Category: Real Estate

Fancier Kitchens, Higher Budgets: Homeowners Want to Renovate | Realtor Magazine

The kitchen is often considered the centerpiece of a home, so it’s not surprising that it tops most homeowners’ renovation lists. Homeowners are spending more to outfit their kitchens, too. Kitchen remodel spending jumped 27% in the past year, reaching a median of $14,000 on upgrades, according to a newly released Houzz & Home survey of more than 140,000 homeowners.

© Houzz

After the kitchen, the next biggest remodeling expenditures are for guest and master bathroom remodels, which increased over the past year by 17% and 14%, respectively, the survey found.

The higher overall costs on remodeling spending is likely due to the increased costs of imported building materials, the survey notes.

“Last year’s 10 percent increase in tariffs on imported building materials is likely one of several forces hitting consumer pockets in areas such as kitchen and bathroom remodels that are heavily dependent on imports of cabinetry, countertops, ceramic tile, plumbing fixtures, and vinyl flooring from China,” says Nino Sitchinava, Houzz principal economist. “We expect similar effects to take place in 2019 given the recent breakdown in trade negotiations.” (Also read Experts:Mexican Tariffs Would Hurt Housing Affordability.)

© Houzz

Top Remodeling, Decorating Projects

Slightly more than half of the 140,000 homeowners surveyed say they plan to continue or begin home renovations this year. They expect to spend a median of $10,000 on upcoming projects, the survey showed.

What are some of the most popular projects?

Security upgrades was one theme of projects that showed a significant rise in popularity. Homeowners are spending a median amount of $500 on items like smart outdoor security cameras, which can be monitored or controlled from a mobile device. Younger generations are the most likely to focus on home security upgrades, according to the survey.

Here’s a breakdown by theme of some other top decorating and remodeling projects.

The top home decor–related purchases among homeowners are:

·Pillows and throws: 51%

·Rugs: 50%

·Large furniture: 47%

·Artwork: 46%

·Small furniture: 44%

·Lamps: 39%

·Window treatments: 39%

·Storage/organization: 34%

·Mirrors: 28%

The top home improvement–related purchases among homeowners who renovated:

·Paint: 71%

·Light fixtures: 55%

·Faucets and shower heads: 52%

·Building materials: 44%

·Lawn and garden supplies: 44%

·Non carpet flooring: 43%

·Hardware (cabinets/doors): 39%

·Sinks: 35%

·Tile (walls/backsplashes): 33%

·Countertops: 33%

·Major kitchen appliances: 32%

·Hand and power tools: 32%

·Toilets: 30%

·Doors—interior/exterior: 28%

The top outdoor decor:

·Lighting: 26%

·Large furniture: 23%

·Small furniture: 20%

·Pillows and throws: 16%

·Fire features: 12%

·Rugs: 12%

 

Financial Risks a Mortgage Co-Signer Must Accept | Realtor Magazine

Young adults with low incomes or poor credit histories may ask their parents to co-sign on their mortgage—and it’s a growing trend. The share of co-signed mortgages rose nationwide from 13.7% in 2015 to 17.4% in 2018, according to ATTOM Data Solutions.

But there are risks to being a co-signer. “Whoever is co-signing has to bring substantial income because they have to be able to afford the new payments on top of all of their other debt,” Eric Boutcher, senior loan officer with Atlantic Coast Mortgage in Fairfax, Va., told The Washington Post. “You’re adding up both borrowers’ debt, and you’re adding up both borrowers’ incomes. It’s all-encompassing.”

Also, it’s the co-signers who are taking on the brunt of the risk because they are responsible for the payments if the person they’re co-signing for can’t afford them. “There’s no separation of who’s responsible for the debt,” Boutcher says. “They’re both equally responsible.” Therefore, the co-signer’s credit and their ability to borrow on their own can then be impacted if the borrower misses a payment.

For those willing to take on the risk, co-signing offers a path to homeownership for some. One lender recalls a recent example of a college senior who wanted to snag a low interest rate and buy a home prior to graduation, according to the Post. By getting his parents to co-sign on the loan, he was able to qualify for a mortgage. “He was able to buy the house before he started the job,” Alex Jaffe, branch sales manager at First Home Mortgage in Chevy Chase, Md., told the Post.

5 Lawn Care Mistakes That Could Ruin Your Curb Appeal | Realtor Magazine

A great lawn adds instant curb appeal to a home’s first impression, but according to Reviewed.com, homeowners may be making one of these common mistakes in their lawn maintenance:

1. Cutting the grass too short. Most grasses should be cut no shorter than 2.5 inches, according to Reviewed.com. Anything shorter could impede the grasses’ ability to absorb enough sunlight to thrive.

2. Failing to water enough. Reviewed.com says that most grasses need 1 to 1.5 inches of water per week. “If you’re just turning on your sprinkler for 10 minutes a day, the water isn’t getting down to the grass’s deep roots, and a lot of that water is going to evaporate before the grass has a chance to absorb it,” the article notes. The grass needs about 30 minutes for most irrigation systems. Reviewed.com suggests a test: Place cans across the lawn and run the sprinkler for 30 minutes. Measure with a ruler the amount of water that collects in the cans. Adjust your timing, as needed, to get 1 inch per watering session. Another test: If you can see your footprints in the grass after you walk on it, that is a sign it’s time to water.

3. Watering at the wrong time of day. To minimize evaporation loss, water early in the morning before it gets too hot. Avoid watering at night, as cool water sitting on the grass overnight can increase disease, Reviewed.com notes. “Don’t rush out to water the grass the moment the sun comes out either,” the article notes. “Grass grows deeper roots when it gets slightly drought-stressed.”

4. Using too much fertilizer. If your grass turns brown, don’t just dump a bag of fertilizer on it. That can waste money and hurt your plants. You likely will need less fertilizer than you think. Follow the directions on the bag for how much to fertilize. Also, avoid applying powdered or granular fertilizer before a rain. It will run off with rainwater. Reviewed.com also notes that if you use compost, try three-fourths of a cubic yard per 1,000 square feet of lawn.

5. Applying fertilizer at the wrong time. Fertilizer will be the most beneficial for a yard in the spring and fall in most climates. “Fertilizer will help your lawn the most when it’s growing the most—that is, not in the middle of summer, when your grass gets stressed by heat and drought,” the article notes.

Report: Fewer Homes Selling Above List Price | Realtor Magazine

The number of homes selling at or above list price is on the decline, returning to historical norms, according to CoreLogic’s Home Price Index. That could be a relief to home shoppers whose budgets have been squeezed in recent years as home prices have soared.

The share of homes that sold at or above list price dropped to 31.1% in March—about the same level as in 2000 and 2001. That also represents a big change from a year ago. In the second quarter of 2018, the share of homes selling at or above list price peaked at more than 40% of total sales—nearly triple that of 2008. “As annual home price growth started to slow in the third quarter of 2018, the share of home buyers able to negotiate a better price began to rise,” CoreLogic researchers note.

But there is variation geographically. Sixty-nine percent of homes sold for at least the list price in San Francisco, which had the largest share of such homes, followed by Washington, D.C., at 50% and Minneapolis at 48%, according to CoreLogic. On the other hand, Chicago and Miami had the lowest share of homes that sold at or above the list price: 21% and 14%, respectively.

“Price pressures rapidly increase as supply drops below three months,” CoreLogic notes. In San Francisco, for example, the supply of homes for sale was at 2.3 months, and home buyers there paid an average 4.6% more than asking price. However, in markets like Miami, where the supply of homes was 10.9 months, home buyers had more negotiating power and saw average discounts of 7.8% in March.

 

© CoreLogic

How Mortgage Shoppers Can Save $2K in Extra Fees | Realtor Magazine

Shopping around for a mortgage can provide savings beyond just the interest rate. Borrowers could save thousands in lender fees as well.

Borrowers who collect up to five offers from mortgage lenders could save more than $2,000 on mortgage fees, according to a new study from LendingTree of 300,000 loan offers. These extra fees include the costs for a mortgage application, underwriting, origination, appraisals, and up to 16 other fees that borrowers are charged by lenders.

Some mortgage fees are flat fees. Others may be based on a percentage of the loan amount.

“Most aspiring home buyers are focused on saving for their down payment—and they may not have budgeted for additional thousands of dollars in fees,” the study’s authors note.

About 7% of new-purchase borrowers paid no fees when taking out a mortgage, and 15% paid less than $500. On the other hand, 13% of purchase borrowers paid $5,000 in fees and 3% paid more than $10,000.

 

Taxes, flood certification, city and county stamps, and recording fees tend not to be negotiable. But other mortgage fees may be, researchers say.

“You can skip the back-and-forth by shopping around for the best rate and fees before you commit to a lender,” the researchers note. “In our study, we looked at the savings available to the same borrower who received offers from multiple lenders. The median spread between the highest and lowest fees proposed was $2,045 for people who received five offers or more. That’s a lot of money to potentially save.”

Interest Rate for 30-Year Mortgage Back in 3% Territory | Realtor Magazine

© REALTOR® MAGAZINE

 

For the first time since January 2018, the 30-year fixed-rate mortgage has dropped below 4%.

“While economic data points to continued strength, financial sentiment is weakening with the spread between the 10-year and the 3-month Treasury bill narrowing as fears of the impact of the trade war with China grow,” says Sam Khater, Freddie Mac’s chief economist. “Lower rates should, however, give a boost to the housing market, which has been on the upswing with both existing- and new-home sales picking up recently.”

Freddie Mac reports the following national mortgage rate averages for the week ending May 30:

• 30-year fixed-rate mortgages: averaged 3.99%, with an average 0.5 point, dropping from last week’s 4.06% average. Last year at this time, 30-year rates averaged 4.56%.
• 15-year fixed-rate mortgages: averaged 3.46%, with an average 0.5 point, dropping from last week’s 3.51% average. A year ago, 15-year rates averaged 4.06%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.60%, with an average 0.4 point, falling from last week’s 3.68% average. A year ago, 5-year ARMs averaged 3.80%.

Home Buyers Are Stretching Their Searches Out to the Exurbs | Realtor Magazine

In their search for affordability, home buyers are taking their house hunts further out from the city limits. Exurbs are the outskirts of major metro areas that lie beyond the suburbs. Many offer more land and greater affordability in new-home construction.

More Buyers Believe Their Home Search Will Get Easier

 

Single- and multifamily activity in the exurbs makes up only a small share of permit activity across the country, but their quarterly growth rates reached a new high in the first quarter of 2019, according to the National Association of Home Builders’ new Home Building Geography Index. Single-family permit activity has posted a 5.6% year-over-year growth rate, which is higher than that for large metro areas and suburbs, the index reveals.

“Being lower priced, housing in areas such as exurbs tend to be less sensitive to price changes and therefore were not as affected as suburbs of large metro areas by higher [mortgage] rates” last year, the researchers note. “As land is more freely available and cheaper in the exurbs than suburbs, building permit activity in this regional geography increased in an otherwise challenging quarter.”

More Homeowners Consider Adding a ‘Granny Flat’ | Realtor Magazine

Home improvement professionals say they’re fielding more inquiries from homeowners about adding accessory dwelling units—often nicknamed “granny flats.” A fifth of remodeling contractors say they undertook projects over the last year to create an ADU by converting an existing space, and a similar number say they created an ADU by building a new addition to a property, according to a new survey released by the National Association of Home Builders.

ADUs are smaller units added to a property, and they can be pricey to build. Only 6 percent of remodeling contractors report completing an ADU project for less than $25,000. Three-fourths say ADU projects cost at least $50,000, and 28 percent report projects costing at least $150,000.

 

 

 

ADUs usually require a building permit, but local and state ordinances vary significantly across the country. Some areas will not allow them at all. There are no federal standards or programs that track ADUs.

ADUs have been cited by industry experts as one possible solution to low inventory, and that has prompted some cities to explore ordinances or programs to add more ADUs to existing properties. For example, Fannie Mae last year picked an ADU program in Denver as one of its three “innovative ideas” for tackling housing shortages. Through this program, city officials and community development nonprofits work together to educate low-income homeowners about how to build ADUs that they can then rent out to earn extra money.

Survey: Tax Changes Haven’t Held Buyers Back | Realtor Magazine

Home buyers appear to be less skittish about the potential financial impact of the 2017 Tax Cuts and Jobs Act on their real estate purchases, according to a new Redfin survey of more than 2,000 consumers. The tax reform law, which placed a cap on deductions for mortgage interest payments and state and local taxes, is having a less significant effect on home-search activity than industry experts expected a year ago, the survey shows.

Fourty-seven percent of home buyers say the tax law is influencing their property search, down from 56 percent a year ago. “Last year, more home buyers were worried that tax reform would hurt their homebuying budgets, but it turns out tax reform wasn’t all bad or all good for home buyers,” says Redfin Chief Economist Daryl Fairweather. “Some home buyers, especially in low-tax states, are now paying less in taxes overall, which has left them with more cash for a more expensive home. For others, not being able to deduct as much of their property taxes or mortgage interest from their taxable income was the other shoe that needed to drop to make them pick up and move to a more affordable area.

“In the long run, we will see demand for luxury homes in high-tax states suffer the most because those homes have been hit the hardest by this tax reform, and there’s actually early evidence of that already happening,” Fairweather adds.

 

© Redfin

 

The states with the largest share of home buyers who say tax reform has affected their home search are New York (61 percent) and California (55 percent). On the other hand, Kansas and Indiana (both at 24 percent) have the smallest share of home buyers who say their search has been affected by tax reform.

3 Design Tricks to Enlarge Small Outdoor Spaces | Realtor Magazine

Home shoppers are focusing their attention on outdoor spaces, but with yard sizes decreasing nationwide, how can you make a small backyard appealing to your buyers? A recent article at Apartment Therapy featured designers who showed off their best design tricks to make a small backyard feel less cramped.

 

© Kate Gould Gardens

 

Add Seating

“No matter how small your outdoor area, you’re going to want to create a sitting area or else you won’t take full advantage of the space,” says Kristen Ekeland, principal at Studio Gil. “Choose a petite table and loveseat or chairs that will instantly turn the little space you have into an outdoor retreat.” Also, consider tucking a sectional into a corner to maximize floor space, suggests designer David Dillon.

 

 

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© Visionscapes NW Landscape Design

 

Bring in Some Green

Cover the outdoor area in as much green as possible, suggests interior designer Courtney Hill. Jasmine or ivy on a wall, plus a mix of potted plants, can help green up a space. “One of our favorite tricks when it comes to decorating an outdoor space is to rely on plants to add color and life to the overall design,” says Caroline Grant and Dolores Suarez, co-founders of Dekar Design. “Make a selection of your favorite flowers, potted plants, and ferns to diversify the space and create that outdoor oasis you’ve always dreamed of.”

 

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© Meridith Baer Home

 

Paint it White

“Make a small outdoor space seem so much bigger by painting it all white,” says Jade Joyner, co-founder and principal designer of Metal+Petal. “You can even go for a monochromatic color scheme with all-white cushions, a white outdoor rug, and white metal pieces. I often add in mirrors and large-scale plants to create the illusion of a larger space.”