Extended family descending on your house this year? Don’t panic. If you start now, you can have a holiday-ready home by the time Aunt Brenda and her brood shows up.
“We say it every year – the holidays will be here before we know it,” said Prime Lending. “For many people, that means hosting parties, welcoming overnight guests and opening your home to unexpected drop-in visitors. You may be thinking it would be great to spruce things up around your house before the holiday hustle and bustle begins. Now is a great time to dive into your home makeover and wrap it up before the holidays arrive.”
Here are the areas you might want to focus on first.
Get your kitchen looking cheftastic
Chances are, your kitchen is going to be one of the places where people are congregating during the holidays, and not just while cooking. If it’s seen better days, or if it just doesn’t reflect your style – or any style from this century – get started. You can select, order, and have new countertops installed in a matter of a few weeks. If you don’t want to touch the countertops, think about painting your cabinets and adding new hardware. A new backsplash can bring it all together, and is something you can do yourself.
Replace or repair appliances
Thinking about the function of your kitchen – not just how you’ll use it over the holidays, but all year round – is key to making good choices when renovating. “If you are hosting Thanksgiving, a double oven and a new refrigerator may be your top priority,” said Prime Lending.
Maybe your dishwasher has seen better days or your washer and dryer have been hanging on for a while. Knowing that they’ll be put to good use with a house full of people might inspire you to make some upgrades now.
Consider the stuff you serve with and eat on, too
While you’re in the kitchen, you may want to think about upgrading your cookware, cooking utensils, glassware, silverware, and anything else that will be helping you prepare, serve, or eat food during the holidays. How old are those dishes, anyway?
Living room redo
If you have clunky built-ins or a large armoire housing your outdated TV, it might be time to make some changes. Turn the built-ins into bookcases or a sleek desk with some streamlined shelving above, which can provide both function and a fashionable upgrade. Turn a fireplace into a focal point by retiling or simply painting old brick white and hang a flat screen above. Voila. Your hangout space is updated and holiday-ready.
If you’re not super tech-savvy and have never installed a flat screen before, it’s smart to hire someone who is and who has. “If a new flat panel television, home theatre system, or other electronic devices are bound for your household this gift-giving season, consider seeking installation quotes from a trained professional,” said Better Homes and Gardens. “Proper installation can maximize your enjoyment of new electronics for a fraction of their purchase price, and the stress of following a multi-page instruction manual may bring out the Scrooge in many DIYers.”
Better Homes and GardensAdd new bedding
You can make the guests rooms (or the guest couches, if your family converging on one house for the holidays looks anything like ours) hospitable and improve the look at the same time by changing out the bedding. Buying new sheets and a comforter is easy and inexpensive – and don’t forget new pillows, too. Choose a neutral color for the comforter and add some patterned pillow for some zip. Or, choose a graphic pattern to give the bed a modern feel. A fresh coat of paint in a color that is neutral and that gives the rooms a calming nature will help transform them into something that feels resort-like.
Address the back yard
If you live in a climate that allows outdoor enjoyment throughout the year – or if you know the kids will be playing outside regardless of the temperature – making some changes in your yard might be in order. The fall is a great time to buy patio furniture, since it’s typically on sale after summer ends. A firepit can be an inviting addition to your outdoor area, and one that will allow your guests to gather in front of a crackling fire while bundled up with a tasty, holiday beverage.
Update the guest bathrooms
One thing you can count on is that your guests will be spending time in the bathrooms. If yours are in need of some attention, now’s the time to pay some. If you don’t want to do a complete overhaul, you can make simple, inexpensive edits by changing out the showerhead, faucets, lighting, and slathering on a fresh coat of paint. A new paint color and some new hardware can also liven up older cabinets. Add a fresh set of towels and bath mats, and you’re all set.
Do a complete audit of everything else
Do a complete walkthrough of your house. Turn on all the baths, sinks, and showers, and all the lights and TVs. Sit on the beds, couches, and chairs. Open closets. Search the walls, doors, and baseboards for nicks and scratches. This will give you a head start on anything that needs to be fixed or replaced before family starts knocking on the door.
Written by Jaymi Naciri on Sunday, 09 October 2016
08 Jan 2016
Sentiment among homebuyers rose in December following a strong 2015. Fannie Mae’s analysis shows that buyers had increased confidence in the US economy and their own personal finances and its sentiment index rose 2.4 percentage points to 83.2. The net share of respondents who believed that now was a good time to buy stayed at 35 per cent while 8 per cent felt it was a good time to sell, doubling the previous month’s percentage. Job security and personal finances showed increased optimism along with expectation of higher real estate prices, although fewer respondents felt that mortgage rates will go down.
30-year FRM rates down
Mortgage rates have started 2016 lower according to analysis from Freddie Mac. It’s Primary Mortgage Market Survey showed that average rates for a 30-year FRM were down to 3.97 per cent for the week ending Jan. 7 compared to 4.01 per cent a week earlier. For 15-year FRM’s the average was slightly higher than last week, rising to 3.26 per cent from 3.24. 5-year ARM’s averaged 3.09 per cent (up from 3.08).
Mortgage credit availability slipped in December
Figures from the Mortgage Bankers’ Association show that mortgage credit availability decreased in December. Its Mortgage Credit Availability Index declined 2.4 per cent to 124.3 with conventional and jumbo loans seeing the largest declines.
Although tightening of lending are usually the reason behind a decline in the MCAI there were additional issues in December: a large part of the decline was driven by a technical issue related to implementation of affordable, low down payment, loan programs,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “Many investors discontinued existing low down payment loan programs only to replace them with new iterations of similar programs that were discontinued.”
Apartment vacancies higher in Q4
The level of apartment vacancies across the US in the fourth quarter rose to 4.4 per cent according to data from New York-based researcher Reis. The slim rise (from 4.3 in the previous quarter) was the first time since 2009 that the rate has risen in two straight quarters. Older properties are in demand whereas some pricier new urban developments are struggling. “It’s taking a lot longer for new projects to lease up,” Ryan Severino, a senior economist at Reis, told Bloomberg. “Vacancies are rising predominantly because a lot of shiny, sexy new Class A projects are having a harder time leasing up relative to a few years ago.”
(Gene J. Puskar/AP)
This week’s expected rate increase by the Federal Reserve should not cause home buyers to panic, if history is any indication.
Back in the early 2000s, after the tech bubble burst, the Fed dropped its benchmark rate to 1 percent. Then in the summer of 2004, it began raising it by a quarter percent. At the time of the central bank’s first increase, the interest rate on a 30-year fixed-rate mortgage was around 6.3 percent. During the next four months, it dropped to 5.7 percent.
As the Fed continued to raise the benchmark rate, the rate on a 30-year fixed-rate mortgage declined, falling to 5.58 percent in June 2005. By the time of its last increase in the summer 2006, the rate on a 30-year fixed-rate mortgage was at 6.68 percent. It had gone up less than a half percent even though the benchmark rate had climbed from 1.25 percent to 5.25 percent.
Could mortgage rates follow the same course this time around? Possibly. But keep in mind the Fed hasn’t raised its benchmark rate in nearly a decade. It’s hard to predict how the market will react to such a momentous change.
“You’ve got 33-year-old bond traders who’ve never in their career seen” the Fed raise its benchmark rate, said Bob Walters, chief economist at Quicken Loans, the largest non-bank mortgage originator.
“You’ll clearly have some reaction in the market, even though [the rate increase is] expected. Just the reality of it plopping in their laps is going to create some volatility, not only in the bond markets but also the equity markets as people try to sort this out. People should expect prices of bonds and equities to start to gyrate.”
John Wake, a self-described “geek-in-chief” at Real Estate Decoded and a real estate agent in Arizona, believes that in 2004 when the Fed increased the benchmark rate it caused an already frenzied housing market to become more manic. Home buyers, worried that rising rates would prevent them for affording a house, became desperate to buy right away.
“The real estate economy is more sensitive to interest rates than most of the economy,” Wake said. “An interest rate low enough to move the needle on the national economy may cause the real estate economy to overheat. We may have seen a bit of that the last couple of years. And because real estate is more sensitive to interest rates, expectations of higher rates have a bigger impact on real estate than most of the economy.”
Wake points out that often what people expect determines what they do. If home buyers expect mortgage rates to increase, they will act as if rates are increasing even if they don’t.
“That could get people to buy sooner rather than later, which could drive prices up even more next year, which is what I am worried about,” he said.
Walters doubts a slight mortgage rate increase will have much impact on the housing market.
“I don’t think most people are going to run out and make a life decision for a quarter of a point interest rate,” he said.
“Long-term rates are determined by the marketplace every day, by traders buying and selling bonds,” Walters said. Traders are “thinking about the returns they are going to get over time. Primarily what they are thinking about, especially on longer term bonds, which a 30-year mortgage goes into, they’re thinking about inflation.”
Inflation has been hovering below the Fed’s 2 percent target. The U.S. economy has been doing fairly well lately, despite turmoil in the global economy, its effect on the dollar and low oil prices.
“You’re seeing a complete decimation of commodity prices right now,” Walters said. “That will influence inflation a great deal. It makes pricing power for wages almost impossible. And if you can’t get wage increases, it’s tough to have inflation. If you don’t have inflation, it’s tough to see rates go higher. That’s the world we’ve been in for [nearly] a decade. That’s not going away anytime soon. We’ve essentially been at zero percent short-term interest rates for seven or eight years. There’s not even a whisper of inflation. That’ll tell you really how challenging it is for price increases to take hold. And as long as that’s the case, long-term interest rates will stay down.”
No matter what the Fed does this week, it is likely that uncertainty in the global economy will continue to put downward pressure on long-term rates. The Mortgage Bankers Association is predicting the interest rate for 30-year fixed-rate mortgage will be around 4.8 percent at the end of 2016, that’s an increase of less than one percent.
“We have a fairly weak global economy right now,” said Michael Fratantoni, MBA’s chief economist. “You have many global investors parking their money in U.S. Treasury securities or other safe assets and that is keeping our longer term rates lower than they otherwise would be.”
What Fratantoni wonders about is what will happen after the Fed raises the benchmark rate, what its plan will be going forward.
“It really is not just when the Fed is going to make their first move,” he said. “It’s how that first move translates into market expectations about the future path of rates. It gets very complicated because it’s not just what they do, but how they talk about it and how investors anticipate how the Fed might act going forward.”
Fratantoni is especially curious about what the Fed will do with its balance sheet. The central bank pumped trillions of dollars in stimulus into the market in the wake of the financial crisis, buying mortgage-backed securities. Pre-crisis, the central bank’s balance sheet was about $800 billion, primarily in short-term Treasury bills. Now it’s $4.2 trillion, and the Fed is the largest single investor in mortgage-backed securities in the world, holding $1.7 trillion in MBS.
“The Fed has said at some point after they increase short-term rates they are going to begin to allow that portfolio to shrink, and they may more actively sell some of those securities,” Fratantoni said. There is “a lot of uncertainty about how the Fed is going to allow their balance sheet to wind down and when or if they might sell some of those MBS. There is not at this point a lot of clarity about who’s going to step in and try to dampen some of that volatility. There’s no investor of comparable size waiting on the sidelines ready to jump in.”
Despite those concerns, Fratantoni is optimistic about next year’s real estate market.
“At some point, you could get to a level of rates, 6 to 6½ percent, that would really begin to crimp affordability and then that would be a real negative,” he said. “But at this point, it’s going to be just a very modest headwind. Most of the other fundamentals are suggesting a very strong housing market in the year ahead.”
Waters agrees. Although he demurred when asked what he thought the interest rate on a 30-year fixed-rate mortgage would be at the end of the year, he didn’t think it would be significantly higher.
“I tend to think from a 30-year fixed mortgage standpoint there’s not going to be an extraordinary change,” he said. “I don’t think they’ll go up or down more than a quarter percent, at least not initially. It’s not going to five [percent] and it’s not going to three [percent]. We’re going to stay in a tight band.”
The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to look at where rates are headed when deciding to buy now or wait until next year.
Below is a chart created using Freddie Mac’s October 2015 U.S. Economic & Housing Marketing Outlook. As you can see interest rates are projected to increase steadily over the course of the next 12 months.
How Will This Impact Your Mortgage Payment?
Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.
According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.4% from this time last year and are predicted to be 4.7% higher next year.
If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.
Even a small increase in interest rate can impact your family’s wealth. Meet with a local real estate professional to evaluate your ability to purchase your dream home.