22
Feb 18

Mortgage Rates on FIRE! Home Prices Up in Smoke?

Mortgage Rates on FIRE! Home Prices Up in Smoke? | Simplifying The Market

Mortgage interest rates have already risen by over a quarter of a percentage point in 2018. Many are projecting that rates could increase to 5% by the end of the year.

What impact will rising rates have on house values?

Many quickly jump to the conclusion that an increase in mortgage rates will have a detrimental impact on real estate prices as fewer buyers will be able to qualify for a loan. This seems logical; if there is less demand for housing then prices will drop.

However, in a good economy, rising mortgage rates increase demand as many prospective purchasers immediately jump off the fence to guarantee they get the lower rate.

Let’s look at home prices the last four times mortgage rates increased dramatically.

Mortgage Rates on FIRE! Home Prices Up in Smoke? | Simplifying The Market

In each case, home prices APPRECIATED and did not depreciate. No one is projecting as dramatic an increase in rates as the examples above. Most are projecting an increase of approximately 1% by the end of the year.

The last time mortgage rates increased by 1% over a twelve-month period was January 2013 (3.41%) to January 2014 (4.43%). What happened to house prices during that span? They appreciated by 9.8%.

Just two weeks ago, Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting explained:

“Mortgage rates have risen 1% or more ten times in the last 43 years, with little impact on home sales and prices when the economy was also strong…Historically, rising confidence, solid job growth, and higher wages have more than offset reduced demand for housing resulting from higher mortgage rates.”

Bottom Line

When mortgage rates increase, history has shown that prices appreciate (and do not depreciate) during that same time span.

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22
Feb 18

Here's What It's Like To Win The HGTV Dream Home

Since 1997, HGTV has made viewers’ lives by giving away their annual Dream Home—a picturesque retreat most people can only dream of owning. And this year’s grand prize was no exception: A 3,500-square-foot home on the waterfront in Gig Harbor, Washington, the four-bed, three-bath beauty came with a Honda Accord and $250,000 from Quicken Loans. But as previous Dream Home winners have discovered, scoring the grand prize doesn’t mean you’re set for a carefree lifetime of fun in the sun. In fact, winning comes with some significant complications.

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22
Feb 18

A Shabby Chic St. Paul Apartment — House Tour

Name: Katherine Harris
Location: Highland Park; St. Paul, Minnesota
Size: 850 square feet
Years lived in: 9 months rented

As a professional photographer, Katie has a keen eye for design, finding inspiration in vintage kitchens and old farmhouses. Most of all, Katie leans heavily on the philosophy that decor need not be expensive. To Katie, meaningfulness trumps all else, with the majority of her furniture being gifts, hand-me-downs, and local purchases. In a short nine months, Katie’s decor philosophy and convictions have served her well in completing this space, despite having started fresh with nearly all of her furniture since her last move.

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22
Feb 18

Here's What We Know So Far About The Pottery Barn Lilly Pulitzer Collaboration

It might not be summer yet, but Pottery Barn is already planning for vacation days and garden parties. The retailer has announced its next collaboration will bring the Palm Beach vibes, courtesy of Lilly Pulitzer.

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22
Feb 18

7 Things I Wish I’d Known Before Buying My Fixer-Upper

When my husband and I finally started looking for a home (after years of renting a barn loft that was short on insulation and long on character), our budget led us to two options: a newer home we would reluctantly call “nice,” or an older home in need of some major updating but one that we could definitely see becoming ours. Despite the fact that everyone who saw option number two clearly had reservations about the work involved, it didn’t take us long to start dreaming up all the changes we’d make, and how we would turn this fixer-upper into a dream home.

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22
Feb 18

Genevieve Gorder Is Engaged & Her Fiancé Has a Role on Trading Spaces

Trading Spaces‘ Genevieve Gorder is prepping to trade some vows. And when the beloved TLC show returns to airwaves in April, her new fiancé will be making an appearance too.

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21
Feb 18

80% of Renters Believe Homeownership is a Part of Their American Dream

80% of Renters Believe Homeownership is a Part of Their American Dream | Simplifying The Market

According to the latest Aspiring Home Buyers Profile by the National Association of Realtors (NAR), 82% of surveyed renters desire to own a home in the future, with 80% believing homeownership is a big part of achieving their American Dream.

The profile went on to state that 50% of millennials believe that their rent will increase, with 20% believing that an increase in rent will be the catalyst that pushes them to consider buying a home vs. renewing their lease.

So, what is holding renters back?

80% of Renters Believe Homeownership is a Part of Their American Dream | Simplifying The Market

What would make renters take the plunge?

80% of Renters Believe Homeownership is a Part of Their American Dream | Simplifying The Market

NAR’s Chief Economist, Lawrence Yun believes that,

“Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher.”

Yun goes on to warn that,

“However, with prices and mortgage rates also expected to increase, affordability pressures will persist. That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”

Bottom Line

If you are one of the many homeowners whose houses no longer fit their needs and are looking to move up to your dream home, now is a great time to list your starter home! First-time buyers are out in force looking to achieve their American Dream.

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21
Feb 18

Mandy Moore's Pantry Is Organization Goals

We love a good sneak peek inside a celeb’s home via Instagram. If you’ve been following This Is Us star Mandy Moore lately on the ‘gram, you’ve seen an eyeful of her newly renovated pad, and recently, we got a look inside the pantry.

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21
Feb 18

A Shaker-Inspired, Hand-Built Vermont Farmhouse — House Tour

Name: Sarah Priestap-Porter and Jeffrey Porter. Our land-mates are Arlo (rescue mutt) and Glaumur (Icelandic Horse)
Location: Tunbridge, Vermont (Central Vermont, for y’all who have no idea where this is)
Size: 1620 square feet
Years Lived In: 1 year, owned

When I started dating Jeff back in 2009, one of the first things he told me was how his dream was to build a house for his family some day. It was college, and the time when everyone talked about big dreams, so I never took it seriously. After all, he was a photography major with a little woodworking experience at the time, not some experienced builder. It wasn’t until 2011 when we moved to Vermont and he began to apprentice with a timber-framer that I realized how real his dream may be.

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21
Feb 18

Our Favorite Electric Kettle Is Currently On Sale — Amazon Deal of the Day

For those who’ve ever wondered if a watched pot ever really does boil, it may be time to invest in an electric kettle. The gadget gets you boiling water fast, whether you need it for tea, coffee, or even cooking. Aside from convenience, electric kettles are also considered safer than boiling water on the stove or in the microwave. If you still need convincing, our recent pick for best electric kettle is currently marked down on Amazon. Why not get one and try it out for yourself? You’ll wonder how you ever waited so long for your French press before.

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