Mortgage rates will rise by the end of 2015, trending up this year. While many analysts were convinced that mortgage rates would rise this year on the back of an improving economy and the winding down of the Fed’s bond-buying stimulus program, the market didn’t comply.
2014 started out with news that the U.S. economy shrank in the first quarter, which put the market on edge. Next came news of unrest in Ukraine and slow growth in Japan and Europe, putting more downward pressure on interest and mortgage rates. A 30-year mortgage is actually cheaper on average than it was at this time last year.
But economists are still betting that 2015 will be the year rates rise in earnest, citing, again, an improving domestic economy and a lack of stimulus from the Federal Reserve. Indications are that the 30-year rate will be ending at 5% by the end of next year, a more than 100-basis point increase from today.
One of the trends in a home purchase that I have only recently been asked about is wireless internet coverage in the home. Since all of our entertainment systems are now going wireless buyers are really looking for excellent coverage throughout the home and that means that they are really starting to look to buy where fiber optic service is now or soon will be.
Be sure if you are selling that you place “boosters” in your home so that if a buyer were to check their coverage in various rooms they would see that there is sufficient connectivity so that they can run their TV/phone/audio equipment to exacting standards. Of course you would want to disclose that you did so.
Another BIG trend that buyers are looking for is OWNED not leased solar systems. That leased solar system could actually work against you as a buyer because it will be a debt counted toward your debt to income ratio. As for now lenders are not willing to look at the fiscal savings that solar brings you, making your debt to income smaller. Be on the lookout for those OWNED solar systems.
Your home’s “walkability” score is a big deal. As many home buyers become increasingly younger they are really looking for that urban feel. They want to be able to walk or bike to shopping, school, entertainment and restaurants. With that they are looking for less interaction with vehicles on the street.
I am also seeing that more and more people are looking for a smaller home with a bigger yard. Even with the advent of more and more people working from home, there is greater pressure to be more involved with the family, or to travel before global unrest makes travel too dangerous. Therefore many people are looking for that smaller home that requires less housework/maintenance but with a much bigger yard. I would suggest that if you are looking to sell in the next couple of years find a way to show how to use that living room as a more friendly, less museum-y space. Create living areas in the backyard with a firepit to put your feet up on, a TV to watch the ballgame by, a great space for grilling and chilling with family and friends.
That being said if they are not looking for a smaller home they are really looking for a multi-generational home. It is not unheard of to have a buyer call me looking for a home for them, their kids, grandkids and parents. Yep, FOUR GENERATIONS in a home. If I ran the world I would probably build more single story homes with two master suites and space for RV parking. RV use has increased by 60% in the last 35 years. People love to get out! Especially with all those people living in a home.
Neighborhood websites such as NextDoor.com and Facebook group pages are a very big deal. Being connected to your neighbors creates a safer environment and gives you a bigger sense of belonging. Ask your Realtor, seller or other neighbors if there is such a site. It’s a great way to meet your neighbors before moving in and studies have shown that with more neighbors feeling more connected there is more neighborhood , kids are staying in the same school with the same friends for longer periods of time and are becoming more successful with their grades thereby heading to college.
Maybe that means that they’ll get that great job and move back to the old neighborhood!
By Cathy Daniel, Realtor. CDPE, CNE, GRI, SRES