Blog « Keegan Mortgage

Housing Has Tough Times On the Way

Monday, October 1st, 2018

The slowdown in housing can be blamed on a number of factors, and the bad news is they are all likely to get worse. The Commerce Department reported last month that single-family housing starts are below the levels they registered in the spring. Single-family permits, which measure how much construction is in the pipeline, fell to their lowest level in a year. Other housing measures, including existing and new home sales, have also been slowing in recent months. The reasons for the weakness are clear. Mortgage rates are near seven-year highs and rising prices are cutting into affordability. A tight […]

The High Cost of Buying and Selling a Home

Tuesday, September 4th, 2018

Any homeowner knows that it costs a lot to buy and sell a home, but the magnitude of these costs may be underappreciated. A working paper by economist Charles Jones found that for someone owning a home for four years or less, the cost of buying and selling the home were higher than for all other costs—including interest payments, property taxes and insurance expenses. Even after owning the home for a decade, the costs of buying and selling a home make up about one-fifth the total cost. The problem with housing transaction costs is that they interfere with markets. To […]

Sealing the Deal with a ‘Bump’

Wednesday, August 1st, 2018

What to do when a home-seller gets an offer but holds out hope for something better? Enter the bump clause. A bump clause lets sellers enter into a contract with a buyer while still continuing to market the property. If the sellers get a better deal, they can “bump” the original buyer. It’s most commonly used when a buyer’s offer has some contingency, usually that they need to sell their current home first. It can help coax the sellers into contract by offering them the ability to seek alternate buyers who don’t have a home-sale contingency or who are offering […]

Spring Home Sale Season Stuck in Neutral

Monday, July 2nd, 2018

A booming economy is providing little boost to the critical spring homebuying season, which is stuck in neutral due to a lack of inventory, high home prices and rising mortgage rates. Existing home sales have declined compared with a year earlier in four out of the first five months of this year. Sales of previously owned U.S. homes dropped in May from the prior month, the National Association of Realtors said Wednesday. Compared with a year earlier, sales in May were down 3%. The warm spring months near the end of the school year are an important test for the […]

Home Sales Fall

Friday, June 1st, 2018

Sales of previously owned homes declined in April, as inventory shortages and rising prices weigh on the market and higher mortgage rates begin to pose a threat to demand for the first time in years. Existing home sales fell 2.5% in April from the prior according to a National Association of Realtors announcement last Thursday. Compared with a year earlier, sales in April were down 1.4% — the second consecutive month sales declined on an annual basis. Thus far the critical spring selling season — when some 40% of U.S. home sales occur each year — is off to a […]

Rising Rates Bite Borrowers’ Budgets

Tuesday, May 1st, 2018

A recent uptick in mortgage interest rates is increasing costs for buyers already grappling with rising prices. The average monthly mortgage payment is up nearly 13% nationally over the past year, according to an analysis released by Realtor.com last month. That’s an increase of $168 per month, according to the analysis. Mortgage interest rates are about a half-percentage point higher than they were at the beginning of the year. According to the Mortgage Bankers Association, the average rate on a 30-year, fixed-rate conforming mortgage ($453,100 or less) was 4.69% in the week ending March 23. With Federal Reserve officials signaling […]

Want The House? Write A Letter

Monday, April 2nd, 2018

Cash may be king, but words are pretty powerful, too: One of the most effective ways to win a bidding war is to write the seller a letter. All cash offers nearly doubled a buyer’s chances of trumping others, while waiving a financing contingency — effectively agreeing to forfeit the deposit if a buyer can’t get a mortgage — boosted a buyer’s odds by 57.9%, according to new data. Surprisingly, penning a cover letter came in a close third, increasing a buyer’s odds by 52.2%. The data are based on about 14,000 offers in 2016 and 2017 that involved competing […]

Housing Has Tough Start to 2018

Thursday, March 1st, 2018

According to a recent Wall Street Journal article, the housing market is slowing, and pressures will only build as the year goes on. Sales of previously owned homes slumped last month. The National Association of Realtors (NAR) reported that existing home sales in January fell 3.2% from December, versus the gain economists expected to see. And sales of new single-family homes fell nearly 8 percent compared to the month before, according to the data released on Monday. Sales were down almost 5% below their year-earlier level, marking the biggest annual decline since August 2014. NAR suggested tight inventories were to […]

2018 Down Payment Strategy

Thursday, February 1st, 2018

Picking the right house is just one of the big decisions you’ll face when buying property. Deciding on the down payment is another. Low inventory continues to pressure potential buyers into making bigger down payments to gain a competitive edge. But the possibility of rate increases in the coming year and new rules on mortgage-interest deductions may also affect how much buyers put down. The median down payment for financed home-purchases in the third quarter of 2017 was a record $20,000, or 7.6% of the median sales price of $263,000, according to the Wall Street Journal. That is up from […]

Tax Reform: What it Means for Mortgages

Friday, December 29th, 2017

The landmark tax reform bill officially passed both houses last week. The big winners appear to be people who rent, corporations, and high-earners. Real estate and mortgages were affected negatively, but it could have been much worse. The mortgage interest deduction was maintained although cut to $750,000 from $1 million. However, doubling the standard deduction will stop many homeowners from itemizing and taking the mortgage deduction. There remains a fair amount of confusion over deductibility of home equity loan interest. It appears you will not be able to deduct interest for anything other than acquisition and home improvement. You will […]

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