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Is Your House Priced To Sell Immediately (PTSI)?

In today’s real estate market, with more houses coming to market every day and eager buyers searching for their dream home, setting the right price for your house is one of the most important things you can do.

According to CoreLogic’s latest Home Price Index, home values have risen at over 6% a year over the past two years, but have started to slow to 4.4% over the last 12 months. By this time next year, CoreLogic predicts that home values will be 4.6% higher.

With prices slowing from their previous pace, homeowners must realize that pricing their homes a little OVER market value to leave room for negotiation will actually dramatically decrease the number of buyers who will see their listing! (see the chart below)Is Your House Priced To Sell Immediately (PTSI)? | Simplifying The MarketInstead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be negotiating with a buyer over the price, but will instead have multiple buyers competing with each other over the house.

The key to selling your house in 2019 is making sure your house is Priced To Sell Immediately (PTSI)! That way, your home will be seen by the most buyers and will sell at a great price before more competition comes to market!

Bottom Line

If you are debating listing your house for sale, let’s get together to discuss how to price your home appropriately for our area and maximize your exposure this Spring Market!

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TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

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Do 46 Million Millennials Know They Are Mortgage Ready?

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”, meaning they meet the qualifications to be approved for a mortgage today!

  • a FICO Score ≥ 620
  • a Back-End Debt to Income Ratio ≤ 25%
  • no Foreclosures or Bankruptcies in the last 7 years
  • no severe delinquencies in 1 year

Rob Chrane, CEO of Down Payment Resource, commented on the findings of the report,

“We now know there are millions of buyers with the income & credit necessary to qualify to buy a home. The biggest question is:

Do they know it? …Unfortunately, many renters don’t investigate homeownership simply because they don’t believe it’s an option.”

The good news is that more and more millennials are realizing that they can afford a home now. Even so, more can be done to increase awareness of low down payment programs to attract even more of this generation.

New data from realtor.com shows that in December, millennials accounted for 42% of all new home loans originated in the month. This is more than any other generation.

Bottom Line

If you are one of the many millennials who may be “Mortgage Ready” but are unsure what your next steps should be, let’s get together to help guide you on your path to homeownership!

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

What Credit Score Do You Need To Buy A House?

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:

  • 16% Very Poor (300-579)
  • 18% Fair (580-669)
  • 21% Good (670-739)
  • 25% Very Good (740-799)
  • 20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”

There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640. Veterans Affairs (VA) loans have no credit score requirement.

As you can see, none of them are above 700!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:What Credit Score Do You Need To Buy A House? | Simplifying The MarketAs you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!

One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

FICO® reported,

Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.What Credit Score Do You Need To Buy A House? | Simplifying The Market

Bottom Line

At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

Want To Increase Your Family’s Wealth? Here’s How!

Everyone should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of ‘forced savings’ that allows you to use your monthly housing costs to increase your family’s wealth.

Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equityAs your home’s value increases, you also gain home equity.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists. They are asked to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

The latest data from their Q1 2019 Survey revealed that home prices are expected to round out the year 4.3% higher than they were in January. For the next 5 years, home values will appreciate by an average of 3.21% a year.

This is great news for homeowners!

For example, let’s assume a young couple purchased and closed on a $250,000 home in January of this year. Simply through their home appreciating in value, those homeowners can build their home equity by over $40,000 over the next five years.

Want To Increase Your Family’s Wealth? Here’s How! | Simplifying The Market

Let’s look at the potential equity gained over the same period of time at some higher price points:

Want To Increase Your Family’s Wealth? Here’s How! | Simplifying The Market

In many cases, home equity is a large portion of a family’s overall net worth.

Bottom Line

Whether it’s your first or your fifth, if your plan for this year includes buying a home, let’s get together to help you understand where prices are headed in our area.

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

Don’t Let Your Luck Run Out! Buy A Home This Spring [INFOGRAPHIC]

Don’t Let Your Luck Run Out! Buy A Home This Spring [INFOGRAPHIC] | Simplifying The Market

 

Some Highlights:

  • Interest Rates for a 30-year fixed rate mortgage have dropped to 4.41% from near 5% in 2018.
  • Take advantage of more inventory coming to market in the spring to find your dream home!
  • Buying now will allow you to start earning equity today!

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

Homeownership is a Cornerstone of the American Dream

“The rumors of my death are greatly exaggerated.”

The famous quote attributed to Mark Twain can apply to homeownership in the United States today. During the housing bubble of the last decade, the homeownership rate soared to over sixty-nine percent. After the crash, that percentage continued to fall for the next ten years.

 

That led to speculation that homeownership was no longer seen as a major component of the American Dream. That belief became so widespread that the term “renters’ society” began to be used by some to define American consumers.

However, the latest report by the Census Bureau on homeownership shows that over the last two years, the percentage of homeowners has increased in each of the last eight quarters.

Homeownership is a Cornerstone of the American Dream | Simplifying The Market

Going forward…

It appears the homeownership rate will continue to increase.

The 2019 Aspiring Home Buyers Profile recently released by the National Association of Realtors revealed that 84% of non-owners want to own a home in the future. That percentage increased from 73% earlier last year.

Bottom Line

In the United States, the concept of homeownership as part of the American Dream is very much alive and well.

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”



Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

 

What’s Going On with Bidding Wars?

In a strong seller’s market, like the one we have experienced over the past few years, bidding wars are common and expected. This makes sense! A seller’s market is defined as a market in which the inventory of homes for sale cannot satisfy the number of buyers who want to purchase a home.

 

According to the Cambridge English Dictionary, bidding wars occur when two or more parties repeatedly outbid each other as they compete to purchase something- in this case, a home.

In some areas of the country, first-time buyers have been met with fierce competition throughout their experience. Some have been out-bid multiple times before finally winning a bid on a home to call their own.

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), there is currently a 3.7-month supply of homes for sale.

With the current number of houses listed for sale and the level of demand from buyers, this means it would take 3.7 months for all the homes listed to sell if no additional listings came to market. Any supply number under a 6-month supply is considered a seller’s market. According to NAR, the housing market hasn’t had a 6-month supply of homes for sale since August 2012.

Good News for Buyers

A recent report shows that the percentage of houses sold including a bidding war before settling on a final price decreased from 53% in January of 2018 to 13% this year.

One reason for the decline is an influx of homes being listed for sale. Even though the month’s supply number is not increasing, the number of homes for sale is. The chart below shows the year-over-year change in inventory over the last 12 months.

What’s Going On with Bidding Wars? | Simplifying The Market

­­

As you can see, the number of homes for sale has started to build over the last eight months. Prior to this reversal, inventory levels had fallen for 36 consecutive months when compared to the year before.

Danielle Hale, realtor.com’s Chief Economist, gave some insight into why bidding wars are less common on a local level this year,

“[Last year] you might have been the only listing in your neighborhood, and you could put your home up at a certain list price and you would likely see multiple offers at or above that list price. That tide is turning this year.

It’s going to depend on what neighborhood you’re in, but we expect it to be more common this year that you won’t be the only listing.”

Inventory in the luxury and premium markets (the top 25% of listings in an area by price), is increasing at a greater rate than the starter home market. As the choices buyers have continued to increase, the likelihood of a bidding war will decrease.

Bottom Line

If you are debating listing your house for sale this year, you may not want to wait for additional competition as inventory continues to rise.

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

4 Reasons to Buy a Home in the Spring

Spring has sprung, and it’s a great time to buy a home! Here are four reasons to consider buying today instead of waiting.

 

1. Prices Will Continue to Rise

CoreLogic’s latest U.S. Home Price Insights reports that home prices have appreciated by 4.4% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.6% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year fixed rate mortgage came in at 4.41% last week. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

Some renters have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgageeither yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move On with Your Life

The cost of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Examine the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, greater safety for your family, or you just want to have control over renovations, now could be the time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

Why an Economic Slowdown Will NOT Crush Real Estate this Time

Last week, the National Association for Business Economics released their February 2019 Economic Policy Survey. The survey revealed that a majority of the panel believe an economic slowdown is in the near future:

“While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.”

 

Their findings coincide with three previous surveys calling for a slowdown sometime in the next two years:

  1. The Pulsenomics Survey of Market Analysts
  2. The Wall Street Journal Survey of Economists
  3. The Duke University Survey of American CFOs

That raises the question: Will the real estate market be impacted like it was during the last recession?

A recession does not equal a housing crisis. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, prices fell dramatically because the housing collapse caused the recession. However, if we look at the previous four recessions, we can see that home values weren’t negatively impacted:

  • January 1980 to July 1980: Home values rose 4.5%
  • July 1981 to November 1982: Home values rose 1.9%
  • July 1990 to March 1991: Home values fell less than 1%
  • March 2001 to November 2001: Home values rose 4.8%

Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained:

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

The housing market is just “normalizing”. Inventory is starting to increase and home prices are finally stabilizing. This is a good thing for both buyers and sellers as we move forward.

Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. As renowned financial analyst, Morgan Housel, recently tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

2 Reports That Say Now Is a Great Time to Sell

Heading into the spring buying market, there are strong trends starting to emerge.

The inventory of homes for sale has increased on a year-over-year basis for eight months in a row. Home price appreciation has continued to grow, although at a slower rate. The homeownership rate has reached heights last seen in 2014, with millennials and Generation X leading the way!

Let’s dive a little deeper into some of the recent reports that have been released and what they mean for the spring buying season!

1. National Association of Realtor’s Existing Home Sales Report

Sales of existing homes were down for the third consecutive month in January. Some of this can be explained by the natural seasonality that the real estate market experiences every year, and some can be explained even further by a lack of homes available for sale on the market.

Inventory

For the last eight months, the inventory of homes for sale has been higher when compared to the same month the year before. The challenge in the market is the mismatch of the type of home that is available for sale. First-time homebuyers looking for a starter home are often competing with other buyers to stand out, often outbidding each other.

Lawrence Yun, NAR’s Chief Economist, agrees that the market is still experiencing an inventory shortage.

“In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed.”

Home Prices

The median home price for homes sold in January was $247,500. This is up 2.8% from January 2018 and marks the 83rd consecutive month of year-over-year gains. The 2.8% growth in home prices represents the smallest year-over-year change since February 2012 but is a welcome change for buyers who had feared being priced out of the market.

Days on the Market

Properties that sold in January were on the market for an average of 49 days with 38% of homes on the market for less than a month.

Yun is positive about how today’s market conditions will help buyers this spring,

 “Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”

2. NAR’s Pending Home Sales Report

The national Pending Home Sales Index (PHSI) rose 4.6% to 103.2 in January from 98.7 in December. An index score of 100 is considered normal. All four major regions of the country experienced gains in January, with the largest increase coming in the South.

 “The PHSI is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.”

Increases in the PHSI often predict increases in the level of home sales in the coming months, which is great news for the housing market leading in to spring! Yun had this to say,

“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”

Bottom Line

The housing market in 2019 will require homeowners to list their house at the right price to attract buyers. If interest rates continue to stay low while wages increase, and more inventory comes to market, 2019 could be one of the best years for home sales in recent history.

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JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”




Cell: (626) 269-9945

Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro