Home buyers need to move fast if they want to spend less, notes Jonathan Smoke, chief economist at realtor.com® in commentary at the site.

“Delayed purchases will only result in higher monthly mortgage payments as prices and rates rise,” Smoke writes. Realtor.com® is forecasting that affordability may decline as much as 10 percent over the year.

The Federal Reserve continues to remind the financial markets that it plans to raise its target federal funds rate this year, which will cause mortgage rates to rise. Many economists are predicting 30-year fixed-rate mortgages to average near 5 percent by the end of the year.  

For now, mortgage rates are near historical lows for homebuyers and home owners who can take advantage. Freddie Mac reported last week that the 30-year fixed-rate mortgage averaged 3.66 percent (last year at this time it averaged 4.32 percent), and 15-year fixed-rate mortgages averaged 2.98 percent (a year ago, it averaged 3.40 percent). 

“Right now, the Fed is using the word ‘patient’ to describe its approach to picking the time to raise the target rate,” Smoke notes. “However, when the Fed ‘loses patience,’ rates will go up at least 20 to 40 basis points in anticipation of the target rate officially going up. … So, buyers beware: The clock on these low mortgage rates may be ticking.”

Source: “2015: Buy Now, Before the Fed’s Patience Ends,” realtor.com® (Jan. 30, 2015)

Purchasing a home right now could help potential buyers save more than $200,000 over the next 30 years, according to the inaugural Opportunity Cost Report released today by realtor.com. This report attempts to show in dollars and cents the cost of delaying purchasing a home in 382 housing markets throughout in the United States.

Read more: Why Homebuyers Need to Act Now

In compiling this report, Jonathan Smoke, chief economist for realtor.com® weighed many factors, including the long-term financial impact of owning versus renting, the amount estimated that renters will lose in waiting to buy, and the financial benefits of homeownership by market.

Interest rates, home prices, and the cost of rent are all predicted to go up throughout the year, which will impact the decision to delay purchasing a home, the report notes.

"Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of  the projected increase in mortgage rates and continuing price appreciation," says Smoke.  "The problem is inventory is low, which has many would-be home buyers –especially first timers – standing on the sidelines and missing out on potentially material financial gains."

So what does this estimated long-term wealth gain really look like? Smoke reports that while some housing markets are more buyer-friendly than others, nationally the average buyer is set to gain $217,726 over a 30-year period based on today's dollars. Additionally, in 88 percent of metro areas, the financial benefit of buying a home right now accumulates at least $100,000 over 30 years.

"This analysis looks solely at the financial reasons to buy a home, based on assumptions about rising mortgage rates and changes in home values," says Smoke. "It's important to remember that a home purchase decision is deeply personal. Potential buyers need to consider factors such as upcoming life events, job security and potential relocation, in addition to financial benefits, because they too can have a significant impact on ownership."

These are the 10 markets with long-term wealth gains exceeding $500,000

1. Santa Cruz-Watsonville, Calif.: $1,006,413
2. Santa Rosa, Calif.: $883,068
3. San Jose-Sunnyvale-Santa Clara, Calif.: $782,144
4. Urban Honolulu, Hawaii: $714,748
5. Napa, Calif.: $712,192
6. Denver-Aurora-Lakewood, Colo.: $696,131
7. Salinas, Calif.: $553,158
8. San Diego-Carlsbad, Calif.: $518,382
9. San Luis Obispo-Paso Robles-Arroyo Grande, Calif.: $510,719
10. Fairbanks, Alaska.: $507,368

Source: Realtor.com®

The Consumer Financial Protection Bureau debuted a new tool kit this week that sets out to turn home buyers into smarter mortgage shoppers.

Mortgage Disclosures

CFPB: Simplified Mortgage Forms Coming in 2015

Last-Minute Closing Changes to Get Difficult

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The tool kit is part of the CFPB’s “Know Before You Owe” mortgage initiative and allows home buyers to use the new Loan Estimate and Closing Disclosure forms, which lenders will be required to provide starting Aug. 1.

The CFPB is requiring creditors to provide the tool kit to mortgage applicants when they apply for a mortgage, but the agency is also urging real estate professionals to point their customers to it as well.

“This tool kit is a great resource for consumers navigating the homebuying process, and will help consumers make well-informed decisions about the biggest financial transaction of their life,” says CFPB Director Richard Cordray. “The new mortgage disclosure forms coming in August will help consumers comparison shop for mortgages and avoid surprises at the closing table. We are releasing this tool kit well in advance of the effective date to help the mortgage industry come into compliance with the new rules.” 

The updated tool kit, which includes interactive worksheets and checklists, aims to help home buyers understand the costs of a real estate transaction, defines what affordability could mean to them, and provides tips on how to shop for the best mortgage.

Source: Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau debuted a new tool kit this week that sets out to turn home buyers into smarter mortgage shoppers.

Mortgage Disclosures

CFPB: Simplified Mortgage Forms Coming in 2015

Last-Minute Closing Changes to Get Difficult

What Are Your Gripes About Closings?

The tool kit is part of the CFPB’s “Know Before You Owe” mortgage initiative and allows home buyers to use the new Loan Estimate and Closing Disclosure forms, which lenders will be required to provide starting Aug. 1.

The CFPB is requiring creditors to provide the tool kit to mortgage applicants when they apply for a mortgage, but the agency is also urging real estate professionals to point their customers to it as well.

“This tool kit is a great resource for consumers navigating the homebuying process, and will help consumers make well-informed decisions about the biggest financial transaction of their life,” says CFPB Director Richard Cordray. “The new mortgage disclosure forms coming in August will help consumers comparison shop for mortgages and avoid surprises at the closing table. We are releasing this tool kit well in advance of the effective date to help the mortgage industry come into compliance with the new rules.” 

The updated tool kit, which includes interactive worksheets and checklists, aims to help home buyers understand the costs of a real estate transaction, defines what affordability could mean to them, and provides tips on how to shop for the best mortgage.

Source: Consumer Financial Protection Bureau

An 86-year-old Davenport, Fla., grandmother has become an Internet star after posing in some photos of her home for-sale. Yolie Ball's 15-year-old granddaughter shared photos on Twitter of her grandmother popping up in staged photographs of the mobile home – from casually sitting in a chair in the family room reading a book to peeking outside of a bedroom door to sipping coffee on the lanai. The photos have gone viral and have even captured international media attention.

Ball lives in the home with her husband, Don, and they have been trying to sell the mobile home to move to Tennessee. Their daughter, Sandra, was visiting recently from Massachusetts and decided to take photos of the home, and that’s when Ball admits things got silly.

"The first picture, the one where I have my head sticking out of the bedroom door, I was going to pull back and Sandra said, 'No, mom, stay right there,'" Ball told ABC News. "It went from there. She'd say 'Oh, lean on the counter,' or 'Go sit on the lanai.' It was just a joke. We're always doing silly stuff."

But it was Ball’s granddaughter, Mackenzie, who saw the photos and thought they were "hilarious" and decided to post them on Twitter. She posted the photos and wrote in all capital letters on Twitter: "MY GRANDMA IS TRYING TO SELL HER HOUSE IN FLORIDA AND THESE ARE THE PICS I AM LAUGHING SO HARD."

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Staging for Listing Photos

Ball says her granddaughter soon after called her to say "'Grandma, I'm going to tell you something. I did something and I don't know if it's going to be good or bad.'"

So far, the post has been retweeted more than 26,000 times so far. Ball has been fielding calls from the media and even from the "Ellen DeGeneres Show". But she says she’s still waiting to get a call on an interested buyer from her home.

Still, "we’re getting a kick out of it," Ball told ABC News.

Source: "Florida Grandmother Poses in Staged Photos for For-Sale House,"ABC News (March 27, 2015) and "Polk Grandmother’s Hilarious Real Estate Photos Go Viral," WFLA.com (March 30, 2015)

With the Spring selling season in full swing, now is the time for your clients to start making changes to improve their home's comfort level and the way it functions to make it more appealing to potential buyers.

Read more: 2015 Remodeling Cost vs. Value: Less Is More

Where should they start? Peter Chovanes, a REALTOR® with Van Guard Properties in San Francisco, advises that clients start with the four home improvement basics: foundation, roof, plumbing, and electrical.  Of these the roof is the most important. "I am almost always asked 'How old is the roof?'" he says. "And keeping the roof in good shape alleviates other problems; for example, water can run laterally and once a leak starts it can follow plumbing and even electrical conduits. So what you think is a plumbing leak might really be a hole in the roof."

• Repair: First take a good look at the state of the home, inside and out. Fix the obvious areas that need maintenance.
• De-clutter: Find ways to store odds-and-ends in containers and cabinets or donate belongings to charity.
• Lighten up: Brighter, light-filled rooms are more appealing and make a house feel more spacious. Consider replacing heavy drapes with shutters, shades, or blinds.
• Add eco value: Replace old windows with energy-efficient versions to reduce home energy costs and add value.
• Update: Water heaters, furnaces, and toilets are also good to update for energy and water conservation but probably will not add significantly to the home's value.
• Refinish: If wood floors are looking tired, refinish them. Replace worn carpeting where possible.
• Kitchen clean-up: The kitchen is an obvious focal point for buyers. Consider a light upgrade in the kitchen, by replacing the sink or replacing cabinets. If you are planning to replace counters try solid surface quartz-based materials, which have become the popular alternative to granite.
• Better bathrooms: Bathrooms are typically less expensive to remodel than kitchens so there is more potential for a return on the investment. Buyers frequently request double vanities and a walk-in shower so consider upgrading accordingly.
• Remodel: It is usually more cost-effective to remodel attics and basements than to add entirely new rooms.
• Spruce up: Add curb appeal by weeding and sprucing up the garden with low maintenance, drought-tolerant plantings -- also called xeriscaping. Giving the front door a new coat of paint is a low cost way to add curb appeal. 

Source: Houseplans.com

More millennials are finally leaving their parents’ homes to form their own households, but they may need financial help to do it.

Read more: Millennials Move Toward Home Ownership

A new report by consumer lender loanDepot shows that about two-thirds of parents – or 67 percent – will use savings to help their children buy a home. loanDepot surveyed 1,000 parents and 1,000 millennials (those between 18 and 38 years old) to find out about parents’ financial assistance in a home purchase.

Seventy-five percent of the millennial-aged home buyers who received financial help from their parents said the assistance was what made it possible for them to buy a home, according to the survey.

"Support from parents is playing a significant role in the housing recovery, and this new research indicates the trend will increase," says Dave Norris, president and chief operations officer at loanDepot. "Without that financial support, it’s likely the pool of millennial first-time buyers would be even smaller than today."

Half of the parents who plan to help their children purchase a home said they plan to contribute toward the down payment, while 20 percent say they will cover closing costs and 20 percent will cosign the loan, according to the survey.

About 68 percent of parents who plan to help their adult child purchase a home say they will do so with no strings attached – providing financial support without expecting any payment in return. But 36 percent of millennials surveyed say they would view any parental financial aid toward a home purchase as a loan that will need to be repaid in the future.

"Our new survey confirms most millennials plan to own a home someday, and their parents are more than supportive of their efforts," Norris says. "Their interest in home ownership will likely pick up once they start their own families, reduce debt, and have been working long enough to earn a decent income and save money."

Source:"Trend of Parents Helping Millennial Children Buy First Home Is on the Rise," loanDepot (March 24, 2015)

For the second consecutive week, mortgage rates continued to fall, with the 30-year fixed-rate mortgage still well below 4 percent and 15-year rates dipping below 3 percent, Freddie Mac reports in its weekly mortgage market survey.

"Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support homebuyer affordability," says Len Kiefer, deputy chief economist at Freddie Mac. 

Freddie Mac reports the following national averages with mortgage rates for the week ending March 26:

• 30-year fixed-rate mortgages: averaged 3.69 percent, with an average 0.6 point, dropping from last week’s 3.78 percent average. Last year at this time, 30-year fixed-rates averaged 4.40 percent.
• 15-year fixed-rate mortgages: averaged 2.97 percent, with an average 0.6 point, dropping from last week’s 3.06 percent average. A year ago, 15-rates averaged 3.42 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.92 percent, with an average 0.4 point, dropping from last week’s 2.97 percent average. Last year at this time, 5-year ARMs averaged 3.10 percent.
• 1-year ARMs: averaged 2.46 percent, with an average 0.4 point, holding the same as last week. A year ago, 1-year ARMs averaged 2.44 percent.

Source: Freddie Mac

Home owners who have owned five to 15 years had the highest effective property tax rates while those who have owned more than 20 years had the lowest, according to the U.S. Property Tax Rates Report for 2014, conducted by RealtyTrac. The report provides average property taxes and effective property tax rates for single-family homes among more than 1,000 counties nationwide.

Read more: Property Taxes at a 20-Year High

For home owners who have owned between 10 and 15 years, the average effective property tax rate was 1.35 percent, while home owners who have owned between 5 and 10 years it was 1.34 percent. The average effective property tax rate was 1.18 percent for home owners who have owned less than a year and 1.15 percent home owners who have owned more than 20 years, finds the report.

"State laws like Prop 13 in California give a property tax advantage to home owners who have owned for a longer time, but the bell curve in effective property tax rates in the middle of the years-owned spectrum indicates that many who purchased during the housing bubble — or in the years leading up to the housing bubble — may be paying taxes based on a still-inflated valuation of their properties," says Daren Blomquist, vice president at RealtyTrac. "These home owners should consider appealing their property’s assessment if that is an option available to them in their county."

The report also found that higher-end homes accounted for more than half of all property tax dollars nationwide. Single-family homes valued $300,000 and higher comprised 25 percent of all single-family homes nationwide, but the property taxes paid on those homes accounted for 54 percent of all property taxes collected nationwide.

The following states had the highest average property taxes in dollars for single-family homes, according to the report:

• New York: $15,625
• New Jersey: $8,108
• New Hampshire: $5,795
• Connecticut: $5,646
• Hawaii: $5,024

On the other hand, the states with the lowest average property taxes in dollars for single-family homes are:

• Alabama: $618
• West Virginia: $931
• New Mexico: $1,096
• Tennessee: $1,116
• Indiana: $1,418

Source: "Property Taxes Highest for Home Owners Who Have Owned Between 5 and 15 Years, Own High-End, or Low-End Homes," RealtyTrac (March 3, 2015)

Mortgage payment often makes up a person’s largest monthly expense – yet more than a third of borrowers have no clue what interest rate they’re paying, according to a new survey of 1,000 adults by Bankrate.com.

Thirty-five percent of those surveyed did not know their mortgage interest rate, and one in seven borrowers were either “not too confident,” “not at all confident,” or had no idea about their rate.

"Your mortgage rate is one of the most important numbers in your financial life, and there's a good chance that one of your neighbors has no idea regarding how much he or she is paying," says Holden Lewis, a senior mortgage analyst at Bankrate.com.

Many borrowers know the general range of their mortgage rate, particularly those who have purchased or refinanced their home within the past five years, the survey showed. Lenders say that most borrowers are more in-tune to what their monthly payment is and not how they arrived at that payment.

"They're in the heat of the moment, they're talking about rate, but really at the end of the day they're more focused on completing the process," Matt Weaver, senior mortgage loan originator for PMAC Lending Services in Florida, told CNBC. "Once it's closed, it's just 'Said it, forget it.'"

However, a half and a quarter percentage point variance in a mortgage rate can make a big difference in savings. Low mortgage rates recently could make refinancing worthwhile too, but some borrowers may not know if they should apply.

"The issue is not so much that they don't know their mortgage rate, it's that they don't know that rates are a whole lot lower now," Lewis says.

Source: “A Third of Mortgage Holders Don’t Know Their Rate,” CNBC.com (Feb. 2, 2015)

Home prices posted solid gains in the fourth quarter of 2014, with the majority of metro areas seeing a slightly stronger price growth, propelled by tight housing supplies, low interest rates, and a strengthening job market, according to the National Association of REALTORS®’ latest quarterly report.

Prices on the Rise

NAR: Home Sales Only Going Up From Here

More States See Rising Home Prices

The national median existing single-family home price was $208,700 in the fourth quarter, up 6 percent year-over-year, NAR reports.

The median existing single-family home price rose in 150 out of the 175 metro markets tracked – or 86 percent. That marks a stronger price gain compared to the third quarter when 73 percent of the metro areas had posted increases. What’s more, 24 areas – or 14 percent – saw double-digit increases in the fourth quarter.

“Home prices in metro areas throughout the country continue to show solid price growth, up 25 percent over the past three years on average,” says Lawrence Yun, NAR’s chief economist. “This is good news for current home owners, but remains a challenge for buyers who are seeing home prices continue to outpace their wages. Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying.”

Meanwhile, total existing-home sales – including single-family and condo – fell 1 percent in the fourth quarter to a seasonally adjusted annual rate of 5.07 million. But existing home-sales are still 2.6 percent higher year-over-year, according to NAR’s housing report.

By the end of the fourth quarter, 1.85 million existing homes were available for sale, which is slightly below the 2.01 million homes for-sale during the fourth quarter of 2013. The average supply was 4.9 months in the fourth quarter. Most economists consider a supply of 6 to 7 months a healthy balance of supply between buyers and sellers.

“Despite affordable housing conditions in most of the country, an upward pressure on home prices still persists in some metro areas – particularly in the West – where the current supply of new and existing-homes for sale is failing to keep pace with overall demand and growing populations,” Yun says. “Unless homebuilders significantly boost construction, housing supply shortages could develop and lead to further price acceleration this spring.”

5 Priciest Markets in the Fourth Quarter

The following were the most expensive housing markets in the fourth quarter:

1. San Jose, Calif. metro: $855,000 (median existing single-family home price)
2. San Francisco: $742,900
3. Honolulu: $701,300
4. Anaheim-Santa Ana, Calif.: $688,500
5. San Diego: $493,100

By Region

The following is a closer look at how existing-home sales and prices fared across the country in the fourth quarter:

• Northeast: total existing-home sales increased 2.5 percent in the fourth quarter and are 4.1 percent below the fourth quarter of 2013. Median existing single-family home price: $246,300, up 2.2 percent from a year ago.
• Midwest: existing-home sales fell 4.7 percent in the fourth quarter and are 0.6 percent below a year ago. Median existing single-family home price: $162,000, a 6.2 percent jump from a year ago.
• South: existing-home sales rose 2.7 percent in the fourth quarter and are 5.8 percent above the fourth quarter of 2013. Median existing single-family home price: $183,500, 6.2 percent above a year earlier.
• West: existing-home sales fell 6 percent in the fourth quarter and are 0.9 percent below a year ago. Median existing single-family home price: $299,500, up 4.8 percent year-over-year.

Source: National Association of REALTORS®