Real Estate Information Archive

Good Monday Morning!

Inflation rates continue to rise and mortgage interest rates continue to increase as a result. This is a situation that I warned everyone about over a year ago, when inflation began to creep in on us. Now with high inflation we also have higher mortgage interest rates. The problem is two fold, mortgage interest rates have gone up far too quickly and have not given consumers or the economy any time to adjiust. The second issue is that the inventory of homes for sale remains historically low and this has put the brakes on home prices declining to help home buyers be able to afford a home purchase. Typically in a situation where mortgage rates increase, home values decline accordingly and the market adjusts. The reluctance of homeowners to give up their 2.5% and 3% mortgage rates is not going to change any time soon. What is really going to control our housing market over the next year and beyond is going to be the inflation rate. Here is an article from "Realtor.com" that talks about the current national housing market.

The numbers: U.S. pending-home sales fell 10.2% in September, which is the fourth straight monthly drop, according to the monthly index released Friday by the National Association of Realtors (NAR).

The decline was much larger that forecast. Analysts polled by the Wall Street Journal had forecast the pending home sales index to drop by 4%.

Outside of the pandemic, the drop in pending home sales is the largest year-over-year decline since 2001. Sales dropped by 33.1% in April 2020.

Contract signings fell by double-digits in all regions across the country.

Pending home sales reflect transactions where the contract has been signed for an existing-home sale, but the sale has not yet closed.

Economists view it as an indicator for the direction of existing-home sales in subsequent months.

The fall in pending sales is preceded by a drop in mortgage application activity, which fell in the latest week.

Key details: Compared with a year earlier, transactions were down by 31%.

Pending sales fell all four major U.S. regions, led by the Northeast, which saw a 16.2% drop from last month, followed by the West, with a 11.7% drop, the Midwest, with a 8.8% drop, and the South, where sales fell 8.1%

This is the tenth time pending home sales have fallen in the last 11 months.

Big picture: The housing market has stalled.

With rates above 7%, buyers aren’t biting, and sellers are having a hard time attracting bids.

Sales have dropped so much that it’s dragged down economic activity in the second quarter.

Sellers also not keen to give up their rock-bottom interest rates, the NAR noted, which means new supply isn’t hitting the market, which then keeps prices up.

According to June data from the Federal Housing Finance Agency, nearly a quarter of homeowners have mortgage rates of less than or equal to 3%. And the vast majority of owners—93%—have rates less than 6%.

What the realtors said: “Persistent inflation has proven quite harmful to the housing market,” said Lawrence Yun, chief economist at NAR.

With the Federal Reserve hiking interest rates to address inflation, the housing market finds itself with “far fewer buyers and even fewer sellers,” he added.

Though mortgage rates are high, “the new normal for mortgage rates could be around 7% for a while,” Yun stated.

With rates doubling from a year ago, on a $300,000 mortgage, mortgage borrowers are paying an additional $700 a month or more today, Yun said.

“Only when inflation is tamed will mortgage rates retreat and boost home purchasing power for buyers,” he added.

What are they saying?

“Contract signings for existing homes dropped 10.2% in September, to the lowest level since June 2010, with sharp declines across all geographic regions,” George Ratiu, senior economist and manager of economic research at Realtor.com said in a statement. 

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Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

3437 Chaucer Way, Eugene, OR 

Price: $510,000    Beds: 3    Baths: 2.5    SqFt: 1662

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Good Monday Morning!

We are in the midst of a very unusual housing market, both locally and nationally. Yes, the market has slowed on all fronts and is most likely going to slow even further due to economic policies that are negatively affecting our national economy. Home sales are down considerably both here in the Eugene and Springfiled area and across the nation. The odd part of the current market is that home inventories are remaining very low. Why is this? It is being caused by an unusual situation where mortgage loan rates were historically low for many years and the majority of home owners took advantage of them and now have mortgages at 3% or lower on their existing home. These homeowners are very reluctant to sell their current homes with a low mortgage interest rate and take on a new home which would have a mortgage interest rate double or even higher than what they currently have. This is not the typical scenario. We would normally see home inventories increase significantly with a declining market. This would in turn bring about a much more competitive home market and send home prices downward. This situation is why, even with a slower housing market, sellers are still able to sell fairly quickly and at good prices, even in this market. This is why, if you are considering a home sale now, your homes value may be slightly less than it was earlier this year, but the market remains much better than it really should for sellers. Here is an article from "Realtor.com" that goes over our current national housing market.

The numbers: U.S. existing-home sales fell 1.5% to a seasonally adjusted annual rate of 4.71 million in September, the National Association of Realtors said Wednesday.

This is the eighth straight monthly decline, the first since 2007.

The decline was in line with economists forecasts, according to a Wall Street Journal survey.

The last time existing-home sales fell to this level was May 2020.

Outside of the pandemic, the level of sales activity was lowest since September 2012.

Compared with September 2021, home sales were down 23.8%.

Key details: Existing-home prices continue to moderate given the backdrop of higher rates and cautious buyers. The median price for an existing home fell to $384,800 in September from $389,500 in the prior month.

And expect this median price to keep falling through January and February, the NAR said.

The number of homes on the market fell 2.3% to 1.25 million units in September.

Expressed in terms of the months-supply metric, there was a 3.2-month supply of homes for sale in September, same as the previous month. Before the pandemic, a four or five-month supply was more the norm.

Homes remained on the market for 19 days on average, up from 16 days in September. Pre-pandemic, the average time for homes to remain on the market was a month.

Sales of existing homes mostly fell across the country. Aside from the West, where sales were unchanged from September, the rest of the regions saw declines.

But the West has seen large declines on a year-over-basis, compared to the rest of the country, of 31.3% from last September.

California may see a “sizable” price drop of as much as 10%, the NAR said.

All-cash transactions made up 22% of all transactions. About 29% of homes were sold to first-time home buyers, unchanged from the previous month a percent higher than last year.

Big picture: The mortgage rate hike continues to hit the real-estate market, with sales slipping. And we’re already seeing some price declines led by some regions.

Rates are firmly above 7%, and is expected to keep rising as the Federal Reserve attacks high inflation in the country.

That’s causing a surge in borrowing costs, which continue to hurt buyer demand. The average contract rate for a 30-year fixed-rate mortgage is at 6.94%, according to the Mortgage Bankers Association.

Someone who was taking out a $300,000 mortgage last year at 3%, now with higher rates, can only afford a $190,000 mortgage, NAR said—a 37% drop in what they can afford.

Equifax, a credit reporting company, said during its third quarter results that it expects mortgage originations to fall over 60% in the fourth quarter.

Economists believe that the housing market downturn is sending ominous signals to the rest of the economy:

What the realtors said: Lawrence Yun, chief economist at the National Association of Realtors said that existing-home sales have further to drop.

“We are not yet at the bottom,” as interest rates are still rising, Yun told reporters.

He said sales could fall to 4.5 million.

Yun added that housing inventory, however, fell from September, meaning that people weren’t selling homes as much, which is hindering prices from coming down further to more affordable levels.

“There will not be a housing market crash because of lack of inventory,” Yun said.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

3437 Chaucer Way, Eugene, OR 

Price: $510,000    Beds: 3    Baths: 2.5    SqFt: 1662

This light & bright south facing home will not disappoint! Beautifully remodeled kitchen & eating area w/ quartz counters, maple cabinetry, stainless steel appliances & Brazilian cherry flooring. Open floor plan w/ great room concept. French doors l...View this property >> 

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Good Monday Morning!

There is still major change taking place in the both the local and national Real Estate markets.  Last week inflation numbers came in at a 40 year high and were at 8.2%.  What this means for the Real Estate industry is that most likely the Fed will raise rates again in an attempt to put a lid on the high inflation rates.  This in turn will effect both the stock market and bond markets and may create more increases in mortgage rates.  We have to slow inflation, but increased mortgage rates are not what the housing industry needs at this time.  My strong suggestion is that if you are wanting to purchase or sell a home, don't wait.  Mortgage interest rates actually dropped slightly last week and the rates we see today may be the lowest we will have for many months.  If you are considering the sale of your home or wanting to purchase a home, contact me and I can go over a number of great ways to either buy or sell in this market.  There are opportunities out there right now that we have not seen in years.  

Here are the home sale numbers for Lane County in the month of September 2022.

New listings (426) decreased 14.5% from the 498 listed in September 2021, and decreased 14.3% from the 497 listed in August 2022. 

Pending sales (381) decreased 15.9% from the 453 offers accepted in September 2021, and decreased 16.8% from the 458 offers accepted in August 2022.

Closed sales (423) decreased 7.8% from the 459 closings in September 2021, and decreased 8.8% from the 464 closings in August 2022.

Inventory and Market Time

Inventory increased to 1.3 months in September. Total market time increased to 31 days.

Year-To-Date Summary

Comparing the first nine months of 2022 to the same period in 2021, new listings (4,572) decreased 3.8%, pending sales (3,723) decreased 8.0%, and closed sales (3,639) decreased 3.9%.

Average and Median Sale Prices

Comparing 2022 to 2021 through September, the average sale price has increased 11.5% from $428,600 to $477,900. In the same comparison, the median sale price has increased 11.6% from $394,400 to $440,000.

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Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

1553 Linwood Street, Eugene, OR 

Price: $599,000    Beds: 7    Baths: 5.0    SqFt: 3100

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Good Monday Morning!

Right now in the Real Estate world any news of mortgage interest rate relief is good news. Last week was good news as mortgage rates dipped slightly.  Even though this dip was not huge it helps and it also put the stop on the several week trend of rising rates.

Here is a recent article from "Realtor.com" that describes the recent mortgage rate decline.

The numbers: Mortgage rates took a breather from its march towards 7% this week, as the economic outlook looks uncertain.

The 30-year fixed-rate mortgage averaged 6.66% as of Oct. 6, according to data released by Freddie Mac on Thursday.

That’s down 4 basis points from the previous week—one basis point is equal to one hundredth of a percentage point, or 1% of 1%.

last week, the 30-year was at 6.7%.

It’s worth noting that Mortgage News Daily, which follows day-to-day movement in mortgage rates, is noting that the 30-year is at 6.95%.

Though rates have come down as per Freddie Mac — albeit ever so slightly — overall, mortgage rates are still high relative to where they were a year ago.

Last year, the 30-year was averaging at 2.99%.

“Rates remain quite high compared to just one year ago,” Sam Khater, chief economist at Freddie Mac, said in a statement, “meaning housing continues to be expensive for potential home buyers.”

This October, the average rate on the 15-year mortgage also dropped slightly to 5.9%.

The adjustable-rate mortgage, or ARM, averaged 5.36%, up from the prior week. Interest in ARMs is rising, with the share of ARMs as a percentage of all mortgage applications for purchases of a home rising to 12%, the Mortgage Bankers Association said. That’s the highest level it’s reached since 2008.

Overall, mortgage applications fell significantly in the latest week, as buyers pulled back amid higher rates, and also due to the hurricane-induced closures in Florida.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

5427 Royal Ave, Eugene, OR 

Price: $1,500,000    Beds: 4    Baths: 3.0    SqFt: 3218

One of a kind property. This close-in home and property has an 80' X 120' riding arena with 8 stalls, 24' X 40' small barn and tac room with 3 stalls, 40' X 100' barn with 10 stalls and 600 sq.ft. apartment. Arena and apartment building are Butler b...View this property >> 

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Good Monday Morning!

We are experiencing some very turbulent economic times and at this point, there is little relief in site.  Yes, this is effecting the national housing market in a big way.  Mortgage interest rates are up from a long run of historic low rates, homes sales are sagging and home prices are beginning to slip. As I have mentioned previously, when one door closes, two more open.  For home buyers, there are many more homes to choose from now than earlier this year, the days of bidding wars are long gone and the price a buyer pays for a home now may compensate for the increased mortgage interest rates.  Also, look for mortgage loan programs to start becoming available that are geared towards getting buyers into houses with the new higher rates.  Over the next few months you may see some attractive ARM loans, 40 year loan terms and also some rewards for those buyers with great credit or even good payment history.  One loan that is now available is an FHA loan that rewards those who have been renters for having a great rental history. The following article speaks about this new mortgage loan program through FHA.

The Federal Housing Administration published a letter to lenders on Tuesday urging them to consider including a borrower’s positive rental payment history when applying for FHA-insured financing. The move is believed to be a boost for first-time home buyers to help to improve their credit scores when applying for a mortgage, the memo reads. 

“If you’re regularly paying your rent on time, that’s a good indication you will also pay your mortgage on time,” says Julia Gordon, Federal Housing commissioner. “We hope that adding this positive factor to all of the characteristics currently considered in an FHA credit evaluation will increase access to affordable FHA-insured mortgages for first-time home buyers.” 

The FHA will consider positive rental payment history as the on-time payment of all rental payments over the last 12 months. Lenders originating purchase mortgages for FHA insurance will be required to obtain verification of the borrower’s timely rental payments and indicate it on their TOTAL Mortgage Scorecard, which the FHA uses to evaluate borrower credit history and mortgage application information when underwriting loans. 

“This change makes FHA requirements more flexible and can help remove barriers to homeownership, particularly for those with nontraditional credit or thin credit files,” says Julienne Joseph, deputy assistant secretary for single-family housing.

The FHA’s move follows on the heels of an announcement by Experian, one of the main credit bureaus, earlier this month that its Experian Boost program would offer a way for consumers to add qualifying, positive residential rental paymentsdirectly to their credit file. Experian’s research has determined that 66% of its consumers will see an instant increase in their FICO score by factoring in on-time rental payment data. The credit bureau said consumers who would see the biggest improvement—of about 14 points—are those with thin credit files or low FICO scores. 

Also, Fannie Mae launched this week a “Multifamily Positive Rent Payment Reporting” pilot program, which is aimed at helping renters build their credit histories and boost their credit score. The program allows eligible property owners to share on-time rent payment data through a system to the three major credit bureau’s so it can be included in the renter’s credit profile. It’s the latest of several initiatives from the government-sponsored enterprise to get rental payment history included in the underwriting process.

In 2021, Freddie Mac announced a new program to help renters build up their credit profiles and help make them more creditworthy. The initiative provides a means for owners or managers of multifamily properties to report on-time rental payments to the three major credit bureaus. 

The move was aimed at helping a portion of the more than 45 million U.S. adults who have no credit score.

If you are wanting to sell your home in this current market, things may not be as bad a you think.  This is especially true if you are selling to purchase another home.  Please get in touch if you are wanting to sell your home.  We can give you a complete evaluation in regards to your homes value and and furnish you with details as to what selling your home in todays market looks like.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

4781 Treewood Ct, Florence, OR 

Price: $515,000    Beds: 2    Baths: 2.0    SqFt: 1552

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