Top DIY Mistakes

Many homeowners attempting to save money on household projects are turning to DIY projects. But do-it-yourself fixes can be costly, shows a new survey from Clovered, a home insurance company.

Eighty-seven percent of more than 1,000 homeowners recently surveyed admitted to making a mistake while attempting a do-it-yourself home improvement project. The median amount spent on fixing those DIY mistakes was $137.50, the survey showed. Millennials tended to spend the most in fixing their mistakes, spending up to four times as much as baby boomers—$200 versus $50 post-mistake.

The top DIY mistake across all generations was starting a project without the necessary supplies or tools. Gen Xers tended to admit to picking the wrong paint, and millennials were the most often to skimp on materials, the survey showed.

TopDIYMistakes_ByGeneration

Thirty-two percent of DIYers admit to having to contact a family member or friend to help them finish a home improvement project. Seventeen percent said they then hired a professional contractor to complete the job.

One in four homeowners who attempted to DIY also injured themselves. The most common injuries were “cutting myself with a sharp tool or project material” (74.9%), “hitting myself with a hammer or other tools” (58.4%), and “tripping over materials” (49%).

TopDIYMistakes

CREDIT:  REALTOR Magazine – October 10, 2019

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9 Housing and Mortgage Trends for the Rest of 2019

Wood block houses in a growth real estate concept.

The first half of 2019 surprised housing markets across the country: Mortgage rates fell. That’s the opposite of what the experts had predicted at the beginning of the year, and it’s welcome news for home buyers, sellers and homeowners. Millions of owners could benefit from refinancing at these unexpectedly lower rates.

In other ways, housing forecasters’ predictions for 2019 were correct. Buyers are still competing for a short supply of homes, but the market isn’t quite as tilted in favor of sellers as it seemed six months ago. Home prices continue to rise, but not as fast as they have over the past few years. Many would-be buyers struggle with affordability.

NerdWallet has identified these nine housing and mortgage trends to watch in the second half of 2019.

1. Wanted: More homes for sale

In real estate, it’s been a seller’s market since August 2012. More would-be buyers exist than homes for sale, giving sellers a stronger negotiating position. While the market still favors the seller in most places, the balance of power is moving in the buyer’s direction.

More homes are available for sale now, so buyers have greater choice. In April, there were 1.83 million pre-owned homes for sale, an increase of 30,000 from the same month last year. Meanwhile, 327,000 new single-family houses were for sale, an increase of 33,000.

Even with thousands more homes on the market, there’s still a shortage of homes for sale. Freddie Mac estimates that in 2017, 370,000 fewer homes were built than needed to satisfy demand resulting from population growth. “Until construction ramps up, housing costs will likely continue rising above income, constricting household formation and preventing homeownership for millions of potential households,” Freddie Mac concludes.

2. Home prices will keep going up

Toward the end of last year, many forecasters predicted that home prices would continue to rise in 2019, but at a slower pace. They were right.

In the first four months of 2019 (the latest numbers available), buyers were paying more for resold homes than a year before — but the year-over-year price increases each month were less than 4%. For the same period in 2018, year-over-year prices were more than 4.5% higher.

“Home price appreciation will slow down — the days of easy price gains are coming to an end — but prices will continue to rise,” says Lawrence Yun, chief economist for the National Association of Realtors. The NAR predicts that home prices will continue hitting the brakes and that year-end prices will be 2.2% higher than at the end of 2018.

Not everyone believes the pace of home prices will slow much in 2019. Fannie Mae has revised its price forecast, but it still predicts that prices for existing homes will rise 4.3% this year.

3. Mortgage rates will remain low

Fannie Mae, Freddie Mac and the National Association of Realtors all predicted that mortgage rates would rise through 2019. Instead, mortgage rates have tumbled.

After peaking at 5.09% in November 2018, the average APR for a 30-year fixed-rate mortgage fell to 4.09% by June 2019, a decline of a full percentage point, according to NerdWallet’s daily mortgage rates survey.

The forecasters now predict that the 30-year fixed will remain relatively steady through year’s end, not changing by more than a couple of tenths of a percentage point.

The unexpected drop in fixed mortgage rates means fewer people are getting adjustable-rate mortgages. At the end of 2018, experts thought rising rates would cause a surge in ARMs this year. With fixed rates dropping back to enticing levels, that surge never happened.

Interest rates have been falling based on the perception that the economy is cooling off, and because of trade tensions between the United States and China. The Federal Reserve, which typically cuts short-term interest rates in response to economic weakness, is expected to reduce rates at least once by the end of 2019, which could ease upward pressure on long-term mortgage rates.

4. Affordability continues to be a concern

Even as home price growth slows and mortgage rates fall, home buyers still have difficulty affording homes — especially first-timers toward the less expensive end of the market.

“While affordability is much better than we expected it to be, rising prices have offset much of the benefit of lower mortgage rates,” says Danielle Hale, chief economist for Realtor.com. “What that means for the individual buyer is that their monthly payments might be roughly the same as if you had bought a year ago.”

Mark Boud, chief economist for Metrostudy, calls the national housing market “top-heavy.” He means that there are plenty of homes available for buyers who can afford to pay $800,000 or more. But buyers outnumber sellers of homes priced $400,000 or less. “We’re still very short of supply in this lower price range,” he says.

The share of newly built homes under $400,000 has gone down. In April 2018, 67% of new homes sold for less than that price; this April, 64% did.

5. More people could save by refinancing

While the drop in mortgage rates benefits home buyers, it’s good for homeowners, too — specifically, homeowners who would snag lower monthly payments by refinancing into a mortgage with a lower interest rate. Every time rates fall, there’s an increase in the number of homeowners who could save money by refinancing.

Black Knight, a technology provider for the mortgage industry, estimates that 5.9 million homeowners could cut 0.75% or more from their mortgage interest rate by refinancing.

Does a lower mortgage interest rate automatically mean that you should refinance? No. You might benefit from a smaller rate decrease, or you might have to wait for a bigger rate drop. A mortgage refinance calculator can help you figure out the ideal time to refinance, which can depend on the rate difference, your loan size, how long you’ve had your mortgage, the loan fees you’ll have to pay and how long you plan to have the refinanced loan.

Even if you bought your home recently, it’s worth checking whether you should refinance. Black Knight estimates that 953,000 homeowners who got mortgages in 2018 could save an average of $162 each month by refinancing.

6. New homes get bigger

From a home buyer’s perspective, most markets need more houses for sale, and they need to be on the affordable end of the price scale. After all, many first-timers buy starter homes instead of forever homes, with prices below the area’s median. Sizes of new homes trended mostly downward in 2018, but the median home size went up in the first quarter of 2019.

Builders construct larger homes during economic recoveries “as high-end homebuyers … return to the housing market in relatively greater proportions,” wrote Robert Dietz, chief economist for the National Association of Home Builders, in a May blog post.

Year-over-year median prices for new homes followed the increase in size, going up sharply in April to $342,200 — an 8.8% increase over the median price 12 months earlier of $314,400.

7. Attention is on first-time buyers

The mortgage and real estate industries are focused on serving first-time home buyers, and for good reason: There’s a lot of pent-up demand.

Tian Liu, chief economist for Genworth Mortgage Insurance, says roughly 3 million first-timers delayed buying homes between 2007 and 2015.

Those buyers are “reaching that age when they can no longer delay,” Liu says. “Their housing needs are really catching up with them. It doesn’t feel right to be raising a family in a rental apartment. They want to own their place. So I think those drivers will be very significant for the next few years.”

From the early 1990s to around 2005, first-timers accounted for roughly 40% of home sales, according to NAR research. That share soared to 50% in 2009, then fell; it was 33% in 2018. With millions of millennials reaching their 30s, market forces could cause the first-timer share to rise again in the coming years.

8. Lending standards ease a little

After the housing crisis, lawmakers required mortgage lenders to assess borrowers’ ability to repay. The regulatory changes made it harder to get a home loan.

The Urban Institute’s Housing Finance Policy Center has argued that lenders overcorrected after lending too freely in the two or three years preceding the financial crisis of 2008.

There is evidence that lenders agree. Gradually, they have been relaxing lending standards, says Matt Hackett, operations manager for Equity Now, a mortgage lender in New York City.

He says he has observed that the relaxed standards come in the form of reduced documentation requirements, lower credit scores and bigger loan-to-value ratios (smaller down payments, basically).

Mortgage data provider Ellie Mae shows that credit standards for lending were about the same in April (the latest data available) compared to 12 months earlier. The average credit score for a conventional purchase loan was 753 in April, compared to 752 a year earlier. Debt-to-income ratios, which measure borrowers’ debt loads, remained the same.

9. Overconfident sellers could struggle

The inadequate pace of home construction, along with rising prices, mean 2019 will remain a seller’s market where there are more buyers than affordable homes for sale. But home sellers shouldn’t count on bidding wars breaking out among desperate buyers.

That’s especially the case with people who are selling homes that are relatively expensive for their local market, Realtor.com economist Hale says. Pricey homes appeal more to move-up buyers than to first-timers — and one-third of buyers are first-timers.

As a seller, Hale says, “If you’re in that above-median price point, you’re going to have to price competitively and offer incentives for buyers.”

Prices vary by neighborhood and region, and the differences from place to place are stark. In the western United States, the median home resale price this spring was $395,100, according to the NAR. In the Midwest, it was $210,500.


The article 9 Housing and Mortgage Trends for the Rest of 2019 originally appeared on NerdWallet.

Be sure to get a chimney inspection

If you’re considering a home that has a fireplace and chimney showing some wear-and-tear or deferred maintenance, be sure to call in an expert. A Chimney/Fireplace inspector will provide a 13-point inspection, make repair recommendation, and ensure that it’s safe to use.

Verification of Property Condition

It’s one of the last steps in purchasing a home and an important one — Verification of Property Condition. Don’t skip or waive this opportunity to see the condition of your soon-to-be home prior to the close of escrow. #realestate #whosnext

 

 

Buyer’s Inspections – Part of the process!