Happy almost spring! As far as I’m concerned, it can’t come soon enough! In this post, I thought I would talk a little about mortgage interest rates and how, as rates rise, affordability decreases. Rates for a 30 year fixed mortgage are currently hovering around 4.32%. In the first quarter of 2013, the same 30 year fixed rate averaged 3.5%. According to the Mortgage Bankers Association, rates are projected to be about 5.2% by next spring. Fannie Mae and Freddie Mac forecasts are also in that range at 5.0% and 5.3%, respectively. If you are thinking about making a move and can’t decide whether to do it this year or next, let’s look at an example of house payments with the different rates.
A $400,000 loan last year at 3.5% would have equaled a monthly principle and interest payment of $1,796. That same $400K loan right now would be $188 more per month at $1,984. A year from now, if the projections hold, that same payment at 5.2% will be $2,196 per month, which is $212 per month more than right now. In other words, it will cost you $2,544 more per year if you wait until next year, and that equals $76,320 over the life of the loan, if you hold it the full 30 years. And to put icing on the cake, the price of homes between now and the spring of 2015 are projected to increase 3.8%-5.6% as well, thus further decreasing your purchasing power.
First and foremost, it is most important to make a move when the timing is right for you and your family. But if the timing isn’t as critical, you may want to consider making that move sooner than later if you will be financing the purchase with a mortgage.
I hope everyone enjoyed our beautiful Pacific Northwest summer! While I've been able to enjoy some of it myself, I've also stayed very busy as the housing market continued to be strong over these past two months. I thought it might be a good time for a market update so below you will find a few data charts for King and Snohomish Counties combined. These charts are a good representation of what's going on in north King and south Snohomish Counties including cities like Lake Forest Park, Kenmore, Shoreline, Bothell, Brier, Mountlake Terrace, and Edmonds.
The inventory of active homes for sale is finally higher than at any point last spring or summer. However, it is still historically low at only 2.2 "months of inventory" which means it technically remains a seller's market. New listings and closed sales fell off a bit compared with July, but pending sales (homes placed under contract) did increase slightly from last month.
This graph shows the pop up in months of inventory to back over 2 months. Will it stay there or fall back down like it did last year going into the fall months?
Sold prices have appreciated very slightly from July to an Average of $466,000. This is up 12.8% compared to last August. More interesting is that the average Active asking price is coming down into more reasonable territory after a somewhat irrational exuberance by some sellers in the spring.
The average dollar per square foot value held basically flat since last month at $210/sqft.
The average selling price as a percentage of the original listing price is holding steady at 99%. There are still many multiple offer situations but that trend is cooling a bit.
The average consecutive days on market remains steady as well at 34 days.
To conclude, the market is still very strong, although it did level off in the late summer. The early fall months typically bring a new crop of buyers and sellers out who want to make a move before the holidays and the end of the year. It'll be interesting to see if that trend holds true once more. Stay tuned!
When we think of selling a home, the services a REALTOR® can provide usually seem worth the cost of their
commission, but what about as a buyer? What can a REALTOR® do for you as a home buyer, and is the commission
worth the services they can provide? Remember, even though the commission is usually paid by the seller, hiring a REALTOR® as a buyer’s agent means your interests will be represented and protected.
Here are five great reasons you should hire a REALTOR® when you are in the market for a new home!
- REALTORS® Can Help You Determine Your Budget—With a few simple pieces of information, a REALTOR® can help you pre-determine what kind of budget you may be looking at for your new home, and can match you with potential lenders that are right for you.
- REALTORS® Have Access To Resources You Don’t—While a lot of real estate listings are available online, there are still
resources and listings that are only available through a REALTOR®. If you are looking for something very specific, having their insider knowledge may be crucial to finding that perfect home.
- REALTORS® Can Read Between The Lines Of Listings—There are a lot of catchy phrases that often appear in home listings, and your agent can tell you what they really mean.
- REALTORS® Increase Your Negotiating Power—A REALTOR® can not only increase your ability to negotiate things like price, they can also give you advice on things like contingency contracts and required paperwork.
- A REALTOR® Can Help You Navigate Through The Closing Process—The closing process can be a complicated process, and a REALTOR® can make sure all the details are addressed and that you are making a good financial investment.
Purchasing a home is a huge financial investment, and having a professional REALTOR® looking after your interests through the process is very important.