Interest Rate Purchasing Power Chart

Interest Rates in 2017

Here is an article I found about the interest rates rising and what that means for buyer’s and seller’s.   The whole time I have been in real estate the mortgage rates have been actually very low.  They continue to be historically low not too.  Back in 2012 the interest rate was 3%!!! If only I could have bought then.  Currently my home is at a 3.75% interest rate and I bought in April 2014.  Right now I’m seeing interest rates up to 4%+ (rates depends on everyone borrowers personal situation, of income, credit, debts etc…)  which is still pretty low.  If you could buy right now though why would you wait even more time, and then kick yourself when rates go up to 4.5% and 5%.  

Unfortunately one result of a booming steady economy means that rates will be higher because more people can pay it.  Now is such a good time to buy and live in a property if you are able and start paying it down, or sell and get more money out of your property.   As a buyer for every interest point added on, you lose about 10% buying power, and that can knock you out of your dream home price range.  As a seller if you try and sell during the interest rate switch and have not owned your property for a long time you are going to have a very difficult time recouping all your money.  If they’re saying that rates  will jump almost a point by the end of the year, and you are currently qualified to buy a home why would you wait and lose purchasing power???

 

Help Clients Keep Rising Rates in Perspective

Since the presidential election, mortgage rates have risen from 3.5 percent to about 4.2 percent, increasing the borrowing costs of would-be home buyers.

The rates are rising on the expectations of greater business activity and a stronger economy. But the good economic prospects may come at a price to home buyers.

Nevertheless, make sure your clients keep perspective. In the 1970s, the average 30-year fixed-rate mortgage was 8.9 percent; in the 1980s, it was 12.7 percent; in the 1990s, it was 8.1 percent. The first decade in 2000s, rates averaged 6.3 percent. Suddenly, that 4.2 percent rate may not look so bad in a historical context, eh?

“Nonetheless, many consumers with a short-term memory, especially among the young, have often witnessed sub-4 percent rates and the latest rising rates feel financially discomforting and discouraging,” notes Lawrence Yun, the chief economist for the National Association of REALTORS®, in his latest column for Forbes.com.

Yun cites the following example: Take a typical home priced at $235,000. The mortgage borrowing amount is $200,000. A monthly payment would be around $898 at a 3.5 percent mortgage rate. As rates rise to 4.2 percent, that monthly payment jumps to $978. At 5 percent, the monthly payments would rise to $1,074. And if rates were ever to return to those levels from the 1980s, payments would surge to $2,166.

Yun and other economists aren’t predicting any such rate jumps like those of the past, however. Yun predicts mortgage rates to average 4.5 percent to 4.8 percent by the end of the year, and 5.5 percent by the end of 2018.

“Rising rates are no doubt pinching the family budget of would-be home buyers,” Yun says. “However, as long as the rate rises are gradual such that salaries have time to rise more strongly to mitigate some of the sting of higher mortgage payment, consumers should view these as still historically attractive mortgage rates.”

Source: “Stressed Over Higher Interest Rates?” Forbes.com (Jan. 5, 2017)

If you have any questions, comments or need friendly real estate advice do not hesitate to reach out to me! I’m here for all your Alaska Real Estate needs!  

-Kaitlyn                                                                                                                                                                                                                                                                                                                                                                                                                                                                907-414-1664                                                                                                                                                                                                                                                                                                                                                                                      Kaitlyn@alaskarealestatelady.com                                                                                                                                                                                                                                                                                                                                                  www.alaskarealestatelady.com

 

Buyer Consultation Packet PDF

Places Potential Buyers Will Check

An open house is a crucial component of the home sale process. Start with these tips for staging an open house, but don’t stop there. Potential buyers are likely to inspect all areas of the house. Yes, even your “junk drawer” and closets. Here’s a list of five often forgotten places that potential homeowners may check.

Don’t forget some of these places when showing your home!

 

The sides of your house

When you spruce up your front yard and backyard, pay attention the sides of your home as well. Potential buyers will likely look at the exterior of your house from all angles. One unkempt side may turn them off from the rest of the home. Make sure the paint and landscaping is in good condition from all angles.

Inside your closets

Don’t stuff everything in your closets and hope no one will open them. Even if the potential buyers aren’t fashionistas, they may still care about closet space. Show it off by organizing it. You wouldn’t want a potential buyer to open a closet just to find a hodgepodge of the belongings you stashed there.

Under your bed

Removing the bulk of storage from your closets is a great way to make closet space appear bigger, but that doesn’t mean your stuff should be shoved under the bed. Not only is it an eyesore, but the potential homebuyer might also see it as a sign that there is not enough storage space. Your best bet is to invest in temporary external storage space so that your open house has all the space it needs.

Inside the shower

Chances are no one wants a small, cramped bathroom. Create storage solutions that may make your space appear bigger and brighter to buyers. For example, stash toiletries and cleaning supplies in a separate closet, a dresser, or under the sink.

Your drawers and cabinets

Potential buyers will probably open drawers and cabinets. Spend time getting inspired by these home organizers. Think about all of the details like your spice rack, whether your dishes match, and finally taming your “junk drawer.”  These secret places may turn off a picky buyer.

Go the extra mile, and don’t get caught off guard. You wouldn’t want to scream a slow motion “nooooo” as a potential buyer innocently reaches to open a closet.

Buyer Consultation Packet PDF

Family Holiday Card Staging Tips

A family holiday card is a great way to show your friends and family your beautiful home. Between finding the time take the photo and choosing the right setting, mailing the holiday card can be a daunting task. These holiday hints can help make the process much more pleasant.

Family Holiday Picture

Avoid Matching Outfits

Your family should be dressed in clothes that are of neutral color and similar style, but wearing the exact same outfits hides each family member’s uniqueness. Let their personality shine while still creating a cohesive look.

Choose the Right Backdrop

Your home can provide the perfect setting for your holiday card. You may choose to shoot it outside to capture the weather of the season, in front of your home’s main entryway. Alternatively, you can utilize any well-lit and well-furnished area inside the house, such as in front of the fireplace or Christmas tree.

Pick the Right Time

Time of day matters when considering the natural lighting that will make your card shine. The hour before sunset is referred to as the “golden hour” and provides stunning lighting for your card.

Clean and Prep with the Whole Family

Once you’ve chosen a place and time, prep and check the area before shooting. This includes cleaning, straightening pictures, aligning furniture, and checking for any blemishes that would stand out in the photo.

Pose Casually

You want your holiday card to seem warm and inviting. Having your family awkwardly pose in unnatural positions can have the opposite effect. Encourage your family to be composed, but casual.

Plan for Restless Children

The last thing most children want to do is sit still, smile, and wear clothes they might find uncomfortable. To avoid difficulties be sure to choose a time of day when they’re well rested, fed, and generally complacent. Make them smile with a joke or the promise of a holiday treat.

Distract your Pets

Holiday cards are a great way to show off a new pet or keep your friends and family updated on the family’s furry friend. Pets, like children, aren’t always eager to be photographed. Have the photographer catch their attention with a treat or one of their toys.

The holidays will be here soon enough, so get started on your family’s perfect holiday card to show your relatives and friends.