Lee Morof's Real Estate Blog

Last week’s economic news included reports on job openings, retail sales and weekly readings on average mortgage rates and new jobless claims.

Job openings were lower in August after hitting an all-time high in July according to the federal government. Job openings fell to 5.44 million in August as compared to July’s reading of 5.83 million job openings, Job openings reached 5.31 million in August of 2015. Job quits were unchanged in August with a reading of 3.0 million quits; the quits rate was 2.20 percent. There were 5.4 million hires in August as compared to 5.8 million hires in July. The hiring rate held steady at 3.60 percent.

Weekly jobless held steady from the prior week’s reading of 246,000 new claims, although analysts expected a reading of 252,000 new claims. September retail sales increased by 0.60 percent in September and fell short of expectations of 0.70 percent growth. August’s retail sales reading was negative at -0.20 percent. Retail sales excluding the automotive sector were as expected with an increase of 0.50 percent.

Mortgage Rates Rise, Consumer Sentiment Slips

Freddie Mac reported higher rates for fixed rate mortgages. The rate for a 30-year fixed rate mortgage rose five basis points to 3.47 percent. The average rate for a 15-year mortgage was four basis points higher at 2.76 percent. The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.84 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Consumer sentiment was lower in October with an index reading of 87.90 percent. Analysts expected a reading of 91.70 percent based on September’s reading of 91.20 percent. November’s presidential election was viewed by analysts as unsettling to consumers’ feelings about current and expected economic conditions. The index reading for consumer sentiment for current economic conditions rose from 104.20 percent in September to 105.50 in October, but fell sharply for expected economic conditions to an index reading of 76.60. Analysts noted that consumers with lower incomes expressed less assurance about post-election economic conditions.

What‘s Ahead

This week’s scheduled economic reports include the NAHB/Wells Fargo Home Builders Market Index, Sales of Pre-Owned Homes and Commerce Department readings on housing starts and building permits issued. In addition to weekly readings on mortgage rates and new jobless claims, reports on consumer spending will also be released.

Autumn is a popular time for new home buyers to start looking for their first house or condo. But with that down payment looming, everybody could use a bit of help saving up to make that bulk payment a little less intimidating.

There are plenty of unconventional ways to save up that may seem small, but will quickly add up and put a dent into that down payment.

Create A High Interest Savings Account

Talk to the bank about creating a secondary savings account with a higher interest rate. These super savings accounts usually come with the caveat that no money can be removed for a designated period of time. Using this account for the down payment works in everybody’s favor because it guarantees those extra dollars cannot be used for any other purpose.

Discard One Guilty Pleasure

Enjoy Starbucks coffee? Grab a pint every happy hour? Choose one vice and put the amount that would be spent on it into a jar. Most people will be surprised on how much money they spend each month on one guilty pleasure that can easily be cut out of their life. Every perk that’s cut will increase the amount by a decent margin.

Put Away Any Bonus Money

Holiday bonuses from work, tax refunds, birthday or Christmas presents, income from side gigs, any and all extra dollars that come in from any source outside of the main paycheck should be considered ‘down payment dollars.’ Sure it’s tempting to use that nice bonus or tax refund on a weekend trip or a night out, but all extra income should be saved away for that initial down payment.

Bring On The Roommates

People who already own a home and are looking to relocate can take this unconventional approach. Decent housing is hard to find so anybody with an extra room can rent it out and put that money towards the new house. Having a roommate can be a pain, but it’s for a limited time and can add up quickly.

While saving for a down payment can be stressful, you don’t have to go through the process alone. Your local real estate professional will be able to guide you and provide some helpful tips for how to make that down payment without breaking the bank. These men and women have seen countless couples go through the same thing and their experience can make a world of difference.

There are things that everyone shares: the need for food, the search for love, and the intrusion of mice into our homes. But don’t despair! There are several ways to deter and remove mice. Read on to learn about a few of the more well known, if a little out-there, methods.

Peppermint Oil And Cotton Balls

The smell of peppermint is lovely for humans, but terrible to a mouse’s nose. Put a few drops of pure peppermint oil on cotton balls and place them where you’ve noticed evidence of mice. Be careful to change those balls for fresh ones at least once a week once the smell wears off, cotton balls are great material for a mouse nest.

Dryer Sheets

Another strong smell that will discourage mice from your home is dryer sheets. Place fresh ones around mouse hangout points, or stuff them into entry holes. Same thing here, though: make sure to remove them once the smell wears off. Nothing looks nicer for a nest than an unscented dryer sheet.

Mousetrap! The Glass Bowl Version

One humane and cost-effective choice is to build a live trap by balancing a glass bowl on an upright coin. Put some chocolate or peanut butter high up inside the bowl. When the mouse reaches for the treat it’ll upset the coin and drop the bowl to the floor, trapping itself. Then slide stiff cardboard over the bowl opening and carry the mouse at least 1km from your home before releasing it. Or you can go the store-bought route but either way, check all traps at least once a day.

Plug Those Holes!

With the mouse gone, there’s two things left to do. First, clean up after it (remove its droppings and sanitize the area) to discourage a return. Then close all its doors. Block any holes bigger than a pencil with caulking, steel or copper wool, or even aluminum foil all of these are tough to chew through.

And that’s it! Keep an eye out, and call in help if it becomes too much to handle these steps are most effective for a small number of rodents. If you need more help, call your local real estate agent for advice and referrals.

Open houses are a debatable topic with real estate agents. Some say they aren’t necessary in the age of the internet when options can be narrowed online. Others argue that closing yourself off will limit the number of possible buyers.

What everybody agrees on is that hosting a successful open house is an art that requires some tricks to pull off. Here are five to try out.

Choose Wise Hours

Find out the most popular hours for open houses in the neighborhood and coordinate around those times. If most open houses end at 4 p.m. then consider ending an hour later at 5 p.m.

This extra hour will bring in house hunters who went the entire day without finding something they wanted as well as people who rushed through every other open house so they could see them all. If there are no other open houses then there’s no reason to rush.

Embrace Technology

Most buyers, especially young ones, are starting their home search online. New apps and websites are launching every day and staying up to date on the newest real estate tech hangouts will allow a seller to hit the popular sites as well as advertise to tech-savvy buyers who are embracing new hotspots.

Change Up The Signs

Not only should there be a lot of signage, but the signs should be tailored towards different demographics. Wealthier areas should be signed with tasteful and professional signs while some cute, handwritten signs will bring in the bargain hunters who are looking for something affordable.

De-Personalize Everything

Every buyer needs to be able to see him or herself living in the home. Anything controversial or personal will remind them of the people living there now and get in the way of their imagination running wild. Clean out anything political, controversial or family related before opening the doors.

Learn From The Criticism

An unsuccessful open house is an opportunity to remain open minded and discover exactly what pushed away a day’s worth of potential buyers. Any criticism or feedback should be used to make changes before the next open house so that the same mistakes aren’t repeated on a new group.

What works for one region may not work for another and only a real estate professional with experience in the area will know what tips have proven successful in your neighborhood.

Solar-powered homes are becoming more commonplace, and are an excellent step in the right ecological direction. That said, there are some aspects to consider if you’re thinking about investing in solar energy. Read on for some salient points about living by the sun.

The Sun And The Economy

As solar power has grown in popularity, the government has introduced incentives to help homeowners combat the once-high costs of purchasing and installing solar panels. And companies are springing up to rent you panels and cover the cost of installation. This means that your initial costs are smaller, but also that those third party companies reap the government incentives and may not always maintain strong relationships between you and your utility company.

The Sun And Your Roof

Roofs are the primary locations for solar panels, particularly on homes. Ensure that your roof has enough strength for the added weight of the equipment, and enough space for the proper placement (away from the edges, for example). The equipment comes with a lifetime guarantee so if the roof it’s on is already old, consider updating it before installation (which is an extra but necessary cost).

The Sun And Your Surroundings

A solar-powered home is all about location, location, location. Watch for tall and shady trees, or for high buildings that will shadow your panels and decrease or prevent their output. Look forward, too are there any plans for development in your neighborhood that would introduce such impediments in the future?

The Sun And Cloudy Days

The most obvious hiccup with solar power is that bane of a sunny existence: cloudy days. Location has influence here too: the climate of your area will determine how many panels you’ll need, where you’ll need to place them and how much energy you’ll be able to glean in each season. There are batteries you can purchase for collecting and storing solar energy but they’re still an expensive option. And solar power is still somewhat unattractive in the global economy because of how variable it is. Fossil fuels are more dependable, and therefore more marketable, than an energy source so tied to the weather although that looks to change if solar energy continues its rise in popularity with the masses.

All things considered, there is a deep and growing draw to solar-powered homes, but don’t enter into anything without looking at all sides of the equation. If you have questions, or want to know more about how solar energy works in your neighborhood, contact your local real estate agent.

Other than a release on construction spending, last week’s economic readings were dominated by labor and employment data including ADP Payrolls, Non-Farm Payrolls and National Unemployment. Weekly reports on mortgage rates and new jobless claims were also released.

Construction Spending Drops in August

Commerce Department readings on construction spending indicate that overall spending fell in August to -0.70 percent; this reading was lower than the expected positive reading of 0.10 percent. July’s reading showed a drop of 0.30 percent in overall construction spending. The decrease in August spending was largely the result of pull backs on public construction spending, which declined 2.0 percent after July’s decline of 3.50 percent in July. Public construction spending is 8.80 percent year-over-year., and August’s reading was the lowest since March 2014.

Private sector construction spending fell 0.30 percent in August. Residential construction fell by 0.20 percent within the private sector reading. Reasons for falling construction spending include impending winter weather and previously cited labor shortages. Shortages of available homes and high demand for homes are creating pressure on construction companies to build more homes.

Labor Reports: Job Growth Slows in Public and Private Sector

ADP reported 154,000 private sector jobs created in September against August’s reading of 175,000 new private-sector jobs. September’s reading showed the lowest growth rate since April. Analysts said that lower readings for job growth could be expected as job openings are filled.

According to the government’s Non-Farm Payrolls report for September, 156,000 new jobs were added, which fell short of downwardly-revised expectations of 170,000 new jobs added. Analysts said that a reading of 120,000 jobs added represented a healthy rate of jobs growth. As more workers return to or join the workforce, job openings can be expected to decrease. Healthy growth in jobs may signal the Fed to increase interest rates in December.

National unemployment rose from 4.90 percent to 5.00 percent in September; variances can be expected in month-to-month readings that are considered more volatile than quarterly or annual readings.

New jobless claims correlated to fewer job openings and fell to a reading of 248,000 new claims 256,000 new claims were expected based on the prior week’s reading of 254,000 new claims.

Mortgage Rates Nearly Unchanged

Average mortgage rates were unchanged with the expectation of a decrease of one basis point for 5/1 adjustable rate mortgages to 2.80 percent. Average rates for 30 and 15 year fixed rate mortgages were unchanged at 3.42 percent and 2.72 percent Discount points were unchanged at 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead

This week’s scheduled economic reports are few due to the Columbus Day holiday Monday. Along with weekly readings on mortgage rates and new jobless claims, reports on job openings and consumer sentiment will be released.

Buying a home is an ideal investment for many people because not only is it a place that belongs to them, it can also be very beneficial financially. While you may be strongly considering buying a home for these reasons, it’s also important to be in good financial health so that your ideal home purchase is within reach. If you’re currently perusing the market for prospects, here are some reasons you should pay down debt before taking the leap into home ownership.

Good Credit History

The amount of your debt load and whether or not you’re paying off your minimum monthly payments has a considerable impact on your mortgage approval, so ensuring that you have good credit history going into the process is important. If you’ve had hiccups with your credit, make sure you go through your credit report prior to submitting your application to determine where you’re at.

Lowering Your Debt-to-Income Ratio

Whether or not you’ve heard the term, your debt-to-income ratio (DTI) has a significant impact on how much house you can afford. Made up of the amount of your monthly debt payment and current house payment, your DTI should be below a certain percentage as this will enable you to afford a higher home payment each month.

Shifting Interest Rates

Getting a mortgage is one thing, but interest rates add more to the monthly amount you’ll owe. A fixed-rate mortgage can seem like a good idea, but if interest rates are low you may end up paying more than you would on a variable rate, which can be hard to predict. As interest rates are a part of home ownership, having lower debt will enable you to deal with these additional costs.

Finding The Right Home

Putting your money into a home can be one of the best purchases you’ll make, but if you’re unable to afford the home you love, it can be a disappointing fact to face. While there are no assurances that paying down debt will enable you to afford your dream home, it can go a long way towards giving you more options that will fit your budget.

Buying a home can be a money saver in the long run, but if you’re struggling to keep up with your debt payments buying into the market can be more of a burden than anything else. If you’re currently paying down debt and considering a home purchase, contact your local real estate professional for more information.

Home prices dipped slightly in July according to the S&P Case-Shiller 20-City Home Price Index. Year-over-year, home price growth dipped to 5.00 percent from June’s reading of 5.10 percent. The Pacific Northwest led the nation in home price appreciation. Portland, Oregon had the highest year-over-year home price growth with a rate of 12.40 percent. Seattle, Washington posted year-over-year home price growth of 11.20 percent. Denver, Colorado was third with a year-over-year home price growth rate of 9.40 percent.

Home prices in San Francisco, California slowed; year-over-year, home prices grew by 6.00 percent in contrast to home price growth topping the 20-city index in recent months. Analysts observed that cooling home prices in San Francisco could represent the end of the area’s housing bubble.

Year-over-year home price growth was lowest in New York, New York with a reading of 1.70 percent. Washington, D.C. posted a year-over-year reading of 2.00 percent; Cleveland, Ohio posted a year-over-year home price growth rate of 2.50 percent.

Month–to–Month Home Price Growth Provides Surprises

The largest month-to-month gains in home prices were posted by Portland, Oregon at 1.20 percent, Denver, Colorado with a reading of 0.90 percent and Detroit, Michigan with a July reading of 0.80 percent. While year-over-year home price growth readings are less volatile than month-to-month readings, signs of increasing home values in cities with depressed home price growth rates are a positive sign.

On the other hand, San Francisco, California posted a flat reading for month-to-month growth after recently topping year-over-year readings in the 20-City Home Price Index. With skyrocketing prices and limited inventories of available homes, it appears that San Francisco home prices may have reached their upward limit.

David M. Blitzer, Managing Director and Chair of the S&P Index Committee, said that July’s readings indicate further improvement of the economy and housing markets. This progress could prove difficult to sustain as house prices continue to outpace wages and rising home prices continue to sideline first-time buyers. Slim supplies of homes for sale are creating higher-than-average demand for homes that fuels rapidly rising home prices. This further complicates home purchase options for home buyers who compete with investors and others who are able to meet or exceed asking prices and purchase homes with cash.

Home buyers requiring mortgages have been supported by relatively low mortgage rates, but strict mortgage credit standards continue to provide obstacles for credit-challenged buyers. Financial institutions continue to take a conservative stance on mortgage lending after sustaining severe losses and government ridicule in the wake of the Great Recession.

Most sellers focus on finding the right furniture to stage their home, but they never consider how the placement of that furniture can undo all their hard work. It’s a subconscious thing, but the arrangement of items in the home can really make a difference with buyers.

Be sure to not make some of these common mistakes when arranging furniture to sell a house.

Keep The Traffic Flowing

A proper furniture layout should serve to guide the flow of traffic from room to room and make it easy to move freely. When furniture is placed without foot traffic in mind it can lead to blocked pathways and dead ends when potential buyers are looking around.

Rooms that are overcrowded with furniture have the opposite problem and supply no easy way for guests to move without stepping over each other. Make sure traffic can flow freely through the rooms and there is plenty of space to walk around.

Decide On A Focal Point

Every room needs a focal point for the furniture. Most rooms use built in features like a fireplace, but when the home doesn’t have anything built in a television or painting will serve the same purpose.

Without a focal point, the room will feel disjointed and confused. This leads to chairs or couches pointed in different directions and can make potential buyers feel uncomfortable. A key focal point also takes the focus away from any flaws in the home.

First Impressions Over Function

Sometimes people can become so comfortable in their own home that function will overrule aesthetics and furniture will be placed where it proves the most useful and not where it looks the best.

This is fine until it’s time to sell and the first thing buyers see when they enter a room is furniture in places where it doesn’t look the most appealing. Walking in and seeing the back of furniture is never a good look, so make sure everything looks the best from the place guests will enter the room.

Every home has a different floor plan and it can be difficult determining whether furniture is placed properly, especially when you are used to the way it is now. A local real estate agent can walk through the home and give great insight into what improvements can be made and provide an outsider view of how the home looks to new visitors.

The floor of your bedroom is important it’s the first thing you touch in the morning, and the last before you go to sleep. Not to mention all the other life moments that go on in there. So take time to consider what you want your bedroom floor to be made of and read on for pros and cons of carpeting and hardwood floors.

The Noise Factor

One of the biggest elements to consider is how sound will carry. Carpet is a very quiet medium, perfect for those bedrooms on higher floors, or in houses that want to keep a quiet profile. Hardwood creaks, and all movements can be heard from walking to a child playing, even to the acoustics of a TV or laptop.

Keeping It Clean

Carpets are hard to keep clean. Dirt, pollen, hair, food and other particles get ground into the fabric, especially if it’s a high-traffic area, and it can be expensive to get them out. Hardwood is easy to tidy and even stains can be refinished without too much cost or effort. On the other hand, carpets need only be vacuumed weekly, whereas a hardwood floor should be swept every other day.

The Life Span Of Your Floor

With careful maintenance, carpets can last for many years but barring anything unforeseen, hardwood floors last forever. They also never go out of style, and offer their rooms a sense of prestige. Carpets need replacing and the patterns can’t be changed with the ease that hardwood floors can be refinished or refurbished with area rugs.

The Cost Of It All

In initial costs, carpets are largely cheaper, although they cost more to maintain because they need to be replaced more often. Hardwood floors take a big initial payment, but because they are more durable the costs even out, in the end. Environmentally speaking, hardwood is often more sustainable (as long as it comes from an ecologically-sensitive company), but there are recycled options for carpeting too.

What Goes On In There

Consider what kind of life will be lived in the bedroom in question. Will it be a kid’s room, where the padding of carpet might be safer? Is it meant for guests, where the beauty of hardwood could make a strong first impression? Does the occupant have allergies, so that hardwood (which doesn’t gather allergens like carpet fabric) is a better choice?

Consider everything when making your decision. Remember, in the end, both hardwood and carpet have pros and cons. For a second opinion, or advice on what works in your neighborhood, talk to your local real estate agent.