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The Louisville Real Estate Blog

Buying a Home

How Will Mortgage Rate Hikes Impact Home Sales?

How Will Mortgage Rate Hikes Impact Home Sales? | Keeping Current Matters

When mortgage interest rates begin to climb, experts immediately begin to discuss home affordability indexes. They calculate how an increase in rates will slow home purchases as more and more potential buyers are priced out of the market. Today, with home prices also increasing, many believe that home sales may slow down rather dramatically.

This may prove to be true in the long term. However, in the short term, increasing mortgage rates may have the opposite effect. Many buyers who have been sitting on the fence may realize that delaying their purchase no longer makes sense.

Last week, in a CNBC article, Matt Weaver of Florida-based PMAC Lending explained the impact an increase in rates will have:

"These increases really help the home-buying market. It really gets buyers to really understand that 'wait a minute, rates are at an all-time low, let's react now, let's react before they go higher’.”

As an example, we can look to 2013 when interest rates spiked up by a full percentage point over a two month period. The result is that many buyers rushed to the market on the fear that rates would continue to climb. It didn’t necessarily increase the number of sales that year dramatically.

However, it did seem to move some sales up in the year as evidenced by the chart below:

Home Sales & Impact of Mortgage Rate Spike | Keeping Current Matters...

2 Out of 3 Renters Want to Own. What’s Stopping Them?

2 Out of 3 Renters Want to Own. What’s Stopping Them? | Keeping Current Matters

The Federal Reserve Bank of New York recently released the 2015 SCE Housing Survey. The survey revealed that most current renters would prefer owning and that 61.9% of them plan to buy a home within the next five years.

68.3% stated they would prefer owning (with 45.6% saying they ‘strongly’ prefer owning). When asked at what point in the future do they think they will own a primary residence:

  • 8.2% said within a year
  • 15.3% said in 1 to 2 years
  • 38.4% said between 3 to 5 years

What’s Holding Them Back?

Of the 68.3% who would prefer to own, 2 out of 3 cited difficulty in getting a mortgage for the reason they do not own. However, many believe that the reason so many think that it would be difficult to get a mortgage is not fully based on current market realities.

For example, studies have shown that there is confusion over the amount of money needed for a down payment. Research has shown that 40 to 50% of Americans believe that between 15-20% is the minimum required for a down payment. In reality, there are many programs available at 5% and ...

Where Will Mortgage Rates Be in 12 Months?

mortgagerates12

One of the biggest questions plaguing the current housing market is where mortgage interest rates will be at this time next year. Over the last two months, rates have begun to creep up (see chart).Interest Rates.1

Though we don’t like to project rates moving forward, we do want you and your family to have the information you need in order to decide whether to wait before buying your first house or moving up to your ultimate dream home.

Here are the most current mortgage rate projections from Fannie Mae, Freddie Mac, the Mortgage Bankers’ Association and the National Association of Realtors.

Interest Rates.2

Projecting interest rates is not easy. So what should you do – do it now or wait? We like the advice Doug Duncan, senior vice president and chief economist at Fannie Mae, recently gave:

“The rule for when is it time to buy is always the same: given your household budget and where current interest rates are, if it makes good financial sense to take out a home loan today, then today is the day to do it.”

Bottom Line

If you are ready,...

The #1 Reason to Buy Right Now – THE MONEY!!

The #1 Reason to Buy Right Now – THE MONEY!! | Keeping Current Matters

People often ask whether they should buy a home now or wait. Recently released data suggests that waiting may not make sense as prices seem to again be on the rise. Let’s take a look at some of the data and commentary on the subject:

Ed Stansfield, chief property economist at Capital Economics:

“The current tightness of supply conditions would normally be consistent with much faster price growth. The continued steady growth in home sales that we expect this year will only add to this upward pressure on prices.”

Case Shiller Home Price Index

“The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015 … with a 0.8% increase for the month.”

Anand Nallathambi, CEO of CoreLogic

“All signs are pointing toward continued price appreciation throughout 2015… Tight inventories, job...

Today Kicks Off National Homeownership Month!

Today Kicks Off National Homeownership Month!

Today Kicks Off National Homeownership Month! | Keeping Current Matters

National Homeownership Month actually started as a week-long celebration of homeownership during the Clinton administration in 1995. In 2002, President George W. Bush proclaimed June as the National Homeownership...

More Home Buyers Putting Less Down

More Home Buyers Putting Less Down

More Home Buyers Putting Less Down | Keeping Current Matters

A recent post by the ...

Buying a Home is 35% Less Expensive than Renting!

Buying a Home is 35% Less Expensive than Renting!

Buying a Home is 35% Less Expensive than Renting! | Keeping Current Matters

In the latest Rent vs. Buy Report from...

The Difference Your Interest Rate Makes

The Difference Your Interest Rate Makes [INFOGRAPHIC]

The Difference Your Interest Rate Makes [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Even a small increase in interest rates drastically impacts...

Attaining the American Dream: The 5 Financial Reasons to Buy

Attaining the American Dream: The 5 Financial Reasons to Buy

Attaining The American Dream: The 5 Financial Reasons to Buy | Keeping Current Matters

We have reported many times that the American Dream of homeownership is alive and well....

Do You Know The Cost of Renting vs. Buying?

Do You Know The Cost of Renting vs. Buying? [INFOGRAPHIC]

Do You Know The Cost of Renting vs. Buying? [INFOGRAPHIC] | Keeping Current Matters...

Homeownership Still a Great Investment

Homeownership Still a Great Investment

Homeownership Still a Great Investment | Keeping Current Matters

Four recent news articles confirmed that most Americans still see real estate as a great long term investment. The Gallup organization ...

This Advice on Homeownership Hasn’t Changed in 200 Years

This Advice on Homeownership Hasn’t Changed in 200 Years

This Advice on Homeownership Hasn’t Changed in 200 Years | Keeping Current Matters

Last month, we reported that billionaire John Paulson believes in the financial advantages of homeownership. He has often repeated:

"I think, from an individual...

Home Sales Skyrocketing!!

Home Sales Skyrocketing!!

Home Sales Skyrocketing!! | Keeping Current Matters

Yesterday, the National Association of Realtors (NAR) released their Existing Home Sales Report. The numbers shocked many analysts as they...

Housing Market: Freddie Mac Remains Optimistic

Housing Market: Freddie Mac Remains Optimistic

Housing Market: Freddie Mac Remains Optimistic | Keeping Current Matters

The April 2015 U.S. Economic & Housing Market Outlook from Freddie Mac revealed that they are...

I Need A VACATION… Home! [INFOGRAPHIC]

I Need A VACATION… Home! [INFOGRAPHIC]

I Need A VACATION... Home!! [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Vacation Home Sales were up 57.4% in 2014
  • 1.13 Million Vacation Homes Sold
  • 2014 marked the highest level of sales...

Does Homeownership Make Sense Financially?

Does Homeownership Make Sense Financially?

Does Homeownership Make Financial Sense? | Keeping Current Matters

Everyone knows the social advantages of home ownership. However, some question the financial...

Desire to Own a Vacation Home Growing

Desire to Own a Vacation Home Growing

Desire to Own a Vacation Home Growing | Keeping Current Matters

The National Association of Realtors just released their 2015 Investment and...

3 Questions to Ask Yourself Before Buying A Home

3 Questions to Ask Yourself Before Buying A Home

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Is Getting a Mortgage Getting Easier?

Is Getting a Mortgage Getting Easier?

Is Getting a Mortgage Getting Easier? | Keeping Current Matters

There has been a lot of discussion about how difficult it is to get a home mortgage in this market. There is...

Pending Sales Surge: Great Sign for the Housing Market

Pending Sales Surge: Great Sign for the Housing Market

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