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Real Estate

Mortgage Rates Still Climbing, Not Fading

NAR Daily News Magazine - February 23, 2018 - 1:00am

There’s no let-up in sight as rates continue to be at the highest averages in four years. 

Categories: Real Estate

The First Cities to Get 5G

NAR Daily News Magazine - February 23, 2018 - 1:00am

Many places across the country are eager to premiere the super-fast network speeds.

Categories: Real Estate

What Happened to the Condo Market?

NAR Daily News Magazine - February 23, 2018 - 1:00am

New construction of condo units has softened in recent years. Some housing analysts are wondering why.

Categories: Real Estate

Spring May Not Be Pretty for First-Time Buyers

NAR Daily News Magazine - February 22, 2018 - 1:00am

A shortage of homes and surging prices could hit rookie home buyers particularly hard.

Categories: Real Estate

IRS: HELOCs Still Deductible for Renovations

NAR Daily News Magazine - February 22, 2018 - 1:00am

Taxpayers can continue to deduct the interest they pay on home equity loans and credit lines when the funds are used for home improvements, the...

Categories: Real Estate

Environmental Hazards Don’t Quell Price Hikes

NAR Daily News Magazine - February 22, 2018 - 1:00am

Home values in ZIP codes with high risks of pollution, brownfields, and other dangers are appreciating at a faster pace, a new report shows.

Categories: Real Estate

HUD Gives $35M to Aid Low-Income Families

NAR Daily News Magazine - February 22, 2018 - 1:00am

The agency says the money will be used to hire or retain service coordinators to help poor residents find jobs, educational opportunities, and...

Categories: Real Estate

Townhouse Starts Indicate Sturdy Market

NAR Daily News Magazine - February 22, 2018 - 1:00am

Construction in this housing segment jumped 21 percent year over year in the fourth quarter of 2017.

Categories: Real Estate

Why Your Mortgage Is Getting More Expensive

RisMedia Consumer News - February 21, 2018 - 3:48pm

(TNS)—World events are conspiring to make it more expensive for you to borrow money to buy a house.

Mortgage rates have increased for five consecutive weeks, according to Bankrate data, bringing interest on a 30-year fixed rate loan to 4.44 percent—the highest level in 11 months—while home prices continue to rise due to a lack of available homes.

After years of tepid economic growth, animal spirits are aflame. Inflation and wage growth recently found a groove, while the Federal Reserve’s plan to raise short-term interest rates multiple times for a consecutive year has reduced the value of government debt. The yield on 10-year Treasuries is close to a four-year high. (Bond prices and yields are inversely related.)

Oh, and China may reduce its appetite for U.S. bonds.

Homebuyers Should Get off the Fence
Mortgage rates are moved by the yield on 10-year Treasuries, rather than short-term rate hikes by the Fed. That’s why mortgage rates fell throughout 2017, for instance, even as the central bank raised the federal funds rate three times.

Rates remain cheap, however, compared to historical prices. A 30-year fixed-rate mortgage came with an interest rate above 6 percent just before the Great Recession in 2007.

Potential homeowners should get off the fence and make a bid, assuming you have an affordable home target and adequate savings, because rates are likely only heading north.

Why Mortgage Rates Are Increasing
You’ve seen this movie before.

Immediately after the 2016 election, investors sold government debt en masse, causing the 10-year yield to rise from 1.88 percent on November 8 to 2.60 percent five weeks later. That dramatic rise was predicated on investors thinking a newly Republican-controlled Washington would bring about faster economic growth through infrastructure spending and tax cuts.

Optimism waned throughout 2017, though, as the GOP failed to overhaul the Affordable Care Act, casting doubt on their cohesion as a governing party. The long-promised massive infrastructure bill never materialized, while the prospects of a tax overhaul dampened. By the first week of September, the 10-year yield was 2.05 percent.

But then Republicans made progress on a $1.5 trillion tax bill, while the employment picture continued to brighten, and the U.S. economy grew at a solid clip over the last six months of the year.

With Congress agreeing to a $300 billion spending bill—which will only throw more coal on the burning economy—investors see fewer reasons to own bonds. Economic growth and higher pay could result in long-awaited inflation gains. Prices have been rising below the Fed’s 2 percent target, according to the central bank’s preferred prices gauge, for years now.

Higher inflation is a boon for fixed-rate borrowers but hurts debtors. The January jobs report, which showed a 2.9 percent-year-over year earnings increase, was a signal to market observers that inflation may be coming.

Meanwhile, Bloomberg reported in January that China, the largest foreign holder of U.S. debt, may reduce or cease U.S. debt purchases, causing market jitters.

Should You Be Worried?
Given the recent run-up in yields, you may be worried—but don’t panic just yet.

“This is not alarming,” notes Chris Vincent, fixed income portfolio manager at William Blair. “There is no significant drama in the credit markets.”

Markets, after nearly a decade of low rates and low growth, are adjusting to the new normal and corresponding volatility—and while China may own over a trillion dollars of U.S. debt, that’s less than 20 percent of all debt owned by foreign nations, and a fifth of what America owes itself.

You are entering a world where it’s going to become more expensive to borrow money. It’s time to get used to it.

©2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

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The post Why Your Mortgage Is Getting More Expensive appeared first on RISMedia.

Categories: Real Estate

Buyers Use Escalation Clauses to Win Bidding Wars

NAR Daily News Magazine - February 21, 2018 - 1:00am

But escalation clauses aren’t always a winning strategy for either buyers or sellers, housing experts warn. 

Categories: Real Estate

2018 Home Sales Off to Sluggish Start

NAR Daily News Magazine - February 21, 2018 - 1:00am

Blame it on the housing shortage: Existing-home sales posted their largest declines on an annual basis in more than three years. Read more from...

Categories: Real Estate

Man Pleads Guilty to Hiding Arizona Agent’s Body

NAR Daily News Magazine - February 21, 2018 - 1:00am

A handyman pleaded guilty to concealing the body of Sidney Cranston Jr., who disappeared two years ago after showing a property in a remote area...

Categories: Real Estate

Higher Rates Offset Loan Demand

NAR Daily News Magazine - February 21, 2018 - 1:00am

Home buyers and homeowners may be getting spooked by higher mortgage rates, as loan applications plummet. 

Categories: Real Estate

How Will Wakanda Come to Real Cities?

NAR Daily News Magazine - February 21, 2018 - 1:00am

The new super-hero movie is so popular that architects and urban planners are looking for ways to bring its look into real-life counterparts.

Categories: Real Estate

Can Yelp Pinpoint the Next Big Neighborhood?

NAR Daily News Magazine - February 21, 2018 - 1:00am

Yelp reviews may be a key to help find neighborhoods on the edge of gentrification, where higher home prices may be on the horizon.

Categories: Real Estate

Higher Rates Could Raise Housing Costs 15%

NAR Daily News Magazine - February 20, 2018 - 1:00am

If forecasted mortgage rate hikes pan out, home buyers may be paying much more expensive monthly payments. 

Categories: Real Estate

Home Maintenance Can Cost Up to $2K a Year

NAR Daily News Magazine - February 20, 2018 - 1:00am

Find out the most common services homeowners use and how much they cost monthly.

Categories: Real Estate

Stop Flu From Spreading to Your Listings

NAR Daily News Magazine - February 20, 2018 - 1:00am

These four tips will help your sellers keep the virus at bay during periods of high foot traffic from open houses and showings.

Categories: Real Estate

How Buyers Misjudge the Mortgage Process

NAR Daily News Magazine - February 20, 2018 - 1:00am

Many consumers find it “stressful” or “complicated” to obtain a mortgage, according to recent surveys. Here are some of...

Categories: Real Estate

Could Glut of Luxury Rentals Cause ‘Crisis’?

NAR Daily News Magazine - February 20, 2018 - 1:00am

Builders have focused for too long on serving the high-end market, while a shortage of affordable rental housing is worsening, economists warn.

Categories: Real Estate