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The Louisville Real Estate Blog

Buying a Home

Home Prices Continue To Rise

Home Prices Continue to Rise | Keeping Current Matters

“Broad-based Slowdown for Home Prices”

That is a headline you might have seen over the past weekend. And though it is true, we must understand the story behind the headline. Case Shiller reports on the year-over-year difference in home values. Their latest report revealed that the rate of appreciation has slowed – not that prices are falling!! Here is exactly what they said:

“The 20-City Composite gained 4.9% year-over-year, compared to 5.6% in August.”

Prices are still up this month over last year’s values (4.9%) just not as much as they were last month (5.6%).

Home Prices are NOT Falling.

As a matter of fact, the latest Home Price Expectation Survey...

NAR's November Existing Home Sales Report

NAR's Existing Home Sales Report [INFOGRAPHIC] | Keeping Current Matters

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Freddie Mac: BUY SOONER RATHER THAN LATER

Freddie Mac: Buy Sooner Rather than Later | Keeping Current Matters

In a recent video update on the housing market, Frank Nothaft, Freddie Mac’s chief economist, stated that with both mortgage interest rates and home prices projected to increase in 2015 buying now makes sense.

“If you are planning to buy a home in the next year, it’s better to do it sooner rather than later.”

Here are the latest mortgage interest rate projections from four major housing entities: Fannie Mae, Freddie Mac, the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR):

Mortgage Rate Projections | Keeping Current Matters

Thinking of Selling & Moving Up?

This advice isn’t limited to just the first-time buyer. If you are considering moving...

TOP 5 BENEFITS OF USING A PROFESSIONAL TO BUY A HOME

Top 5 Benefits of Using a Professional to Buy A Home | Keeping Current Matters

Every year the National Association of REALTORS releases their Profile of Home Buyers & Sellers, in which they reveal the results of a yearlong survey of buyers and sellers. The latest profile revealed what actual buyers saw as the benefits of using an agent during the home buying process.

Here are the Top 5:

#1: Helped the Buyer Understand the Process

Whether it is your first time purchasing a home, or you’re an experienced buyer, there are over 230 possible actions that need to happen during every successful real estate transaction.

Having someone to guide you through the process who can simply explain what is going on at every step of the way was sited as the top benefit by 63% of all buyers (that number jumped to 83% with first time buyers).

#2: Pointed Out Unnoticed Features/Faults with the Property

When you start the process of buying a home, you may be too excited to see each potential home for what it is, good and bad. An experienced professional can help you realize the potential hidden gems or risks before you make an offer.  Nearly 60% of all buyers listed this as a major benefit of hiring a professional.

#3: Improved the Buyer’s Knowledge of Search Areas

Whether you are looking to relocate to a new state, or just across town, having someone...

A SNAPSHOT OF MORTGAGES

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Where are prices headed over the next 5 years?

Where are Prices Headed Over the Next 5 Years? | Keeping Current Matters

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.  

The results of their latest survey

  • Home values will appreciate by 4.8% in 2014.
  • The cumulative appreciation will be 23.5% by 2019.
  • That means the average annual appreciation will be 3.6% over the next 5 years.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 15.1% by 2019.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

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Harvard's 5 Financial Reasons to Buy a Home

Harvard's 5 Financial Reasons to Buy a Home | Keeping Current Matters

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. Last year, he released a paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

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HISTORIC MORTGAGE RATES

Historic Mortgage Rates

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FEAR OF LOW DOWN PAYMENT

Fear of Low Down Payments Mostly Unwarranted | Keeping Current Matters

After it was announced that Fannie Mae and Freddie Mac would again make available mortgage loans requiring as little as a 3% down payment, many people showed concern. Were we going back to the lower qualifying standards of a decade ago that caused the housing market crash? Won’t lower down payments dramatically increase the default rates? Will we again be faced with an avalanche of short sales and foreclosures?

The simple answer is - NO. Let’s look at the data.

While it was happening (2011)

Back in 2011, as we were just recovering from the worst of the Great Depression, many organizations were looking for the cause of the massive default rate on mortgages.

The National Association of Realtors (NAR), the Center for Responsible Lending (CRL), the Mortgage Bankers Association (MBA), the National Association of Home Builders (NAHB), the Community Banking Mortgage Project and the Mortgage Insurance Companies of America (MICA) issued a white paper on the subject titled: Proposed QRM Harms Creditworthy Borrowers and Housing Recovery.

Let's look what the report says:

“In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream. First time homebuyers will have to choose between...

Veterans Day

Happy Veteran's Day! | Keeping Current Matters

Thank you for your service!

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4 REASONS TO BUY BEFORE WINTER

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...

3 Questions to ask before buying a home

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home.

There are three questions you should ask before purchasing 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 finances. 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:

  • 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 the space

What non-financial benefits will you and your family derive 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?

When looking at future housing values, Home Price Expectation Survey provides a fair assessment. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Here is what the experts projected in the latest survey:

  • Home values will appreciate by 4% in 2015.
  • The cumulative appreciation will be 19.5% by 2018.
  • Even the...