The Latest Info on Mortgage Rates
Mortgage rates have been on a general upward trend for over a year, and in the last few months, they've taken an even bigger jump higher.
As the economy recovered from the pandemic, low interest rates fueled increased spending. At the same time, supply chain issues created shortages for items like microchips, building supplies and certain food items. These factors combined to drive inflation higher as supplies failed to meet demand. According to the latest Consumer Price Index (CPI), 12-month inflation hit 8.5% in March, the highest it's been since 1981.
Adding to the inflationary pressures is Russia's invasion of Ukraine, which has disrupted some financial markets. This war could also add to global food shortages as agriculture, fuel and fertilizer shipments from these countries are limited or disrupted.
Sitting on the sidelines of all this is the COVID-19 pandemic, while case counts were declining to start 2022 that could change. If we see a resurgence of COVID it could add uncertainty to the global economy.
Is It A Good Time to Buy a House?
Even though mortgage rates are higher now than the previous year, on a historical level, rates still aren't as high as they used to be. For example, in 2002, the average rate on a 30-year fixed mortgage was about 7%. In addition, the rate on a 5-year adjustable-rate mortgage (ARM) is lower by 1.3 percentage points than a 30-year fixed mortgage rate. However, the historical average spread between these two rates is about 0.8 percentage points, making the 5-year ARM currently more attractive to borrowers.
Although the most popular form of home financing is the 30-year fixed-rate mortgage, adjustable-rate mortgages (ARMs) are also common. Thus, we may see a change in U.S. household mortgage trends. According to the Federal Reserve of New York, the ARM share has fluctuated substantially over time, reaching highs of 60 to 70 percent in 1994 but falling significantly in recent years. Nevertheless, buyers should be aware that the rate and consequently the monthly mortgage payment will change after the first 5 years, depending on economic conditions.
Experts caution against trying to time the market to secure the lowest mortgage rate, even though mortgage rates are important and a point or two can mean a lot over the life of the loan. Start the home-buying process when it's the next best step for your life circumstances and you have the finances to maintain homeownership. Shop around for a mortgage lender to get the best deal you can at that time–lenders' rates can vary significantly.
Schedule a Consultation with JJ Elek
If you'd like to get a better grasp on mortgage rates, the experts at JJ Elek Realty can help. Schedule a consultation with one of our experts today.
How the Delta Variant Could Affect the Housing Market
When the COVID-19 pandemic first struck the world, housing experts predicted that stay-at-home orders, closed businesses, and general uneasiness would result in a drop in home prices. Instead, we saw an unexpected hike in prices due to a significant lack of homes for sale. Buyers became more competitive as sellers became more hesitant to sell.
When vaccines became available and a semblance of normalcy returned, we started to see home prices level out. But then the Delta variant hit. Experts have been debating how the new variant will impact the housing market, so what can we expect?
Declining Mortgage Rates
The housing market may get an even bigger blow caused by a drop in mortgage rates. Since the Delta variant emerged, investors have begun shifting their overseas money into mortgage bonds, which has dropped mortgage rates to as low as 2.37% in some areas. If the pandemic worsens, these rates will drop even lower.
While this may inspire would-be buyers to begin shopping again in larger numbers, the increased transmission of COVID, plus any newly introduced stay-at-home mandates, could decrease the amount of people willing to sell, which would result in a boost to home prices.
No Reason to Panic
It goes without saying that buyers would love for more homes to become available, and for those homes to not be priced over market value, but the Delta variant doesn't appear to be cooperating with that goal. This doesn't mean you should expect things to get worse. In fact, the market may end up showing little to no change.
Vaccinated individuals may feel comfortable enough to continue home shopping as they have been, even with the rise of the new variant. And since no new stay-at-home orders have been issued, home prices will likely stay where they're at.
Looking to the Future
As it stands, the housing market hasn't changed drastically since the introduction of the Delta variant, but experts agree that more time is needed to determine its overall impact. Until then, it's important to stay informed and to contact a JJ Elk agent if you have any questions about buying or selling a home in the coming months.
The Eviction Moratorium and What It Means
The COVID-19 pandemic has been an unprecedented time for everyone across the world, including landlords and their tenants. Financial hardship, businesses shuttering, and loss of work have contributed to many Americans being unable to pay their rent.
The federal government, as well various states, have begun taking action to limit the impact COVID has had on tenants, including a moratorium on evictions, a halt of late rent fees, and prevention of utility shutdowns due to non-payment.
What is the Current Status of the Moratorium?
On August 3rd, 2021, the Center for Disease Control and Prevention (CDC) issued an Agency Order on the current eviction moratorium in place until October 3rd, 2021. Titled Temporary Halt in Residential Evictions in Communities with Substantial or High Levels of Community Transmission of COVID-19 to Prevent the Further Spread of COVID-19, the order protects people from eviction if they're unable to pay their rent and meet the criteria below.
This order also requires that tenants who meet any of these criteria complete a declaration form. Since US states can put their own moratoriums in place, a tenant may still be protected by their state orders if they fail to meet the federal criteria listed by the CDC.
Contact JJ Elek Realty for More Information
Find out if your state has any tenant protections in place by visiting your state or governor's website. If you live in New Jersey, feel free to reach out to a JJ Elek Realty agent for more information.
Tips for Buyers in a Seller's Market
If you're trying to buy a house right now, you know the market isn't for the faint of heart. You can see a property you love one minute, and the next it's under contract. In this blog, we'll give you 5 tips for successfully navigating a seller's market in New Jersey.
A seller's market means that there's more demand for homes than there is supply. This is generally what we see in real estate markets today. It means buyers have a lot of competition when it comes to finding a home, and sellers have more leverage than the buyers.
In a seller's market, it's not uncommon for a house to go for more than the list price. In fact, properties are sometimes picked up by all-cash buyers. This is because they can close on the home faster than someone who needs to finance the purchase.
If you're looking to buy in a popular neighborhood, the listings are likely to be few and far between. When they do hit the market, then they're unlikely to be on the market for long. If you know where you want to be, make sure you're house hunting as soon as possible and ready to act quickly whenever you see something you love.
In today's market, there are likely to be multiple offers on a house. Be ready to throw your hat in the ring and have supplemental paperwork on hand like your mortgage pre-approval and proof of funds for the down payment. This will make the process swift and help you edge out any competitors.
Removing contingencies from your offer (inspections, mortgage commitments, etc.) can help make your offer more competitive. Sellers tend to see these contingencies as opportunities for a deal to fall through. If you make your offer clean, you'll make yourself a more attractive buyer.
As noted above, houses are likely to go for more than the list price in a seller's market. With this in mind, start out with a strong sale price. Sellers are likely to be enticed with a big payout. If you're able, a cash offer is also a great way to give yourself the advantage.
House hunting can feel incredibly overwhelming and discouraging right now, but don't give up! Just take the proper steps to prepare yourself, and you'll be in your dream home before you know it. JJ Elek Realty can help you today!
Everything You Need to Know About Closing Costs
If you've ever wondered what closing costs are and who pays them, you're not alone. They're often a mystery to first-time home buyers — and even first-time sellers. Here's a breakdown of what they are and who's responsible for them.
What Are Closing Costs?
Closing costs are fees paid to third parties to help facilitate the sale of a home. The total can range from 2 to 7 percent of a home's purchase price. This means a $250,000 house can expect the amount to run anywhere from $5,000 to $17, 500.
Who Pays the Closing Costs?
While both buyers and sellers pitch in to cover the fee, the majority of the cost is paid by the buyer since many of the fees are associated with the mortgage. Often, you'll see the buyer's share running about 3 to 4 percent compared to the seller's share of 1 to 3 percent.
When Are Closing Costs Paid?
While some of the closing expenses, like the home inspection fee, must be paid upfront before the home is officially sold, the bulk of the closing costs are paid upon the exchange of the keys.
What Fees Can the Home Buyer Expect to Pay?
Buyers should expect to pay the following (among others) as part of closing costs:
Keep in mind that at least three days prior to closing, the lender is required by federal law to send the buyer a closing disclosure outlining these costs.
What Fees Can the Seller Expect to Pay?
Home sellers typically cover fees associated with:
A Real Estate Agent Can Help
If you're curious what your closing costs will be, you can find many closing calculators online where you can plug in the numbers yourself. Otherwise, your best bet is to consult a real estate agent, lender, or mortgage broker for a more accurate estimate. Remember, before you close, you'll want to check all documentation to make sure all the costs line up with what you originally quoted. Contact JJ Elek today for more information about closing on a home
4 Surprising Factors That Can Boost Home Value
Making your house more energy efficient, adding square footage, and upgrading the landscaping are some of the more well-known ways to increase its worth. There are thousands of data points like these that correlate to sale prices — but there are many others that aren't so obvious.
Here are some of the surprising factors that can affect either the existing value of your home or the price buyers are willing to pay for it.
If you own a home in the major metropolitan area, there's a good chance you're sitting on a rapidly appreciating financial asset. While many people may be leaving the city for the suburbs, they still want to be near a major city. According to a recent Zillow analysis, home values in the New York metro area are worth $2.6 trillion.
Between 1997 and 2014, homes within a ¼ mile of a Starbucks saw a 96 percent boost in value, on average, compared to 65 percent for all U.S. homes. Those with a Dunkin' nearby appreciated 80 percent, on average, during the same 17-year period.
HGTV's Chip and Joanna Gaines inspire many homeowners with their identifiable aesthetic seen on their show Fixer Upper. Some of their favorite features like farmhouse sinks and barn doors actually contribute to homes selling faster and for a premium in the real world. According to a recent Zillow analysis of over 2 million homes sold nationwide, listings with "barn door" in the description sold for 13.4 percent more than expected and 57 days faster than comparable homes without the keyword. Listings boasting a "farmhouse sink" led to a nearly 8 percent sales premium.
Walls painted in cool neutrals like blue and gray have been shown to convey that a home is well cared for or has other desirable features. A recent paint color analysis by Zillow examined 32,000 photos from sold homes around the country, finding that blue kitchens sold for a $1,809 premium compared to similar homes with white kitchens, and pale-blue to soft periwinkle-blue bathrooms sold for $5,440 more.
If you're in the market to buy or sell a home in New Jersey, JJ Elek can help you dig up useful tidbits like these to help you in the process. Contact us today to learn more.
Tips for Selling Homes with Ease in Spring 2021
As the world faces a new normal in 2021, real estate agents face new opportunities and challenges. Make-up buying from the disruption of the pandemic will propel a demand of home purchases, with a healthy share of Millennial and Gen-Z first-time buyers along with trade-up buyers older generations.
How can real estate agents prepare for the surge in consumer spending and availability of homes on the market? Here are some tips to set yourself up for easy sales in spring of 2021.
Focus on Digital Marketing
Many people are still working remotely and practicing social distancing, and that means most potential buyers will be searching for homes online. Capitalize on SEO to showcase listings and attract new clients. Start a blog to share updates about local market conditions and available properties.
Stay Active on Social Media
Home buyers and sellers often check social media to find out more about an agent. Make sure your profiles are professional, approachable, and up to date. Provide consistent updates, with useful information for buyers and sellers, and links to available homes. Be interactive to start building a network of potential clients.
During these times, many sellers are concerned about showing their homes and buyers are reluctant to visit them. Agents who excel at photography can offer quality images and video for virtual tours to be posted on websites and social media. Showcase large properties with aerial photography using a drone, if possible.
Maintain Safety Protocols
Fear is common with the new normal. Agents must know and maintain safe protocols for showing homes and interacting with clients. Have hand sanitizer, masks, and cleaning supplies ready for use at all times. Confident agents who know how to handle all situations make buyers and sellers feel comfortable to take action.
As everyone remains curious about what 2021 will bring, real estate agents have opportunities to connect with clients in a meaningful way. JJ Elek agents are ready for the challenge.
Step-by-Step Guide to Creating a Virtual Home Tour
The COVID-19 economy has drastically increased consumer demand for virtual home tours. Using 360-degree and 3D tour technology, you can deliver an immersive experience to view potential homes while limiting in-person contact.
And it's not as complicated as you might think. This step-by-step guide includes everything from the equipment to the execution needed to set up a successful virtual home tour.
Anyone who's doing any volume of home sales should invest in a 360-degree camera. You can capture and turn thousands of square feet into a dynamic home tour in less than 20 minutes. Most models cost between $250 and $500. Whichever 360-degree camera you use, you'll also want to purchase a tripod or monopod, an extra battery, and a battery-charging station. You'll also need to download a smartphone app or invest in a hosting platform to store, edit, and share your photos. There are hundreds of 360-degree tour providers and hosting platforms, including Giraffe360, and EyeSpy360, Immoviewer, Matterport, Ricoh360 Tours, and Box Brownie. Choose one that allows you to upload and store your photos as you take them, and you're ahead of the game.
Before you take any pictures, plan your shoot, preferably during the daytime.
Many editing programs, including Box Brownie and Immoviewer, will put your photos in the right sequence as they upload, as long as you've taken them following the floorplan. If you have the editing skills to stitch the images together yourself, you can use Adobe Lightroom and Photoshop, available as a monthly online subscription.
Once the images and 3D model have been created, it's time to share it. MLSs, platforms like Realtor.com, and social media are key places to publish your virtual home tour. You can share the link on Facebook, and even embed it in email campaigns and text messages
Moving forward as an agent, it's vital to make sure to make virtual home tours a part of your process. At JJ Elek, we empower our team with cutting-edge technology, education, and 100% administrative support for successful marketing campaigns. This makes all the difference.
Why Working from Home May Impact Buyer Preferences
COVID-19 has profoundly changed the ways we think, interact, shop, and work. We used to have in-person meetings, go to conventions, and meet for cocktails. Yes, we're socially distant these days, but how much is it affecting real estate? Has buyer desire changed?
With so many businesses rolling out work-from-home policies in 2020, finding the right house matters more than ever. Home buyers are drawn to more spacious homes with effective working spaces, according to recent Zillow research. In fact, for-sale listings in spring 2020 had 10% more focus on home workspaces than the previous spring. The fact is, appealing to work-from-home buyers can boost your home's profile.
Think like a remote worker when selling a home
Right now, remote-workers are getting by with what they have. Some were forced to convert a room into a home office. Others already had a home office space, but want something better now that they're using it more. Some are simply working at the kitchen counter or on their couch. Those on the market for a new home are specifically looking for more room, with dedicated office spaces — and many will consider new geographic locations to get it.
Broaden your advertising scope to attract geographically flexible buyers
The length of a commute isn't much of a factor now. Given their newfound ability to work from practically anywhere, home buyers are ready to migrate away from the expensive cities they previously chose for career reasons. Secondary cities are rebounding more quickly than the downtown markets where larger homes were always much harder to come by.
Highlight usability of space for activities
Homeowners aren't just looking for a room for a home office. The desire to have a home gym, an updated kitchen, laundry rooms, storage, and more space in general – indoor and outdoor – are all key factors motivating buyers to change their home search parameters.
If you want to get the most bang for your buck, focus on the features that today's home buyers really want to see. The agents at JJ Elek can help you do just that.