Blog - East Valley Homes

Case-Shiller Reports Growth In Home Prices In November

January 29, 2020 by Cathy Carter

, Blog, East Valley Homes, East Valley Homes Case-Shiller Home Price Indices reported that national growth of home prices rose by 0.30 percent in November. Analysts said that slim inventories of available homes boosted home prices. Whether or not home price growth continues gaining speed depends on variables including supplies of homes for sale, affordability and home-buyer confidence in the economy.

Mr. Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices said, “It is, of course, too soon to say whether this marks an end to the deceleration [of home price growth] or is merely a pause in the longer-term trend.”

Phoenix Holds First Place In Home-Price Growth For 6 Consecutive Months

Case-Shiller’s 20-City Home Price Index showed that all cities tracked reported year-over-year growth in home prices after seasonal adjustments. Phoenix, Arizona held the top position with home price growth of 5.90 percent; Charlotte, North Carolina held second place in the 20-City Index with 5.20 percent growth in home prices and Tampa, Florida held third place with year-over-year home price growth of 5.00 percent.

The Case-Shiller 20-City Home Price Index posted a year-over-year gain of 2.60 percent in November and home prices rose by 0.10 percent in November as compared to October. Case-Shiller reported that home price growth increased by 3.50 percent nationally on a seasonally adjusted annual basis.

Buyers Seeking Affordable Homes Inland

Home-buyers sought less expensive homes in inland states as high-priced homes in coastal regions continued to be unaffordable for many. Slim supplies of homes contributed to bidding wars that drove home prices higher. Analysts said that home prices are set to drop in high-cost markets as the home-buyers move to more affordable markets.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported a 4.90 percent gain in November home prices for properties associated with mortgages owned by Fannie Mae and Freddie Mac; this reading was compiled on a seasonally-adjusted annual basis.

FHFA data noted that the Mountain Region reported slower month-to-month growth in home prices in November, but all geographic regions reported positive growth in home prices year-over-year. The Mountain region includes the states of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming; these states typically offer a lower cost of living and affordable home prices as compared to high priced coastal areas.

How A Reverse Mortgage Can Help With Long-Term Care

January 28, 2020 by Cathy Carter

, Blog, East Valley Homes, East Valley Homes Anyone who has paid attention to the TV recently has likely seen a lot of commercials for something called a reverse mortgage. For those who might not know, a reverse mortgage is exactly that. In this option, people receive monthly payments from a lender in exchange for equity in their homes. In essence, this functions as an annuity.

One of the major benefits of a reverse mortgage is that it can be used to cover the costs associated with long-term care. Over the next few decades, the number of elderly individuals in the United States is projected to double. For this reason, long-term care is projected to become a major expense.

How Can A Reverse Mortgage Pay For Long-Term Care?

Long-term care is one of the biggest unexpected expenses encountered by the elderly. Often, coinsurance associated with a health insurance policy, combined with the lifetime caps on many policies, can shift significant medical costs to the individual. This leaves many elderly individuals looking for an immediate for some cash. Because many elderly individuals and families are on a fixed income, there are not a lot of options.

This is where a reverse mortgage can come in handy. Many elderly individuals have paid off their houses entirely. This can act as an immediate source of equity, providing seniors with a much-needed cash infusion to cover the costs associated with long-term care.

Improving On Reverse Mortgages And Long-Term Care

With long-term care expected to become a bigger issue as a larger percentage of the US population reaches retirement, suggestions have been offered to address these costs. One of these suggestions has been to marry long-term care and reverse mortgages with improved social services.

Many experts have been suggesting ways to tie the equity in someone’s home to Medicare and Social Security. This could be used to create a nice safety net that might support seniors by covering the costs of long-term care. Given the stress that an unexpected medical expense can create, this can offer a much-needed respite for seniors and caregivers alike.

Taking Advantage Of A Reverse Mortgage

In the meantime, it is important for seniors to note that a reverse mortgage can offer an immediate cash infusion. This can be used to cover an unexpected cost, such as a medical bill. It will be interesting to see how reverse mortgages evolve in the future.

If you are interested in purchasing a new home or listing your current property, be sure to set up an appointment with your trusted real estate professional.

What’s Ahead For Mortgage Rates This Week – January 27th, 2020

January 27, 2020 by Cathy Carter

, Blog, East Valley Homes, East Valley Homes Last week’s economic reporting was slim due to the observance of the Martin Luther King Jr. holiday. The National Association of Realtors® reported on sales of previously owned homes and the Veterans Administration announced changes to its home loan programs. Weekly reports on mortgage rates and initial unemployment claims were also released.

Sales Pace of Pre-owned Homes Rose 3.60 Percent in December

The sales pace of previously-owned homes jumped by 3.60 percent on a seasonally-adjusted annual basis. December’s sales pace rose to 5.54 million sales. 5.35 million homes were sold on a seasonally-adjusted annual basis in November. Sales of new and pre-owned homes rose 10.60 percent year-over-year.

The number of available homes for sale reached its lowest reading since the National Association of Realtors® started tracking sales in 1999. There was a three-month supply of homes for sale in December as compared to a 3.70 month supply of homes available in November. Real estate pros typically consider a six-month supply of homes to balance market conditions evenly between buyers and sellers.

December’s data indicates that housing markets are skewed in favor of sellers, which increases challenges for buyers relying on mortgage loans or moderate-income buyers seeking affordable homes.

High demand for homes encourages bidding wars and cash offers that grab sellers’ attention at the expense of traditional purchase offers contingent on mortgage financing. Moderate-income buyers may require additional approvals from mortgage insurance companies or programs geared toward first-time buyers.

Veterans Home Loans: No More Loan Limits in 2020

As of January 1, 2020, VA home loans are no longer subject to loan limits based on property location. Past regulations included home loan limits based on maximum loan amounts determined by the county where a veteran’s prospective home was located.

Removing loan limits streamlines VA loan approval and can avoid problems caused if a VA home loan limit is lower than a home’s appraised value. More veterans are expected to gain the advantage of no down payment required for VA loans. Veterans with less than full VA loan entitlement remain subject to loan limits.

Mortgage Rates, Fall as New Jobless Claims Rise

Freddie Mac reported the lowest average mortgage rates in three months last week. Rates for 30-year fixed-rate mortgages averaged 3.60 percent and were five basis points lower. The average rate for a 15-year fixed-rate mortgage averaged 3.04 percent and was five basis points lower.

5/1 adjustable rate mortgages had an average rate of 3.28 percent, which was 11 basis points lower than in the prior week.

First-time jobless claims rose by 4000 claims to 211,000 new claims filed. Analysts said that the rise in first-time claims did not indicate more layoffs.

What’s Ahead

This week’s scheduled economic reports include Case-Shiller Home Price Indices, new home sales and the Federal Open Market Committee of the Federal Reserve will issue its customary post-meeting statement. Weekly readings on mortgage rates and new jobless claims will also be released.