INTEREST RATES ARE RISING!

For all you fence sitters, the party is over…….no not really, but seriously, if you are considering buying a home and have been putting it of you may want to reconsider. Interest rates a year ago were in the middle to high 3’s and today they are at 4.5% and continuing to creep up as our economy gets better. In addition, home prices are also rising a bit, so with those two factors what it means is a year from now you won’t be able to buy as much house unless your income rises as well. For all you young people out there that are just coming into the housing market, please read article to the bottom and you will see the what the interest rates have been in the past by the decade. That should convince you that now is the time to buy that dream home now…..and buy as big as you think you will need and can afford as these current rates will never be back. They are still the lowest in my life time. Don’t miss the boat! As always, if you need any help making a purchase in the greater Tampa Bay area, please feel free to give Richard Kemper a call at 813-777-5332 or email me at getrichquick2@aol.comImage 

 

Freddie: No more record-low mortgage rates

 

 

WASHINGTON – April 2, 2014 – While mortgage rates have been rising the last few months, they’re still historically low compared to the trend over the last four decades, Freddie Mac says in a blog post.

But rates as low as they were in November 2012 – when the 30-year fixed-rate mortgage reached an all-time low of 3.31 percent – aren’t likely to return any time soon, the mortgage giant says. 

Still, Freddie assures borrowers that the all-time record high of 18.63 percent reached in October 1981 isn’t on the horizon either. (At 18.63 percent, monthly mortgage payments on a $200,000 loan would be $3,117, compared to $992 a month at today’s 4.32 percent average.)

With mortgage rates at 4.32 percent, 123 of the 157 metros that Freddie Mac tracks remain very affordable to households earning the median income. In order for affordability to be hampered in the majority of markets, interest rates would have to reach 7 percent, according to Freddie Mac.

“Stubbornly high unemployment over the last several years coupled with stagnant income growth exacerbates declining affordability in a rising interest rate environment,” according to Freddie’s blog post. “More jobs and income growth would help blunt the effects of higher interest rates and make buying a home more accessible. While jobs and income have shown some improvement in recent months, they continue to be challenged.”

Mortgage rates through the years

Here’s an overview of mortgage rates in the past four decades, as well as the approximate payment on a $200,000 mortgage and how it changes with the rise and fall of rates, according to Freddie Mac.

 1970s
 Average 30-year fixed-rate mortgage: 8.86%
 Approximate payment on a $200,000 mortgage: $1,589

 1980s
 Average 30-year fixed-rate mortgage: 12.70%
 Approximate payment on a $200,000 mortgage: $2,166

 1990s
 Average 30-year fixed-rate mortgage: 8.12%
 Approximate payment on a $200,000 mortgage: $1,484

 2000s
 Average 30-year fixed-rate mortgage: 6.29%
 Approximate payment on a $200,000 mortgage: $1,237

 2014
 Average 30-year fixed-rate mortgage: 4.36%
 Approximate payment on a $200,000 mortgage: $997

Source: “Mortgage Rates: From Dirt Cheap, to Cheap,” Freddie Mac (March 24, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688 

PENDING HOME SALES DECLINE FOR 4TH MONTH IN A ROW SEPTEMBER 2013

Wow, this is not good news for a recovering Tampa housing market. The investors came in about a year or so and stabilized the Tampa market and helped us get our prices back to what they should be. But, the investors have slowed purchases in Tampa as they move on to cheaper markets, there was a 1%+ interest rate jump (which has now gone back down), 3 price increases by new construction builders in Tampa area, a government shut down, Obamacare, etc., which I think has some buyers heading back to the sidelines to wait it out and wait for some of the uncertainty to settle. I think key to the slower pending sales is price. I think home prices went up too quick which may make some people wait it out to see if prices are going to drop. No one wants to buy a home that is going to go down in value right after they bought it. That’s how we ended up with all the short sales after the housing market crash of 2007. Stay tuned to my blog to see how the Tampa real estate market is doing. Richard Kemper Re/Max Realty Unlimited 813-777-5332

Pending home sales continue slide in Sept.

WASHINGTON – Oct. 28, 2013 – Pending home sales declined for the fourth consecutive month in September. According to the National Association of Realtors® (NAR), higher mortgage interest rates and higher home prices curbed buying power.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August. Year-over-year, the index is down 1.2 percent compared to September 2012.

The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.

“Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” says Lawrence Yun, NAR chief economist. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”

September marks the first time in 29 months that pending home sales weren’t above year-ago levels.

“This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014,” says Yum. “Even so, ongoing inventory shortages will continue to lift home prices, though at a slower single-digit growth rate next year.”

The PHSI in the Northeast dropped 9.6 percent to 76.7 in September, and 6.4 percent below a year ago. In the Midwest, the index fell 8.3 percent to 102.3 in September, but it’s 5.7 percent higher than September 2012.

Pending home sales in the South slipped 0.4 percent to an index of 116.2 in September, but it’s 2.0 percent above a year ago. The index in the West dropped 9.0 percent in September to 97.3 and 9.8 percent lower than September 2012.

NAR projects that total existing-home sales this year will be 10 percent higher than 2012, reaching more than 5.1 million, and will likely hold even in 2014. The national median existing-home price is expected to rise 11 to 11.5 percent for all of 2013, but moderate to a 5 to 6 percent gain in 2014.

© 2013 Florida Realtors®

HAVE YOU EVER THOUGHT OF FLIPPING HOUSES? HERE IS SOMETHING YOU SHOULD KNOW!

I have flipped a few homes over the years, but you really have to know what you are doing and know your costs before you pull the trigger. I thought the below information is worth passing on…..the flippers have moved more towards high end flips because that is where they have better chances of making money. If you are an investor in the Tampa area and would like to partner up with me to flip some homes give me a call at 813-777-5332.

 

Home flipping down 13%, but high-end flipping up 34%

IRVINE, Calif. – Oct. 17, 2013 – RealtyTrac released its Q3 2013 Home Flipping Report, which shows 32,993 single family home flips – where a home is purchased and subsequently sold again within six months – in the third quarter of 2013. That number is down 35 percent from the second quarter and 13 percent year-to-year.

Overall, Florida’s 4,706 home flips in the third quarter came in second after California, which had 8,592 flips. And only one city in the state made RealtyTrac’s “Top 15 Markets for Profitable Home Flipping”: No. 13 Deltona-Daytona Beach-Ormond Beach.

In some cities, the number of home flips decreased significantly since the second quarter, including two Florida cities, Tampa (47 percent decrease) and Orlando (28 percent decrease).

According to RealtyTrac, real estate investors made an average gross profit of $54,927 on single-family home flips in the third quarter – a 12 percent higher average gross return compared to the third quarter of 2012.

The higher gross profit on fewer total home flips was driven, in part, by an increase in the number of high-end homes sold by flippers for $750,000 or more. A total of 968 high-end homes nationwide were flipped in the third quarter, down 13 percent from the previous quarter but up 34 percent from a year ago.

More than three-fourths of all high-end flips were in five markets: the New York metro area and four coastal California markets – Los Angeles, San Francisco, San Jose and San Diego. Flips on homes priced between $1 million and $2 million increased 42 percent year over year, while flips on homes priced between $2 million and $5 million increased 350 percent year over year.

“Increasing home prices over the past 18 months combined with decreasing foreclosures have created a market less favorable to the high quantity of middle- to low-end bread-and-butter flips that we saw late last year and early this year,” says Daren Blomquist, vice president at RealtyTrac.

“But the sharp rise in high-end flipping indicates there is still good money to be made for flippers willing and able to take on the additional risk of buying and rehabbing more expensive homes,” he adds.

The number of single family homes flipped in the third quarter decreased from the previous quarter and a year ago nationally, but flipping numbers were still up from a year ago in some markets such as Los Angeles (11 percent increase), New York (14 percent), Detroit (13 percent), Atlanta (32 percent), Las Vegas (9 percent) Chicago (28 percent) and Seattle (23 percent).

© 2013 Florida Realtors®