Home prices rise 5.2% in October: S&P/Case-Shiller

CNBC Real Estate - Tue, 12/29/2015 - 14:00
Tight supply is pushing home prices ever higher again — with annual gains swelling in most major markets.

4 Steps to a Clean Kitchen, Fresh Start - Mon, 12/28/2015 - 06:00

Filed under: ,

Shutterstock / Breadmaker


Most of us make a daily effort to keep our kitchens and food preparation areas fairly clean and tidy. But if you think your kitchen is really clean, you may have to think again.

There are literally dozens of places in your kitchen that are rarely touched in those regular mop-ups, and these areas can detract from the overall appearance and function of one of your most-used rooms. The solution: a kitchen deep-clean.

Every kitchen could use an intense scrub every couple of months, but don't let that daunt you. Follow this strategy, and your cleaning day will be as painless as it is productive.

1. Clean out your kitchen cabinets.

The kitchen typically is the focal point of most household activity, and therefore accumulates a number of items that don't necessarily have any business being there. Grab a box or bag, and fill it up with any items - such as books, electronics, and mail - that belong elsewhere.

Once the obvious miscellany are removed, empty all the cupboards and drawers. As you remove dishes, glassware, cookware, and gadgets, separate out any pieces that are damaged or infrequently used into another pile for repair, donation, or trash.

Give your pantry's contents a quick once-over, too. Throw away any items past their expiration date, and donate anything you won't eat to the local food pantry.

Before you move your curated collection back in, wipe down all the cabinet interiors and shelves with soapy water. A diluted vinegar spray is ideal for pantry shelves, since its main ingredient is both non-toxic and anti-bacterial. Dry with a clean cloth or paper towel, then line the shelves with paper for a more visually streamlined appearance.

Finally, fill up your cabinets, making sure the things you use the most - and those closest to expiring - are the easiest to reach.

2. Say goodbye to grime and grease.

Cooking inevitably leads to a sticky buildup of food particles and grease on your cabinets, walls, and countertops, so once you've dealt with the interiors, turn your attention to the exteriors.

-- Wipe down all surfaces with a kitchen degreaser, then polish the wood and metal with an appropriate polish.

-- Unscrew whatever parts can be removed (knobs, pulls, and handles), and place them in a mixture of lemon juice and water. While they soak, you'll be able to better clean the surface where they attach. Rinse well with water and replace. >

-- Remedies for splotches and stains vary depending on the countertop material. If yours is a wooden butcherblock counter, for example, remove stains with a solution of one teaspoon of lemon juice or hydrogen peroxide per two ounces of water. For laminate, treat stains with a baking soda and water paste. In any case, stick with soft cloths and sponges to avoid scratching up your surface.

-- If you have a tile backsplash, scrub the grout lines with lemon juice and salt to get rid of stains and discoloration; rinse with warm water.
-- Wipe down door knobs, light fixtures, light switches and switch plates, and any other surfaces that could possibly collect dust, including spice racks, pot hangers, and clocks. >

3. Give your appliances some extra TLC.

The surfaces of your fridge, oven, and dishwasher tend to get completely covered in fingerprints, smudges, and germs over time. Start by cleaning their exteriors using the cleanser recommended by the manufacturer. Then target each appliance individually.

-- Treat the refrigerator as you did the cabinets. Pull everything out, and toss any food and condiments past their expiration dates. Wipe down all of the emptied appliance's shelves, drawers, and bins using a vinegar and water mixture. Attack any stubborn spills with the additional scrubbing power of a pinch of baking soda. Refill the fridge, and repeat with your freezer. Before you've finished, thoroughly dust and vacuum the unit's fan and coils.

--Clear your stovetop of any burners and move them to a bucket or sink full of warm, sudsy water while you wash the surface where they sit. Don't forget to wipe down the front, sides, and knobs, too. Soapy water works for a light cleaning, but if you need to scrub off a stain, mix equal parts water, baking soda, and salt into a mild abrasive paste and let it sit on your spill for a few minutes. Apply the paste to any splotches on the stovetop, then wait a few minutes. Use a little elbow grease to rub off the spot, and wipe away the paste. Rinse and towel off the grates before you replace them.

​--You'll have already wiped the worst off the outside of your dishwasher, so freshen the inside by running a couple of almost-empty loads while you work in the kitchen. First, fill a dishwasher-safe bowl with 1 cup vinegar, place it in the top rack, and run a full hot-water cycle. Then remove the bowl, sprinkle a cup of baking soda over the bottom of the appliance, and run it on a short hot-water cycle.

--Wipe down the garbage disposal. Run a few pieces of cut citrus fruit through the garbage disposal to kill any stench, followed by a rinse with boiling-hot water. Even if you don't have a disposal, at minimum wipe down the tub of your sink, faucet, and knobs. Then flush any potential clogs from its drain with a half-cup baking soda and a half-cup vinegar.

And don't neglect small countertop appliances in your deep-clean:

--Toaster: Remove the crumb trap, brush away any food particles, and wipe down the exterior.

-- Coffee maker: Run a 50-50 vinegar-and-water mixture through the machine, then do several water-only brews to wash out the lingering acidic flavor.

--Microwave: Nuke a bowl full of water and cut lemons for 10 to 15 minutes so their steam soaks away all the burnt-on food bits. Wipe the interior clean with a damp microfiber cloth.

4. Finish with the floor.

While wiping down every last surface in your kitchen, you've likely knocked more than a few crumbs to the ground. That's why it's best to end your deep-clean with a good sweep or vacuum.

Grab your dust-busting instrument of choice, and zero in on the collection along baseboards and heating registers. Use a lightly damp mop and an appropriate cleanser for your flooring to wipe up.

Send soiled towels, oven mitts, rugs, and curtains through the wash and replace.

Return your cleaning supplies to their homes.

Then wash your hands of all the hard work in the fresh sink in your bright, shiny kitchen.


Permalink | Email this | Comments

How to Give a Boring Apartment a Jolt of Style - Mon, 12/28/2015 - 06:00

Filed under: ,

Getty Images/iStockphoto

By Brie Dyas

Unless you're lucky enough to live in a grand older building, a loft, or one of the high-design modern luxury developments that are popping up everywhere, your apartment might best be described as a plain white box defined by a distinct lack of character. After all, apartment complexes are generally built to appeal to just about everyone.

That's where decor comes in. But decorating that new apartment isn't necessarily about what you like -- it's also about what won't affect your security deposit. The following apartment decor ideas will help you bring personality to your pad without freaking out your landlord. (Just make sure to read the fine print of your lease or get the OK from said landlord before reaching for that paint roller.)

Repurpose a Craft Staple

Washi tape is all over Pinterest, and for good reason. The adhesive-backed paper strips are affordable and come in a rainbow of patterns and colors. Since it's basically pretty masking tape, washi tape presents endless DIY options for renters. We love how Molly Madfis of the blog Almost Makes Perfect used washi tape to create a pattern on her plain white closet doors that's reminiscent of architectural molding.

Can't Paint? Go for Temporary Wall Coverings

"Look into removable wallpaper. The stuff has grown leaps and bounds in recent years -- there are so many cute varieties on the market," says designer Jacqueline Clark. "It's a great way to personalize your space, without any permanency." Chasing Paper is just one of the many companies offering an impressive range of motifs and solids that rival "real" wallpaper, with precut options backed with a low-tack adhesive that allows you to simply peel away panels once moving day rolls around.

Use Color Strategically

Whether you use removable wallpaper or can actually paint your apartment, a "statement wall" makes the task easy. By focusing the attention on one wall through color or pattern, you'll create a visual illusion that makes a room seem longer or wider (depending on the dimensions of the wall you choose).

Hide Visual Clutter

Apartments never quite have enough outlets, which leads to a mass of wires, cables, and extension cords. However, this inconvenience presents an option to get creative. "When it comes to hiding wires, try your best to camouflage them into your existing decor," says designer Kristin Jackson of Hunted Interior. "I like to use garden stools for hiding wires and routers to keep my desk area clean and stylish."

Choose Dual-Purpose Pieces

Jennifer Koen, vice president of business development at the designer furniture consignment site Viyet, has noticed a demand for furniture that can serve more than one purpose. "Dual-purpose pieces such as ottomans with storage inside, small x-base benches that can be tucked under a console and pulled out for extra seating, pull-out sofas, and nesting tables for entertaining are always on trend," she says. Koen also points to the trend of bar carts, which can add style and be of endless service. You can use the cart for entertaining, as a movable bookshelf, or as display space for small items and art. Use it by the door to bring a welcoming touch to your entry (no matter how tiny).

Accessorize with Storage

There's only so much that can fit in an under-the-bed box. Baskets and decorative bins provide a spot to hide clutter while adding a little personality to your space. You can also pair them with open shelving or a storage piece, a la Liz Fourez of the blog Love Grows Wild. She used rustic bins to bring a vintage feel to the credenza.

Fix a Boring View with Window Decals

Peel-and-stick film ranges from privacy-boosting frosted effects to patterns reminiscent of stained glass. No matter what you choose, it's one of the cheapest ways to add a little extra interest to a window.


Permalink | Email this | Comments

Will an Adjustable Rate Mortgage Cost an Arm and a Leg? - Sat, 12/26/2015 - 11:56

Filed under: , ,


By Geoff Williams

If you're buying a house soon, you may be mulling over the idea of getting an adjustable-rate mortgage. Or you were, until you heard about the Federal Reserve's recent decision to raise interest rates a quarter point. That likely put a chill on many homeowners' desires to have an adjustable-rate mortgage, also known as an ARM.

If you currently have an ARM, you might be in full-blown-panic mode, wondering if your interest rate is going to climb soon.

"My voicemail and email has been inundated by my clients, friends and partners all asking the same question, 'What should I do about my ARM mortgage and when?'" says Drew Grandi, a loan originator with Wintrust Mortgage in Massachusetts.

What should you do? It really depends. An ARM can be a terrific strategy for paying a mortgage, or a terrible one. Before you get one, or get rid of one, you need to think about how you want to proceed.

What Is an ARM?

It's a home loan with a fixed interest rate, usually for five years -- but after that, it can adjust every year. (That's why you'll often hear ARMs referred to as a 5/1 ARM, although you could have a fixed interest rate for a different period, like a 7/1 ARM or 10/1 ARM.)

After those five or more years are up, the interest rate can go up or down for the duration of your mortgage.

Because the interest rate could go up, it can be risky to have an adjustable rate. Nobody wants an ARM to cost them an arm and a leg.

So why get an ARM if your monthly mortgage payment can turn on you like that? Because the fixed rate for those five years or so is lower than a traditional fixed mortgage rate. It hasn't been all that much lower in recent years, of course, since all mortgage rates have been low. Still, even a percentage point can reduce a mortgage payment enough to save a homeowner thousands of dollars in the long run.

How High Can an ARM Go?

While your monthly mortgage payment can adjust every year to a higher and higher rate, there is a limit to how much financial pain you'll endure.

"There are protective caps, so the loan cannot adjust higher than the designated annual cap or lifetime overall rate cap," says Staci Titsworth, regional manager of PNC Mortgage in Pittsburgh. This is looked upon as insurance against risk.

"Most ARMs are capped so that your interest rate will not exceed more than 5 percent above your original rate," Grandi says.

That doesn't sound so bad, but it can add up. Grandi offers an example of the homeowner who has a 5/1 ARM at 3 percent on a $300,000 mortgage. That would mean you're paying $1,264.81 a month for the first five years, he says. If interest rates shot up, the most you would pay is 8 percent on that $300,000, which would mean a max monthly payment of $2,201.29, or about $936 more than your original payment.

If you are thinking about an ARM, Titsworth suggests having the loan officer run a few examples of payments, including the worst-case-scenario payment. It may be eye-opening.

What if You Have an ARM Now?

Don't panic, Grandi says. "Everyone currently in an ARM should not necessarily be hounding their mortgage expert to refinance into a fixed-rate mortgage," he says.

In fact, if you have a low-rate ARM now and you refinance into a 30-year fixed-rate mortgage, you'd likely pay around 4 percent and your monthly payment would jump a little. With that previous $300,000 ARM example, Grandi says, the homeowner's payment would go up less than $200 a month.

That may well be worth it to have the comfort of knowing you have a fixed mortgage payment. But if you're planning to move in the next couple of years, you're probably better off keeping the ARM. That's because one of the biggest factors in whether you should get an ARM is how long you plan to live in your house. Generally, if you're going to live in your home for a short time before selling it, an ARM is considered a financially shrewd move.

"I'm a big believer in ARM loans and have one now," Titsworth says. "Adjustable rate mortgages are a good option for consumers that have a shorter-term need, and also those that are comfortable with a little risk," she adds.

Who Shouldn't Get an ARM?

Do what you want, but if you'd like some general rules of thumb, there are three types of homeowners who should likely avoid an ARM.

-- First-time homebuyers. Ali Vafai, president of The Money Source, a national correspondent lender and mortgage loan servicer on New York's Long Island, says first-time homebuyers or those with little down payment should not choose ARM loans. Since rates are near historic lows today, he says it's very likely rates will be higher in five years and payments would increase after the fixed period. Even if you're not planning to stay very long, maybe you'll discover you hate moving and and realize you don't want to go anywhere.

-- People on a tight budget. So you scraped up your down payment, barely, and you figure you can afford to live in a house if you pare back your budget a bit. It sure doesn't sound like you would do well if, in five years, your monthly mortgage payment shot up a couple hundred dollars a month.

-- Natural-born worriers. As has been duly noted, ARMs are a risk. Before you get an ARM, ask yourself some risk-related questions, Grandi suggests.

For instance, when you've been living in your home for two years, will you suddenly have sleepless nights because you aren't sure what your mortgage payment will be in three years?

"Do you expect continued doom and gloom for the United States' economy with unemployment increasing and inflation staying low?" Grandi asks.

In other words, if you a worrier, the ARM is probably not for you.

Titsworth agrees. She loves the ARM, though, and points out what isn't often emphasized: When your fixed rate ends and it adjusts, your monthly payment doesn't necessarily have to go higher. "It's possible the rate could drop," she says.

Still, all in all, "ARM loans are typically not the product of choice for someone that believes they will be in their home long term and wants [the] peace of mind of knowing what their payment will be," Titsworth says. "The long-term fixed rates come with less risk and therefore a higher rate."


Permalink | Email this | Comments

How to Turn Up the Heat on Your Landlord - Fri, 12/25/2015 - 12:00

Filed under:

Hemera Technologies/Getty

By Devon Thorsby

The radiator's crapped out in your apartment, and your landlord hasn't responded to your emails or answered the phone for two days. As much as you love your new winter coat, wearing it while you watch TV -- and while you sleep -- isn't your idea of fun. The arctic chill may have you thinking: At what point is my landlord required to make repairs?

That would be two days ago.

The relationship between a landlord and tenant can get sticky when things go awry. The only way to successfully protect yourself from housing law violations is to know your rights as a renter, and act when you feel you are being unfairly treated.

Here are some basics to get you started on understanding tenant and landlord laws.

Federal law protects against civil rights violations in housing. The Fair Housing Act dictates no landlord can refuse housing to a potential tenant based on race, nationality, sex, familial status, religion or disability.

The Department of Housing and Urban Development, the federal government's authority on housing, aims to provide affordable housing options and protect consumers from discrimination. HUD recently reported it received more than 3,500 complaints of housing discrimination in 2012 and 2013, of which 40 percent were settled, charged or sent to the Department of Justice for further action.

HUD spokeswoman Elena Gaona notes that federal regulations often also carry through to state, county or municipal laws, particularly with fair housing. "There's always local protections, too," to help reinforce the policy, she says.

Many of your tenant rights are spelled out in state or local laws. In a situation where you feel you are being treated unfairly for any reason, check with your state's laws on tenant and landlord rights. For the most part, tenants' rights fall under the jurisdiction of the state or local government, which means they vary throughout the country, explains Dean Preston, executive director of Tenants Together, a nonprofit that advocates for renters in California.

"There are some states, for example, that the state laws prohibit rent control entirely. Then there are other states that are like California where there isn't state rent control, but they allow local rent control laws," Preston says.

You have a right to livable conditions. All tenants have a right to be provided with a space considered habitable -- including working plumbing, electricity and heat. Beyond these basic details, it varies by state how a landlord is required to provide them and what tenants may do when their needs are not met.

David Merbaum is an attorney based in Georgia who handles landlord-tenant disputes, among other real estate and business-related litigation. He says he has seen a number of situations where tenants have trouble with mold in their apartments, which poses a safety issue while they work out the dispute of mold removal.

Merbaum says Georgia has legislation regarding constructive eviction -- where the landlord effectively forces the tenant out because the place is no longer habitable. In mold cases where tenants fear for their health, he says leaving and explaining the claim of constructive eviction in court will at least remove any immediate danger. "I can't guarantee [a judge will agree with you], but I wouldn't stay there if I didn't feel safe," he says.

While most states have thorough legislation when it comes to habitability, Preston says it's one of the most common issues he sees from renters seeking assistance from his organization. "The problem is one of enforcement," he says, citing local and state code enforcement offices that are often underfunded or lack the motivation to effectively police conditions of rental properties.

You have to pay your rent. Landlords have a right to pursue eviction when they stop receiving rent, regardless of the reason. Some state or local laws will allow landlords to lower the cost of rent or prorate rent for the number of days a unit is unlivable. However, you cannot refuse to pay rent to provoke your landlord to perform maintenance or other duties.

Merbaum explains that rent is not a bargaining chip to get what you want from the landlord. "The obligation to pay rent is always independent of the landlord's obligation to fulfill his duties. So if the air conditioning's not working, the tenant cannot hold the rent back -- the tenant will be in breach of the lease and they can be evicted," he says.

Georgia is one of many states with a "right to deduct" policy for the tenant, which means if something is broken and you have given your landlord repeated notice and ample time to fix it, you can personally have it repaired or replaced and subtract the cost from your next month's rent.

However, the right to deduct can be a dangerous game to play. California also has right to deduct policies, and Preston says he often only recommends it as a last resort for tenants seeking repairs, because the landlords can still pursue eviction if they dispute the deduction. A worst-case scenario would leave the tenant with the bill for the repair and without a home as well.

The lease you sign doesn't surpass the law. In many cases, landlords can be unaware of the specifics of tenant and landlord rights, or they may try to take advantage of the fact that you don't know your rights. If you sign a lease that includes rules that violate tenants' rights, the fraudulent policies cannot be enforced by the landlord or law. For example, Merbaum says major repairs needed to make a property livable, like water and plumbing, cannot be placed in the renter's hands. according to Georgia law. "If it's in the lease, that's it's the tenant's responsibility, it's not even enforceable," he says.

In New York, state law dictates all tenants living in privately owned buildings have the right to sublease their rental unit to another person. This excludes public or subsidized housing, nonprofit buildings, co-ops and tenants with controlled or subsidized rent. Even if your signed lease states you cannot sublease your apartment, that clause of the contract is not legally enforceable, and the landlord cannot pursue legal action against you if you sublease your space.

You should document everything. No one moves into a new apartment planning to get into a fight with their landlord, but it's best to be prepared for the possibility. "It doesn't matter what system of laws you're operating under, if you're going to try to enforce them at some point, you need to document the situation," Preston says.

When you move in, photograph every room and note any needed repairs. Also keep dates and documents of every repair request should you need evidence of attempts to fix problems. When you move out, if the landlord tries to charge you for damages you documented when you moved in, you're far more likely to successfully avoid the fee.

You have advocates who will help. There are countless tenant rights organizations throughout the country to ensure renters have access to the resources and understand the privileges afforded to them by law. For instance, Preston says Tenants Together operates a statewide hotline in California to field renter problems and requests for information.

In the event of discrimination violating the Fair Housing Act, Gaona advises contacting HUD directly, whether it's the headquarters in Washington or one of the dozens of local offices nationwide. HUD has its own investigators to look into possible infractions and can pursue violators.


Permalink | Email this | Comments

How to Design a Restful Bedroom - Thu, 12/24/2015 - 06:00

Filed under: ,

Courtesy of Zillow Digs

By Kerrie Kelly

November through January is a busy, busy time. With family dinners, office parties and Christmas shopping, lack of sleep inevitably follows and full-blown burnout becomes a very real possibility. Don't forget to think about yourself. A restful bedroom can be the key to combating fatigue.

Clear the Clutter

It's often said that a cluttered room is the sign of a cluttered mind. Having too much "stuff" obstructs from the flow of a serene space, and doesn't tie in well with any design concept.

Take what you love and move it somewhere safe, and get rid of everything else. Having a clear and collected space will lead to a clear and collected life. Don't you feel better already?

Courtesy of Zillow Digs

Soothe with a Calm Color Palette

Nothing whispers "rest" quite like a soft and soothing color palette. From cozy cream to serene beige, color is key when creating a restful bedroom. Refrain from bold colors like red, green, or yellow, and instead use those shades to accent your calming paint choice instead.

Courtesy of Zillow Digs

Total Texture

Sink into a sound slumber quickly and easily with plush pillows, dreamy duvets, and cozy throw blankets. Layer different textures, prints, and soft colors to create a bed as irresistible as a 3 o'clock nap.

Courtesy of Zillow Digs

Go Stress-Free with a Sitting Area

Don't want to ruffle your restful bed sheets? Create a cozy corner instead with a chair, side table, and a great reading lamp. Grab a cozy blanket, sip a cup of tea, and get lost in a good book while relaxing the day away in your rest-inspiring oasis.

Courtesy of Zillow Digs

Finish with Lush Lighting

When you're about to drift off to dream land, nothing's worse than switching from light and bright to dull and dark. Opt for lighting that is dimmable or masked by an opaque shade. Layer lighting with pendants, recessed cans, and tableside lamps for the perfect amount of sparkle.

Courtesy of Zillow Digs

The holidays don't have to mean all-nighters and dazed mornings. Create your restful bedroom using the above elements, your favorite sleep-inducing rituals, and personal touches that you find particularly restful. Sit back, relax, and lull yourself to sleep knowing that the New Year is just around the corner.


Permalink | Email this | Comments

Average 30-Year Fixed Mortgage Rate Falls to 3.75% - Wed, 12/23/2015 - 06:00

Filed under: , ,

ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed home loans fell this week, with the rate borrowers were quoted on Zillow at 3.75 percent Tuesday, down five basis points from last week.

The 30-year fixed rate fell throughout the week before settling at Tuesday's rate.

"Mortgage rates fell last week despite the [Federal Reserve's] decision to raise short-term lending rates," said Erin Lantz, vice president of mortgages at Zillow. "The announcement, which had largely been priced in, contained few surprises and signaled a slow upward path for rates moving forward. This week we expect rates to be flat, as markets will be quiet for the end-of-week holiday."

Additionally, the 15-year fixed mortgage rate was 2.95 percent. For 5/1 ARMs, or adjustable-rate mortgages, the rate was 3.00 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.


Permalink | Email this | Comments

U.S. Existing Home Sales Dive in November - Tue, 12/22/2015 - 11:44

Filed under: , ,

Shutterstock / Tyler Olson

WASHINGTON (AP) -- Home sales plunged sharply in November, as buyers faced rising prices and new regulations that might have delayed some closings.

The National Association of Realtors said Tuesday that sales of existing homes collapsed 10.5 percent to a seasonally adjusted annual rate of 4.76 million. It was the weakest pace in 19 months.

The setback follows solid gains in real estate for much of 2015. Sales of existing homes are on track to rise roughly 5 percent for the entire year. But the introduction of a new disclosure form in October likely prevented many homebuyers from closing on sales in November. Home values are also rising at more than double the pace of wages.

The median home sales price was $220,300 in November, a 6.3 percent annual increase from a year ago. Sales fell in all major geographic regions -- the Northeast, Midwest, South and West.

The new rules introduced by the Consumer Financial Protection Bureau to inform homebuyers about interest rates and fees may have delayed the completion of sales last month. It took 41 days to close a sale in November, compared to 36 days a year ago. The extended timeframe means that some sales may have been pushed back into December.

"The effect should be a one-time hit to the data and we expect the uptrend in sales to get back on track next month," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics.

Still, an improving job market and relatively low mortgage rates have encouraged home-buying for this year. Unemployment at a healthy 5 percent has endowed more people with a sense of financial certainty.

But tight inventories and rising prices have curbed further gains. Sales have cooled after accelerating to a rate of 5.58 million in July. Relatively few properties are on the market as the economic expansion has crossed the six-year mark, with many homeowners still recovering equity lost during the Great Recession and the bursting of the housing bubble.

The number of listings on the market has dropped 1.9 percent from a year ago, a shortage that has restricted options for buyers and fueled escalating prices. As a result, more people have no choice but to rent. The share of homeowners has slipped to 63.7 percent from a high of 69.2 percent in 2004.

Low mortgage rates have minimized some of the financial pressure. Still, rates are higher than a year ago. The Federal Reserve hiked a key short-term rate last week, the first increase of its kind in nearly a decade as the economy appears solid enough to manage higher borrowing costs.

The average, 30-year fixed mortgage rate has risen to 3.97 percent from 3.8 percent a year ago, according to mortgage buyer Freddie Mac.


Permalink | Email this | Comments

The Fed and Home Loans: Why Mortgage Rates Fell - Tue, 12/22/2015 - 06:00

Filed under: , ,

Getty Images/iStockphoto

By Julian Hebron

This month, the Federal Reserve System hiked rates for the first time in nine years. In the days since the Fed move, mortgage rates actually dropped.

How is this possible? And will this trend hold as home-buyers make plans for 2016?

Immediate Mortgage Rate Reaction to Fed Meeting

Most U.S. mortgage loans up to $417,000 are packaged into bonds called Mortgage Backed Securities (MBS), and these bonds trade daily in global markets.

Throughout each day, mortgage rates fall when MBS prices rise, and mortgage rates rise when MBS prices fall.

Mortgage rates rose as investors sold MBS ahead of last week's Fed meeting. It was widely expected the Fed would hike the short-term Fed Funds Rate, but without knowing how the Fed might position 2016 rate policy overall, MBS investors took the conservative stance of selling ahead of the meeting.

Then when the Fed meeting announcement actually came out, the Fed said it was only hiking the Fed Funds Rate by .25 percent, and will take a "gradual" approach to tightening rate policy from here.

Bond markets reacted positively, and MBS buying resumed, pushing mortgage rates down.

Mortgage Rate Outlook Based on Revised Fed Policy

Now markets are estimating the "gradual" Fed Funds Rate hikes will happen about four times in the next year, for a total of about one percent.

The Fed Funds Rate is intended to influence broad rate markets overall, but not necessarily to have a direct impact on mortgage rates.

For example, the last time the Fed lifted Fed Funds was from June 2004 to July 2006, when the rate went up a total of 4.25 percent. During that same period, 30-year fixed mortgage rates only rose 0.5 percent.

As such, if 2016 estimates call for Fed Funds to rise one percent, mortgage rates probably won't rise by that full amount. However, there is one other element of Fed policy that does directly impact mortgage rates.

In response to the financial crisis, the Fed started buying MBS in January 2009 in order to push up MBS prices and keep mortgage rates down. In recent years, they slowed their highly aggressive MBS buying, but still buy enough MBS to influence mortgage rates.

The recent Fed statement reaffirmed a plan to continue this MBS buying during the Fed Funds Rate hiking cycle. This eased MBS market concerns, and should prevent a sharp spike in mortgage rates.

What Higher Mortgage Rates Mean for Home Buyers

Given all these factors, market estimates call for mortgage rates to rise about 0.5 percent by mid-2016.

A Zillow survey just showed that 70 percent of current home shoppers wouldn't be deterred by rates rising this amount, although 45 percent of these shoppers said they might scale down their price range.

The survey also showed that if rates rose 0.5 percent, the monthly mortgage payment on the median home in 19 percent of the country's top 500 metropolitan areas would increase by less than $25 a month. However, buyers in high-priced markets such as San Francisco and San Jose would see a monthly payment increase of $175.

Additionally, the Mortgage Bankers Association predicts mortgages for purchases will increase by 10 percent in 2016, so rates will certainly impact -- but shouldn't derail -- your home buying plans for the new year.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow or AOL Real Estate.


Permalink | Email this | Comments

Home Design Trends for 2016: What's In and What's So 2015 - Mon, 12/21/2015 - 06:00

Filed under: ,

Courtesy of Mosaic Architects & Interiors.

By Zillow Team

Zillow Digs has announced its top home design trends for 2016, along with the three soon-to-be forgotten fads of 2015. Results were based on a survey of leading interior design experts and trending photos on Zillow Digs.

So what will be 2016's hottest trends? Check out the results below.

2016's Top Home Design Trends

1. Art Deco-Inspired Patterns and Shapes

Courtesy of Zillow Digs

Art deco will make a bold new comeback in 2016. Look for the style's trademark geometric patterns and honeycomb shapes to weave their way into everything from wallpaper to artwork, adding elegance and dimension to any space. Experts also predict gold statement lighting fixtures will become more popular.

2. Nubby Wool Rugs

Courtesy of Mosaic Architects & Interiors

Nubby wool or other natural fibers will be the go-to texture for 2016, especially for area rugs. Their neutral hues create the perfect indoor/outdoor vibe, while softening bolder colors and dramatic statement pieces.

3. Encaustic Tiles

Courtesy of Zillow Digs

These intricate patterned tiles get their coloring from different types of clay rather than glaze and can be used to create a beautiful, natural-looking focal point. Expect to see encaustic tiles pop up throughout the house in 2016, including on kitchen backsplashes, bathroom shower tiles, accent walls and even fireplace mantles.

4. Artisan Accent Pieces

Courtesy of David Scott Interior Design

Travel souvenirs, unique artisan pieces and flea market finds will take center stage in home design as more homeowners gravitate toward decorating with unique art pieces that tell a story. Look for a rise in partnerships between big box stores and global artisans to accommodate the increased demand for one-of-a-kind or handmade items.

3 Fads to Ditch From 2015

1. Mason Jars

Courtesy of Zillow Digs

The mason jar trend is exhausted, and will finally make its exit in 2016. After using them to invoke a rustic chic feeling everywhere from wedding decor to restaurants, experts and homeowners alike are finally ready to move on.

2. Chalkboard Paint

Courtesy of Zillow Digs

Chalkboards smudge easily, and unless decorated with perfect handwriting, are usually not the best way to label household items. This trend is not built to last in 2016.

3. Burlap Details

Courtesy of Zillow Digs

Burlap is too harsh for indoor use, and is far overplayed for another year in the spotlight. Instead, homeowners will gravitate toward softer natural fibers that are more suitable for throw blankets, pillows and rugs.

Want to learn more about 2016's hottest home design trends? Check out more photos of the top trends on Zillow Digs.


Permalink | Email this | Comments

Home mortgage lenders easing up on home loans

CNBC Real Estate - Fri, 12/18/2015 - 17:02
More home lenders are reporting easing credit standards, and expect standards to ease rather than tighten in the near future.

Why the Fed move doesn't matter to mortgage rates

CNBC Real Estate - Thu, 12/17/2015 - 18:39
The Fed's quarter-point hike doesn't mean the average 30-year fixed mortgage will be a quarter point higher.

Mortgage refinances up 1% on rate fears

CNBC Real Estate - Wed, 12/16/2015 - 12:13
Mortgage rates didn't move last week, but more borrowers made applications to refinance, possibly worried rates will move higher.
Syndicate content