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Eight Must-Do’s Before You List Your Home For Sale

The Spring selling season is on, and if you’re considering listing your house, it’s time to get it in tip-top shape. You may think your home is already listing ready right now, but a real estate agent may not agree. These eight activities will help you put your best house forward.

Clean up that yard

You can’t underestimate the power of curb appeal. An unkempt yard, chipping paint, even a mailbox that’s seen better days can turn off a potential buyer – or turn one into a bargain hunter. And you don’t want either.

“Your home’s curb appeal is the first thing buyers see when they drive up to the property. Buyers immediately start assessing the exterior and landscaping, forming a knee-jerk first impression,” said Professional Staging. “This initial reaction is very powerful. It instantly sets the tone of the tour and will have an effect on how buyers perceive the rest of the property. If their first impression is a negative one, then the rest of the home will suffer for it. The state of a home’s exterior usually matches the interior. If the grass is long or patchy, the paint on the house is faded or peeling, and there are cracks in the driveway, then buyers are going to be very wary of what other kinds of maintenance issues could be awaiting them inside and in places that they can’t see. These issues instantly translate to dollar signs and stress for home buyers, so it’s likely they will move on to the competition to avoid them both.”
Consider your door

Chances are, you don’t look much at your front door because you come in and out of the garage. A buyer approaching your house will notice if your door isn’t pristine and may project the lack of pristine-ness onto the rest of the house. A fresh coat of paint is inexpensive but the impact is dramatic.


A cluttered house can mask its best qualities and also make potential buyers feel like it’s not as spacious as they want it to be. “Resist the urge to roll your eyes at this one,” said Family Handyman. “It is imperative that your home looks livable. Potential buyers may not be able to see past your clutter. Think of it this way – don’t move things you no longer want or need. Make decisions now and your house will sell faster and your move will be easier. Take one room, or even part of one room, at a time and dive in. Recycle or shred paper. Donate books, toys, clothing and duplicate household items. If you’re getting frustrated and you can’t deal with one more stack of papers or shoebox of old photos, put them in a plastic tub, label the tub and stack it somewhere out of the way.”


You want your home to be memorable, but for the right reasons – not because of your wall full of crosses or bookcase overflowing with antique figurines. Pack them away to neutralize the space. “The next step on your declutter list? You want to remove any distractions so the buyers can visualize themselves and their family living in the property,” Kipton Cronkite, a real estate agent with Douglas Elliman in New York, told “He says that includes personal items and family photos, as well as bold artwork and furniture that might make your home less appealing to the general public. The goal is to create a blank canvas on which house hunters can project their own visions of living there, and loving it.”

Light bulbs, handles, and hardware, oh my!

Burned-out bulbs, loose handles, and hardware that’s worn, scratched, or rusted is easy to take care and can help your place look finished.

Give everything a good dusting

Look up! How’s that ceiling fan? You’d be surprised how a little thing like a dusty fan can impact a buyer and turn them into a non-buyer. Get out that duster and hit all the corners and window sills you never notice. And then clean all those windows so when you open all the blinds and drapes to let the sun shine in, the light doesn’t get blocked by smudges and fingerprints.

Walk through your home like you’re seeing it for the first time

Come in through the front door and examine every inch of the house. You’ve probably been ignoring little things that have just become part of the landscape. A scuffed baseboard here. A broken switchplate there. Even the pile of shoes in the front hall that you don’t even notice anymore. Potential buyers will, and these little things could be enough to turn them off.

“Once you’ve decided it’s time to sell your home, start to look at it with an objective eye,” said Family Handyman. “If you were the potential buyer, what red flags would you see when you walked around your house and yard?

Clean out your closets, your cabinets, and your pantry

Don’t fool yourself into thinking people won’t open doors and drawers and look through everything (Side tip: Hide your valuables before showings, just to be safe!). You don’t have to worry about being judged for your fashion sense—although, you might want to pack away those ‘80s parachute pants! You should be more worried about whether buyers will walk away because they think there isn’t enough closet or storage space, or it’s not efficient space.

You have to pack anyway since you’re moving, so start early. Empty out closets, cabinets, and storage areas so the space looks sufficient and nicely organized. For closets, the idea is to make them look filled, but not overfilled. Create space between hangers and fold other items neatly on shelves. Make sure there is ample space for shoes because, let’s face it, this could be a deal breaker for some people.

Written by Jaymi Naciri



March 7, 2018   No Comments

Renovation Tips For A Classic, Not Trendy, Home

Here’s the dilemma. You’re getting ready to redo your kitchen and you want it to be stylish and modern but not trendy. After all, this is the only kitchen renovation you ever plan to do and you don’t want it to be outdated before you are even finished with the final touches.

If you’re paralyzed because you’re afraid of making the wrong decision, we get it. We’re facing a similar dilemma here, FYI, with floors that need to be done and so many options from which to choose and no winner (yet) because it’s not yet clear if what is currently hot is just a flash in the (floor) pan or will stick around for a while.

So how do you know how to choose? First, it depends on what your goals are. If you’re just looking to update and then sell your house, choosing materials that are trending now may be a good call. If you’re thinking, “I want to love this and have it still look good in 10 years,” that’s another story.

“You’ve probably taken on a renovation project because you want to update the style. While you’d like to give your home a modern look, choosing a short-lived style or personal design is a major fail,” said HomeAdvisor. “While a trendy design is sure to make your home stand out, it’s also going to quickly go out of style. This is a big problem if you want to resell your home in the future. Modernize the look of your kitchen or bathroom, but avoid bold styles that only appeal to those with specific tastes.”
Go neutral

Yes, neutral can be boring. It’s true. (It can also be super chic when done right.) Making a bold choice with your kitchen countertops might feel like the right way to go right now, but you may turn around in a couple years and regret that choice, especially if you’re going to try to sell your home. You can always bring in pops of color with accessories or items that are easier to replace or redo.

For the last several years, grey has been the go-to color for homes. Prior to that, it was beige – a color that is currently seeing a resurgence even though grey is not gone – yet. Black and white is another currently hot option for color schemes, and, the bonus is, “black and white remains a classic combination,” said HGTV. Certain colors will never go out of style – House Beautiful has 10 of them. But remember that no matter what color you choose, it’s not permanent. Painting is one of the easiest ways to update your space and change the mood whenever you like.

Just keep in mind that high ceilings and other architectural features may make a DIY situation un-DIY-able and may make a redo more expensive because you have to hire someone. Key in on walls that don’t soar to a pitched ceiling or that can act as a focal wall for high-impact that’s easy to accomplish yourself.

Be smart about your kitchen

You may have a desired look cemented in your head for your kitchen, but are you making smart choices? Shaker cabinets, farmhouse sinks, and marble countertops are a few good options if you want something that looks modern but “will stand the test of time and still look as beautiful twenty years from now as it does today,” said Apartment Therapy.

Go eclectic with your furniture

An entire house full of mid-century modern furniture can begin to look like a showroom, and when the trend is over, it can be painful to replace it all. Creating a more eclectic look with an eye toward classic pieces creates staying power. Adding in a vintage piece or two can add another important layer. “A design rule that’s sure to remain true? Every room in your home needs a unique vintage piece,” said HGTV. “Even in newly-decorated spaces, distressed or worn pieces create a collected, designer look.”

Avoid hyper trends in larger items

Drapery, rugs, and bedding can be easily changed out to accommodate your fickle design taste. But when it comes to the larger pieces in the home – a couch or a set of chairs, perhaps, avoiding trends will give you longevity. “Timeless decor means fabrics that will stand up to years of changing trends! They transcend those changes,” said Stone Gable. “Don’t rush out and buy foundational furniture in the ‘color of the year’! It’s only the ‘color of the year’ for one year! Choose colors and patterns, especially when buying big ticket items, that will still look amazing when this year’s trends have come and gone. Add layers of accent decor like lamps, art, tableware, pillows, bedding, etc. in more updated colors and styles. They can be changed out easily when they get tired or are out of style.”

Written by Jaymi Naciri


February 27, 2018   No Comments

Kitchen Trends With Staying Power

Kitchen Trends With Staying Power Parkes Interiors

As a designer, I pay attention to trends that come and go in kitchen design. And there are a lot of new options to consider. But I tell my clients that the key is always to consider whether what’s trending will actually function for your kitchen. So let’s take a look at some of the current trends that I would argue are among the best options to incorporate into your kitchen remodel. Which ones would you love to have?

1. Fewer upper cabinets. The trend toward less wall cabinetry in the kitchen will continue. It’s not that clients have less stuff to store, but rather that they desire less visual clutter and that feeling of openness that a lack of wall cabinets inspires. This means that clever storage solutions for both base and tall cabinets are even more important.

Glassware is commonly stored in the wall cabinet closest to the sink. With less upper cabinetry, the dilemma of where to put the glasses arises. Consider using a drawer or rollout shelf, as seen here. Drawers are overlooked when it comes to glass storage. To make it work, just line the bottom of each drawer or rollout with a nonslip rubber liner.


Pantry pullouts are also a great source of storage when wall cabinetry is scarce. This tall, narrow pullout holds dishes, cups and glassware galore, as well as half a dozen stainless steel bowls.


2. Comfortable seating areas. For years, islands have been considered the ideal gathering spot in the kitchen. But now there’s a trend toward more comfort, and seating areas in kitchens are evolving accordingly. Clients want a place to kick off their shoes and relax with a glass of wine while waiting for their dinner to cook. Expect to see more soft seating in the kitchen, like the light blue couch in this photo.


3. Steam convection ovens. My favorite kitchen appliance slowly gaining a foothold is the steam convection oven. Cooking with steam locks in nutrients and keeps foods moist. Unlike microwaves, steam ovens reheat leftovers without drying them out. As a bonus, there’s a convection mode that bakes and roasts.


Will steam ovens replace microwaves? The answer probably depends on whom you ask. They still can’t reheat beverages or pop popcorn, and for some that’s a deal-breaker.

4. Induction cooktops. Induction cooking has been popular in Europe for many years, unlike here in the United States, where cooking with natural gas is preferred. With induction cooking, the energy is generated by a metal coil beneath the surface of the glass cooktop. When turned on, the coil produces an electromagnetic current only when it comes in contact with magnetic cookware. This current heats the bottom of the magnetic pan and cooks the food it contains. Induction is safe — the cooktop is cool to the touch when the cookware is removed. It’s also fast. Water boils in under two minutes.


One way to introduce induction cooking into your kitchen is to add a burner or two. This kitchen has a gas range plus a small induction cooktop in the island.

5. Smart kitchen technology. Our homes are becoming ever more connected with our devices. Whether through voice activation, phone apps or computers, connectivity is here to stay, so it was only a matter of time before the advent of smart appliances.


Smart refrigerators. Ever get to the grocery store and discover you’ve forgotten your list? Of course you have! A few of my trailblazing clients have purchased smart refrigerators equipped with an interior camera that takes a photo of the contents when the door is closed. This photo can be accessed while shopping from the corresponding app. Some refrigerators can determine when stocks are running low, make a list and even reorder.

Smart ovens and ranges. Imagine being able to control your oven or range remotely. Car stuck in traffic? Begin preheating your oven from your phone.


6. Column refrigerators. Unlike traditional refrigerators with their predetermined refrigerator-freezer spaces, column refrigerators are full-sized single units that are either all refrigerator or all freezer. They’re quickly becoming a client favorite due to the ability to customize chilling spaces based on one’s needs and preferences.

Column refrigerators are available in sizes ranging from 18 to 36 inches wide, and they can be installed separately or combined side by side for a cohesive look. They can be paneled to blend seamlessly with the cabinetry or left stainless, as seen here.


7. Servo drive cabinetry. A servo drive electrical system can open any cabinet with either a slight touch or a remote control. Though often found in more modern kitchens designed without hardware, this feature needn’t be reserved for the modern aesthetic. Even traditional kitchens can benefit from a servo drive trash bin. Nudge the cabinet door with your knee and the receptacle magically appears.

8. Lighted interiors. Interior lighting is no longer limited to glass-front cabinets displaying lovely dishes. Pantry and base cabinets are often 24 inches deep with dark crevices, limiting the visibility of their contents — and what isn’t readily visible often doesn’t get used. Consider lighting the interiors of your deeper cabinets not as a luxury but as a necessity, like the light in your bedroom closet.


9. Touch faucets. Often found in public bathrooms, touch faucets are gaining popularity in kitchens, and they are very useful. When hands are full, or perhaps contaminated with raw chicken, touch the faucet’s body with an elbow or the back of your hand to turn it on. Touch it again and off it goes. Touch faucets make water more easily accessible for multitasking cooks.


10. Working sinks. Many clients are requesting sinks that double as work stations. These working sinks can be as small as 36 inches wide and as large as 80. Fitted with accessories like cutting boards, colanders, bowls and drying racks, they’re designed to improve function in the kitchen.


11. Black stainless. Every few years, appliance manufacturers debut a new appliance finish in hopes of starting the next big trend. Stainless steel is currently king. Anyone remember oil-rubbed bronze appliances from a few years back? Nope, neither do I.

The latest entry vying for market share is black stainless. It’s impervious to fingerprints, and that is a big, big selling point. Its main drawback is that when scratched — and it will get scratched — the underlying color is stainless, as in silver.

I’ve specified black stainless appliances twice in the past six months. Will black stainless have staying power? Only time will tell.

Written by Barbra Bright


December 21, 2017   No Comments

Homebuying Sentiment Rises

by Steve Randall
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.”


January 8, 2016   No Comments

Top Reason to List Your House For Sale Now!

Top Reason to List Your House For Sale Now! | Keeping Current Matters

If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:

“While feedback from REALTORS® continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.”

The latest Existing Home Sales Report shows that there is currently a 5.1-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below November 2014 numbers.

The chart below details the year-over-year inventory shortages experienced in 2015:

Housing Supply Year-Over-Year | Keeping Current Matters

Anything less than a six-month supply is considered a “Seller’s Market”.

Bottom Line

Meet with a local real estate professional who can show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy now!


January 5, 2016   No Comments

What a Fed Rate Hike Could Mean to Mortgage Borrowers

December 14 at 7:00 AM

(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.

As the chart from the Federal Reserve Bank of St. Louis shows, a very loose connection exists between the benchmark rate and a 30-year fixed-rate mortgage. Mortgage rates are more closely linked to 10-year U.S. Treasury yields, and bonds tend to move ahead of, rather than after, central bank decisions. As a general rule, when 10-year Treasury yields go up, mortgage rates go up. According to Freddie Mac’s national survey of lenders, the 30-year fixed-rate average was 3.95 percent last week. It has remained below 4 percent since late July.

“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.”



December 14, 2015   No Comments

Where Are Mortgage Rates Headed? This Winter? Next Year?

Where Are Mortgage Rates Headed? This Winter? Next Year? | Keeping Current Matters

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.

Mortgage Rate Projections | Keeping Current Matters

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.

Bottom Line

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.


November 24, 2015   No Comments

Fed Minutes Lay Out Plans for Rate Hikes

18 Nov 2015

by Craig Torres

Federal Reserve policy makers inserted language into their October statement to stress that “it may well become appropriate” to raise the benchmark lending rate in December and largely agreed that the pace of increases would be gradual, minutes of the meeting showed.

“Members emphasized that this change was intended to convey the sense that, while no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting,” said minutes of the FOMC’s Oct. 27-28 meeting, released Wednesday in Washington.

A majority of Fed officials have signaled they expect to raise interest rates this year for the first time since 2006. That message was underscored when policy makers inserted a reference to the “next meeting” on Dec. 15-16 in their October statement, in connection with their assessment on when to act.

A “couple” of voting policy makers had qualms that the wording change “could be misinterpreted as signaling too strongly the expectation” for December liftoff, according to the report.

Participants in the meeting “generally agreed,” the minutes said, “that it would probably be appropriate to remove policy accommodation gradually.”

“It was noted that the beginning of the normalization process relatively soon would make it more likely that the policy trajectory after liftoff could be shallow,” the minutes said.

Three Camps

The minutes broke policy makers into three camps, with some saying economic conditions necessary for tightening policy “had already been met,” while “most participants” estimated that their criteria “could well be met” in December.

“Some others, however, judged it unlikely that the information available by the December meeting would warrant” a rate increase, the minutes said.

U.S. economic data since the meeting have been encouraging. Employers added 271,000 people to payrolls in October, the biggest gain this year, and unemployment fell to 5 percent. Job openings in September climbed to the second highest on record, while the consumer price index, minus food and energy, rose 1.9 percent last month from a year earlier.

Earlier Wednesday, several Fed officials talked up recent data on the U.S. economy and said it reinforced the case for raising interest rates, though they stopped short of committing to liftoff at their next meeting.

“I’m comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions,” Atlanta Fed President Dennis Lockhart told a conference in New York.

‘Live Possibility’

Chair Janet Yellen told Congress on Nov. 4 that a December rate hike was a “live possibility,” and New York Fed President William C. Dudley said Wednesday that raising rates would be a sign of confidence in the economy.

Officials in October also dropped a reference in their statement to “recent global economic and financial developments” potentially constraining economic growth.

“Most participants saw the downside risks arising from economic and financial developments abroad as having diminished,” the minutes said.

Despite missing their target for 2 percent annual inflation for more than three years, Fed officials continued to anticipate prices would rise back to their goal “over the medium term,” the minutes said.

Fed officials received a staff briefing on the equilibrium real interest rate, or the policy rate that would keep the economy running at full employment with stable prices, according to the minutes.

Fed officials discussed the possibility that the short-run equilibrium rate “would likely remain below levels that were normal during previous business cycle expansions,” the minutes said.


November 18, 2015   No Comments

Are Today’s Home Prices in a Bubble?

17 Nov 2015


by Jeanna Smialek

An ongoing rebound in U.S. home prices is different from the credit-fueled run up that fanned the financial crisis and tipped the nation into recession when the real estate bubble burst, economists at the Federal Reserve Bank of San Francisco find in new research.

The distinction matters: San Francisco Fed President John Williams has recently warned that it’s important to monitor for asset price bubbles, saying that preventing imbalances from building is one argument in favor of raising interest rates off near-zero, where they have been held for seven years. Williams said in October that he was “starting to see signs of imbalances emerge in the form of high asset prices, especially in real estate,” and that once such issues grow large, they are difficult to tackle.

Williams noted then that the market isn’t yet at a “tipping point,” and the researchers uphold that conclusion. They find that today’s market lacks many of the riskiest characteristics that were evident in the run up to the late-2000’s housing collapse.

“The increase in U.S. house prices since 2011 differs in significant ways from the mid-2000s housing boom,” economists Reuven Glick, Kevin Lansing and Daniel Molitor find, noting a “less-pronounced increase in housing valuation together with an outright decline in household leverage — a pattern that is not suggestive of a credit-fueled bubble.”

Since bottoming out, the median house price has recovered to just 8 percent below the prior peak, according to the paper.

This time, however, the ratio of home prices to rent stands at about 25 percent below its mid-2000s high, the researchers find. The number is analogous to the price-to-dividend ratio for stocks and provides insight into whether price matches up with the fundamental value of the underlying asset.

“As house prices have recovered since 2011, so too has rent growth, providing some fundamental justification for the upward price movement,” the researchers write. What’s more, the mortgage debt-to-income ratio, which reached an all-time high in 2007, has continued to decline.

“The red flags are not evident in the current housing recovery,” they write. Even though this cycle is different, they say that “given that housing booms and busts can have significant and long-lasting effects on employment and other parts of the economy, policy makers and regulators must remain vigilant to prevent a replay of the mid-2000s experience.”


November 18, 2015   No Comments

Mortgage Rates Pushed Upward Following Strong Employment Data

November 12 at 10:29 AM

Mortgage rates continued to move higher in anticipation of a Federal Reserve rate hike next month, according to the latest data released Thursday by Freddie Mac.

Home loan rates began creeping up after the Federal Reserve signaled earlier this month that a December interest rate hike was a possibility. What the Fed does with interest rates doesn’t have a direct relationship to mortgage rates, since they are more closely tied to long-term U.S. Treasury yields. Bonds are more likely to move ahead of a Fed action than in response to it.

With the release of last week’s stronger-than-expected jobs report, the possibility that the Fed will raise rates became greater and home loan rates experienced an upturn.

The 30-year fixed-rate average jumped to 3.98 percent with an average 0.6 point, creeping ever closer to the 4 percent mark. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.87 percent a week ago and 4.01 percent a year ago. Since falling to a six-month low of 3.76 percent in late October, the 30-year fixed rate has gained 22 basis points in two weeks. (A basis point is 0.01 percentage point.)

The 15-year fixed-rate average climbed to 3.2 percent with an average 0.6 point. It was 3.09 percent a week ago and 3.2 percent a year ago.

Hybrid adjustable rate mortgages also rose. The five-year ARM average grew to 3.03 percent with an average 0.4 point. It was 2.96 percent a week ago and 3.02 percent a year ago.

The one-year ARM average increased to 2.65 percent with an average 0.2 point. It was 2.62 percent a week ago.

“A surprisingly strong October jobs report showed 271,000 jobs added and wage growth of 0.4 percent from last month, exceeding many experts’ expectations,” Sean Becketti, Freddie Mac chief economist, said in a statement.

“The positive employment reports pushed Treasury yields to about 2.3 percent as investors responded by placing a higher likelihood on a December rate hike. Mortgage rates followed with the 30-year jumping 11 basis points to 3.98 percent, the highest since July. There is only one more employment report before the December FOMC meeting, which will have major implications on whether we see a rate hike in 2015.”

Meanwhile, mortgage applications were flat again this week, according to the latest data from the Mortgage Bankers Association.

The market composite index — a measure of total loan application volume – slipped 1.3 percent from the previous week. The refinance index dropped 2 percent, while the purchase index increased 0.1 percent.

The refinance share of mortgage activity accounted for 59.8 percent of all applications.


November 12, 2015   No Comments