Monday, March 24, 2014

Money Magazine Says: Buy Now Not Later

The KCM Crew released an article about Money Magazine saying now is the time to buy, not later. It can be viewed here: Money Magazine: Buy Now Not Later or below.

We have often suggested that potential homebuyers consider rising interest rates when thinking about the true cost of a home. Remember, cost is not determined by price alone but by price and mortgage rate. The longer a buyer waits, the higher the mortgage payment will be if rates continue to increase (as is projected by Fannie Mae, Freddie Mac, the National Association of Realtors and the Mortgage Bankers Association).

Money Magazine, in its latest issue, agreed with our analysis as they also warned their readership of the same ramification if they waited to buy a home.

Here is what they said:

"BE MINDFUL OF RATES. The average interest rate on a 30-year fixed loan is predicted to climb from the current 4.4% to 5.3% by the 2015 spring buying season, according to Freddie Mac. For a $250,000 loan, that means that a borrower who waits would pay $136 more per month and an additional $49,090 in interest over the life of the loan. Will you need a big loan? Better to act soon before rates tick up."

And the monthly increase Money mentioned did not take into consideration that prices are also projected to increase over the next year. Here is what the additional cost would be if prices rise by the 4.5% projected by the latest Home Price Expectation Survey and interest rates go to 5.3%.

Friday, March 21, 2014

Rates Sharply Higher After Fed Cuts QE3

A great article was posted yesterday on The Mortgage Reports website.  You can access the article here: Fed Cuts QE3 for Third Straight Meeting; Mortgage Rates Sharply Higher.  I have included a bullet point summary of the key information relating to mortgage rates.

 “Fed Cuts QE3 for Third Straight Meeting; Mortgage Rates Sharply Higher”

  • Mortgage rates are rising sharply after the Federal Reserve's March 2014 FOMC meeting.

    • The Fed also announced the next phase of its QE3 taper, to being in April.
    • QE3 is an economic stimulus program which aims to suppress U.S. mortgage rates. As the size of QE3 shrinks, mortgage rates are expected to rise.
    • QE3 was a success. With weeks of its launch, U.S. mortgage rates had dropped to their lowest point ever.
    • Now, the Fed is phasing QE3 out.
    • After its December 2013 meeting, the Federal Reserve announced a ten billion dollar cut the program, split evenly between Treasuries and mortgage bonds. After its January 2014 meeting, it elected to do the same, in the same proportions.
    • The March meeting marks the third cut to QE3 -- also a $10 billion cut.
    • QE3 purchases are now comprised of $30 billion in U.S. Treasuries and $25 billion in mortgage-backed bonds monthly, to begin in April. The taper loosens further the artificial cap that the Fed has placed on mortgage rates.
    • As QE3 shrinks, mortgage rates are expected to rise.

    Thursday, March 20, 2014

    5 Reason to Buy a Home Now

    Below is an article posted by the KCM Crew with 5 reasons to buy a home now.  You can view the article here: 5 Reasons to Buy a Home Now.  I underlined some great points that are made in the article.

    Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying.

    1. Competition is about to Increase
    Every spring a surge of prospective purchasers enter the housing market. Like you, they will want the best home available in the best location at the best price. They will be competing with you for the ‘steals’ in the market. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy available today that no longer be available as the market heats up..
    2. Price Increases Are on the Horizon
    Nationally, home prices are projected to appreciate by 4.5% in 2014 and by over 19% from now until 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.
    3. Owning a Home Helps Create Family Wealth
    Whether you rent or you own the home you are living in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Federal Reserve, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.
    4. Interest Rates Are Projected to Rise
    The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the spring of 2015. That is an increase of almost 3/4 of a point over current rates.
    5. Buy Low, Sell High
    Most would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.

    Wednesday, March 12, 2014

    March edition of You Magazine

    Below is the March edition of You Magazine.  The article "Mother Nature Keeps Buyers Inside" talks about the factors that are holding back sales in the West and causing low inventory.  The factors mentioned are rising prices and decline in foreclosure inventory.  Year-over-year in January, Oregon had the third largest home price appreciation at 14.3% when including distressed sales according to CoreLogic.  Nevada and California were the leaders.  

    Another great article in this month's edition is "Movin' On Up" which discusses the advantages and disadvantages of purchasing a home during the different seasons.  According to the National Association of Realtors, most home sales take place between April and July.

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    Clayton Scott   Clayton Scott
    Branch Manager/Mortgage Consultant
    WMS Series LLC/AT
    Phone: 503-497-5060
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    License WA-CL 713524, OR-ML 5271
    WMS Series LLC/AT
    March 2014

    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013

    Mother Nature Keeps Buyers Inside
    Severe winter weather from the south to the northeast kept prospective homebuyers indoors, resulting in home buying traffic at its lowest pace since April 2013.
      Mother Nature Keeps Buyers Inside
    These 10 Tips Will Help You Set and Reach Your Goals 
    If you're having difficulty setting achievable and realistic goals, you're not alone. Sometimes it's difficult to clarify how you want to get towhere you want to be. Just like all the numbers need to "fall into place" when opening a combination lock, it's best to have the right sequence in goal-setting to reach your definition of success.
      These 10 Tips Will Help You Set and Reach Your Goals
    What Not to Buy at Drugstores
    By Cameron Huddleston, 

    Here are ten things you're usually better off purchasing at warehouse clubs, dollar stores, big-box retailers or supermarkets.
      What Not to Buy at DrugstoresBy Cameron Huddleston,
    Movin' On Up
    Timing is Everything...But Not in the Way You Think

    It's a question every homebuyer faces: When's the best time to purchase a home?
      Movin' On Up - Timing is Everything...But Not in the Way You Think
    A Spoonful of Sugar?
    Limit Your Fructose Intake to Protect Your Health 

    Most people know that too much sugar isn't good for your teeth. But did you know that too much sugar can increase your chance of diabetes, fatty liver disease, high blood pressure, and kidney disease, as well as negatively impact your memory?
      A Spoonful of Sugar? - Limit Your Fructose Intake to Protect Your Health
    Mama's Authentic Italian Meatballs
    Gather up your family for a hearty meal with authentic Italian meatballs. You can serve them immediately with a traditional Italian Salad featuring iceberg wedges and a creamy sauce, or save them for pasta, sandwiches and snacks. Delicious and great for a feast with the whole famiglia!
      Mama's Authentic Italian Meatballs

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    Lake Oswego, OR 97034

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    Friday, March 7, 2014

    Portland Rent Up 9.7% Year-Over-Year in February

    Trulia recently released their Price Monitor an Rent Monitor data that shows year-over-year changes in Asking Price and rent.  The report breaks down US Metropolitan Areas.  Year-over-year in Portland, the average Asking Price rose 13.8% for the month of February.  During this same period of time, rent increased 9.7% in the Portland area.  Only four states had higher year-over-year increases in rent than Portland.  You can view a copy of the report here.  

    Image provided by Alex Bailey