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Spring skiing!

by Allison Simson

I hope you enjoyed the Easter/Passover weekend!  It was lovely here in Summit (well, OK, it was cloudy and gray, but the snow is melting and the crocus in my garden are poking their heads up through the mud! 

In Summit County 'mud season', when things slow down, normally starts after Easter because that is when the ski resorts mostly closed in the past. This year is unique as it is the first time in around 20 years the Breckenridge is going to staying open through Memorial Day.  And they have stated this will continue in the future.  A-Basin is also still open, of course, and will likely make it into June. This change could cause a slight shift is real estate purchasing patterns.  I will track any changes and let you know. 

Here is a mortgage rate update in case you are thinking of purchasing this spring:

  • Rates rose 0.04% this week as US unemployment rates continue to drop, inflation numbers showed minimal movement, and strong economic data out of China was released. 
  • Despite the small increase in rates over the first two weeks of April, rates are still down 0.18% since the beginning of March and still significantly lower than in 2018.
  • The combination of a 50 year low for unemployment, controlled inflation, and historically low rates should benefit home buyers preparing for spring.

The spring selling season has begun!  Let me know if you are curious about the value of your property, or want us to keep a lookout for the perfect property for you.  

 

Mortgage interest rates have already risen by over a quarter of a percentage point in 2018. Many are projecting that rates could increase to 5% by the end of the year.

 

What impact will rising rates have on house values?

Many quickly jump to the conclusion that an increase in mortgage rates will have a detrimental impact on real estate prices as fewer buyers will be able to qualify for a loan. This seems logical; if there is less demand for housing then prices will drop.

However, in a good economy, rising mortgage rates increase demand as many prospective purchasers immediately jump off the fence to guarantee they get the lower rate.

Let’s look at home prices the last four times mortgage rates increased dramatically.

In each case, home prices APPRECIATED and did not depreciate. No one is projecting as dramatic an increase in rates as the examples above. Most are projecting an increase of approximately 1% by the end of the year.

The last time mortgage rates increased by 1% over a twelve-month period was January 2013 (3.41%) to January 2014 (4.43%). What happened to house prices during that span? They appreciated by 9.8%.

Just two weeks ago, Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting explained:

Mortgage rates have risen 1% or more ten times in the last 43 years, with little impact on home sales and prices when the economy was also strong…Historically, rising confidence, solid job growth, and higher wages have more than offset reduced demand for housing resulting from higher mortgage rates.

Bottom Line

When mortgage rates increase, history has shown that prices appreciate (and do not depreciate) during that same time span.

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.

What do interest rates mean for home costs?

by Allison Simson

HAPPY TUESDAY MORNING TO YOU!

The COST of a Home: Last Year, This Year & Next Year

Posted: 26 Aug 2013 04:00 AM PDT

Same Price, Lesser Cost

The cost of a home is determined mainly by two components: price and mortgage rate. Today, we want to show how the monthly cost of purchasing a median priced home has changed over the last twelve months and how it might change over the next twelve months. For the first two examples, we will be using the National Association of Realtors’ (NAR) Existing Home Sales Report to establish median price and Freddie Mac’s Primary Mortgage Market Survey to establish mortgage rate. We also assumed a 20% down payment in all examples.

LAST YEAR

The median priced home in the country was selling for $187,800. The 30-year fixed mortgage rate was at 3.5%. Here is what it would cost to buy a home last year:

Last Year

TODAY

The median priced home in the country is selling for $213,500. The 30-year fixed mortgage rate is at 4.5%. Here is what it would cost a purchaser to buy a home today:

This Year

The monthly cost increased by: $190.78!

NEXT YEAR

Projecting into the future in real estate can be rather tricky. To establish future pricing, we depended on the over 100 housing experts surveyed for the Home Price Expectation Survey who called for an approximate appreciation rate of 5% over the next twelve months. For the interest rate, we took the average of the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae. Here is what these experts project will be the approximate cost of a home a year from now:

Next Year

The monthly cost will increase by about: $97.32!

Bottom Line

From a financial perspective, why wait if you are thinking about buying?

And Here's Your Morning Coffee!

Warmly,

Allison Simson, Owner/Broker
Kelie Gray, Buyer Specialist
Sarah McNeill, Buyer Specialist
Jen O'Neill, Client Care Manager
Margaret Bowes, Event Coordinator
 

Go Green 2

Where are interest rates headed?

by Allison Simson

Happy Tuesday morning to YOU!

Lots in the news about the interest rate rollercoaster.  Here's what you need to know:

Today’s $20,000 question is…Where are mortgage rates headed in the near future? Most believe the rapid rise in rates experienced over the last month will not be sustained and that they will level off into a range between 4% and 5%.

When recently asked, Zillow’s director of Mortgage Marketplace, Erin Lantz suggested:
~“It is impossible to predict. However, we expect there to be a lot of volatility, probably between 4.5% to 5%.”

In Bankrate.com’s Mortgage Rate Trend Index last week, 20% of the experts said rates would go up this week, 30% said rates would go down and 50% said they would remain unchanged.

What about going forward?
 

Doug Duncan, chief economist for Fannie Mae recently addressed where mortgage rates may eventually end up:
~“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”
Why wouldn’t the Fed be troubled? They have artificially kept rates low in order to stimulate the economy. As economic indicators begin to show signs of a recovery, the stimulus will be pulled back and rates will rise.

 

Frank Nothaft, Freddie Mac’s VP and chief economist confirms this:
~“As the economy continues to improve, we expect to see continued upward movement in long-term interest rates.”

Buckle in!! The rollercoaster ride will probably continue.

We hope you get some Summit County mountain time this summer.  As one of my friends recently said, "The heat wave here in the mountains is killing me!  It got up to a blistering 76 degrees yesterday!"  :-)

Displaying blog entries 1-5 of 5

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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