Meet with a local real estate professional who can evaluate if your ability to buy now!

When Is It A Good Time To Rent? NOT Now!

by KCM Blog

When Is It A Good Time To Rent? NOT Now!

Posted: 12 Jan 2016 04:00 AM PST

When Is It A Good Time To Rent? NOT Now! | Keeping Current Matters

People often ask whether or not now is a good time to buy a home. No one ever asks when a good time to rent is. However, we want to make certain that everyone understands that today is NOT a good time to rent. The Census Bureau recently released their third quarter median rent numbers. Here is a graph showing rent increases from 1988 until today: Median Asking Rents | Keeping Current Matters

A recent Wall Street Journal article reports that rents rose “faster last year than at any time since 2007, a boon for landlords but one that has stoked concerns about housing affordability for renters.”  The article also cited results from a recent Reis Inc report which revealed that average effective rents rose 4.6% in 2015, the biggest gain since before the recession. Over the past 15 years, rents have risen at a rate of 2.7% annually.

Where are rents headed?

Jonathan Smoke, Chief Economist at realtor.com recently warned that:

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.” 

Bottom Line

According to the WSJ article:

“In general, the higher rents go, the more difficult it will be for young people to save for down payments, making them likely to rent even longer.”

One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, meet with a local real estate professional who can help determine if you are able to today!

Thinking of Buying a Home? 3 Questions Every Buyer Should Answer First

Posted: 11 Jan 2016 04:00 AM PST

Thinking of Buying a Home? 3 Questions Every Buyer Should Answer First | Keeping Current Matters

If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market. Answering the following 3 questions will help you determine if now is actually a good time for you to buy in today’s market.

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money. A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money. They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months. What does that mean to you? Simply put, if you are planning on buying a home that costs $250,000 today, that same home will cost you an additional $13,250 if you wait till next year. Your down payment will need to be higher as well to account for the higher home price.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates. The Mortgage Bankers Association (MBA), the National Association of Realtors and Freddie Mac have all projected that mortgage interest rates will increase by approximately three-quarters of a percent over the next twelve months as you can see in the chart below: Mortgage Rate Projections | Keeping Current Matters

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

TOP REASON TO LIST YOUR HOUSE NOW!

by KCM Blog

Top Reason to List Your House For Sale Now!

Posted: 04 Jan 2016 04:00 AM PST

Top Reason to List Your House For Sale Now! | Keeping Current Matters

If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage: “While feedback from REALTORS® continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.” The latest Existing Home Sales Report shows that there is currently a 5.1-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below November 2014 numbers. The chart below details the year-over-year inventory shortages experienced in 2015: Housing Supply Year-Over-Year | Keeping Current Matters

Anything less than a six-month supply is considered a “Seller’s Market”.

Bottom Line

Meet with a local real estate professional who can show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy now!

Displaying blog entries 1-7 of 7

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Photo of Summit Real Estate Real Estate
Summit Real Estate
The Bright Choice
330 Dillon Ridge Way, Suite 10
Dillon CO 80435
970-468-6800
800-262-8442
Fax: 970-468-2195

Allison Simson, Owner/Broker, is a licensed Colorado Real Estate Broker