Rising mortgage rates are the top concern for homebuyers

 In the current housing market, prices are high, the supply of homes is low and credit is tight. But the number one concern for potential homebuyers is rising mortgage rates, according to a recent online survey by real estate research firm Trulia.

More than 40 percent of people who planned to eventually buy a home said they were worried about rising rates, followed by rising home prices and low inventory. Among those homeowners who were planning to buy a home within the next year, inventory just edged out rising rates, the survey said.

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The 30-year fixed rate touched 4.5 percent last week, according to data from Freddie Mac, and there appears to be no turning back, economists say. If rates rise too fast, they have the potential to hurt the housing recovery by pricing homebuyers out of the market.

More than half of homebuyers also said that they would be discouraged from entering the market if rates reached 6 percent. Rates are still low by historical standards, but people have grown accustomed to them being below 4 percent, said Jed Kolko, chief economist at Trulia.

Mortgage rates have been under the spotlight lately following the Federal Reserve’s statements that it could wind down its stimulus program early if the economy keeps improving. The Fed’s bond-buying program has kept rates artificially low since the housing crash. As Fed Chairman Ben S. Bernanke testifies this week before Congress, his remarks will be carefully scrutinized to get a sense of the central bank’s policy direction for the rest of the year.

It’s logical for people to be worried about rising rates, Kolko said, but what they should really concentrate on is credit.

“Low mortgage rates don’t do much good if you can’t get a mortgage,” he said.
There are some signs that banks have started to loosen credit standards, Kolko said, but rising mortgage rates may actually help further loosen them. Mortgage credit availability increased in June compared with last year, according to data from the Mortgage Bankers Association.
“Some banks will look to do more home purchase lending as their refinancing business shrinks,” he said.

Homeowners who want to refinance their mortgages — to take advantage of low rates — are immediately affected by rising rates. The number of refinancing applications has fallen to its lowest level in two years over the past few weeks, according to data from the Mortgage Bankers Association.

In the near future, rising rates are more likely to push demand higher, Kolko and other economists say.

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Real Estate Watch: New tactics for relisting a home

Relisting a home isn't an enviable position for any seller. Something went wrong the first time, and for many sellers, trying again to sell the home raises more questions than answers.

While it's common for real estate agents to handle relistings, data on just how common the situation is can be hard to come by because some agents pull listings for a week or two and then relist. It's a tactic designed to make a home listing look fresh. But increasingly, a true relisting is defined as having a 90-day gap between the time the property goes off the market and when it comes back. In that scenario, many real estate agents say it isn't always price that kept the property from moving.
"When relisting a home, the first objective should be to tackle the questions of why the home was removed from the market in the first place," says Aaron Mighty, a real estate broker in central Florida. "Clearly, in this economy and recovering housing market, it can be one of many reasons, but the best answer is always the truth, no matter what it may be."

Listen to broker comments. If you're relisting your home after three or more months off the market, the best place to start is with a post-mortem on what went wrong the last time.
After the original listing ends, ask your agent how the market perceived the home, said Paul LeJoy, founder of Pacific Realty Partners in Newark, Calif. What you hear should guide future strategy, especially if a number of agents and buyers raise the same issues.
Consider low-cost improvements. But don't go overboard, says Cannon Christian, president of Renovation Realty in San Diego.

"Painting, whether interior or exterior, is relatively low-cost and adds a quick revamp to your home," Christian says.

But that doesn't mean customizing the property to your tastes. Paint in neutral colors, and avoid making improvements beyond cosmetic changes. Expensive repairs seldom pay for themselves.
Stage it right. Sellers who relist their homes without rethinking staging aren't setting themselves up for success, according to David Kean, a real estate agent in Beverly Hills, Calif.
"A well-presented house can make all the difference," says Kean, who advises clients to keep a listing "clean and clear" by decluttering. "If you don't need something, store it, sell it or give it away," he says.

He advises clients to air out their homes because every dwelling has a distinct aroma that may not be pleasing to all buyers.
Hire the right agent. If your home didn't sell, consider hiring someone else to handle the listing. But, says Deb Tomaro, a Re/Max agent in Bloomington, Ind., it's the seller's responsibility to do the due diligence.

"People tend to pick a Realtor because he's their parent's neighbor, or she's their hair stylist's cousin, and a lot of times, it doesn't end up being a good match," Tomaro says. "What they need to do is ask a lot of questions to make sure the agent is on the same page."
Change the marketing. Ask if the previous marketing plan's ads and photos drove enough prospective buyers to your property.

A good place to start, says Houston Realtor Sissy Lappin, is with the photos in the old listing.
"Some of the pictures I see on the (multiple listing service) look like a drunk took them with a flip phone," she says, adding that all sellers need quality pictures in their listings.
In addition to more professional photos, Lappin says it's critical that sellers make sure their agent markets the property widely online.

Should you reduce the price? That's perhaps the most common question sellers face when they return to the market after an unsuccessful first attempt to sell a house.
Sellers should consider cutting the price if some or many of the market conditions remain the same as when the house was on the market the first time. A general rule of thumb is if 40 buyers have seen your home and you have not received a single offer, your home is overpriced.
Mortgage rates this week

Mortgage rates skyrocketed this week as the market reacted to hints that the Federal Reserve may taper its bond-buying program soon.
The 30-year fixed-rate mortgage rose 25 basis points to 3.99 percent. A basis point is one-hundredth of 1 percentage point.

The 15-year fixed-rate mortgage rose 24 basis points to 3.21 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, rose 21 basis points to 4.2 percent.
The 5/1 adjustable-rate mortgage rose 11 basis points to 2.81 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.

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Five questions to ask before hiring a real estate agent

Want to sell your property quickly? Looking for your dream house? Are you hoping to get the best deal possible during the complex process of buying or selling a home? With so much money – and often, emotion – at stake, going it alone is generally not the best way to reach your goals. The secret for getting exactly what you want: Work with a savvy real estate agent.

A qualified real estate agent will streamline the process, help you save money and serve as a liaison with your best interests in mind. But how do you find the right real estate agent? Hundreds or even thousands of real estate professionals may work in your area, but finding the best one for your unique situation doesn’t have to be time-consuming.

Remember, you’re hiring this individual for his or her expertise and services. Your agent will get a designated percentage of the sale of the house. Depending on negotiations, this cost may be covered by the seller, buyer or split by both. You want someone who will work hard for you, but also someone you are comfortable with because you may be spending a lot of time together.

To find the best real estate agent for you, ask these five critical questions:

1. How many buyers or sellers have you helped in the last year in the area?

An active agent is more likely to be up-to-date on the market, and local and state laws. Furthermore, active agents with experience in your neighborhood, or the neighborhood where you’d like to move, are better positioned to help you because they can provide unique insight that other less-knowledgeable agents cannot.

2. Do you have advanced training?

Any licensed real estate agent can help you buy or sell a home. But an agent who has advanced specialty training is better qualified to assist you. For example, an agent who is an Accredited Buyer’s Representative (ABR), has enhanced training focusing specifically on buyers. An agent who is a Certified Distressed Property Expert (CDPE) has special training to deal with short sales and foreclosures. RE/MAX agents on average have more certifications and extra training to better serve buyers and sellers.

3. What services do you offer?

While the majority of people shop for homes online first, having someone on your side through the search and sale process can save time and money. A buyer’s agent should help you schedule showings, assist with negotiating the price of the new home, guide you through the paperwork, be there at the closing table, and provide insight through any contingencies during the process.

For sellers, an agent should help set the price of the home, based on a competitive market analysis (CMA). Ask the agent how he or she will market your home (websites, videos, direct mail). Also inquire about assistance with staging and hosting open houses. Then, when the offers come in, the agent can help you with the decision on which one to accept.

4. Who else will be working with me?

The person you hire should do most of the work, but you may work with a support team, too. Additional team members may include mortgage brokers, home inspectors or contractors. If you’d like more information about what it’s like to work with an agent, don’t be shy about asking for references. You’ll get real insight into what it’s like to work with that particular professional.

5. How often will I hear from you?

No matter if you’re selling or buying, ask how often you’ll hear from the agent and make sure that this aligns with your expectations. For buyers: Do you just want to hear when there’s a new home that may interest you? Do you want regular check-in calls too? For sellers: Do you want to hear from your agent only after a buyer has toured your home, or do you want to be kept in the loop on a weekly basis?

Buying or selling a home is a complex process most people do only a few times in their lives. Hiring the right real estate agent from a reputable company like RE/MAX can give you an edge so you get the best deal possible while meeting all your goals.

You can learn more about the home buying and selling process and find an experienced agent in your neighborhood by visiting www.homewardboundpro.com

Mortgage Rates: Hurry Up and Wait (absence of news on the fiscal cliff)

The waiting game continues. As our Representatives in Washington DC, the President and the members of Congress dilly-dally instead of getting serious about negotiating a deal to avoid the major tax increases and automatic spending cuts known as the fiscal cliff, market participants have no choice but to wait for signs of movement. Today, with no new information to consider markets are calm.


Mortgage rates have ticked higher this morning after a positive start for the stock market. In the absence of news on the fiscal cliff, the stock market today is trading simply based on non-US and corporate news. A positive economic report from Germany and a halt to the recent fall in the stock of Apple has turned trading positive this morning.

Equally, if not more importantly today, the US Federal Reserve’s Open Market Committee begins a two-day meeting at which it is widely believed to announce a new program for the purchase of long-term government securities. It’s Operation Twist program, in which existing short-term securities in its portfolio were replaced with longer-term securities (primarily mortgage-backed securities) has helped to push rates to the all-time lows where they currently sit. However, Operation Twist will end at the end of this month. Without new buying by the Fed, rates would definitely rise, yet new purchases expand the Fed’s balance sheet which adds to the risk.

Tomorrow all eyes will be on the Fed and their decision to pursue additional quantitative easing. I also expect the market will be waiting to hear the thoughts of Chairman Bernanke in the post-meeting news conference regarding the fiscal-cliff and longer-term budget matters. I expect the Fed Chairman to let our political leaders “have it” with both barrels tomorrow and explain clearly just how much damage is possible if we fail to reach a deal on these fiscal matters.