Tag Archives: housing

Housing For The Holidays

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With Thanksgiving, Black Friday, and Cyber Monday under our belts, the holiday season is officially in full swing and we couldn’t be happier about it! 2016 has been a whirlwind of a year, and on behalf of everyone at Alpha Mortgage, we are glad that we were able to make so many dream home ambitions a reality. So what’s going on in the housing world? We’re here to update you on what’s happening now, what to expect, and the best gifts to give your home the extra love it deserves this holiday season.

What’s happening- A Recap

As many of you know, mortgage rates have stayed relatively low for the past few years, and the market has favored sellers. Why? Recently, the housing market has been in high demand with very tight supply across the nation, which led to a new peak in home prices nationally in September 2016, according to CNBC. You know the deal- sellers can list as-is, and usually, drive up the price of the sale due to multiple offers because demand is so high.

Here’s the update- in early November 2016, mortgage rates raised for the first time since January from about 3.94 to close to 4.10. Why? A little thing called the United States of America’s Presidential Election. Don’t panic, the rates were the same at the beginning of 2016.

The FHFA also raised their conforming loan limits from $417,000 (which has been in place since 20016), to $424,100 which will be effective January 1st, 2017, and that means that house prices are going up enough to qualifies you to borrow more money starting in the new year.

Oh, and tiny homes are still a thing.

What to Expect

A holiday housing freeze- it is normal for sales and prices of homes to drop in the Winter months, following in suit of dropping temperatures, as well as increased spending on other things (hello holiday shopping). Longtime Realtor Kim McElroy explains to Realtor.com that “Typically, sales do slow down somewhat in the winter just because the focus is on the holidays and a lot of people do take their houses off the market,” says longtime Montgomery, AL-based Realtor Kim McElroy of Keller Williams Realty. “But I see a spike of interest and calls right after the holidays.”

Longforecast predicts that the 30-year mortgage rate for December 2016 will increase by 1.41% averaging a rate of 4.33, and also predict that January 2017’s average rate will be 4.28 or a -1.15% from December.

Expect the housing market to swing in the favor of buyers in the next 2-3 years due to increased supply from builders taking advantage of the lack of homes available.

Top 5 gifts under $250 to make your house a home

  1. Satechi iPhone Charging Stand – $25- Amazon- This is a great stocking stuffer for anyone who Facetimes, Cooks and uses their phone for recipes, or multitasks in general! It comes in 4 different finishes that match each phone color.

81ls-p3a3ul_sl1500_2. Ring Video Doorbell Pro– $249 – Amazon- See, hear, and speak to anyone at your door from your smartphone, tablet, or PC and get instant alerts when visitors press the doorbell.

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  1. Nest – Learning Home Thermostat– $249 – Amazon – Nest automatically adapts to your life, as well as when the seasons change. All you have to do is use it for a week, and it programs itself!61kyuqogkl-_sl1000_
  2. August Smart Lock– $229 – Amazon- Use your smartphone to lock, unlock, and monitor traffic on your doors.

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  1. Kohler Moxie Showerhead and Wireless Speaker– $92.50 – Amazon -Stream music playlists, news, and other audio in the shower.

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2016 Housing Market Predictions

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New Year, New Housing Market? Not so much. According to many housing predictions, 2016 will bring a whole lot of the same to the table. But is this a bad thing? Absolutely not. While 2015 was known as the best year for housing since 2007 due to many factors such as increased employment rates, implementation of TRID, and more, 2016 will also continue the housing market’s upswing- just not as exponentially.  We’ll start to secure a ‘normal’ in 2016. Remember that word?!

Here are our 2016 Housing Predictions:

  1. Increased Interest Rates– The Federal Reserve is expected to continue to raise interest rates in the short term between now and 2016’s end, & homeowners who have adjustable-rate mortgages or home equity loans will most likely see their interest rate rise as a result.  Housing wire goes as far to say that Fixed-rate mortgages will also rise, perhaps up one-half of a percentage point between now and the end of 2016, reaching 4.5% for 30-year loans. Despite this increase in interest rates, mortgage rates will remain historically low. If the rates do start to rise in 2016, as gradually as they may, we could see slightly lower home-buying numbers next year. But these changes will be minimal due to the continued increase in economic expansion and employment numbers- meaning more people are becoming able to afford houses.
  2. Evolving Mortgage Process – Mortgages may be in reach for more Americans in 2016 due to legislation that would allow Fannie Mae and Freddie Mac to take into account new ways to measure creditworthiness like evaluating rental history and utility bill payments instead of just the FICO credit score. More loans may also allow buyers to include income from room rentals, etc. More lenders are continuing to ease credit standards, and don’t see that changing in the future.  This is good news for potential homebuyers!
  3. Increased Housing PricesReverse Mortgage Daily reports that appreciation in national home price indexes will likely continue at a faster pace than inflation, but grow more moderately than last year. The CoreLogic Home Price Index was up about 6% over the last 12 months, and CoreLogic anticipates a rise of 4-5% during 2016. This increase in home sales and prices can be attributed to the improved economy, which has brightened the financial outlook for many families and enhanced their overall financial security. Prices may be higher, but they will still be affordable to most.
  4. More first time buyers– We expect first-timers to make up a bigger portion of the market than they did this year. The reason is simple: The market will be more welcoming to them thanks to the aforementioned slowing price growth and easier access to loans. It is important to note that Millennials & Young Gen X’ers are expected make up the largest demographic of home buyers in 2016 because they have recovered from the financial crisis, are entering their prime professional years, as well as their prime family raising years.
  5. Rental Homes & Millennials– According to a recent analysis by the Federal Reserve, outstanding student loan debt now totals more than $1 trillion. Student loan debt can create additional hurdles for mortgage shoppers. It increases the borrower’s total debt-to-income ratio, which can cause problems during the underwriting and approval process, and excessive debt can lower a person’s credit score. All of this makes it harder for Millennials to qualify for home loans.  This is why we predict rental homes will continue to increase in popularity- Millennials simply can’t afford homes. Rental vacancy rates for both apartments and houses are at, or near, their lowest levels in 30 years, and rents are rising quicker than inflation.
  6. Smart Homes/ Housing Tech – Smart homes and houses with more technological features available at time of sale will continue to become more popular. Features like beacon technology, security tech, VR and more will make homes more appealing. Smart home features will start to be expected by consumers in 2016.

We can’t wait to help you own your dream home in 2016! On behalf of all of us from Alpha Mortgage, we wish you a very happy New Year!