5 Trends Shaping Green Homes

Depositphotos 5892794 MThink green home design is a fad? Well, think again. Sustainable home designs are gaining popularity at a breakneck speed. In 2017, green homes accounted for more than 60 percent of family home builder’s portfolios, according to a survey conducted by the National Association of Home Builders.

But what is really driving green home designs? In this post, we explore five trends shaping sustainable homes.

1. Energy Efficiency

Home designs that cater to consumers’ need to reduce utility bills continue taking center stage. From net-zero energy homes to energy conserving products, home buyers want to save money. Moving forward, industry experts predict that ultra-efficient building designs like net-zero-energy or passive home designs will continue dominating the industry.

2. Health

Most home buyers are more aware of the dangers of chemicals than before. As such, most of them are seeking non-toxic interior products. The manufacturing industry trend is leaning towards healthier materials. As the demand rises and prices stabilize, these products are more likely to be game changers. Most home designs will probably focus on eliminating troublesome chemicals such as VOC paints and phthalate free flooring.

3. Home Performance And Monitoring

Home energy audits are major factors considered by consumers, and home performance is key. Some cities like Austin expect new homes to undergo performance tests before recommendation for resale.

Energy software programs allow home builders and remodelers to monitor how slight changes in home designs can save thousands of dollars in utility bills. Homeowners are also benefiting from energy monitoring devices to track their household energy consumption.

4. Water Efficiency

80 percent of American states anticipate water shortages in a few years, says a Government Accountability Office survey. Therefore, wise water usage is becoming crucial as consumers demand for water efficient homes. Most builders are already getting their homes HERS Rated as consumers look for ways to save dollars from rising water prices.

5. Biophilic Home Designs

Nature is beneficial to us biologically, physically and psychologically. However, in the last century, home designs separated us from nature. Today, biophilic designs (connected to nature) strive to reverse that by integrating nature into homes. Modern building can capture the sun’s movement using windows, architectural details and patterns, connecting us to the season, time of day and our inner biorhythms.

If you are in the market for a green home, be sure to contact your trusted mortgage professional for a financing pre-approval!

3 Millennial Home-Buying Trends Sellers Should Know

consumer1After five consecutive years of Millennials outpacing all other home-buying demographics, sellers would be wise to wrap their thinking around what makes this generation tick.

According to a 2018 Home Buyer and Seller Generational Trends research study, Millennials purchased more than one-third of all homes in 2017. With home purchases totaling approximately 36 percent of the market in 2018, this class of buyer has increased its market share from 34 percent in 2017.

Taken as a whole, the previously formidable Baby Boomers ranging from 52-70 years old enjoyed only a 32-percent market share. GenXers declined from 28 percent in 2017 to 26 percent in 2018.

With the relatively young Millennials still not fully engaged in the real estate market, expectations are that this group could set the tone for decades.

Millennials Have Improved Buying Power

If you accept the Pew Research Centre definition of Millennials, then they were born between 1981 and 1996. That means the entire population is currently at or past the age of college graduation.

Other research indicates that they enjoy an average annual income that has trended up from $82,000 in 2017 to $88,000 in 2018. That means their overall income outran the estimated inflation rate of about 2.1 percent. Not every group can boast that claim.

With the older end of the group now over 30 years old and the younger swath advancing into careers, sellers may want to plan for spare-no-expense Millennial buyers. The average home they purchased in 2017 was $205,000. In 2018, the average rose to $220,000. They apparently are not shy about spending more on a house they like.

Single Millennial Women Are Buying More Homes

Young single females are making a run at home-buying supremacy. According to recent data, single women purchased approximately 18 percent of all homes in 2017. The figure is more than double that of single males, although married couples remain in the top spot.

The average age of single female buyers stands at 28 years old, and their home loans exceeded $175,000. Appraised values reportedly topped $210,000. Sellers may want to consider a more single female-oriented aesthetic moving forward.

Millennials Willing To Pay For More Space

There are two telling reasons why many Millennials are inclined to bypass traditional starter homes and pay for larger ones.

The first reason goes to the age of the older Millennials. At about 36 years old, they entered into adulthood during a painful economic period. High unemployment and a sluggish economy persuaded older Millennials to either wait or hunker down in a small starter home. That group now has equity in the property or money in the bank. With a hot economy and rising wages, larger homes make affordable sense.

Younger Millennials, by contrast, are entering the workforce during a full-blown economic revival. Jobs are plentiful, and employers are competing with wages to secure workers. The robust economic landscape allows many young professionals to afford larger homes. With that in mind, sellers may want to upgrade outdoor patios and consider taking down a wall or two to create an open floor plan.

If you are a homeowner interested in listing a property, speak with a real estate professional about what Millennials in your area want in a home. Millennial home buyers are changing the industry. If you are a Millennial in the market for a property, be sure to contact your trusted mortgage professional for a pre-approval!

What’s Ahead For Mortgage Rates This Week – November 13th, 2018

board-of-the-federal-reserveLast week’s scheduled economic news was slim last week. The Federal Open Market Committee of the Federal Reserve issued its post-meeting statement, weekly readings on average mortgage rates and first-time jobless claims were also issued.

FOMC: Fed Target Rate Unchanged, but Expected to Rise in December

The Federal Open Market Committee of the Federal Reserve announced that it did not raise the target federal funds rate but set the stage for raising the benchmark rate n coming months. The current range for the Fed rate us 2.00 percent to 2.00 to 2.25 percent. The Fed expects to increase rates three times in 2019 provided that strong economic conditions prevail.

FOMC members watch inflation, financial markets and domestic and global news to determine how or if to adjust the Federal Reserve’s target interest rates range.

Although FOMC releases projections based on current events and financial developments, changes to financial markets or global events could cause the Fed to hold off on raising interest rates.

Mortgage Rates, Hit Seven-Year High, New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates that pushed current mortgage rates to their highest levels in seven years. Rates for a 30-year fixed rate mortgages rose 11 basis points to an average of 4.94 percent; 15-year fixed rate mortgage rates averaged 4.33 percent, which was ten basis points higher than the prior week.

Rates for a 5/1 adjustable rate rose by 10 basis points to an average of 4.14 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell by 1000 new claims to 214,000 new claims filed. Analysts expected 210,000 new claims filed based on the prior week’s reading of 215,000 first-time jobless claims filed.

What‘s Ahead

Next week’s economic reports include readings on inflation, retail sales and weekly reports on mortgage rates and mortgage rates.

What Does A Home’s Energy Rating Imply?

Depositphotos 5892794 MYour home’s energy rating is an evaluation of your home’s overall energy efficiency. If your house’s rating is high, it means your potential for energy loss is also high. Bringing your rating numbers down means that your home is becoming more energy efficient.

Your home’s energy rating is based on several things. When your energy company does a home energy audit, they are looking for ways that your home or its components are wasting energy. A low rating means that a home is more energy efficient than one with a higher number. For example, if a home is rated at 70 on the HERS Index, it is approximately 30% more energy efficient than a home built in 2006. There are many factors that are taken into consideration when determining a home’s energy rating.

Here are several things you can do to bring your numbers within an acceptable range.

Energy Efficient Appliances

All new appliances manufactured within the United States must now carry an energy rating label that states its efficiency and how much energy is required for it operate. The Environmental Protection Agency has determined that, in order to save as much energy as possible, appliances are to be manufactured to certain specifications that will allow them to be operated using as little energy as possible.

HVAC System

One of the biggest energy drains in your home is your HVAC system. With regular maintenance and prompt repairs, your heating and cooling system can operate at maximum efficiency for many years to come. Changing the filters every month and keeping the ductwork and vents properly cleaned can also help your HVAC system to function efficiently and may reduce any type of energy waste.

Insulation, Windows, And Doors

Other areas where energy can be lost is through the roof and the windows and doors. Adding more insulation to your attic may prevent energy from being lost through the roof. It can help to keep your home cooler during the summer months and warmer during the winter months. Replacing older windows with newer, more energy efficient windows can dramatically reduce energy loss and improve your home’s energy rating. The same is true for older doors that may have worn weatherstripping.

The government offers rebates on your federal taxes for each home improvement you make that improves your home’s energy rating. If you are interested in learning more about energy ratings, contact your local utility company to have an energy audit performed. They will provide you with the answers you’re looking for.

Whether you are in the market for a new energy efficient home or refinancing your current property, your trusted mortgage professional is available to discuss your best financing options.

How To Cut A Great Deal On A New Home Construction

builder-confidence-is-upSavvy home buyers often get great deals on new home constructions by asking for deals and discounts and doing some up-front research.

Home builders often dislike offering steep discounts in sales prices because they want everyone in the community to feel like they bought their property at a fair price. Maintaining sales prices also helps with future home appraisal values. It helps all of the buyers in a neighborhood to keep sales prices consistent and growing.

Fortunately, you can still get great discounts that can reduce the cost of your new home.

Ask the builder if they can do the following:

Settle Closing Costs

Closing costs vary depending on your state. On average, the costs can be as high as $10,000. In Colorado, for example, a standard closing is about 3 percent of the selling price.

It’s important to note that closing costs vary widely and can be structured in many ways. Make sure to consult a trusted mortgage finance professional to get the best information on your situation. But if the builder pays the bill, that money remains in your pocket. Isn’t it a great discount?

Buy Down Your Interest Rate

Although interest rates are low, if a builder is willing to buy down your rate further as part of the closing, it would reduce the amount you pay monthly in interest on your mortgage payment. That makes it manageable in the long run. Once again, your mortgage professional can give you the best details on this idea.

Offer Free Upgrades

Most homes have standard built in appliances. To get high-end appliances, home buyers normally have to pay for upgrades. Ask your builder if you can get the upgraded home appliances or other upgrades without paying extra. It’s a great strategy to move into an improved new home.

Additional Discounts

To sweeten the deal, home builders can throw in additional discounts such as automated garage doors, landscaping, finished basements and window coverings. These discounts are worth asking about.

Although these strategies are great, there are some situations that make it more difficult to get sales concessions. Therefore, as you negotiate, keep the following in mind:

If business is going great, deals become more unlikely as builders have little motivation to give discounts.

You may not end up with the perfect home you want since you may be buying a home that’s near completion or already built.

The best home locations may be taken because properties in prime lots are usually the first to sell.

Knowledgeable buyers are most capable to cut great deals. Therefore, research new construction homes in your preferred neighborhood, visit some homes and compare what deals you can get. Above all, don’t hesitate to ask questions of your trusted real estate and mortgage professionals.

Case-Shiller: Home Price Growth Slows to 20-Month Low

buying real estateHome price growth slowed to its lowest rate in 20 months according to the 20-City Home Price Index issued by Case-Shiller. After years of dismal readings, Las Vegas, Nevada led the cities included in the index.

Top three cities for August included Las Vegas, Nevada where year-over-year home prices grew by 13.90 percent. San Francisco, California saw home prices increase by 10.60 percent year-over-year and Seattle, Washington home prices rose by 9.60 percent year-over-year. August’s 20-City Home Price Index overall reading fell below six percent for the first time in a year.

Cooling Home Price Growth Helps Balance Housing Markets

Cooling home prices have been forecast for months, but August’s reading indicated that home prices have peaked and that current home price growth rates may ease pressure on overheated real estate markets, where high home prices, limited inventories of homes for sale and rising mortgage rates have limited buying opportunities. Home price growth remained above current rates of wage growth and inflation, but slower appreciation of home values will help balance the housing market from an extreme sellers’ market to more moderate market conditions.

Rising Mortgage Rates Not Sole Cause of Easing Home Prices

Dallas Federal Reserve President Robert Kaplan recently said that rising mortgage rates were not the only cause of slowing growth of home prices. Mr. Kaplan said that multiple factors including rising building costs, labor shortages and rising mortgage rates combined to ease record demand for home; Mr. Kaplan said that the Fed is closely monitoring the economy and housing markets and mentioned that he had previously forecast slower housing markets as 2019 approaches.

Recent stock market sell-offs boosted the 10-year Treasury note price, but this momentum appears to be settling. Fixed mortgage rates are connected to yields on 10-year Treasury notes. Yields rise as note prices decline. Mortgage rates rise as the 10-year Treasury yield rises. While nothing is set in stone, this situation indicates that mortgage rates could continue to rise.

Rising mortgage rates and strict mortgage lending requirements have barred home buyers concerned with affordability and less than perfect credit profiles. As prospective home buyers abandon their home searches, demand for homes should ease and may further reduce gains in home prices.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted mortgage professional to discuss current financing options.

Real Estate Crowdfunding Investment Is Trending

home-sales-increase-in-two-regionsAlthough the real estate market is currently booming, the last housing bubble burst remains relatively fresh in investors’ minds and that has many taking a long look at crowdfunding.

One of the lessons that came out of the burst and ensuing Great Recession was that investors were blind to where their money went. If you watched the Academy Award-winning film “The Big Short,” then you at least understand Hollywood’s hyperbolic explanation of the subprime mortgage crisis. You may be asking: what does this have to do with real estate crowdfunding real investing? Well, everything.

Among the key reasons that the financial collapse occurred was the fact that investors had no clue what was in the AAA collateralized debt obligations (CDOs). Most people didn’t know what was in them and others simply did not care. At the end of the day, Americans lost massive amounts of wealth because they were not hands-on about investing.

That’s a primary reason why real estate crowdfunding platforms are trending. Crowdfunded real estate investments tend to be more of an open book. Consider the transparency differences between crowdfunding and a real estate investment trust (REIT).

Transparency: Crowdfunding Or REIT

Let’s assume that you are not particularly keen on buying an investment property and becoming a landlord. Although renting yourself has its benefits, it can also be labor intensive at times. That being said, wealth-building alternatives such as REITs and crowdfunding present opportunities that require less effort.

REITs tend to be the more hands-off than crowdfunding. That’s because REITs are generally traded funds. Dating back to 1971, the FTSE Nareit REIT index reportedly yielded a return of 9.72 percent. Some REIT investments do quite well in specific sectors such as self-storage and office space among others.

But REITs can be widely diversified, and some have non-real estate assets embedded in them. An REIT with hundreds of moving parts can be onerous to track. That makes them feel a lot like the CDOs. This is not to imply that REITs are a scam like those CDOs. It’s just that crowdfunding investments are more clear.

When investors opt for crowdfunded real estate investments, it falls on their shoulders to select specific properties for their portfolio. Unlike an REIT in which you just buy in and someone else manages the entire fund, crowdfund investors pick real estate options one at a time. In many ways, it is like becoming a landlord, just with someone else doing the legwork. At the end of the day, there’s less need for transparency because you picked all the assets yourself.

Why Consider Real Estate Crowdfunding?

Besides not having to do the heavy lifting, real estate crowdfunding generally avoids much of the volatility of the market-driven REITs and stocks. Everyday people are not investing the market per se, just the select properties you feel confident about. Also, the IRS reportedly allows investors to deduct depreciation.

But what makes real estate crowdfunding increasingly popular is that it allows people to invest directly into tangible properties without having to take on landlord responsibilities. Simply put, you know what you are buying.

Checking your credit and becoming pre-approved are important first steps for most home purchases. It is important to discuss other factors, including seasoning of funds, when considering options like crowdfunding. These are all steps your trusted home mortgage professional can help you navigate.

What’s Ahead For Mortgage Rates This Week – November 5th, 2018

board-of-the-federal-reserveLast week’s economic news included readings for Case-Shiller Home Price Indices, Commerce Department readings on construction spending and the University of Michigan’s reading on consumer confidence. Labor sector reports on jobs growth and the national unemployment rate were posted along with weekly readings on mortgage rates and first-time jobless claims.

Case-Shiller: Home Price Growth Lowest in 20 Months; Construction Spending Falls

Home price growth hit its lowest pace in 20 months according to Case=Shiller’s 20-City Home Price Index for August. Home prices grew by 5.80 percent year-over-year as compared to July’s growth rate of 6.00 percent.

Analysts said that slowing growth of home prices could signal that home prices have reached their peak; Inventories of homes for sale are near the six-month inventory reading considered a normal inventory of homes for sale.

Sales have slowed in recent months due to rapidly rising home prices, high demand for homes and slim inventories of available homes. Increasing supplies of homes for sale are a sign that housing markets are balancing to accommodate prospective buyers.

Construction spending was flat in September at a seasonally-adjusted annual rate of $133 trillion. Analysts expected 0.20 percent growth in construction spending based on August’s growth rate of 0.80 percent. The slowdown in spending was likely due to seasonal dips in construction activity as winter approaches.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average mortgage rates last week; rates for 30-year fixed rate mortgages averaged three basis points lower at 4.83 percent. Rates for a 15-year fixed rate mortgage averaged 4.23 percent. Rates for 5/1 adjustable rate mortgages were 10 basis points lower at 4.04 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week with 214,000 new claims filed; analysts expected 212,000 new claims to be filed based on the prior week’s first-time claims 216,000 new claims filed. Reported. The Commerce Department reported 250,000 public and private sector jobs added in October. ADP added 227,000 private sector jobs in October. The national unemployment rate was unchanged at 3.70 percent.

The University of Michigan’s Consumer Confidence Index reported an index reading of 137.90 in October as compared to September’s reading of 135.30 and an expected reading of 136.40.

What‘s Ahead

This week’s scheduled economic reports include the post-meeting statement from the Fed’s Federal Open Market Committee along with weekly reports on mortgage rates and new jobless claims.

Could Fed Interest Rate Hike Help Home Buyers?

board-of-the-federal-reserveNews of the Federal Reserve hiking interest rates appears to have caused unnecessary panic among people poised to purchase a first home or a larger one for a growing family.

Headlines and news reports that talk about interest rates being at their highest since 2014 can be alarming. Announcements from the Fed that rates would increase four times in 2018 and again in 2019 seems downright scary. After all, isn’t it logical that increased interest rates mean that monthly mortgage payment could be substantially higher?

As it turns out, neither the click-bait headlines about dramatic rate increases or higher monthly premiums are real-life concerns. A thoughtful look at interest rates and rational thinking about homeownership indicates that today’s market could be an excellent time to buy.

Interest Rates Are Not Frighteningly High

Americans have largely come to recognize that the media thrives on scare tactics to get you to tune in or click a link. Stating that interest rates are the highest since 2014 is a fair statement, on its face. But the reality behind the numbers is entirely different if you take a long look at historical rates.

Homebuyers that stepped into the market as the economy began to surge in 2017 did a fine job of positioning themselves. That’s because they took full advantage of tremendously low rates while moving into a stable jobs environment. It’s important to keep in mind that low Fed standards of 1.5 percent had already increased from the historic low.25 percent set in 2008 to stimulate the horrific economy.

As the Great Recession hit, unemployment started its climb to 10 percent in 2009 and things were generally bad. Wonderfully low interest rates were of little use when people were out of work and those who were employed lacked job stability. The Fed’s goal was to gradually increase rates as the economy steadily recovered. The common wisdom was to raise rates to 3 percent by 2020.

But if you look back over rate data from the 1970s until the Great Recession, rates tended to be at 5 percent or higher. The Fed’s reported intentions would likely leave potential homebuyers in a better position than most over the 40-50 years. That’s because the country is in the midst of an economic surge that appears to have legs.

Fed’s Hike Won’t Deter Many Buyers

The Chicken Little’s of the housing sector may be crying the sky is falling, but nothing could be further from the truth. The modest increases planned by the Fed do not substantially change a potential homeowner’s buying power.

For those with a specific monthly mortgage payment window, the rate increase could slightly change the listing price options moving forward. On the other side of the coin, rate hikes tend to flatten or at least slow asking prices. While buyers cull together a down payment, home prices may be slowing. That could prove very beneficial in terms of securing a dream home.

The basic point about the Federal Reserve raising rates is that this should not necessarily be viewed as a negative. The Fed reportedly had a long-term plan that followed alongside our economic recovery. If you compare the current rates against wage increases, low unemployment, and a juggernaut economy, home buyers are in the driver’s seat right now.

Whether you are interested in buying a new property or refinancing your current property, contact your trusted mortgage professional to find out about the current financing options available.

3 Budgeting Tips to Help Make Your New Mortgage Payments Easier

calculatorBuying a new home is an exciting time, but excitement can easily turn to stress if there isn’t enough money to pay the monthly mortgage bill. The added expense can take some time to get used to, but there are ways to make the payments easier, especially in those first few months when money is the tightest.

Prioritize The Mortgage Bill And Pay It Immediately

This may seem like a counterintuitive tip for anybody looking for help making mortgage payments, but it is easily the best one and the one that provides the most trouble for homeowners.

Late mortgage payments come with hefty fees that make it harder and harder to pay the next mortgage bill in full and on time. It’s a slippery slope that can end in foreclosure if the mortgage bills go unpaid for too long.

Don’t Get Carried Away With Household Spending

What’s the first thing most couples do after finally purchasing their first home? If they moved in from a smaller apartment, filling in the empty space will probably be at the top of their list.

Spending sprees are all too common after moving into a new home. There are extra rooms that need to be furnished and extra space that needs to be filled in with a larger television or another sofa.

These purchases will severely limit the mortgage budget and could lead to late payments right from the start for anybody who gets carried away. Put a budget in place for new furniture and stick to it so that there is always money for the mortgage.

Limit Spending In The First Few Months

The biggest change for anybody moving into a new home may be the extra expenses they aren’t used to paying. Water, power, heat, air conditioning, internet and cable are all things that could be included when renting and once those bills start coming in, it can be alarming.

It doesn’t matter how careful they are, budgeting can take a huge hit if new homeowners are expecting to pay the same as they were in their previous home. Always wait the first few months before making any purchases to get used to the new monthly bills that will be waiting.

Making successful mortgage payments starts with getting a mortgage you can actually afford. Make sure you consult with a trusted mortgage professional who will be able to help you find the best deal and get a mortgage that won’t break the bank each month.