You Need A Professional When Buying A Home

You Need a Pro When Buying a Home | Keeping Current Matters

Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to go it on their own. In today’s market: you need an experienced professional!

You Need an Expert Guide if you are Traveling a Dangerous Path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and ready for you to move in to can be tricky. An agent listens to your wants and needs, and can sift out the homes that do not fit within the parameters of your “dream home”.

A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home.

You Need a Skilled Negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

4 Reasons to Buy Before Winter

4 Reasons to Buy Before Winter | Keeping Current Matters

It’s that time of year, the seasons are changing and with them bring thoughts of the upcoming holidays, family get togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don’t have to look much farther to find four great reasons to consider buying a home now, instead of waiting.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 11.2% (most pessimistic) and 27.8% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way You are Paying a Mortgage

As a recent 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.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

5 Questions You Should Ask Your Real Estate Agent

5 Questions You Should Ask Your Real Estate Agent | Keeping Current Matters

Whether you are buying or selling a home, the process can be challenging. That is why you should take on the services of a real estate professional when embarking on a potential home move. However, not all real estate agents are the same. A family must make sure they hire someone who truly understands the current housing market and, not only that, knows how to connect the dots to explain how market conditions may impact your decision.

How can you make sure you have an agent who meets these requirements?

Here are just a few questions every real estate professional should be able to answer for their clients and customers:

  • Are home values approaching a new bubble or will prices continue to appreciate?
  • Is it better for a first time buyer or a move-up buyer to wait until they save a bigger down payment before they purchase a home?
  • Where will 30-year mortgage rates likely be in 12 months?
  • Why do I need an agent when I can just as easily find the house online myself?
  • Is buying a home still a good investment for my family?

Make sure you hire an agent that can answer questions like those above. That will guarantee the home buying or selling process will be much easier for you and your family.

The Most Important Report in Real Estate?

The Most Important Report in Real Estate? | Keeping Current Matters

Many people report on the National Association of Realtors’ (NAR) Existing Home Sales Report which quantifies the number of closed sales of single-family homes, townhomes, condominiums and co-ops. However, there is another report that NAR releases each month that may be even more important – the Pending Home Sales Report which reveals the current Pending Home Sales Index.

According to NAR, the Pending Home Sales Index (PHSI) is

“a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.”

The PHSI generally leads Existing Home Sales by a month or two and therefore is a more current pulse on home sales.

How is the PHSI calculated?

According to NAR:

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population”.

What does the PHSI look like right now?

The most recent report showed that the PHSI climbed 3.3 percent to 105.9 in July from 102.5 in June. The index is at its highest level since August 2013 (107.1) and is above 100 – considered an average level of contract activity – for the third consecutive month.

Looking at the PHSI at a regional level, we can see the comparative strength of each market.


This region includes the states of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.

The PHSI in the Northeast jumped 6.2 percent to 89.2 in July, and is 8.3 percent above a year ago.



This region includes the states of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Ohio, North Dakota, Nebraska, South Dakota, and Wisconsin.

The PHSI in the Midwest fell 0.4 percent to 104.6 in July, and is 6.4 percent below a year ago.


This region includes the states of Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

The PHSI in the South increased 4.2 percent to 119.0 in July, and is 1.0 percent below a year ago.



This region includes the states of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

The PHSI in the West increased 4.0 percent to 99.5 in July, and is 6.0 percent below a year ago.

Bottom Line

There can be an argument made that the Pending Home Sales Report is actually the most important report released each month because of its timeliness and its measurement of an historically healthy market.

Immigration & Its Impact on the Housing Market

Immigration and Its Impact on the Housing Market | Keeping Current Matters
There are many hot topics right now and immigration is definitely one of them. Whether we agree or disagree on what is going on at this moment, the history of immigration starting around 1600 shows us the United States has been a country that always received immigrants. Several organizations have done research on the impact immigrants can have on housing demand. Let’s look at some of those results: Research done by the National Association of Home Builders (NAHB) in 2012 states: “Assuming net immigration of 1.2 million (the low end Census Bureau projection for 2010) persists for 10 years, the model estimates that after 10 years new immigrants will:

  • account for close to 3.4 million US households
  • occupy more than 2 million multifamily units and more than 1.2 million single family homes
  • account for more than 900 thousand homeowners”

The Research Institute for Housing America also projects “that from 2010 to 2020 immigrants will count for over one-third of the growth of homeowners and over one-quarter of the growth in renter households.”

Need for Continued Research

In this month’s edition of Fannie Mae’s Housing Insights, they source the American Community Survey in stating that there were 18.8 million immigrant renters in the country in 2012. Fannie Mae goes on to say that these numbers represent “a large reservoir of potential future homeownership demand”. They conclude with:

“Continued study of how these and future immigrants advance into homeownership as they reside longer in the U.S. may provide valuable insights into future prospects for the country’s housing market.”

A More Localized Look at the Impact

For those looking for local data, a research study performed by AS/COA and Partnership for a New American Economy, provides an interactive map showing “the net change in a county’s immigrant population from 2000 to 2010 and the corresponding effect on median home values.”

Bottom Line

If we look at the conclusions made by multiple sources, we see that they agree that immigrants will revitalize less desirable neighborhoods and support the housing market. Each group is seeking greater economic opportunities just like the immigrants in past decades that came to United States. The question is: are we prepared to help them with their real estate needs? 

Don’t Get Caught in the ‘Renter’s Trap’

Don’t Get Caught in the ‘Renter’s Trap’ | Keeping Current Matters

In a recent press release, Zillow stated that the affordability of the nation’s rental inventory is currently much worse than affordability of the country’s home sale inventory. The release revealed two things:

  1. Nationally, renters signing a lease at the end of the second quarter paid 29.5% of their income to rent
  2. U.S. home buyers at the end of the second quarter could expect to pay 15.3% of their incomes to a mortgage on the typical home

Furthermore, renters pay more than the average of 24.9% that was paid in the pre-bubble period while buyers actually pay far less than the 22.1% share homeowners devoted to mortgages in the pre-bubble days.

Don’t Become Trapped

If you are currently renting you could get caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment. Zillow Chief Economist Dr. Stan Humphries explains:

“The affordability of for-sale homes remains strong, which is encouraging for those buyers that can save for a down payment and capitalize on low mortgage interest rates…As rents keep rising, along with interest rates and home values, saving for a down payment and attaining homeownership becomes that much more difficult for millions of current renters.”

Know Your Options

Perhaps you already have saved enough to buy your first home. HousingWire recently reported that analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment. 

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

Freddie Mac came out with comments on this exact issue:

  1. A person “can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets)”.
  2. Freddie Mac’s purchase of mortgages with down payments under 10 percent more than quadrupled between 2009 and 2013.
  3. More than one in five borrowers who took out conforming, conventional mortgages in 2014 put down 10 percent or less.

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

A ‘Soft’ Housing Market? We Beg to Differ!

A ‘Soft’ Housing Market? We Beg to Differ! | Keeping Current Matters

There are some pundits lamenting the softness of the 2014 housing market. We can’t understand why. Though it is true that the early part of the year disappointed because of a myriad of reasons (ex. weather, lack of inventory, less distressed sales), the recent housing news is extremely encouraging. Let’s give some examples:

Spring Home Buying Season is Healthiest in 3 Years

Move, Inc. just last week revealed that this spring’s housing market finished stronger than any time in the last three years. In the report, Jonathan Smoke, chief economist for explained:

“This is the first time, since the beginning of the recovery that we expect to see positive momentum throughout the second half of the year. While seasonal patterns are emerging in July month-to-month comparisons, all other metrics point to fundamental market health and a build-up of momentum.”

Existing Home Sales are Up

In their latest Existing Home Sales Report, the National Association of Realtors (NAR) announced existing-home sales increased in July to their highest annual pace of the year. That is even though distressed property sales fell to 9%, the first time they were in the single-digits since NAR started tracking the category in October 2008. Lawrence Yun, chief economist for NAR explained:

“The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market. More people are buying homes compared to earlier in the year and this trend should continue.”

New Construction Surging

According to an article on Market Watch, new constructing is surging:

“Construction on new U.S. homes jumped 15.7% in July to the highest level in eight months and starts were revised up sharply for June, indicating a pickup in home building after an early-year lull. Housing starts climbed to an annual rate of 1.09 million last month…Economists surveyed by MarketWatch had expected starts to climb to a seasonally adjusted 975,000 in July.”

Foot Traffic at Year High Numbers

Foot traffic (the number of people out actually physically looking at homes) has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.

The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market.

Bottom Line

The spring market finished stronger than any time in the last three years. Home sales are at year long highs. New construction is beating estimates. There are more buyers out than at any time in the last twelve months.

We think the housing market is doing just fine.

Still a Great Time to Buy a Home…but HURRY!!

Still a Great Time to Buy a Home…but HURRY!! | Keeping Current Matters

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.”

We couldn’t agree more. However, one must realize that, with prices and interest rates both projected to increase, waiting could be costly.

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!