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March 15th, 2016 4:51 PM

Yes, Home Prices Are Rising. No, a New Housing Bubble is NOT Forming

Posted: 10 Mar 2016 04:00 AM PST

Yes, Home Prices Are Rising. No, a New Housing Bubble is NOT Forming | Keeping Current Matters We recently reported that home prices are continuing to rise across most of the nation. This has created concern in some pundits that a housing bubble, like we saw ten years ago, is forming again. We want to explain why these concerns are unfounded. The current increase in home values can be easily explained by the theory of supply and demand. Right now, the number of families looking to purchase a home is greater than the supply of homes on the market. Here is a chart that explains how the months’ supply of housing inventory impacts home values: Yes, Home Prices Are Rising. No, a New Housing Bubble is NOT Forming | Keeping Current Matters According to the latest Existing Home Sales Report from the National Association of Realtors, there is currently a four-month supply of inventory. That puts us in the blue section of the above graphic. Home prices should be appreciating.

The difference in 2006…

A decade ago, the demand for housing was artificially boosted by lending standards that were far too lenient. Today, the strength of the demand for housing is legitimate, as lending standards are nowhere near what they were a decade ago. For proof of this, let’s look at a graph of the Mortgage Bankers’ Association’s Mortgage Credit Availability Index:Yes, Home Prices Are Rising. No, a New Housing Bubble is NOT Forming | Keeping Current Matters The higher the number, the easier it was to get a mortgage. We can see that from June 2005 to June 2007, mortgage standards were much more lenient than they have been over the last nine years.

Bottom Line

Today’s price increases, unlike those a decade ago, are the result of qualified buyer demand exceeding the current inventory of homes available for sale. Once the supply increases, prices will level out.

Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on March 15th, 2016 4:51 PMLeave a Comment

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Thinking of Buying A Home? What Are You Waiting For?

Posted: 23 Feb 2016 04:00 AM PST

Thinking of Buying A Home? What Are You Waiting For? | Keeping Current Matters
With spring right around the corner, you may be wondering if you should wait to enter the housing market. Here are four great reasons to consider buying a home today instead of waiting.
  1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years. The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
  1. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained below 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost three-quarters of a percentage point by this time next year. An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
  1. Either Way You Are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
  1. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Bottom Line

If you are ready and willing to buy, find out if you are able to. Meet with a local real estate professional who can help you find your dream home.

Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on February 23rd, 2016 1:12 PMLeave a Comment

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December 24th, 2014 9:32 AM

Two Great Reasons to Buy not Rent


Two Great Reasons to Buy not Rent | Keeping Current Matters

There are many young people debating whether they should renew the lease on their apartment or sign a contract to purchase their first home. Based on a recent study, here are two reasons buying a home might make more sense:

Two Great Reasons to Buy not Rent | Keeping Current Matters

Two Great Reasons to Buy not Rent | Keeping Current Matters


Posted in:buying a home and tagged: Buying a Home
Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on December 24th, 2014 9:32 AMLeave a Comment

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