Housing Recovery to Pick Up Steam in 2016

Steady employment and economic growth, pent-up demand, affordable home prices and attractive mortgage rates will keep the housing market on a gradual upward trend in 2016.

However, persistent headwinds related to shortages and availability of lots and labor, along with rising material prices are impeding a more robust recovery, according to economists who participated in a recent National Association of Home Builders (NAHB) Fall Construction Forecast Webinar.

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Terms every home buyer/seller should know (Part 2: F-Z)

Terms every home buyer/seller should know (Part 2: F-Z)

Like any industry, real estate has its own language and jargon. Below are some terms to help you translate. Before you dive in, be sure to check out Part 1 of the list.

Fannie Mae: The Federal National Mortgage Association, created during the Great Depression as part of the New Deal to encourage home ownership. This government-sponsored lender is one of the biggest mortgage providers in the country.

FICO: Abbreviation for the Fair Isaac Company, the former name of the company that provides the software used to calculate your credit rating. Lenders use your credit rating to determine the amount and conditions of your mortgage. Your FICO score is based on the amount you currently owe on your debts, your payment history, recently opened lines of credit, length of credit history and the types of credit you use.

GFE: The Good Faith Estimate form gives you an idea of what your closing charges and loan terms will be if you are approved for the loan you are applying for.

Lien: A legal claim against a property that must be satisfied before the property may be sold. Common liens include tax liens filed by the government if you haven’t paid your taxes, judgment liens from losing a lawsuit or an unpaid attorney, and mechanic’s liens from unpaid contractors or repairmen.

Lock-In (Rate Lock): A lender's promise to guarantee a borrower a certain interest rate and loan terms for a specified period of time.

MLS: Short for the Multiple Listing Service, a database of all properties for sale.

PITI: Stands for Principal, Interest, Taxes and Insurance. This is your monthly mortgage payment. The principal is the part of the payment that pays down the loan, the interest is the part of the payment that pays the lender for loaning you the money to buy the property, and the taxes and insurance are usually paid into an escrow account each month.

Settlement Statement: The standard document with the details of the sales transaction and the closing costs.

Short Sale: When a home is sold for less than the amount the current owner owes the mortgage company.

Title: The document that proves ownership of a property, publically recorded in the county in which the property is located.

Walk-Through: This is the final inspection the buyer makes of the home before closing to make certain the conditions of the property match the contract.

Hopefully this vocab lesson helped you feel more comfortable in the world of real estate. For more information about the process of buying or selling a home, contact a RE/MAX agent

Terms Every Home Buyer/Seller Should Know (Part 1: A-E)

Terms Every Home Buyer/Seller Should Know (Part 1: A-E)

Thinking about buying a home? Study the terms below to help you make informed decisions throughout the process.

Amortization: The distribution of payments into installments over time. The terms of the agreement will determine how much of each payment goes toward interest and how much goes toward paying down the principal.

A.R.M.: Abbreviation for Adjustable Rate Mortgage. An A.R.M. is a loan program with an interest rate that changes throughout the life of the loan, as opposed to a fixed rate mortgage. This means if interest rates rise, a house payment may increase. 

Balloon: The whopper of a payment due at the end of some loans.

CC&Rs: The covenants, conditions and restrictions overseen by Homeowners Associations.

Comps: Short for comparable properties to the home you’re buying or selling, used by Realtors to help determine property value.

Contingency: A section of the purchase agreement that spells out certain conditions that must be met before the sale can proceed. For example, necessary repairs recommended by the home inspector.

Closing: The meeting between the buyer and seller where mortgage documents are signed and the deed is transferred.

Deed: The legal document that transfers ownership of the property.

Disclosures: Information about the home that a seller must provide to a buyer. The extent of disclosures varies by state.

Earnest Money: A deposit of money buyers pay to sellers to prove their genuine intent to purchase. If the buyer walks away through no fault of the seller, the seller may keep the earnest money.

Escrow: Don’t worry — it’s not what you eat if you’re on the losing end of a bidding war. An account held by an independent third party while the buyer and seller negotiate the contract. Funds for earnest money, property taxes and homeowners insurance may be held in escrow.

Equity:  What’s left of the fair market value of a home after subtracting the amount the owner still owes on the mortgage. “Sweat equity” refers to the manual labor performed to maintain and improve the property over the years.

Is your head spinning from all the industry jargon? A real estate agent can help translate.

Buyer demand continues to outpace inventory of homes for sale

New Home Sales Surge

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New Home Sales Surge   According to the latestreport from the US Census Bureau and the Department of Housing and Urban Development, newly constructed home sales jumped 5.7% month-over-month and 21.6% year-over-year to an annual pace of 552,000. Many buyers are looking to the new homes market to make up for the lack of existing home sales inventory. National Association of Home Builders Chief Economist David Crowe explains: "Today's report indicates the release of pent-up housing demand as the overall economy strengthens, consumer confidence grows and mortgage interest rates remain low. The housing market should continue to move forward at a modest but more persistent pace throughout the rest of 2015." Regionally, the Northeast led the way with a 24.1% increase in new home sales, followed by the South (7.4%) and West (5.4%). Sales in the Midwest declined by 9.1%. The inventory of new homes for sale currently sits at a 4.7-month supply down slightly from July (4.9) and significantly from August 2014 (5.4). Buyers who purchased a new home were willing to spend more to get the amenities that they wanted. The median home price for new homes was $64,000 higher than existing homes in August at $292,700! Approved applications for building permits increased 3.5% over July and 12.5% over this time last year. Permit applications are seen as a strong indicator of builder confidence in the market. Bottom Line Buyer demand continues to outpace inventory of homes for sale. If you are thinking of selling your house this year, now may be the time to list before builders have a chance to replenish the supply of new homes. Want to know more about New Home Sales?