As a student, you may have a lot of educational loans to pay off. These loans can get in the way of purchasing a home, a dream you may have had for many years now. Keep this dream alive and deal with your student debt appropriately by taking the following proactive measures. Continue reading…
If you have extensive knowledge of renovation and real estate, flipping houses for a living may be a lucrative venture to consider. This process involves a lot of decision-making, and one wrong move could be financially disastrous. Make sure you are ready for this long-term endeavor by consulting with a real estate professional. They can help in many ways. Continue reading…
While many people dream of buying their own homes, not having a lot of money on hand can sometimes make that difficult. Fortunately, there are ways to find a home that’s within your budget and fits your lifestyle to perfection. There are even government programs that can help. Consider the following steps to make home buying on a budget a little easier. Continue reading…
Around 35% of people looking for homes fall into the first-time category. The pursuit of a new home foments both excitement and stress, but for good reason. Obviously, you have never committed to such a large financial investment in your life. Though you may not be a real estate expert, you can take the critical steps required to choose a home that’s perfect for you and priced appropriately. Continue reading…
In recent Lake Minnetonka economic news, it appears home buyers and home sellers are entering the coming spring selling season with a feeling of optimism. Despite interest rates moving slightly upward and home prices continuing to rise, housing sentiment is increasing as well.
Fannie Mae publishes an index each month that ranks buyers’ sentiment. The most recent report showed buyers’ sentiment about the spring real estate sales season has risen to the highest level in six years, in part, due to a strong showing by millennial purchasers.
The millennials segment of the home buying population mentioned solid increases in employment confidence and income gains, which go hand-in-hand for first-time home purchasers – creating increased demand in the housing market. And while millennials are finally making the move out of mom and dad’s basement or spare bedroom faster than ever, the majority are still destined to rent, according to Fannie Mae’s research and statistics. As the supply of affordable inventory in the housing market continues to plague many millennials, so too does the higher price appreciation. Simply put, most millennials still find it challenging to afford to purchase their first home.
However, an ever-increasing number of millennials are entering the housing market and that’s making Lake Minnetonka economic news. The same millennials that had put off marriage and having families are slowly turning their thoughts to home ownership. Recent research shows roughly 50% of millennial families have at least one child. That represents an increase of nearly 5% from last year and 7% two years ago. Real estate experts say children in the family is the most common reason young couples buy their first homes. With the U.S. home ownership rate at what has been near an all-time low, that’s good news for millennials and good for the housing economy. In addition, when it comes to living in urban areas, the number of millennials desiring to live the urban lifestyle is decreasing – by more than 6% in just two years. They are opting for the suburbs for the spacious outdoor amenities like playgrounds and parks.
The Fannie Mae buyers’ sentiment survey also revealed 85% of millennial buyers felt their home purchase was a “good financial investment.” And why wouldn't they? They’ve seen the prices of homes rise consistently in many of the popular neighborhoods throughout the country and they’re familiar with the average cost of a home – many have watched homes in their price range continue to rise faster than their income. Despite the higher prices, the fact that millennials see their home as a good investment should fare well for increased demand as they and other millennials begin raising bigger families and buy larger and newer houses as their families grow.
Experts say the Lake Minnetonka economic news would include even greater demand for housing were it not for home values that continue to rise as a result of lower inventories nationwide – especially starter homes, popular with first-time home buyers. According to CoreLogic, nationwide home values increased 6.9% in 2016 compared to 2015. While home prices grew at a faster pace than incomes, the result was lower during the month of December 2016. Analysts cite a rise in mortgage interest rates immediately after the presidential election as possibly having an affect on asking prices by eager home sellers.
A CoreLogic spokesperson said, “Home prices continue to climb across the nation, and the spring home buying season is shaping up to be one of the strongest in recent memory.” He further added, “A potent mix of progressive economic recovery, demographics, tight housing stocks and continued low mortgage rates are expected to support this robust market outlook for the foreseeable future.”
According to the Fannie Mae sentiment report which measures consumer confidence regarding the housing market, the biggest gain in confidence was among those respondents who felt now is a good time to purchase a home. In addition, home sellers also felt it was a good time to sell. With more Americans feeling better about their employment and job opportunities, fewer are worried about losing their jobs. Other statistics in the survey showed more households are reporting slightly higher incomes – and the number of people surveyed expecting home prices to continue to rise did indeed increase. Lastly, among respondents asked about expectations that mortgage interest rates would drop, the survey percentages remained largely unchanged for the third consecutive month. This signals to researchers and real estate professionals alike that demand is high in the housing market, prospective purchasers are fairly bullish on home values and, so far, are not thwarted by what could possibly be continued slight increases in mortgage rates.
All in all, it appears that the biggest story in the Lake Minnetonka economic news is that the housing market could see a relatively strong spring selling season. Prices will be as high as they’ve been for the past several months, but qualified purchasers will be fueled by steady incomes and job security for the most part – and, while interest rates are worth watching, most analysts feel they won’t be a deterrent for purchasers anxious to trade up.
You can find more articles pertaining to Lake Minnetonka economic news in the "Economy" section of articles just below Lake Minnetonka Real Estate Categories in the column to your right. Remember to also check us out by finding us on Facebook and Twitter.
Recent trends have seen Lake Minnetonka real estate interest rates rise slightly over the past couple of months. While prospective home buyers may feel disillusioned by rising rates, let's take a look at what it may mean for them and the possibility of becoming homeowners.
As mortgage rates increase, naturally, the amount of home you can purchase decreases. In other words, the higher the interest rate, the higher the payment — and perhaps the lower the mortgage amount must be to be affordable. Borrowers need not be completely dismayed however, as there is flexibility among mortgage lenders and their qualification guidelines. Let's take a short revisit of the rate fluctuations since the presidential elections of this past November and review how interest rates have affected home affordability. How will recent Lake Minnetonka real estate trends affect the housing market?
A Recap of Lake Minnetonka Real Estate Interest Rates and the Outlook for the Future
Between the election on November 8 and Christmas of 2016, Lake Minnetonka real estate interest rates went up .75%. The rate increase was fueled in part by the feeling on the part of the American public that the new administration would enact policies of infrastructure spending, tax cuts, and a certain amount of deregulation that, once enacted, would be inflationary. In addition the skyrocketing gains in the stock market pushed the bond yields downward, and since mortgage rates are very closely tied to the US Treasury bond rates, mortgage rates had nowhere to go but up.
Most savvy economists felt when interest rates rose, they would also level off in time. And, while that is happening, it is still volatile at best. Interest rates go up and down literally daily in response to investors reacting to policies of the new administration. When investors exhibit concern that post-election inflation will continue to occur, the rates go higher. Conversely, when investors feel inflation will be softened by certain policies, delays in action, or hindrances, rates will come down.
The bottom line for interest rates is the post-election peak seems to be over, and the net result is an interest rate increase of roughly .5% since the election.
Experts predict continued rate volatility as stock market investors and the Federal Reserve work to gauge interest rate movement as part of the new government administration. Here's how that volatility is expected to impact housing activity.
The Effect of Lake Minnetonka Real Estate Interest Rates on Home Affordability
According to experts, a $350,000 home purchase on which a prospective borrower plans to put down 20%, a rate increase of .5% reduces the affordability by roughly $17,000.
While such a decrease in affordability may tend to make a prospective homebuyer look for a lower-priced home, there are other alternatives — especially if you're familiar with how most mortgage lenders operate.
For decades, mortgage lenders have used a debt-to-income (DTI) ratio in their qualification guidelines. A DTI compares the relationship of your total monthly recurring debt to your gross monthly income. Mortgage lenders typically like to see a DTI of 43% or less.
Borrowers earning, say, $65,000 annually with monthly obligations such as an auto loan and credit card bills totaling $615 per month may have qualified for the $350,000 home mentioned above. However, at a slightly higher interest rate of .5% more, they may not. Here’s why: At the income and debt totals currently, the DTI ratio was less than 43%. With the rate increase, it’s climbed to over 44%. At first glance, the only solution is to work to reduce the purchase price down to $333,000 (the original $350,000 less the $17,000 by which the affordability was reduced.) That would reduce your DTI back to a level less than 43%. However, let’s consider an alternative.
Increasing Home Affordability
Rather than trying to get the price reduced by $17,000, most experts recommend lowering your other recurring debt. As an example, a monthly credit card payment of $125 with a remaining balance of $3,125 can be reduced to roughly $45 per month by paying down the balance by just $2,000. Honestly, that may be a much easier solution and a much softer sell than trying to get the seller to come down $17,000.
Analyzing Lake Minnetonka Real Estate Interest Rates and Trends to Make the Best Decisions
It’s important to keep an eye on interest rates and other changes in the marketplace. Remember, in much the same way that the old adage, “All real estate is local,” all mortgage lending is individual. What that means is every situation is different and everyone’s DTI is comprised of components that may be changed slightly to improve the qualification percentage. Don’t make the erroneous assumption that rising rates will always reduce the price a borrower may qualify for.
See more articles pertaining to the latest Lake Minnetonka real estate interest rates and trends in the section of articles on Lake Minnetonka Real Estate just below Lake Minnetonka Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.
The Lake Minnetonka mortgage rate outlook this spring is creating a sense of urgency on the part of prospective home purchasers. With interest rates having edged up slightly and home prices rising continuously, many borrowers are making a beeline to apply for home loans. Their rationale is the sooner they act, the more they potentially will save – on interest rate charges and home price increases.
Interestingly, home purchasers are electing to take out adjustable rate mortgages (ARMs) in unusually high numbers in hopes they can handle the Lake Minnetonka mortgage rate outlook of potentially higher rates and save money on their mortgage payments in the first few years.
Mortgage activity has been on the rise in recent weeks, having increased nearly 3.5% from one week to the next, based on the most recent report from the Mortgage Bankers Association (MBA.) Despite the week over week increase, total mortgage volume is roughly 18% lower than it was during the same period in 2016. Experts say the lower volume has more to do with the decrease in the number of refinance applications than it does with the Lake Minnetonka mortgage rate outlook. While most borrowers refinanced a year ago when interest rates were at or near record lows, there is still some refinance activity in the mortgage marketplace. The volume of refinance loans is down 34% so far this year, but mortgage lenders have seen an increase of more than 5% in recent weeks – based on consumer fears that the Lake Minnetonka mortgage rate outlook might include higher interest rates moving forward.
Some analysts attribute the rush to refinance to recent remarks made by key Federal Reserve officials indicating what wound up being another interest rate increase in March. In addition, other economic factors came into play such as the recent Gross Domestic Product (GDP,) manufacturing results and inflation projections. While mortgage interest rates really are not directly tied to federal funds rates – upward or downward – a rate increase by the Federal Reserve could still make mortgage interest rates increase, only time will tell on this for sure. Fed funds rates are generally more short-term in nature, while mortgage rates are longer term, of course.
How will the Lake Minnetonka mortgage rate outlook impact the usually brisk spring real estate sales season? While the true impact remains to be seen, economists say demand on the part of home buyers is still high. The problem, they contend – which is of greater concern than the prospect of higher interest rates – is affordable homes are still in short supply. The inventory shortages that occurred during much of 2016 have carried over into 2017, and don’t appear to be improving anytime soon. Since a good portion of the housing demand is on the part of millennials and first-time buyers, the inventory shortage is of major concern.
As mentioned above, one of the results of the recent Lake Minnetonka mortgage rate outlook is more buyers are opting for adjustable rate mortgage solutions in an effort to save money since the ARMs offer lower interest rates for a certain time period. Statistics reported by the MBA showed that the ARM share of recent mortgage lending applications was the highest since 2014. The results simply highlight the concern borrowers have for higher interest rates, and in spite of the indications, home demand remains high going into the spring. In addition to the ARM share of applications reaching a three-year high, the average loan size for applications to purchase homes reached a high of $313,000. This is the result of two different factors. First-time buyers tend to impact the higher mortgage amounts less than buyers in the market who are moving up and buying bigger, newer and more expensive homes.
The Lake Minnetonka mortgage rate outlook may have a definite impact on the spring market, however, all early indications are that due to high demand and the overall impression that interest rates – despite their slight upward tick in recent months – are still relatively low. Many borrowers remember when interest rates were in the 8%-9% range for a number of years. With that in mind, rates roughly 50% as high are veritable bargains today – in spite of the higher home prices that exist in today’s real estate market.
More first-time borrowers are going to faced with the dilemma of continuing to pay higher rents versus putting their monthly payments into paying a mortgage and building equity in a home of their own. The home participation or home ownership rate reached an all-time low in 2016, but the trend seems to be one of slight improvement during 2017. Time, as usual, will tell as first-timers decide what to do and when to do it. Housing inventory, as already cited, will determine a great deal as the market needs starter homes and more affordably priced houses to meet the demands of some of the first-time home buyers. In addition, there needs to be a larger supply of “move-up” homes for that segment of the buying public that’s ready to expand into a larger home, a better neighborhood or a newer home.
You can find more articles pertaining to the Lake Minnetonka mortgage rate outlook in the "Lake Minnetonka Mortgage Info" section of articles just below Lake Minnetonka Real Estate Categories in the column to your right. Remember to also check us out by finding us on Facebook and following us on Twitter..
Lake Minnetonka home improvement ideas usually are reserved for homeowners who want to make their homes bigger, more attractive or more modern. However, many home improvement steps can be taken to prepare your home when it comes time to sell. If you’ve made the decision to sell your home, it’s not just a good idea – sometimes it’s a necessity – to make your home as attractive and presentable as possible for prospective buyers. Here’s how.
Be Ready to Hit the Market Running Listing your home for sale isn’t a decision to be made lightly. In addition, putting your home on the market before you’re ready or it’s ready can severely hamper your ability to sell it for its full value. Make sure you prepare your home for the real estate marketplace. Follow these Lake Minnetonka home improvement ideas and make the best impression you can for potential buyers to sell your home quickly and for the best price.
Clean and Declutter Your Home While it may sound cliche’ to some, we can’t emphasize enough how important it is to make sure your home is clean and free from unsightly clutter. Follow these steps and you’ll be glad you did when you receive an offer that’s at or near your full asking price.
- Remove as much clutter as possible before you start to clean. There's no better time to get rid of unwanted items and things you’re just tired of staring at each day (we’re talking about objects, not family members!) You can donate unneeded items to a local charity, or have a yard sale if you have larger items. In addition, recycling companies are usually more than happy to come pick up large metal items – often at no charge.
- Give your house a good deep-cleaning. While this step will take the largest investment of time, it will also yield the best results. Try to involve the entire family and assign everybody a task or two. Make sure you give necessary attention to the bathrooms and kitchen – lots of women who will ultimately make the decision on the house purchase will be looking them over closely. Lastly, clean the inside and the outside of your home’s windows. You’ll be surprised how it will make your home sparkle – and buyers will notice!
- Take the time to organize your closets, cabinets and drawers. Don't just stuff them with things you want to get out of the way. You’ll be surprised at how many prospective buyers will open cabinets and closets so they can get an idea of the amount of storage space they contain. Clean, organized cabinets, drawers and closets will give the buyers the impression that you take care of the home – which may translate into a feeling that the rest of the home and its systems are well-maintained, too.
Make Do-it-Yourself Repairs One of the next Lake Minnetonka home improvement ideas – and possibly one of the least expensive – is to perform various repairs to your home you can take care of all by yourself with a little time and know-how.
- Fix leaky faucets and running toilets
- Replace the caulking around showers, tubs and sinks
- Repair or replace grout, if necessary
- Repair cracks, stains, or nail holes in walls and repaint them in a neutral color
- Fix cracked, broken or discolored windows
- Replace or repair damaged or missing window screens
- Replace burned-out light bulbs or fluorescent tubes
Improve Your Home’s Curb Appeal The old adage, “You never get a second chance to make a good first impression” is never truer than when you’re showing your home to prospective purchasers. If they don’t like what they see in exterior photos online or in person, chances are they may not look further. And, if your home’s curb appeal is just “average,” most buyers may adopt the feeling the rest of the home is “average,” as well. You want to “wow” your buyers. Make them love what they see on the outside and they will look forward to seeing the rest of the house. Consider these “spruce-up” tips for your home’s outside, too.
- Trim the bushes, shrubs and trees in your yard
- Fix broken downspouts and gutters
- Apply new mulch as needed to give your planted areas a fresh, clean look
- Clean and repair concrete or stone areas such as driveways and walkways. Pay close attention to oil stains and weeds or grass growing through the cracks.
- Add some flowers to give your lawn and garden a little more color. Add a new doormat to your doorstep or front porch area. Ensure that the house numbers are clean and easy to see.
As you can see, with a relatively small amount of time, attention and expense to your home, these and a few of your own Lake Minnetonka home improvement ideas will help you give it a renewed appearance – making it more attractive inside and out to prospective home shoppers.
You can find more articles pertaining to Lake Minnetonka home improvement ideas in the Lake Minnetonka Home Improvements section of our site below Lake Minnetonka Real Estate Categories in the column to your right. We also post tips daily on Twitter and Facebook and would love for you to follow us there as well.
Lake Minnetonka real estate news trends seem to indicate an increasing number of Americans in search of the proverbial American Dream of home ownership may not be able to experience it. In a nutshell, they either can’t afford the prices of new homes or are unable to save money for a down payment.
Recent statistical models show prospective home buyers at various household income levels are likely to experience sticker shock when shopping for a home this spring. Finding a home in their affordable price range is expected to be a challenging task for many.
Home prices throughout much of the nation have risen by as much as 40% during the past five years. Conversely, incomes have increased roughly half that pace, therefore, creating a chasm between price and affordability. First-time buyers and those in the lower-tiered household income range will face significant competition for the listings they may be able to afford. In addition, higher interest rates may also dampen their ability to afford many homes on the market. If interest rates continue to rise, potential home buyers and borrowers on the qualification borderline may be unable to qualify for mortgage financing.
An even more disheartening twist in the Lake Minnetonka real estate news trends is the feeling among some housing experts that lack of available credit is a bigger problem than what interest rates do or don’t do. In the words of one housing economist, there appears to be two completely separate housing markets today: One for higher-income purchasers that seems to be brisk and successful, and one for affordable housing units that’s stagnant and struggling.
Lack of growth in the category of starter homes is cited as one reason first-time home buyers, such as millennials, have been slower then previous generations to buy their first home. Incomes just haven’t kept pace with home price increases, making it difficult for middle-class income borrowers from attaining home ownership.
As has been mentioned numerous times in Lake Minnetonka real estate news trends, the inventory of available – and affordable – homes is in short supply. Due to this tight supply, those homes that are on the market are likely priced higher than they ordinarily would be, creating a seller’s market – what typically occurs when the supply doesn't equal demand. In this case, even the lesser priced homes may be out of reach for many prospective purchasers.
The Down Payment Dilemma
To make matters worse for some, saving money for a sufficient down payment is also a challenge that’s a direct result of two factors: 1) Not earning enough money to be able to save and, 2) As home prices continue to rise, so do rents for the first-time homeowners waiting for the right time to buy.
A 20% down payment on the median-priced home of $192,500 in the U.S. currently is roughly $38,500 based on a recent Zillow report. Compounding the problem, in parts of the country where incomes are higher and prospective homeowners are able to save money, the real estate prices in those areas are more expensive, too – making it the typical "catch 22" scenario when it comes to affording a home.
Despite mortgage loan programs requiring considerably less than the widely-accepted 20% down payment – some as little as 3.5% – first-time borrowers are finding those loans are available at higher interest rates and they require the addition of private mortgage insurance (PMI.) PMI insurance is a type of mortgage protection insurance insuring the lending institution against the borrower defaulting on the mortgage payments. The premiums on PMI can be rather steep – especially on top of an already-high loan amount and resulting monthly mortgage payment.
To combat against the higher cost of financing more and putting less of a down payment, many first-time home buyers are tapping into other assets to make the American Dream a reality. Lake Minnetonka real estate news trends are seeing some prospective first-timers withdrawing money from their 401(k) accounts, while others are relying on loans or gifts from parents to provide the necessary 20% to avoid PMI – and the monthly escrow of taxes and insurance payments required for loans with higher loan-to-value (LTV) ratios such as these. Typically, lending institutions who finance more than 80% of the appraised value of a home will require the borrowers to pay the monthly pro-rated portion of the real estate property taxes and the homeowners insurance premium into an escrow account. When the taxes and insurance premiums are due and payable, the lending institution then pays those amounts out of the borrower’s escrow funds and the process starts all over again for the next year.
While the short-term solution may be to increase the number of affordable homes on the market, unfortunately that process takes a while. New home construction, while brisk in some markets, still lags behind demand. In addition, home builders are commanding top dollar for new homes, forcing purchasers to sell their existing ones for as much equity as possible.
It’s a cycle worth continuing to follow as part of the Lake Minnetonka real estate news trends – not only here in Lake Minnetonka , but throughout the nation in coming months.
See more articles pertaining to the most current Lake Minnetonka real estate news trends in the section of articles on Lake Minnetonka Real Estate News just below Lake Minnetonka Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.
Lake Minnetonka home buying strategies can be vital as you enter the market this spring in search of a new home. While a home search is always an exciting and challenging one, in what is currently a sellers’ market, it can be especially daunting. Chances are pretty good that a seller will have his choice of buyers and offers from which to choose. That makes it a little more difficult in the event you find “the” home that’s right for you and your family. If you’ve bought a home before, you know the feeling. You’ve searched high and low and visited numerous open houses and finally found that “just right” home that meets all your needs – and is perfect for your budget, too. But, what happens if the seller isn’t as excited about you or your offer as you’d like for him to be? Then what? Let’s look at five Lake Minnetonka home buying strategies that may help you deal with a seller who doesn't necessarily like you or your offer for his home.
First, remember a seller can refuse a prospective buyer for any reason. While it’s unusual for people selling their homes to be finicky or fickle, it’s not unheard of. Plus, as mentioned above, in a sellers’ market they may be able to afford to be a little more stubborn when it comes to the sales price, the terms, any contingencies, or the closing and move-out date.
Consider these tips in working with a seller in that position:
Hit Them With Your Best Shot. No, not literally, even though it may be tempting, we’re not advocating violence! What we’re suggesting is that if you submit an offer and suffer through the back-and-forth of counter offers, it could be time to stop playing games and wasting time. Cat and mouse can be fun and challenging, but we're talking about a home here. If you like the home and want it, make your very best offer. At that point – win or lose – you’ve done all you can do – and now the proverbial ball is in the seller’s court to accept or reject your best deal. While they may reject your offer and hold out for a better one from another potential purchaser, sometimes they may rethink your offer a few weeks later.
Keep on Keeping on. Another of our recommended Lake Minnetonka home buying strategies is to “cut your losses and move on.” While doing so is difficult and often heart-wrenching, sometimes it’s necessary. If the seller isn't open to working with you or negotiating, it could be time to throw in the towel and move on to the next listing. Wasting time, talent, energy and desire on wanting the seller to see the deal the same way you do may mean you’ll lose out on the next “perfect’ home out there – and trust us, there’s always another one waiting.
Live and Learn. The best coaches in the country – no matter the sport or the level of competition – will say, "…other than preparation and execution, learning from mistakes in competition is very important for the next game." So, when things don’t go exactly as you planned, take a little time to try to figure out what went wrong – and learn from it for the next negotiation on the next house. The more you understand about what worked and didn’t work, the more likely your next transaction will be more successful. Just like most things in life, it’s critical to live and learn.
Don’t Overthink This. While you’re performing your analysis on the experience you’ve had in negotiating with or trying to work with a seller in buying their home, be careful not to overthink the seller. As is the case with most people – even close friends and family – nobody really knows what goes on inside a seller’s head. Maybe they’re not really ready to let go of their home. Maybe they’re holding out for every single dollar they can squeeze out of the deal. Perhaps they aren't prepared to move and are dragging their feet in an effort to buy time. Whatever the reason, don’t waste precious time trying to figure out the seller and his motivations or desires. Move on to the next property and concentrate on it.
Self-Analysis Can be Healthy. Lake Minnetonka home buying strategies can be useful – but only if you use them to your advantage and to accomplish your necessary goals. So, remember this: If you keep trying to work with sellers that refuse to cooperate, maybe you’re the problem, not them. Identify a seller who is both motivated and serious about selling his home. Work with them and make the best deal you can. Don’t waste time pining over the “one that got away,” as there are other fish in the sea. Keeping a positive attitude and a feeling of optimism in the face of rejection or disappointment may mean the difference between finding the right home and becoming frustrated. Stay positive and get what you want.
Read more about home buying advice in the section of articles on Lake Minnetonka Home Buying Tips just below our Lake Minnetonka Real Estate Categories in the column to your right.