Mortgage rates falling despite Fed’s increase

When the Federal Reserve Board raised its benchmark interest rate by a quarter of a point in mid-March, the consensus prediction was that mortgage rates would rise as well.

Instead, the interest rate on the popular 30-year mortgage last week fell for the fourth week in a row. It was 4.08 percent last week, Freddie Mac data showed, the lowest rate for this calendar year.

The Fed’s decision to raise its benchmark rate affects the price banks have to pay to borrow from one another. The decline in interest rates illustrates the importance to the housing market of the 10-year Treasury bond, whose ups and downs more closely prompt changes in mortgage interest rates.

Whereas the Fed’s decision to raise rates was regarded as a vote of confidence in the U.S. economy, the decline in the yield of the 10-year Treasury bond reflects an increased appetite for safety among investors.

The U.S.-backed Treasury note is viewed as among the safest investments in the world. In the face of recent international uncertainty, investors have ratcheted up their demand for these instruments. The higher demand has sent the interest rate, or yield, on these bonds lower, as the government doesn’t have to offer as attractive an interest rate to snag investors’ money.

In November, the rate on 10-year Treasury notes went from 1.77 percent before the election to 2.3%, an increase of a magnitude that had occurred only three times in the last decade. That rise was a reaction to projections about how the new president’s policies might affect the economy.

A few months after the inauguration, though, it’s clear that those policies might not be implemented as quickly or as easily as some imagined.

The 10-year Treasury yield is about 2.23 percent, Realtor Mag notes. It was about 2.62 percent a month ago.

The declining mortgage rates are a welcome development to potential home buyers. Lower rates translate to greater buying power — a point of interest in all markets, but especially one as robust as Bend’s.

If you’re in the market to buy a home, I can put you in touch with a lender who will prepare a package that’s right for you. If you already have financing — or if you’re considering putting your home on the market — I can also help ensure an optimal outcome. I will bring my knowledge of the Bend market to bear for your benefit.  To learn more about how I can assist you, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Sales prices approach highest on record

March homes sales in Bend, Oregon, picked up compared with the previous month and registered the second-highest median sales price in the last 10 years.

The median price climbed to $395,000 in March. The only month in our data set (dating to the start of 2007) that figure has been higher has been May 2007, when it was $396,250.

March’s median sales price was 11.3 percent higher than February’s mark of $354,853. Year over year, March’s median represented a 14.2 percent increase.

The 11.3 percent monthly increase in March was the largest in Bend since January 2015 had a 13.7 percent increase from the month prior.

Can anything be learned from January 2015 that can be applied to the future of the current Bend market?

That can’t be answered. But it is worth pointing out that January 2015’s median sales price of $329,700 turned out to be greater than the year-end median sales price for the entirety of 2015 ($327,500).

And January 2015 represented the fifth-highest month for sales price in that year, whereas January usually is among the lowest months for median sales price.

Returning to the present year, remember that typically, March’s median sales price represents a “support” level, or a springboard, for prices for the remainder of the calendar year. In each of the last six calendar years, the month with the highest median sales price has been September or August. So it would be unusual for March’s median sales prices not to be exceeded in the coming months.

Other information in the March sales data support the position that Bend remains strongly a seller’s market.

For one, the inventory of homes on the market was 2.0 months. Inventory represents the amount of time it would take for all homes on the market to sell, given the current pace of sales. There is some debate about the boundary between a buyer’s and a seller’s market (with figures ranging from three to six months), but there’s no debating that March’s inventory was the third-lowest for the time span the Skjersaa Group has data and the lowest for any March in that period.

The average days on the market in March was 112 days. That is 24 fewer days than in February (a halt to our record-breaking winter weather undoubtedly helped), and, perhaps more significant, 18 days fewer than in March 2016. The average days on market for the entirety of calendar year 2016 was 118 days.

We entered April with 273 pending sales, a number that promises another busy month.

As the real estate market gears up, it’s as important as ever to have a trusted, experienced Realtor on your side. Whether you’re looking to sell your home or considering buying, I can provide guidance and advice to ensure an optimal outcome for you.  To learn more about how I can assist you, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Housing market continues to rise from depths of foreclosure crisis

More than 7.75 million homes went through foreclosure in the 10 years ending with the close of 2016, but recent employment and economic trends in the United States show the potential to drive the future number of foreclosures to below the pre-housing crisis levels.

A report by CoreLogic, a California company that provides financial and consumer information, shows that in terms of the number of foreclosures, 2016 was the best year since the onset of the housing crisis in 2007. What’s more, CoreLogic’s report indicates we are likely to see foreclosure numbers fall further.

CoreLogic reports that there were 7,783,000 foreclosures from 2007 to the end of 2016. January 2011 was the worst month, with an inventory of 1,563,000 homes in foreclosure in the United States.

That high-volume mark corresponds with the low point for the median sales price for homes in Bend, Oregon, in the last 10 years. The median sales price in Bend in January 2011 was $170,000. One month earlier, it was $169,000, the lowest median sales price in the 10 years for which the Skjersaa Group has data.

Nationwide, the low point for home prices was March 2011, according to the CoreLogic report. Since then, we’ve seen mortgage interest rates fall to a record low of 3.31 percent in November 2012, a 10 percent year-over-year increase in home prices in March 2013 and what CoreLogic calls the serious delinquency rate decline in March 2015 to the lowest level since before the start of the housing crisis. All of those developments strengthened the housing market and made foreclosure less of a likelihood.

Also since the start of the housing crisis, lending regulations have stiffened. The employment picture has strengthened considerably across the United States, and consumer confidence surveys are firmly in positive territory.

The Bend market has been part of the changing tide since the worst of the housing crisis. The end-of-year median home sales price has risen for five years running, inventory of homes for sale remains low, and the city remains an attractive place to live.

Although fewer and fewer homes are moving into foreclosure, buying or selling a home remains a stressful, taxing process. I can put my knowledge and expertise to work for you, wherever you are in the real estate process. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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How to find a lender that’s right for you

mortgage-lendersIf you’re in the market to buy a home, you’re probably in the market for a mortgage, as well. Here are some suggestions on choosing a lender.

Know your options for obtaining a mortgage. You’re not limited to a bank with nationwide branches or one of the big online lenders. Credit unions and regional banks offer home loans, as do mortgage brokers. Armed with connections to multiple lenders, mortgage brokers might offer a lower interest rate and better overall terms than banks and online lending institutions.

A borrower will be best-served by a lender who offers a product that aligns with the borrower’s needs — and those needs might not be apparent even to the borrower unless the lender asks the right questions. A first-time buyer might assume mortgages are one-size-fits-all and inquire about a 30-year fixed-rate loan because … because … because that’s what his or her parents had. Choose a lender who can identify a loan program that works for your budget, financial picture and objectives. Not all lenders provide this insight. Many just tell you what you qualify for and let you choose from a menu.

Understand the total costs of the mortgage each prospective lender is offering. Shopping lenders based upon an advertised interest rate is a fallacy. There’s a lot more than that rate that goes into the cost of a mortgage, and not all parts are equal from one lender to the next. Different lenders might have different names and charges for similar line items.

Choose a lender who “feels” right. Does the lender embrace your unique situation, or does he read off a script every time you have a question? If you’re a first-time borrower, is the lender willing to explain every line item on your paperwork? Conversely, if you’re an experienced borrower, does the lender realize he doesn’t need to tell you what points are?

“You want to sit down with two or three lenders to make sure you find one who’s a good fit, the right match for you as a borrower rather than a product pusher,” Michael Jablonski, executive vice president and retail production manager for BB&T Home Mortgage, said in a Bankrate.com article. “Mortgage lending should be a collaborative process.”

Ask prospective lenders to explain the timeline of a loan and what happens if speed bumps arise. Get an estimate for how long an appraisal, underwriting and closing will take. Ask what would happen if the appraised value doesn’t support the value of the loan, or if a family emergency before closing makes buying a home impossible. Ideally, surprises won’t arise, but it’s better to anticipate the unexpected than to be blindsided.

Choosing a lender is a crucial part of buying a home. It’s important to select a lender who can help the buyer understand the full matrix of elements that make up a loan program — someone with integrity and someone who has the ability to follow through on the representations that he or she makes. A lender local to the region you’re looking to buy in is important, too.

Integrity is vital in the Realtor you choose, also. Whether you’re buying a home or considering putting  your home on the market, I promise I will work in your best interests to obtain the best deal possible for you. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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    ADJUSTABLE-RATE MORTGAGE (ARM) Interest rates on this type of mortgage are periodically adjusted up or down depending on a specified financial index. AMORTIZATION A method of equalizing the monthly mortgage payments over the life of the loan, even though the proportion of principal to interest changes over time. In the…
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4 tips to make sure you’re happy with home you buy

I love it when a client of mine buys a home. It is the culmination of a process that can be exciting but exasperating, rewarding and enriching — in ways even an appreciating asset like a home in Bend can’t touch.

Most important, though, I want all homebuyers — not just my clients — to be happy with the homes they buy. To try to produce that type of an outcome, I have these tips to consider before you decide you have found the perfect home:

  • Ask your best friend to look at the home. Sometimes, a buyer is dazzled by one or two features of a home and blind to its faults. Someone who knows you through and through will be able to tell if the house fits you. And by best friend, I don’t mean your spouse or partner (who might be tempted to be agreeable). I mean that someone who is your go-to person when you need honesty, that someone who isn’t afraid to say, “What the heck?” when something just feels wrong. Having a soulmate look at your prospective home with a critical eye will give you a valued third-party perspective about this huge step you’re considering.
  • Don’t make up your mind too soon. If you’re eager to buy a house, it’s easy to fall for one of the first properties you see and close your mind to anything that follows. Your desire to ditch apartment life or finally to have separate bedrooms for the kids can influence your decision-making in a negative way. If you have appointments to look at a certain number of homes, see them through — even if you are convinced the first or second of eight showings on a weekend was just made for you.
  • Understand a home’s hidden characteristics. It’s perfectly fine to want to buy a house with a fabulous bathroom. But be careful you’re not buying a home because of a fabulous bathroom. Just about anything about a home that you can see can be changed to fit your tastes. What you can’t see — the foundation, the plumbing and electrical systems — and what you can’t change — location, lot size, neighborhood traffic — are more difficult (or impossible) to alter and might have more effect on your long-term satisfaction with a home.
  • Ask your Realtor to offer reasons maybe you shouldn’t buy the house. Much like your best friend (see tip No. 1), your Realtor can see potential drawbacks about a house that you might miss. Your best friend will see how the house fits you; the Realtor will see how the house fits everyone. If you’re “eco-conscious,” you’ll want the Realtor to note how much water the huge lawn will require and the inefficiency of the aging furnace. Your Realtor will note that a home near a school means not only slow traffic in the area but also considerable congestion twice a day and on any nights school activities are scheduled. If the house is right for you, you’ll appreciate knowing about these caveats your Realtor throws at you.

As a Realtor, I don’t want to just complete a deal for my clients. I want to complete the right deal for my clients. For the best result in a real estate transaction, you’ll want a Realtor who puts your best interests first. If you list your home with me or you are buying with me as your Realtor, I will use my experience and knowledge to your benefit. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Median price drops in February amid overall mixed data

UntitledLooking solely at February’s median sales price of a home in Bend, Oregon, one might be struck by the decline from the previous month. But other data from the real estate market indicate the demand for homes remains strong.

February’s median sales price was $354,853. That’s 4.3 percent lower than January 2017’s figure of $370,813. Compared with February 2016, however, median prices showed a 7.0 percent increase.

This was the sixth consecutive February in which there was a year-over-year increase in the median sales price. Last month’s 7.0 percent year-over-year rise was the second-lowest over this six-year span, not much more than the 6.8 percent increase from February 2014 to February 2015. In the other four years, the February year-over-year increase in the median sales price was more than 14 percent, and — looking at just one month earlier — the year-over-year increase from January 2016 to January 2017 was 16.8 percent.

Does February’s median sales price mean that the appetite for homes is grinding down? In considering this question, it’s worth looking at other information from last month.

The inventory of homes for sale decreased from 3.1 months in January to 2.7 months in February. In 2016, the February inventory of 4.9 months was a calendar-year high.

The average days on the market in February also reflected a more active than usual February market. In January, the average days on market was 141 days, and in February it fell to 136, within two days of the shortest time in any February in the 10 years for which the Skjersaa Group has data.

One hundred twenty-eight homes were sold in February. On a per-day basis, that’s a higher rate than the 130 sold in January. Comparing to February in previous years, the 128 is the second-most sold in the last 10 years, behind the 131 in 2014.

But there’s also this: Fifty-seven houses on the market in Bend reflected a reduced price. As a percentage of active listings (324 homes), that is 17.6 percent. Looking, again, to February in previous calendar years, that was the most since a 19.9 percent reduced rate in February 2011. In February 2012, the rate was 17.5 percent, essentially the same as in February of this year.

The percentage of homes priced at $625,100 or more continues to be the largest segment of homes on the market. Of the 324 active listings in February, 35 percent (114 homes) were in this price range after 36 percent of active listings were of this price in January. As the calendar turned to March, there were 326 active listings, and the percentage of homes priced $625,100 or more was higher: 38 percent.

Whatever the market is doing, you will benefit from having an experienced Realtor working for your best interests. I know the Bend market and will help you realize a worry-free outcome — whether you’re considering selling your home or you’re a buyer. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Jason Boone | Principal Broker, CRIS | Duke Warner Realty | Skjersaa Group
Oregon Real Estate Licensee | 1033 NW Newport Ave Bend, Oregon