Lee Morof's Real Estate Blog

As a pet owner, you’re probably just as excited to see how your pet loves the new house as you are yourself. It’s fun to watch as your pets explore the new digs. But moving can be stressful for pets. Here are some tips for making the move as stress-free as you can for your furry loved ones!

Acclimate Your Pets To A Pet Carrier

If you travel infrequently, your pets may not be used to being inside the confined space of a pet carrier. Help them get used to it by placing it on the floor near where they sleep. Put some of their favorite toys or blankets inside and encourage them to spend time in there. Once inside, bring Fido or kitty for a short ride in the family car; just once or twice around the block is plenty. Do this a couple of times a week and always reward them afterward with a treat or some petting.

Keep Pets Isolated On Moving Day

Moving day will be scary for your pets. To keep them calm and safe, isolate them in a separate room in the house. You could place food and water bowls in a spare bathroom along with a blanket to rest on. Put a sign on the door so the moving men don’t enter. Isolating pets on moving day will also prevent pets from running outside, where they might run off out of fear or confusion.

Let Pets Adjust To Your New Home Slowly

Even if you have pets that are savvy and accustomed to being outdoors, you don’t want to let them outside when you first move. They may become disoriented and try to walk back to the old house. Or they could encounter a neighborhood animal that isn’t friendly. For a few days after you move into your new home, keep little Fluffy indoors. There will be plenty of time for them to transition into the backyard if that’s something you want for your pets.

Your pets will grow to love your new home, but it’s important to let them take it slow. These three tips may help with the transition. Above all, help them to feel comfortable with the traveling and keep them away from the activity on the actual moving day.

If your personal budget is similar to many other people’s budgets, your home mortgage payment is by far the largest expense that you pay for each month. In fact, this payment may easily account for 20 or 25 percent or more of your take-home income.

Understandably, you may be focused on trying to pay this expense off early. By focusing on this payment, you can build equity and may be able to achieve financial security more quickly. You simply have to find a way to put aside a bit of extra cash regularly so that you can make extra payments, and there are few easy ways that you can consider.

Use Your Tax Refund

First, if you are one of the many taxpayers who receives a refund each year, consider setting aside some or all of this refund to reduce your outstanding mortgage balance.

Some taxpayers may have such a sizable refund that it can account for two or more mortgage payments each year. However, even a few hundred dollars extra put toward your principal balance will save you a considerable amount of money in interest charges over time and will have a wonderful effect on your balance.

Earmark Your Annual Bonus

If you are lucky enough to receive an annual bonus each year, you may consider using this to pay down your principal balance. While you may usually spend this money on extra holiday gifts or just add it to your spending cash, you can benefit more substantially when you contribute it to your effort to pay down your mortgage.

Use An Automated Draft To Create a Fund

Another great idea that will work well for all individuals is to create an automated draft from your checking account each month. You may set aside the funds in a special account, and you can make an extra mortgage payment from this account periodically. Another idea is to set up auto payments for your mortgage that are higher than the amount due. For example, you may establish auto payments that are $50 or $100 more than your scheduled payments.

Paying off your mortgage earlier can be a life changing event for you. Simply imagine how different your life would be if you were not responsible for this payment each month. The fact is that this could be your reality sooner than you think if you follow these tips. For the best results, apply two or even all three tips to your efforts.

It’s exciting to be able to move into a new home. But there are some tricky details to navigate when you already own a home and you’re ready to buy a new one. Should you buy or sell first? Don’t worry. There are viable solutions.

Should You Sell First?

Think about how selling your home first will impact your family. On the one hand, you’ll be in a better financial position. You’ll have cash in the bank. You may be able to negotiate better terms on your new house by putting more down. However, selling first may mean moving into temporary housing while you find a new house to buy. You might need to store your furnishings. In other words, you may need to move twice.

Should You Buy First?

Buying first gives you more stability. You can stay in your own home until you’re able to move into the new house. When you do move, there won’t be a big rush. You could move over the course of a week or even more. The downside to buying first is that you might be responsible for paying two mortgages for a month or more. There’s no guarantee that your home will sell in a predetermined length of time. And, there’s no guarantee you’ll get the amount of money for your old home that you need to be financially secure.

Viable Solutions No Matter What You Do

Thankfully, there are solutions no matter how you decide. If you sell your home first, you could ask your buyers for a later closing date so that you have time to find a new home. You could even ask them if you can lease your old home on a month-to-month basis so that you have time to buy a new home.

If you buy a new home first, you could get a bridge loan, that helps you pay the second mortgage until you sell your old home. You could also rent out your old home to help offset your mortgage payment.

As you can see, there are ways of making both scenarios work. Whether you decide to buy first or sell first, your real estate agent can help you make it happen.

It is important for everyone to diversify their investments. When people hear this term, they usually think about diversifying their investments across stocks, bonds, and mutual funds. In addition, it is also a prudent idea to leave the traditional financial markets and look for other sources of wealth as well.

This includes real estate. Without a doubt, this has been a challenging year. At the same time, those who are looking to build wealth should consider purchasing a house this year. There are several reasons why.

Mortgage Loans Are At Historic Lows

Those who have checked mortgage rates recently have probably found that they are close to historic lows. Therefore, a lot of people who would otherwise not be able to afford a home might be able to purchase a home at a relatively low price. Because interest rates are so low, this has the potential to save someone tens of thousands of dollars over the life of the loan. Even those who already have a mortgage are refinancing their homes anyway because of the significant difference. It is not often that homeowners have the opportunity to purchase a home at such a low price. 

Real Estate Values Are Likely To Rise In The Future

Even though it is impossible to protect the real estate market with 100 percent certainty, there is a solid chance that real estate values are likely to rise in the future. Because the real estate market is depressed right now, many people believe that the only place the market has to go is up. There is no telling when the market is going to be this low again. As a result, those who are looking to make an investment in the real estate market should take advantage of the unique opportunity at the present time. 

Diversify Investments In Real Estate To Build Wealth

Ultimately, there are a lot of challenges regarding looking for a home right now; however, those who are able to take advantage of the current opportunity have a chance to build wealth. Even though this might not be the perfect time to buy a home, it might be as close as the market gets. Consider looking for a new home today.

Last week’s economic reports included readings from Case-Shiller on home prices, the Federal Housing Finance Agency also reported on home prices and the Commerce Department released data on sales of new homes and pending home sales. The University of Michigan released its Consumer Sentiment Index, and weekly readings on mortgage rates and jobless claims were released.

Case-Shiller Home Price Indices Report Fastest Price Growth in 7 Years

The S&P Case Shiller National Home Price Index reported December home prices rose at the fastest pace since 2014. The National Home Price Index posted a year-over-year home price growth rate of 10.40 percent in December as compared to November’s home price growth rate of 9.50 percent.

Case-Shiller’s 20-City Home Price Index posted December home price growth at a year-over-year pace of 10.10 percent as compared to November’s home price growth rate of 9.20 percent according to Case-Shiller’s 20-City Home Price Index. Phoenix, Arizona home prices rose at a seasonally-adjusted annual pace of 14.40 percent; Seattle, Washington home prices held second place with 13.60 percent growth, and San  Diego, California held third place in the 20-City Home Price Index with 13.00 percent home price growth. 18 of 19 cities reported higher home prices;  Detroit Michigan did not report data for December.

The Federal Housing Finance Agency reported year-over-year home price growth of 11.40 percent in December for homes owned or financed by Fannie Mae and Freddie Mac. High demand for homes and short inventories of available and affordable homes created challenges for first-time and moderate-income home buyers. Builders said that rising materials costs and labor shortages continued to impact new home construction.

New Home Sales Increase as Shortages of Pre-Owned Homes Persist

The Census Bureau reported 823,000 sales of new homes in January on a seasonally-adjusted annual basis. Analysts expected 850,000 sales based on December’s reading of 885,000 new homes sold. Homebuyers are turning to new homes as supplies of previously-owned homes are in short supply. Shortages of previously-owned homes continued as homeowners stayed in their homes due to economic uncertainty, unemployment, and ongoing concerns over the pandemic.

 Pending home sales fell by – 2.80 percent in January as compared to December’s reading of – 0.50 percent.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose 16 basis points to 2.97 percent; the average rate for 15-year fixed-rate mortgages rose 15 basis points to 2.34 percent. Rates for 5/1 adjustable rate mortgages averaged 22 basis points higher at 2.99 percent. Discount points averaged 0.60 percent for fixed-rate home loans and 0.10 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 730,000 new claims filed from the prior week’s reading of  841,000 initial jobless claims filed. Ongoing jobless claims were also lower; 4.42 million continuing claims were filed last week as compared to 4.52 million ongoing claims filed in the prior week.

The University of Michigan reported an index reading of 76.80 for its Consumer Sentiment Index in February, as compared to January’s index reading of  76.20.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, job growth, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.

When you are going through the process of looking for a new home, you are probably focused on the sticker price of that home. Even though it is important to think about your down payment, your monthly mortgage payment, and the total amount of the loan, there are other expenses that you might need to cover as well. If you do not put down enough money, there is a chance that the lender could ask you to pay for something called private mortgage insurance. What is private mortgage insurance and how much do you have to pay? There are several important points that you should keep in mind.

Why You Might Purchase PMI

Private mortgage insurance is something that the lender may ask you to purchase as a way to reduce their risk. If you do not make a sizable down payment, then the lender is responsible for funding most of the cost of your home. If you end up defaulting on the cost of that loan, the lender will lose a major amount of money. With PMI, the lender will be able to get his or her money back in the event that you default. Even though the exact cost of PMI will vary, you should expect to pay somewhere between 0.5 percent and 2 percent of the loan. You might be able to ask the lender to check with multiple options to find the least expensive policy possible for you. Once the PMI policy is instituted, this is something that you will have to pay on top of your monthly mortgage payment.

Avoiding PMI Payments

Importantly, there are ways that you can avoid PMI. You might be able to avoid this insurance policy altogether if you are able to increase the size of your down payment. If you cannot do that, the PMI policy will usually be canceled when you reach a certain threshold in equity. This is something that you should negotiate with the lender before you sign on the dotted line. In some cases, the PMI policy as waved when you reach 10 percent of the loan amount paid back. Even though you should check with a professional accountant, PMI is likely tax-deductible, similar to mortgage insurance.

For those who are getting ready to put their home on the market, they want to make sure they get as much money as possible for their home. This means making a positive first impression. There is never a second chance to make a first impression. Therefore, homeowners need to make sure they do everything possible to “wow” potential buyers at open houses and showings. What are a few of the top tips that homeowners should keep in mind?

Listen To The Agent

Homeowners know their home the best. Therefore, they feel like they are able to show their home in the best manner possible. Even though they should have some input, homeowners are ultimately selling a building. They are not selling their memories.It is a prudent idea to listen to the agent. For example, the real estate agent may recommend staging the home in a certain way. The real estate agent may even recommend that he or she hosts the open house personally. Homeowners will need to listen to the experience of their real estate agent in order to have the best showing possible. 

Clean The Home Thoroughly

Homeowners also need to make sure they clean the home thoroughly. There is a high chance that the real estate agent may even recommend a cleaning service to scrub the house from top to bottom. Even though a potential buyer is probably going to clean the home after he or she buys it, nobody likes to see a dirty house. If there are any children or pets living in the home, try to eliminate all traces of them. 

Put Away Family Photos And Memories

Finally, homeowners also need to put away any family photos or personal items they have left out. When someone is looking for a new home, they want to envision what their life might be like in that home. This is going to be challenging if the current homeowner has family photos all over the walls. Remember, selling a home does not mean selling the memories in it. As a result, homeowners should try to put away their family photos and trinkets before the open house or showing. This will increase the chances of getting a great offer.

S & P Case-Shiller Home Price Indices reported the fastest pace of U.S home price growth in seven years. National home prices grew by 10.40 percent year-over-year in December as compared to November’s reading of  9.50 percent home price growth on a year-over-year basis.

The S&P Case-Shiller 20-City Home Price Index reported home price growth in 18 of 20 cities included in the index. Detroit, Michigan did not report home price data for December. Phoenix, Arizona held the top position in the 20-City Index for the 19^th consecutive month with year-over-year home price growth averaging 14.40 percent. Home prices in Seattle, Washington home prices held second place with year-over-year growth of 13.60 percent. San Diego, California home prices grew 13.00 percent year-over-year.

The Federal Housing Finance Agency released home price data for homes owned or financed by Fannie Mae and Freddie Mac. Home prices rose by 10.80 percent in the fourth quarter of 2020 as compared to home prices in the fourth quarter of 2019. Home prices reported by FHFA rose by 3.80 percent between the third and fourth quarters of 2020.

Idaho home prices reported by FHFA rose by 21.10 percent year-over-year.  Montana home prices grew by 15.50 percent; Utah followed closely with 15.40 percent home price growth. FHFA reported the highest pace of home price growth for cities in Boise, Idaho; home prices in San Francisco, California grew at the slowest pace. This data supports the trend of homeowners moving from costly metro areas to inland suburbs where they can buy larger homes for lower prices.

Rapidly Rising Home Prices Impact Affordability

While homeowners welcome quickly rising home prices, affordability issues worry real estate analysts and prospective home buyers. The covid-19 pandemic caused home prices to rise as homeowners fled congested urban areas for suburban and rural areas.

Supplies of available homes fall as demand for homes keeps rising during the pandemic. Millennials are in their peak home-buying years but many current homeowners are waiting out the pandemic to sell. Low inventories of available homes and rising building materials costs add to the shortage of homes in general and affordable homes in particular.

First-time and moderate-income home buyers face increasing challenges as home prices and mortgage rates rise. Mortgage approval standards are difficult to meet as rising home prices cause housing payments and down payment requirements to increase. In addition to property taxes and hazard insurance, buyers who cannot pay 20 percent down must also pay for mortgage insurance.

Skyrocketing home prices should ease when demand for homes slows, but that won’t happen until supplies of available homes catch up to buyer demand.

There are lots of homeowners who fall on rough times from time to time. For example, some people may be in the midst of changing jobs. Other people might be going back to school. When this happens, it can be hard for homeowners to keep up with their mortgage payments. Even though they might be thinking about waiting for the bank to do something, this would be the ultimate mistake.

There are ways to handle late mortgage payments as long as homeowners reach out to the lender to discuss their options. What should homeowners do if they start falling behind on their mortgage payments?

Let The Lender Know Why They Are Falling Behind

If lenders do not hear anything from the homeowners, they are not going to know what is going on. Therefore, they may end up taking drastic action. The first thing that homeowners need to do is to let the lender know that they are falling behind on their mortgage payments. That way, the lender understands that the homeowner knows he or she is behind on the mortgage. Then, let the lender know why the mortgage payments will be coming in late. For example, there might be an unexpected medical expense that took the mortgage payment that month. Or, the homeowner might be looking for a new job. These are all understandable reasons why the mortgage payments might be late. 

Ask The Lender To Go Over The Options

Next, the homeowner also should discuss with the lender all of the options when it comes to late mortgage payments. There are lots of options available. If there is a one-time unexpected expense, the lender might simply break up that payment and spread it out over the upcoming payments without charging any extra interest. Or, the lender might be willing to simply add a few months to the mortgage in exchange for not charging a late fee. These are a few of the many options the lender has at his or her disposal.

Do Not Ignore Late Mortgage Payments

The only mistake that homeowners can make with late mortgage payments is not communicating with the lender. As long as the lender understands what is going on, homeowners should have options at their disposal.

Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts and building permits issued along with data on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builders Index Rises One Point in February

Homebuilder confidence rose by one index point to 84 according to the National Association of Home Builders Housing Market Index. Readings over 50 in the Housing Market Index indicate that most homebuilders are confident about U.S. housing market conditions.

Component readings for the housing market index were mixed in February. Builder confidence in current market conditions for new single-family homes was unchanged with an index reading of 90; builder confidence in new home sales for the next six months fell by three points to a reading of 83. Builder confidence in buyer traffic in new single-family developments rose four points to an index reading of 72.  Before the pandemic, readings for buyer traffic in new housing developments were typically below 50, but the pandemic has created more interest in new single-family homes as families moved from congested urban areas to suburban areas.

Builders cited ongoing concerns including rising materials costs and affordability issues for first-time and low-income homebuyers.

Housing Starts Lower in January as Building Permits Rise

The Commerce Department reported fewer housing starts in January based on 1.58 million starts reported on a seasonally-adjusted annual basis, 1.67 million starts were reported in December and analysts expected a pace of 1.68 million housing starts for January.

Building permits issued rose in January to a seasonally-adjusted annual pace of 1.88 million permits. Analysts expected a reading of 1.67 million permits issued based on 1.70 million permits issued in December. Winter weather conditions likely contributed to fewer housing starts, but builders took out more building permits in anticipation of improving weather and continuing demand for homes due to shortages of available homes for sale and higher demand due to the covid-19 pandemic.

The National Association of Realtors® reported 6.69 million sales of previously-owned homes on a seasonally adjusted annual basis as of January. Low inventories of available homes and high demand for single-family homes continue to drive home sales during the pandemic. Rising home prices caused by high demand and low inventories of homes for sale created affordability issues in suburban areas as well as traditionally high-priced metro areas.

Mortgage Rates Rise, Jobless Claims Mixed

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by eight basis points to 2.81 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 2.77 percent and two basis points lower than the prior week.

Weekly jobless claims data was mixed last week with 861,000 initial jobless claims filed as compared to the prior week’s reading of 848,000 first-time jobless claims filed. Ongoing jobless claims fell to 4.49 million continuing claims as compared to the prior week’s reading of 4.56 million continuing jobless claims filed.

What’s Next

This week’s scheduled economic readings include S&P Case-Shiller Home Price Indices, the Federal Housing Finance Agency’s Home Price Index, and data on pending home sales. The University of Michigan will issue its reading on consumer sentiment and weekly readings on mortgage rates and jobless claims will also be published.