Federal Reserve on Interest Rate Hike: Not Yet

The Federal Reserve voted Wednesday to continue to leave short-term rates alone, but hinted that a raise is still likely before the end of the year.

Fed Chair Janet Yellen offered an upbeat report about a strengthening economy, while still acknowledging the sluggish first half of the year. Employment is increasing and household incomes are too, she said. While the case for raising rates has strengthened, Yellen said there was no need to raise rates quite yet because inflation remains below the Fed’s 2 percent target.

“We judged that the case for an increase had strengthened but decided for the time being to wait for continued progress toward our objectives,” Yellen said at a press conference following the Fed’s policy meeting.

Source: “Fed Stands Pat, But Says Case for Rate Increase Has Strengthened,” The Wall Street Journal (Sept. 22, 2016) and “Why Housing Doesn’t Care About the Fed,” CNBC (Sept. 21, 2016)

Home Colors That Turn Off Buyers

Could the wrong shade of paint dampen interest in a home? As a real estate pro, we can point sellers in the right direction when they’re considering color updates.

First, take note of palettes consumers tell researchers they like: The favorite color combos for exteriors are white and gray, beige and taupe, and slate and black, according to the 2013 National Home Color Survey. On the inside, neutral wins too. The most popular 2016 colors include grays and shades of white, as well as natural-looking greens.

So, what are the paint chips your clients should avoid? Credit.com highlights their findings based on studies of colors at: 4 Colors You Should Never Paint Your Home,” Credit.com (Aug. 22, 2016)

The Best Time to Invest Is Now?

“Whether it’s stricter lending standards, a shift in attitudes among borrowers or simply the nation getting wiser about the risks of real estate, we’re hardly seeing irresponsible buying in 2016,” writes Reeves, who is also the editor of InvestorPlace.com. “What we are seeing is a healthy housing market that continues to steadily and organically appreciate.”

“Nobody should put all their savings into one or two properties, but in a diversified portfolio, there is a very good argument for real estate investments in 2016,” writes Reeves.

Companies are stepping in to help more people become investors too. For example, Investability, an online real estate marketplace, says it offers tools like cash flow calculators that allow those interested in investing to input estimated vacancy rates and rental incomes from potential properties.

Source: “This Is the Best Time in History to Invest in Real Estate,” MarketWatch (Aug. 23, 2016)



Tiny Homes Are Making a Bigger Mark

Tiny houses are trending bigger nationwide. Interest in small-home living among the public has gained momentum since the recession, and made some Americans crave a simpler, less expensive way to live, according to U.S. News & World Report.

These small homes, often built on a trailer and portable, tend to be under 700 square feet. They tend to cost a fraction of a typical home, as low as $10,000 or up to $100,000, depending on the size.

TV shows are giving viewers a peek at this new type of living, especially on networks that HGTV that have shows featuring small-home living such as “Tiny House Hunters,” “Tiny House Nation,” and “Tiny House, Big Living.”

Source: “The Big Impact of Tiny Homes: How Little Houses Are Changing Real Estate,” U.S. News & World Report (Aug. 5, 2016)

Home Loan Rates Move Even Lower This Week

Fixed-rate mortgages dropped slightly this week compared to the previous week, and continue to hover near all-time lows.

Freddie Mac reports the following national averages for the week ending Aug. 18:

  • 30-year fixed-rate mortgages: averaged 3.43 percent, with an average 0.5 point, dropping from last week’s 3.45 percent average. Last year at this time, 30-year rates averaged 3.93 percent.
  • 15-year fixed-rate mortgages: averaged 2.74 percent, with an average 0.5 point, dropping from last week’s 2.76 percent average. A year ago, 15-year rates averaged 3.15 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.76 percent, with an average 0.4 point, rising from last week’s 2.74 percent average. A year ago, 5-year ARMs averaged 2.94 percent.

Source: Freddie Mac

Home Loan Rates Hold Steady This Week

Average fixed-rate mortgages remained near historic lows this week, keeping financing costs lower for home shoppers and home owners looking to refinance.

Freddie Mac reports the following national averages for the week ending Aug. 11:

  • 30-year fixed-rate mortgages: averaged 3.45 percent, with an average 0.5 point, rising from last week’s 3.43 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
  • 15-year fixed-rate mortgages: averaged 2.76 percent, with an average 0.5 point, increasing from last week’s 2.74 percent average. A year ago, 15-year rates averaged 3.17 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.74 percent, with an average 0.5 point, increasing from last week’s 2.73 percent average. A year ago, 5-year ARMs averaged 2.93 percent.

Source: Freddie Mac

July Marked a Big Month for Housing

The housing market heated up in July, with several factors favoring buyers this summer.

Jonathan Smoke, realtor.com®’s chief economist, says this summer one of the best in a decade: we’re seeing the highest consumer confidence for a July since 2007, we’ve also had the highest nominal home prices for a July on record, and we’ve had the lowest July mortgage rates on record.

“The good news for would-be buyers who have struggled to find a home or have been outbid in prior attempts is that the balance of power shifts a bit more in your favor in late summer and fall,” Smoke writes in his column at realtor.com®. “This is the time of the year when sales slow down, but inventory is at its peak. That means there are more homes for sale per buyer now, and yet mortgage rates remain close to their all-time lows. The window to enjoy the best summer in a decade for real estate remains open for the well-qualified and those ready to act.”

Source: “Finally, a July to Remember – and to Buy a Home,” realtor.com® (Aug. 4, 2016)

Buyer Traffic Strong; Sellers Still Hesitant

Housing demand remains strong this summer, even as inventory issues persist in many markets across the country, according to the REALTORS® Confidence Index for June.

Overall housing demand this summer is on the rise due to more jobs being created and by low mortgage costs. According to NAR Research, “Job creation is strongly associated with the demand and supply of homes: strong job growth improves the prospect for home ownership, while job contraction in an area may lead to more homes being sold as people move out of the area.”

More details and national chart at: “Buyer Traffic Continued to Outpace Supply in Many States in April–June 2016,” National Association of REALTORS®’ Economists’ Outlook Blog (Aug. 3, 2016) and REALTORS® Confidence Index

Instagram Debuts ‘New Stories Feature’

Instagram is starting to look a lot more like its competitor Snapchat. The popular photo-sharing app just debuted its Instagram Stories feature, where users can post photos and videos.

Instagram’s Stories feature is already available in its own section on the photo-sharing app, giving users the ability to draw and add text over photos and combine multiple photos into a narrative story that can be seen by their followers for up to 24 hours before it disappears.

Stories also sets out to make sharing on the photo app a bit more casual and personal. “Our mission has always been to capture and share the world’s moments, not just the world’s most beautiful moments,” says Kevin Systrom, co-founder and chief executive of Instagram. “Stories will alleviate a ton of the pressure people have to post their absolute best stuff.”

Source: “Instagram Takes a Page From Snapchat, and Takes Aim at It, Too,” The New York Times (Aug. 2, 2016)

First Half Review: Housing Is Doing Well!

The first half of 2016 has proven to be a boom to real estate, writes Jonathan Smoke, realtor.com®’s chief economist in his monthly column. Total home sales are up 5 percent compared to the first half of 2015 and median existing home prices are up 5 percent as of June, setting a new record. Also, a rise in equity for home owners may encourage them to consider selling.

Yet, Smoke doesn’t expect the strong market to stay this strong in the second half of the year.

“All ages have been tempted by near-record lows in mortgage rates prompted by global economic weakness and instability driving investors toward U.S. bonds,” Smoke writes in his latest column. “But even with all that demand, the market can grow only so much, because of the limited inventory of homes for sale.

“As long as [mortgage] rates do not increase substantially in a short period of time, the real estate market should remain strong,” Smoke says. “The underlying reason for higher rates is a stronger economy; so the benefits of that will offset the impact of marginally higher rates. A stronger economy, more jobs, lower unemployment, and higher wages will power demand. Higher rates will also likely help loosen credit. Those positive conditions coupled with demographic tailwinds from millennials and boomers will keep the U.S. housing market healthy and strong for at least two more years.”

Source: “Housing Had a Great First Half of 2016, But Will It Last?” realtor.com® (July 28, 2016)