Blog – CTeBockhorst's Blog

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices Up

June 29, 2023 by Coleen TeBockhorst

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices Up April readings for S&P Case-Shiller’s Housing Market Indices showed gains in home prices throughout the U.S. Rising prices were caused by shortages of previously-owned homes for sale and increasing buyer demand as the average 30-year mortgage rate exceeded six percent. The southeastern region lost its top spot on S&P Case-Shiller’s 20-City Home Price Index as Chicago, Illinois, Atlanta, Georgia, and Tampa, Florida held the top three year-over-year home price growth rates for April.

Chicago, Illinois Breaks Southeast’s Lead on April Home Price Growth

The top three cities with the highest home price growth rates as reported in April’s S&P Case-Shiller’s 20-City Home Price Index were Chicago, Illinois with a year-over-year home price gain of 4.10 percent; Atlanta, Georgia posted a year-over-year home price growth of 3.50 percent. Tampa, Florida placed third in the 20-City Index with an average home price gain of 2.40 percent. All year-over-year readings for April home prices were seasonally adjusted.

Average home prices lagged in the West as the combined impact of high home prices and mortgage rates created affordability issues for would-be home buyers. Seattle, Washington saw average home prices drop by -12.40 percent year-over-year; San Francisco, California reported that year-over-year home prices declined by 11.10 percent in April. Home prices in Las Vegas, Nevada fell by 6.60 percent year-over-year.

Mortgage rates nearing 7 percent did not appear to impact home buyers to a great extent, but higher rates do increase the cost of home loans and monthly payments; current mortgage rates and rising home prices do not promote affordable opportunities for first-time and moderate-income home buyers.

FHFA House Price Index

In related news, the Federal Housing Finance Agency posted 0.50 percent month-to-month-home price growth in its House Price Index for April. This index reports on home prices for homes sold by the Government Sponsored Enterprises Fannie Mae and Freddie Mac. These homes were acquired through foreclosure and were subject to original loan limits established by FHFA for mortgages acquired or guaranteed by Fannie Mae and Freddie Mac The GSEs’ loan limits cause a more moderate range of home price growth reported in FHFA’s House Price Index as compared to data reported in the S&P Case-Shiller Home Price Indices.

Renovating a Bathroom: DIY vs Hiring a Professional

June 28, 2023 by Coleen TeBockhorst

Renovating a Bathroom: DIY vs Hiring a Professional The bathroom is one of the most important and frequently used spaces in a home. Over time, it may start to show signs of wear and tear or become outdated. If you’re considering renovating your bathroom, one of the first decisions you’ll face is whether to tackle the project yourself or hire a professional. Both options have their pros and cons, and it’s essential to weigh them carefully before deciding.

DIY Renovation:

One of the most significant advantages of a DIY bathroom renovation is the potential cost savings. By doing the work yourself, you eliminate the labor costs associated with hiring a professional. You have control over the materials and can find budget-friendly options to stay within your desired price range.

Taking on a DIY bathroom renovation also gives you complete control over the project. You can choose the design, materials, and timeline that suit your preferences and schedule. This level of flexibility allows you to customize your bathroom to your exact specifications.

Completing a DIY bathroom renovation can be a rewarding experience. Seeing the transformation unfold before your eyes and knowing that you accomplished it on your own can provide a great sense of pride and satisfaction. It can also be a learning opportunity, as you’ll gain new skills and knowledge throughout the process.

Hiring a Professional:

Professional bathroom renovators bring a wealth of knowledge and experience to the table. They are well-versed in all aspects of bathroom renovations, from design to construction. Their expertise ensures that the project is executed efficiently and to a high standard, resulting in a beautiful and functional bathroom.

Hiring a professional allows you to save time and effort. They have a team of skilled workers who can complete the renovation quickly and efficiently. Professionals also have access to specialized tools and equipment that can streamline the process and deliver excellent results. Professional bathroom renovators take pride in their work and strive to deliver exceptional quality.

The decision between a DIY bathroom renovation and hiring a professional depends on your skills, budget, and personal preferences. DIY projects can be cost-effective and rewarding, but they require time, effort, and a certain level of expertise. Hiring a professional ensures expertise, efficiency, and high-quality results but comes with a higher cost and limited control. Whichever option you choose, thorough planning, research, and realistic expectations are essential for a successful bathroom renovation.

Most Common Questions First-Time Home-Buyers Ask

June 27, 2023 by Coleen TeBockhorst

Most Common Questions First-Time Home-Buyers Ask Buying your first home is an exciting milestone in life, but it can also be overwhelming and filled with questions. As a first-time home buyer, you want to make informed decisions and ensure a smooth process. Below we will address some of the common questions that first-time home buyers often ask.

1. What Exactly Is a Mortgage? A mortgage is an agreement between you and a lender that allows you to borrow money to purchase or refinance a home and gives the lender the right to take your property if you fail to repay the money you’ve borrowed.

2. What is the Difference between Pre-Qualification and Pre-Approval? A Pre-Qualification is informal and can be done over the phone or internet with no obligation or paperwork to complete and will only be able to tell you roughly what you can borrow. A Pre-Approval is a formal commitment to lend, and the lender collects all required documents to verify your income, assets & credit and will give you a definite idea of what you can afford.

3. What Steps Do I Need to Take to Secure a Loan? The first step is to complete a Loan Application and provide documentation to verify the application information.

You will need to provide:

Pay Stubs
W2 Forms or Tax Returns
Recent Bank Statements
Any other documents requested by the underwriter

4. How Can I Find Out What My Credit Report Score Is? There are several ways to obtain a copy of your credit report. You can request a free copy of your credit report from each of the three major credit reporting agencies.

5. What Are My Responsibilities During the Lending Process? The key thing to remember is to keep your financial circumstances steady during the loan process.

Here are some simple guidance tips:

Do not change jobs, become self-employed or quit your job.
Do not acquire more debt (This includes cars, boats, jewelry, household items or furniture etc.)
Do not charge large amounts to your credit cards and keep all payments current.
Do not spend money you have set aside for closing.
Do not apply for loans.
Do not change bank accounts or make large or unusual deposits into your account.
Do not agree to co-sign or co-borrow with anyone during the process of your loan.

6. What Does it Mean to “Lock in a Rate?” Interest rates fluctuate day to day, when you lock the loan it will guarantee that you will receive that rate for the duration of the lock.

7. What does Loan-To-Value mean? Loan-to-value is the amount of money you borrow compared to the purchase price conveyed as a percentage.

8. What Is Included in the Monthly Mortgage Payment? There are five items that are included in a mortgage payment. principal interest, property taxes, homeowners’ insurance, and mortgage insurance

9. What Is Mortgage Insurance and Why do I need It? Mortgage Insurance protects the lender if you fail to pay your mortgage and it is usually required if you put down less than 20%. There are many mortgage insurance options to fit your needs.

10. What Should I Expect on Closing Day? Be sure that you have everything that you need. At closing you will sign a lot of papers, but they will all be explained to you. BE SURE you arrive to the closing on time, and you will be guided from there.

What’s Ahead For Mortgage Rates This Week – June 26, 2023

June 26, 2023 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - June 26, 2023 Last week’s scheduled economic reports included readings on housing starts, existing home sales, and Federal Reserve Chair Jerome Powell’s congressional testimony. Weekly readings on mortgage rates and jobless claims were also released.

National Home Builders Association Releases June Housing Market Index

U.S. home builder confidence rose by five points to an index reading of 55 in June according to the National Association of Home Builders Housing Market Index. The June reading surpassed the expected reading of 51 and May’s housing market index reading of 50. Component readings for the Housing Market Index also rose as builder confidence in current market conditions rose five points and confidence in market conditions for the next six months rose six points.

NAHB said that a shortage of previously-owned homes for sale is driving sales of new homes and rising builder confidence. Many current homeowners refinanced to very low rates available during and immediately after the pandemic and are not inclined to refinance or buy new homes at current higher interest rates.

Mr. Robert Dietz, the chief economist for the NAHB, said: “A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year.” Mr. Dietz also noted that “with the Federal Reserve nearing the end of its tightening cycle, it’s good news for future market conditions in terms of mortgage rates and the cost of builder and developer loans.”

June’s reading was the sixth consecutive month showing increasing home builder confidence and the 11^th month since builder sentiment moved into positive territory.

Mortgage Rates Fall

Freddie Mac reported lower average mortgage rates last week as rates for 30-year fixed-rate mortgages fell by two basis points to 6.67 percent and rates for 15-year fixed-rate mortgages fell by seven basis points to an average rate of 6.03 percent.

Sales of previously-owned homes rose to a seasonally-adjusted annual rate of 4.30 million sales as compared to the expected reading of 4.25 million sales and April’s reading of April’ reading of 4.29 million sales.

What’s Ahead

This week’s scheduled economic reporting includes readings from S&P Case-Shiller Indices, new and pending home sales, and inflation. Weekly readings on mortgage rates and jobless claims will also be released.

How to Calculate Mortgage Payments

June 23, 2023 by Coleen TeBockhorst

How to Calculate Mortgage Payments Calculating mortgage payments involves several variables, including the loan amount, the interest rate, and the loan term. Here are the steps to calculate mortgage payments:

Determine the loan amount: This is the amount you will borrow to purchase the property. For example, if you plan to buy a house for $300,000 and you plan to put down a 20% down payment ($60,000), your loan amount will be $240,000.

Determine the interest rate: The interest rate is the cost of borrowing the money. It is expressed as a percentage. For example, if the interest rate is 4%, you will pay 4% of the loan amount in interest each year.

Determine the loan term: This is the length of time over which you will repay the loan. For example, if you have a 30-year mortgage, you will make 360 monthly payments (30 years x 12 months).

You can use the following formula to calculate your monthly mortgage payment:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:

M = monthly mortgage payment

P = loan amount

i = interest rate (monthly)

n = loan term (number of months)

Using this formula, you can calculate your monthly mortgage payment by plugging in the values for P, I, and N.

Alternatively, you can use a mortgage payment calculator to calculate your mortgage payment If you choose a mortgage calculator, you will need to know your income, expenses, and debts. This information will help you determine how much you can afford to borrow. You can find a mortgage calculator online or through a mortgage lender’s website. Make sure you use a reliable calculator. Once you have a mortgage calculator, enter your financial information into the calculator. This includes your income, expenses, debts, and the loan term. Use the calculator to adjust the variables such as the interest rate, down payment, and loan term to see how they affect your monthly payment and the total cost of the loan.

The mortgage calculator will provide you with an estimate of how much you can afford to borrow, what your monthly payment would be, and the total cost of the loan. Make sure the results fit within your budget and financial goals. If you’re ready to move forward with a mortgage, it’s a good idea to consult with a mortgage lender to discuss your options and get pre-approved for a loan. They can also provide you with more information on closing costs and other fees associated with the mortgage.

The Pros and Cons of buying new VS Pre-Owned

June 22, 2023 by Coleen TeBockhorst

The Pros and Cons of buying new VS Pre-Owned Buying a home is a significant investment, and one of the most important decisions to make when buying a home is whether to purchase a new or pre-owned property. Here are some pros and cons of each option:

Pros of buying a new home:

Customization: With a new home, you have the ability to customize and personalize the space to your liking, including choosing finishes, colors, and layouts.

Energy Efficiency: New homes often come with energy-efficient features, such as double-pane windows, modern insulation, and energy-saving appliances, which can save you money on utility bills.

Warranty: New homes usually come with a warranty that covers defects and repairs for a certain period of time.

Low Maintenance: Since everything in a new home is brand new, there is less need for repairs and maintenance in the early years.

Cons of buying a new home:

Cost: New homes are often more expensive than pre-owned homes due to the cost of land and construction materials.

Location: New homes are often built in new developments, which may be further away from established neighborhoods, schools, and other amenities.

Lack of Character: New homes may lack the charm and character of older homes, which may have unique architectural details and historic features.

Pros of buying a pre-owned home:

Affordability: Pre-owned homes are often less expensive than new homes, especially if they require some updates or renovations.

Established Neighborhoods: Pre-owned homes are often located in established neighborhoods with mature trees and amenities like parks, schools, and shops.

Character: Pre-owned homes often have unique features, such as original hardwood floors, fireplaces, and architectural details, that give them character and charm.

Cons of buying a pre-owned home:

Repairs and Maintenance: Pre-owned homes may require more repairs and maintenance, especially if they are older and have not been well-maintained.

Lack of Customization: Pre-owned homes may not be as customizable as new homes, and you may have to live with features that you do not like.

Energy Efficiency: Pre-owned homes may not have the same level of energy efficiency as new homes, which can result in higher utility bills.

Ultimately, the decision to buy a new or pre-owned home depends on your priorities, budget, and personal preferences. It is important to consider all factors and work with a reputable real estate agent to find the right home for you.

Legal Documents You Need When Buying a House

June 20, 2023 by Coleen TeBockhorst

Legal Documents You Need When Buying a House Buying a house can be an exciting but complex process that involves many legal requirements.

You will need to provide several documents to your lender and the seller. The specific documents required may vary depending on the lender and the type of loan you are applying for, but here are some of the most common documents you may need:

Proof of Income: This may include pay stubs, W-2 forms, and tax returns from the past two years.

Bank Statements: You will need to provide bank statements for the past two to three months to show your savings and checking account balances.

Credit Report: Your lender will obtain your credit report to assess your creditworthiness and determine your interest rate.

Employment Verification: Your lender may contact your employer to verify your employment and income.

Loan Application: This is the first step in the mortgage process, and it will require you to provide detailed information about your income, assets, and debts.

Pre-approval Letter: Once you have submitted your loan application, you may receive a pre-approval letter from your lender, which will state the amount of money you are qualified to borrow.

Loan Estimate: This document provides an estimate of the closing costs associated with your mortgage, as well as the interest rate, monthly payment, and other details about the loan.

Closing Disclosure: This document is provided to you three days before closing and includes a detailed breakdown of all the costs associated with your mortgage, including the interest rate, monthly payment, and closing costs.

Identification: You will need to provide a government-issued ID, such as a driver’s license or passport.

Purchase Agreement: This is a legally binding contract between you and the seller that outlines the terms of the sale, including the purchase price, closing date, and contingencies.

Mortgage Documents: If you are financing your home purchase, you will need to sign several mortgage documents, including a promissory note and a mortgage.

Deed: The deed is a legal document that transfers ownership of the property from the seller to the buyer.

Title Report: A title report is a document that shows the history of ownership of the property and any liens or other encumbrances that may affect the title.

Homeowner’s Insurance Policy: You will need to purchase a homeowner’s insurance policy to protect your investment in the property.

It is important to compile and review these documents carefully before submitting them to your lender. It is also wise to seek the advice of a real estate attorney or other qualified professional if you have any questions or concerns.

What’s Ahead For Mortgage Rates This Week – June 19, 2023

June 19, 2023 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - June 19, 2023 Last week’s scheduled economic reports included readings on inflation, the Fed’s Federal Open Market Committee meeting, and Fed Chair Jerome Powell’s press conference. Weekly readings on mortgage rates and jobless claims were also published.

Fed Leaves Key Rate Range Unchanged

Federal Reserve policymakers left the Fed’s current interest rate range unchanged at 5.00 to 5.25 percent; the Fed decision was announced after a scheduled meeting of the Fed’s Open Market Committee ended on Wednesday. Factors contributing to the FOMC policymakers’ decision included the cumulative effects of tightening monetary policy, lags between changing monetary policy and any impact on the economy, along with inflation and global and domestic economic developments.

The Committee reasserted its commitment to returning the inflation rate to its two-percent goal. Factors considered by FOMC Committee members include readings on labor markets, inflationary pressures and expectations, along with domestic and global economic and financial developments.

Inflation Pace Eases in May

The federal government reported slower inflation during May. The Consumer Price Index posted month-to-month inflationary growth of 0.10 percent from April to May; this reading matched expectations and was lower than April’s reading of 0.40 percent month-to-month. Core inflation, which excludes volatile food and fuel sectors, matched expectations and was unchanged from April’s month-to-month reading of 0.40 percent growth. Core inflation rose by 5.30 percent year-over-year and matched expectations but was lower than April’s year-over-year core inflation reading of 5.50 percent growth.

Mortgage Rates Fall; Weekly Jobless Claims Unchanged

Freddie Mac reported lower average mortgage rates as rates for 30-year fixed-rate mortgages fell by two basis points to 6.69 percent. Rates for 15-year fixed-rate mortgages rose by three basis points to an average rate of 6.10 percent. Jobless claims held steady with 262,000 new claims filed, which exceeded the expected reading of 245,000 initial claims and matched the previous week’s reading.

The University of Michigan’s Consumer sentiment survey improved in June with an index reading of 63.9, which surpassed the expected reading of 60.8 and May’s index reading of 59.2. Readings over 50 indicate that most consumers have a positive outlook on current economic conditions.

What’s Ahead

This week’s scheduled economic reporting includes readings on home builder confidence, housing starts, and sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims will also be released.

How Do You Make A Household Budget

June 16, 2023 by Coleen TeBockhorst

How Do You Make A Household Budget Creating a household budget can be a helpful way to track your spending and ensure you are meeting your financial goals. You will need to examine your fixed expenses that are the same each month, such as rent or car payments and your variable expenses that change each month, such as groceries or entertainment. Dealing with debt can be challenging but incorporating it into your budgeting strategy can help you regain control of your finances. Here are some steps you can take to effectively manage your debt while budgeting:

Assess your debt: Begin by gathering all your debt information, including outstanding balances, interest rates, and minimum monthly payments. List your debts in order of priority, such as high-interest debts or those with approaching due dates.

Create a budget: Develop a comprehensive budget that covers all your income and expenses. Categorize your expenses into essential (e.g., housing, utilities, groceries) and non-essential (e.g., entertainment, dining out) categories. Make sure to allocate funds for debt repayment.

Prioritize debt payments: Allocate a portion of your budget specifically for debt repayment. While making minimum payments on all debts, focus on paying extra towards high-interest debts to reduce their impact over time. This strategy is known as the debt avalanche method. Alternatively, you can prioritize the debt with the lowest balance first (debt snowball method) for psychological motivation.

Reduce discretionary spending: Look for areas where you can cut back on non-essential expenses. This might involve reducing eating out, entertainment costs, or finding more affordable alternatives for certain services. Direct the savings towards debt repayment.

Negotiate with creditors: If you’re struggling to meet your debt obligations, contact your creditors to discuss possible alternatives. They may be willing to offer reduced interest rates, extended repayment terms, or debt consolidation options. Exploring these options can help make your debt more manageable.

Consider debt consolidation or refinancing: If you have multiple debts with high-interest rates, consolidating them into a single loan or refinancing them with a lower interest rate may be beneficial. This approach simplifies your payments and can potentially save money on interest charges.

Build an emergency fund: While dealing with debt, it’s crucial to simultaneously build an emergency fund. Having some savings set aside can prevent you from relying on credit cards or loans in case of unexpected expenses. Start with small, regular contributions until you reach your desired emergency fund amount.

Remember, managing debt takes time and discipline. Stay committed to your budgeting efforts and regularly review your progress. Over time, as you reduce your debt, you’ll regain financial stability and move closer to achieving your financial goals. It may take some time to find the right balance, but creating a household budget can be an effective way to manage your finances and achieve your financial goals.

The Most Common Dangerous Home Issues

June 15, 2023 by Coleen TeBockhorst

The Most Common Dangerous Home Issues The most important reason to check for dangerous home issues is to ensure the safety of you and your family. Leaving home issues unchecked can cause significant damage to your property and if you’re planning to sell your home in the future, it’s important to ensure that it’s free of dangerous issues that could affect its value.

Here’s What to Look For:

Electrical problems: Faulty electrical systems, exposed wires, and outdated circuits can pose a serious risk of electrical fires, electrical shock, and electrocution.

Mold: Mold is a type of fungus that grows in damp, warm environments and can cause a variety of health problems, particularly for people with allergies, asthma, or weakened immune systems.

Carbon Monoxide Poisoning: Carbon monoxide (CO) poisoning is a potentially deadly condition caused by inhaling carbon monoxide gas, which is colorless, odorless, and tasteless. It can be produced by gas-powered appliances, such as furnaces, water heaters, and stoves, as well as by cars and generators.

Gas Leaks: Natural gas leaks can cause carbon monoxide poisoning, fire, and explosions. If you smell gas, you should evacuate your home immediately and contact your gas company.

Lead Poisoning: Lead poisoning is a serious health issue caused by exposure to lead, a toxic metal that can cause damage to the brain, kidneys, and other organs. Children under the age of 6 are particularly vulnerable to lead poisoning because their developing bodies can absorb more lead than adults.

Asbestos: Older homes may contain asbestos, which can cause lung cancer and mesothelioma. Asbestos should be removed by a professional.

Drowning: Drowning is a leading cause of accidental death, particularly among children and young adults. Drowning can happen in any body of water, such as pools, lakes, oceans, and even bathtubs. To prevent drowning, it’s important to always supervise children around water, never leave them unattended, and teach them basic water safety skills such as swimming and floating. Additionally, homeowners with pools should install fencing around their pools and use safety covers when the pool is not in use.

Radon: Radon is a naturally occurring gas that can seep into homes and cause lung cancer. A radon test can determine if your home has unsafe levels of radon.

Reducing Household Dangers

Reducing household dangers is important for maintaining a safe and healthy living environment. Here are some tips to help reduce potential dangers in your home:

Install smoke detectors and carbon monoxide detectors on each level of your home and outside each sleeping area. Test them regularly and replace the batteries as needed.
Keep fire extinguishers in accessible areas of your home and make sure everyone knows how to use them.
Keep all electrical cords in good condition and avoid overloading outlets or extension cords.
Regularly maintain and clean your home’s heating, ventilation, and air conditioning (HVAC) systems.
Keep your home free of clutter, especially on stairs and in walkways, to reduce the risk of trips and falls.
Ensure that your home has adequate lighting, especially in areas like stairways and entrances.
Regularly inspect and maintain your home’s plumbing systems to prevent water damage and leaks.
Store hazardous materials, such as cleaning products and chemicals, in a secure location away from children and pets.
Test your home for radon and consider installing a radon mitigation system if necessary.
Regularly inspect your home’s roof, foundation, and siding for damage and make repairs as needed.

It is important for homeowners to regularly maintain their homes and address any potential issues promptly to minimize the risk of harm. By following these tips, you can help to reduce potential dangers in your home and promote a safe and healthy living environment for you and your family.

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