Four Things That Help Determine Your Mortgage Rate

If you’re looking to buy a home, you probably want to secure the lowest interest rate possible for your home loan.

Over the last couple of years, that was easier to do as the housing market saw record-low mortgage rates, but this year rates have risen dramatically.

If you’re looking for ways to combat today’s higher rates and lock in the lowest one you can, here are a few factors to focus on. Since approval opportunities can vary, connect with a trusted lender for customized advice.

Your Credit Score

Credit scores can play a big role in your mortgage rate. Freddie Mac explains:

“When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”

That’s why it’s important to maintain a good credit score. If you want to focus on improving your score, your trusted advisor can give you expert advice to help.

Your Loan Type

There are many types of loans, each offering different terms for qualified buyers. The Consumer Financial Protection Bureau (CFPB) says:

“There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose.”

When working with your real estate advisor, make sure you find out what’s available in your area and which types of loans you may qualify for.

Your Loan Term

Another factor to consider is the term of your loan. Just like with location and loan types, you have options. Freddie Mac says:

“When choosing the right home loan for you, it’s important to consider the loan term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”

Depending on your situation, the length of your loan can also change your mortgage rate.

Your Down Payment

If you’re a current homeowner looking to sell and make a move, you can use the home equity you’ve built over time toward the down payment on your next home. The CFPB explains:

“In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”

To learn more, connect with a lender to find out the difference a higher down payment can make for your new mortgage.

Bottom Line

These are just few factors that can help determine your mortgage rate if you’re buying a home. The best thing you can do is have a team of professionals on your side. Connect with a local real estate professional and a trusted lender so you have the expert advice you need in each step of the process.

Learn more on Keeping Current Matters.

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• How to Sort Through and Get Rid of Your Paper Clutter For Good

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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How to Sort Through and Get Rid of Your Paper Clutter For Good

It’s time to part ways with your paper clutter!

Today, identify all the paper piles from around your home and gather them together into one massive pile. If you feel like each area has a big amount already, consider focusing on just one zone. Then, sort it into five main categories:

• Trash and recycling: Throw out used envelopes, inserts, and bulk mail. For any items with sensitive information, use a shredder, scissors, or your hands to tear them up. Recycle items where possible.

• Action items: These are things that require you to do something, such as a bill that needs to be paid. These should be accessible — such as in a bin near your workspace or at the entryway — so you know to address them.

• Short-term: This includes coupons that you want to use but expire in the next few months or something you need to reference soon. Just like the action items, you’ll want to be able to access these items with ease. Consider stashing them in a tray, bin, or paper sorter away from the rest of your paper.

• Long-term: Items that you need for your records that can be filed away. These should be stored in a safe place.

• Leisure reading: Catalogs, magazines, and newsletters should be sorted and placed in an area you like to read in, such as in a magazine holder by the sofa or in the guest bathroom or have it placed on the coffee table.

PRO TIP: Once things are sorted and decluttered, take further action by identifying what can be digitized for the future in order to minimize clutter. Go ahead and cancel those unwanted magazine subscriptions and sign up for e-bills too.

Get more tips like this on Apartment Therapy.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Is the Rental Market Beginning To Normalize?

Renters haven’t had much good news lately as landlords have jacked up monthly rents to previously unthinkable amounts across the country.

However, the rental market may be returning to something more seemingly normal. In September, the median monthly rent in the 50 largest U.S. metropolitan areas dropped for a second straight month, to $1,759, according to a recent report from Realtor.com®. That’s $12 lower than last month and a $22 drop from the peak in July.

Rents were still up 7.8% from September of last year. However, it’s the lowest year-over-year price increase since May 2021.

The report looked at apartments, condos, townhomes, and single-family homes advertised for rent in September on Realtor.com in the 50 largest metros. Only studios and one- and two-bedroom units were included. Metros include the main city and surrounding towns, suburbs, and smaller urban areas.

“September provided us consistent evidence of a rental market cooldown,” says Jiayi Xu, an economist at Realtor.com.

Prices typically slow or drop seasonally around this time of year, she explains. “Typically, when we enter fall and winter, the market is kind of slow.”

That small dip in prices is significant, though, as it comes after nearly two years of consistent rental price hikes.

And even with the recent drops, asking rent is still $275, or 22.8%, more a month for a studio apartment and $355, or 22.4%, higher for a two-bedroom unit than in September 2020. Year-over-year growth has slowed from its red-hot peaks, falling into single digits over the past two months.

Chicago rental prices continue to soar

Many of the wildest price increases for homes and rental units have been in the Sun Belt. Southeastern cities saw prices skyrocket as the move to remote work and COVID-19 fears pushed high earners out of their pricey coastal metros and toward warmer places like Florida, Texas, and Arizona. Cities such as Miami saw eye-popping, year-over-year rental growth rates of more than 50%. Many other Florida destinations weren’t far behind.

As that growth rate has cooled, Chicago has posted the largest rent hikes for the last two months running. Median rents rose 23.9% year over year in the Windy City in September, to reach $2,045 a month.

Real estate professionals attribute the rapid growth to a confluence of factors, including Chicago’s relative affordability throughout the pandemic and soaring demand. Many renters would have become homeowners if not for the difficulties they faced in the for-sale market, which included sky-high prices and a severe shortage of properties for sale. Now, rapidly rising mortgage interest rates have effectively pushed homeownership out of financial reach for many of them. That resulted in their renting for longer.

“What it comes down to is a real lack of inventory, so prices are rising. And why is there a lack of inventory? Interest rates,” says Mark Zipperer, a Realtor® and founder of Chicago’s Zip Group. “If you’re not buying, you’re going to go to rent.”

hicago is not alone in its rapid rise. Other Northern metros have also seen high year-over-year price increases. Rents rose 19.9% in Boston,18.2% in New York City, and 16.7% in Providence, RI, in September.

Learn more.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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It’s a Tie for the 2 Hottest Markets in America Right Now—Can You Guess Why They’re Neck and Neck?

America’s hottest real estate markets right now are hiding far, far away from the glitz of big cities, the bustle of tech hubs, and the warm, sandy beaches where many may aspire to relax or retire.

And while these hot spots might not have big-name recognition, they are known for what’s top of mind for homebuyers now: affordability.

Manchester, NH, and Rochester, NY, are tied for the honor of being named the nation’s hottest housing market in September, according to a recent Realtor.com® report. Manchester is about an hour northwest of Boston while Rochester is about 5.5 hours north of New York City on Lake Ontario.

“They’re equally hot, but for different reasons,” says Hannah Jones, an economic data analyst at Realtor.com. “Manchester properties see higher demand, but homes in Rochester spend five days less on the market.”

With high home prices and fast-rising mortgage interest rates, homebuyers are increasingly seeking out smaller cities in the Northeast, Midwest, and South where they can find a home for sale within their budget, according to the report.

Homes in nearly three-quarters of the 20 hottest markets cost less than the national median price tag of $427,000.

Not a single Western real estate market made the list, likely due to the higher home prices in that swath of the country.

“As mortgage rates have continued to climb and home prices are still high, buyers are looking for homes that are still within their budget,” says Jones. The hottest markets “are receiving much more attention as buyers are desperate to find reasonably priced places to live.”

The rankings are based on the number of views that listings in these metropolitan areas receive on Realtor.com, and how quickly properties are selling. (Metros include the main city and the surrounding smaller towns and urban areas.)

Why homebuyers are so interested in Manchester and Rochester

The Manchester metro has been a regular in the No. 1 spot over the past year and a half. Its popularity surged during the COVID-19 pandemic, when the area picked up a lot of remote workers as well as those who didn’t need to commute as often to their offices in Boston. New Hampshire, where Manchester is located, is also known for its low taxes and more affordable real estate.

The median home list price in Manchester was $487,400 in September, up 17.1% year over year. While that’s not cheap, it’s significantly less than the $742,000 median price tag in Boston. That would help explain why Manchester homes attracted 2.8 times as many views on Realtor.com as the typical listing across the country.

Meanwhile, the Rochester metro is tied for No. 1 due largely to its affordable real estate. This college town, where Kodak is headquartered, boasts a median list price of just $223,000. That’s significantly less than the national median price tag of $427,000.

But the competition is brisk in the small city in upstate New York, with homes selling in just 25 days—about half the median time on the market as in the rest of the country. Listings also received about 2.5 times as many views as the typical home.

Tiffany Hilbert of Keller Williams Realty Greater Rochester is seeing locals competing with out-of-towners looking for more affordable real estate now that they can work remotely, buyers looking for second homes on Lake Ontario or the Finger Lakes, and investors looking for flips and properties they can turn into rentals.

She heard through the grapevine that a listing agent had recently received 20 offers—and was expecting more—on a 1,600-square-foot, three-bedroom ranch listed at $199,000. Hilbert expects it will sell for over $300,000.

Meanwhile, one of the agents on her team wrote an offer of $115,000 over the mid-$200,000 asking price for a property. Even so, that agent’s client didn’t get the house.

“People are desperate for properties,” says Hilbert. “The price of our homes is still not outrageous.”

Get more like this on Realtor.com

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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The Housing Revolution Is Coming

Accessory dwelling units might just spell the end of the American suburb as we know it—in the best possible way.

Pull up to any intersection in Los Angeles, and you will see a column of illegally posted signs forming a kind of capitalist totem pole. Most advertise services catering to the darker side of life: “Cheap Divorce!” “Fix Your Credit!” “Liquidation Sale!” Even the now-ubiquitous “Sell Your House Fast” calls to mind desperate families collapsing under the weight of a mortgage. Yet over the past couple of years, a more hopeful sign has joined the mix: “Free ADU Consultation.”

The abbreviation needs no explanation in California, where accessory dwelling units have graduated from wonky planning jargon to popular parlance. Variously known as granny flats, mother-in-law units, or casitas, ADUs are small, additional rental units that share a lot with another structure—typically a single-family home.

ADUs can now be found in backyards across the Golden State, providing homeowners with a new source of income and renters with new housing options. Something like 60,000 ADUs have been permitted since 2016, the year they were legalized. It’s a startling figure, but it’s only the beginning. As more states legalize them in response to the ever-deepening housing crisis, ADUs could soon be coming to a backyard near you. This hyperlocal building boom might just spell the end of the American suburb as we know it—in the best possible way.

Despite their reputation as a novel solution to the nationwide housing shortage, ADUs were common before the rise of zoning. Take a walk around your local pre-zoning residential neighborhood, and you’ll see what I mean: In places such as Brooklyn, many brownstones were built with a basement accessory unit that could be rented out. On sleepy inner suburban alleys across the Midwest, small apartments still regularly sit atop garages. My grandmother grew up in a unit carved out of the second floor of an aging mansion in Old Louisville. (Historic-preservation rules would make it tricky to subdivide that same mansion today.)

These extra little homes made homeownership more attainable and cities more accessible to people of little means. Homeowners could collect rent that could in turn be used to pay down a mortgage, while renters gained access to shelter in a neighborhood that they might otherwise not have been able to afford.

Like most states, California went all in on zoning in the 20th century, prohibiting the construction of apartments—including ADUs—in most residential neighborhoods. Indeed, the first single-family zoning district in the United States was adopted in Berkeley in 1916, specifically and explicitly to segregate the suburb. Following the Supreme Court’s seal of approval in Euclid v. Ambler in 1926—a decision that infamously derided apartments as “mere parasites”—single-family zoning districts spread nationwide, producing the homogeneous and segregated suburban landscape we have today.

Such prohibitions play no small role in the California housing crisis. By one estimate, the state faces a shortfall of nearly 1 million units. Until recently, apartments were technically illegal to build in 75 to 94 percent of residential areas in cities such as Los Angeles and San Jose. Worse yet, in numerous California suburbs and smaller towns—including many in the heart of Silicon Valley—apartments were completely prohibited. That is, until the state legalized ADUs.

For nearly four decades beginning in 1982, across five separate bills, state policymakers in Sacramento nudged local governments to adopt workable ordinances to allow backyard and basement apartments of their own accord. Yet at the local level, NIMBY politics prevailed. Local planners eagerly exploited loopholes in the state bills, setting standards that made ADU production practically infeasible. Not surprisingly, few were built.

Jerusalem Demsas: The next generation of NIMBYs

That changed in 2016 with the passage of S.B. 1069 and A.B. 2299. Where previous attempts at legalization retained the deference to local control typical of U.S. planning, these bills set clear, statewide standards for how local governments could and could not regulate ADUs. Unworkable design standards and onerous parking mandates were out. Prompt and affordable permitting processes were in. And a funny thing happened: It worked. Almost as soon as the new laws went into effect, ADU-permit applications skyrocketed across the state.

Unsurprisingly, those suburbs most committed to exclusion continued to find ways to subvert the law. In a kind of reform whack-a-mole, seven more bills were needed to address creative new forms of exclusion. Setbacks were rightsized, owner-occupancy mandates were dropped, and the state’s housing authority was granted the power to call out misbehaving towns. The work continues: Just this year, Governor Gavin Newsom signed yet another bill streamlining state ADU laws.

The pro-housing forces are winning. Building a home in your backyard in California has never been easier. And sure enough, the market has responded.

The number of ADUs permitted increased by 1,421 percent from 2016 to 2021. Other than 2020—a year racked by the COVID-19 pandemic—ADU permitting has increased by 42 to 76 percent every year since 2016, and this permitting growth is unlikely to slow down anytime soon. As of last year, ADUs constituted roughly one in seven homes permitted in California.

Keep reading on The Atlantic.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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