Mortgage Rates Increase – Mortgage rates are on the rise again, reaching their highest level since 2011. The 30-year fixed-rate mortgage rose six basis points recently to an average of 4.66 percent. “Mortgage rates so far in 2018 have had the most sustained increase to start the year in over 40 years,” says Sam Khater, Freddie Mac’s chief economist. “Through May, rates have risen in 15 out of the first 21 weeks (71 percent), which is the highest share since Freddie Mac began tracking this data for a full year in 1972.” Khater adds that the higher rates likely are having an impact on the housing market. “At a time when housing inventory remains extremely low, it’s worth watching whether these high borrowing costs lead some would-be sellers to stay put in their current home,” he says. “Inventory shortages would likely worsen if more homeowners decided not to sell out of reluctance of having a new mortgage with a higher rate.”
More Properties Selling Above List Price –According to the latest REALTORS® Confidence Index Survey, more homes are being sold for at or above the list price. Thirty-seven percent of properties that closed in February sold at or above the list price, according to the survey. A year ago, 35 percent of properties sold at or above the list price. From January 2012 through 2015, about a quarter of homes would sell for at or above the list price. “Buyer demand continues to outpace supply of homes being listed for sale in the market, sustaining the upward pressure on home prices,” the National Association of REALTORS® reported in its Economists’ Outlook blog.
Pros and Cons of Bypassing an Appraisal – Based on The Washington Post reports, since mortgage giants Fannie Mae and Freddie Mac announced last year special rules for when a property does not need a traditional in-person appraisal, only about 5 percent of Fannie’s 1.2 million home mortgages have qualified. Freddie estimates that, eventually, no-appraisal mortgages will account for up to 15 percent of its new loans. In some transactions, Fannie and Freddie are relying on proprietary analytics and property data to value homes rather than sending an appraiser to inspect it. But not every buyer is eligible to bypass the in-person appraisal. Generally, banks collect a down payment of at least 20 percent, and then Fannie Mae and Freddie Mac identify which properties are eligible.
Will Exurbs and Suburbs Merge? – According to realtor.com®, home buyers looking to escape city living can find similar neighborhood attributes in the suburbs and exurbs. Homes in both areas tend to offer more square footage, less noise, less pollution, and more privacy. But there are a few distinct differences between the suburbs and exurbs as well. The location is the key difference. Suburbs lie just outside of the city; exurbs are farther out and tend to be in more rural areas, “Suburbs provide a functional lifestyle close to shopping, schools, and transportation,” says New York-based real estate broker John McSherry. “Exurbs provide a remote location free from noise and congestion.” The suburban housing market has seen significant growth in recent years, according to research from the Urban Land Institute. The overflow of residents from the city to the suburbs continues to accelerate, and many suburbs are expanding outward.