Impending interest rate news

Selling your Rochester home? Get a free Home Price Evaluation

We're in for a very competitive stretch in the real estate market.

First off, mortgage rates have started increasing. For the first time since last summer, the 30-year average mortgage rate is now over 4%. This follows a long period when mortgage rates were near record lows.

And this latest increase might be more than just a temporary bump. Some experts, including Freddie Mac's deputy chief economist Len Kiefer, predict we've seen the last of sub-4% mortgage rates, thanks to strengthening inflation and broad-based economic growth.

Second, mortgage applications are also increasing. Applications were up in January by 4.1% compared to last year. This has been led by people looking to refinance their homes, while mortgage applications by homebuyers remained at steadier levels.

Third, housing supply continues to be increasingly tight, with 10% fewer homes on the market than a year ago.

So what do all of these numbers mean for you? The growth in mortgage rates shouldn't affect the number of eager homebuyers very much because there is so much more demand than supply right now.

However, this rise in mortgage rates might actually reduce the number of homes for sale even further.

The increase in mortgage applications for refinancing bears this out. Homeowners are looking to lock in the current, still fairly low mortgage rates. When mortgage rates increase further, homeowners will have less of an incentive to sell their current home and buy a new home, which will require a mortgage at a new, higher rate.

Does this mean you should worry about these new mortgage rates?

Not necessarily.

For example, if you're looking to buy, the biggest impact will still be the number of homes in the Rochester market.

Fortunately, a bunch of great homes have recently come on the market. You can see them all here:

Click here for all available Rochester homes for sale.

And if you're looking to sell, the current conditions make it very easy for you to do so at a top price.

To get an idea of what your home is worth in the current market, check out this home value calculator that takes into account recent Rochester sales:

Enter your street address here to find out what your home is worth.

Finally, if you want an even more accurate estimate, give me a call. I'm here to help.

Why You Should Sell Your Home In 2018

Selling your Rochester home? Get a free Home Price Evaluation

This winter is likely to be a very important time for many home sellers.

That’s because several big trends are coming together to affect Rochester Area home prices right now:

1. Housing inventory remains extremely tight.

The total number of homes on the market fell 10% year over year in the last quarter. This is the biggest drop since 2013, and it's part of a consistent pattern of very limited and decreasing housing supply. Of course, the fewer homes there are on the market, the easier it is to sell, and the higher the price you can expect to get. This is borne out by numbers: Home prices have increased almost 6.5% since last year.

2. Buyers are increasingly optimistic.
Despite the tight inventory, homebuyers are increasingly optimistic and continue to look for homes. Partly, this has to do with the recent growth in income and job stability. Also, loosening lending standards are making many homebuyers eager to take advantage of current mortgage rates, which slipped under 4% recently, near all-time historical lows.

3. The new tax reform bill will impact the market.

The federal government recently passed The Tax Cuts and Jobs Act, majorly overhauling the tax code. While it’s unclear how this will affect the real estate market as a whole, there are several changes that do not favor home sellers. As a result of the changes made to the tax code, the National Association of Realtors now projects slower growth in home prices in 2018, with an appreciation rate of 1% to 3%. By doubling the standard deduction, Congress has significantly reduced the value of mortgage interest and property deductions as tax incentives for homeownership. However, no changes were made in the rules surrounding capital gains for home sales, which is a major victory for home sellers.

When you put all three of these trends together, two big conclusions emerge.

First, now is a very favorable moment for home sellers thanks to the shortage in the market, the many eager buyers, and the high and rising prices.

On the other hand, higher cost, higher tax areas will likely see prices decline as the result of new restrictions on mortgage interest and state and local taxes.

If you are looking to take advantage of the present moment to sell your home, you can get started by finding out what it might be worth in the current market. To do so, check out this home value calculator, which takes into account recent Rochester Area sales:

Enter your street address here to find out what your home is worth.

And if you want a more personalized and accurate estimate, give me a call at (507) 258-5850. I'm constantly talking to homebuyers in the Rochester Area, and I can give you a precise idea of how a sale of your home would unfold in the current market. If you have any other questions or would like more information, feel free to reach out. I look forward to hearing from you soon!

3 Types of Value and How They Matter to Your Listing

Selling your Rochester home? Get a free Home Price Evaluation

Today we’re going to be discussing the difference between assessed value, appraised value, and market value.

Each of these three types of values is different, so I want to clear up what separates them.

First, let’s start with the assessed value. The assessed value is what the government will tax you on. You will get a statement in the mail telling you what portion of that value you will be taxed upon.

Next, there is the subject of appraised value. The appraised value has to do with what the appraiser thinks your home is worth. It’s important to remember that the appraiser isn’t buying your home, though. Every appraiser will give different values and place different levels of worth on the features in your home.

Market value is ultimately the most important type of value.

The appraiser’s opinion of your home’s value is just that: an opinion.  The view, location, or finishes within the home are all taken into consideration. This still isn’t market value, though.

The market value is the amount buyers will actually be willing to pay given current market conditions. This is ultimately the most important type of value. Market value will be determined by supply and demand.

The more demand and less supply there is, the higher the market value. An agent will help you determine a pricing strategy based on all of this information.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.