Real Estate Information Archive

One of the more recurring laments over the past few years has centered on tight, rigid lending. We've all known someone who should have received financing, but didn't because lenders were too risk averse.

One upside of an improving market is a willingness to accept more risk, and we are seeing more risk acceptance in the mortgage market. Down payment requirements are easing, while fewer borrowers are being turned down on credit scores alone.

Piggyback loans have also resurfaced, as have stated-income loans. On the latter, far too many self-employed people have been excluded from the mortgage market. Fortunately, that's changing, which means more people are added to the pool of home sellers and buyers. More participants lead to more robust and more stable markets.

Even subprime loans are coming back to serve a market of borrowers who have healthy incomes but who suffered a short sale or credit hit when the market imploded in 2008 and 2009.

To be sure, we all want a more accommodating mortgage-lending market. The good news is we are making progress in that direction.

 Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

More of the Same With Mortgage Rates

For the past couple weeks, we've been speculating that mortgage rates have likely plateaued and were unlikely to push much higher. Our rationale was similar to that of many market participants: The threat of the Federal Reserve tapering from quantitative easing (money pumping and low interest rates) was overstated.

A meaningful spike or dip in rates could be in waiting next Friday with the release of the July employment report. Job growth significantly higher than the consensus estimate could lead to a rate spike; disappointing job growth will likely drop rates (though nowhere near to the March lows).

Job growth, a benefit of economic growth, means housing will continue to improve, even if interest rates rise. Job growth (and to a lesser extent wage growth) is key: More people working means more people who can afford a home and financing costs.

For now, though, housing looks good. We say that even though sales of existing homes came in below expectations for June. The good news is market composition is healthier. Only 15% of sales were related to distressed properties – the lowest reading since the number was tracked in 2008. At the same time, the market is shifting more toward owner-occupied buyers and away from investors, who comprised only 17% of purchases for June.

Prices also continue to trend higher. The national median price for an existing home rose a strong 5.5%, lifting the national number to $214,200. Rising prices, in turn, will further lift inventory, which remains tight and is limiting sales in many local markets.

As for new homes, they're moving in the opposite direction: sales are up, but prices are down.

New home sales, at 497,000 units on an annualized rate, handily beat the consensus estimate for 481,000 units. The pace of new-home sales is on a strong two-year run, and is approaching levels unseen since 2008. We were equally encouraged to see that sales maintained their strength in May and June despite the spike in mortgage rates.

It's possible that new home sales maintained their momentum on price discounting. For June, the national median price of a new home was down 5% to $249,700. Year over year, though, the price trend remains up, with year-over-years gains approaching 10%. Given that supply remains tight, at 3.9 months supply at the current sales rate, homebuilders should be able to maintain pricing power into the foreseeable future. Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Here are 5 renovations that will increase your Harrisburg PA home's value.

Reno Do #1: Upgrade Your Kitchen

All of our experts agree that a kitchen renovation should be at the top of your list, since it's the heart of a home—the room where families spend most of their time. But where to start? A couple of givens include upgrading to stainless steel appliances and installing countertops made from engineered stone or granite, because these fairly easy changes will improve the aesthetic appeal of the space. Details can also make a difference, like putting shiny knobs on cabinets and purchasing a sparkling new faucet for the sink.

Another wise kitchen upgrade? Knocking down a full or half wall, so you can connect the kitchen to a den or living room. “It makes the kitchen feel more spacious," says Phyllis Rockower, owner of the Real Estate Investors Club of Los Angeles in California. "If you’re cooking, you can still hear what people are saying during a party, or keep an eye on your kids while they’re playing.”

Reno Do #2: Revamp Your Bathroom

Anchoring can be a difficult psychological trait to overcome. By that, we mean the inclination to believe that the past will either return or be will maintained in the future.

Anchoring occurs frequently in the investment world. Investors buy a stock, see it's share price cut in halve, and yet despite poor prospects, they'll continue to hold, believing that it's inevitable their purchase price will again prevail.

We see the same phenomenon in the mortgage market. Many potential borrowers believe it's inevitable that mortgage rates will again hit multi-decade lows of a few months ago. Tomorrow will somehow present yesterday's opportunities.

This isn't to say yesterday's prices can't return, but yesterday isn't today: the outlook and the variables influencing today's market are decidedly different. Today, we are looking at stronger economic growth and stronger residential construction across most of the United States. Neither variable bodes well for lower lending rates.

The point we want to emphasis is to keep focused on the future, and the variables – Federal Reserve tapering, job growth, rising consumer spending, higher housing demand and construction – that will prevail in the future. With the future in mind, it's becoming increasingly difficult to make a case for a lower-rate lending environment.

 Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Fed Chairman Settles Mortgage Markets

After sprinting a full percentage higher over the past two months, the 30-year fixed-rate mortgage has finally taken a breather. Last week, the bellwether loan was staid, holding near the prior week's rate. This week, the rate actually fell a few basis points.

Lending markets have finally settled down, and for this we can thank Federal Reserve Chairman Ben Bernanke, who assured credit-market participants the Fed is unlikely to taper QE3 in the near future. This means the Fed will continue to purchase long-term U.S. Treasuries and mortgage-backed securities.

In short, mortgage rates have likely plateaued for the near future, which gives frantic buyers some breathing room.

The interesting lesson in the mortgage-rate surge is that it failed to materially impact the purchase market. Indeed, the four-week purchase-application trend held steady. What's more, the latest data from the Mortgage Bankers Association show purchase applications actually rose 1% last week.

Purchase applications are obviously related to home sales and building activity. On the latter, there's concern rising rates could translate into falling activity because of falling consumer demand. The latest data on housing starts, released Wednesday, raised a few eyebrows, and a few concerns.

Housing starts were down significantly, dropping 9.9% to 836,000 units on an annualized basis in June. After the news was released, we ran across a number of comments forecasting the end of the housing recovery. Upon closer inspection, though, it appears housing's imminent demise was highly exaggerated.

We say that because the drop in starts was lead by the smaller and more volatile multifamily component, which declined 26.2% in June after rising 28.2% in May. In contrast, the larger and more stable single-family component slipped a modest 0.8% for the month after rising 0.5% in May.

It's informative to consider the longer-term starts trend; by this measure, the residential construction industry looks quite healthy. Over the first   half of 2013, multifamily starts are up nearly 34% from the same year-ago period, while single family starts are up 20%. These are meaningful increases in activity and tell us we've come a long way in a short time.

Moreover, there is plenty of room left to run. Starts remain low when viewed from a historical perspective. From 1959 through 2000, roughly 1.5 million housing units were started annually. (And keep in, the population was meaningful smaller back then.)

So, yes, we've come a long way on residential construction, but we still have long way to go. This suggests that housing will remain healthy and will remain a key economic driver for at least the next couple years.

And even if mortgages continue to climb, we think that's unlikely to change.

 Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Last week, we mentioned that Federal Reserve monetary policy is, in essence, closely tethered to job growth: The Fed won't reign in loose monetary policy and low interest rates until the unemployment rate is around 6.5%.

The problem, as we noted, is that the unemployment rate is a moving target. Yes, unexpectedly strong job growth can occur, as what occurred in June, with payroll growth hitting 195,000 for the month, roughly 25,000 higher than most estimates. At the same time, unemployment held steady at 7.6% because more people have entered (or re-entered) the job market.

So it would appear the Fed would be firmly committed to holding interest rates low for the foreseeable future until 6.5% unemployment is achieved.

It's becoming more likely that's not the case. The minutes from the latest meeting of Federal Reserve policymakers show that half want to wind down quantitative easing (money printing, low interest rates) by the end of the year.

Given the unimpeded rise in interest rates over the past two months, it's become obvious many credit-market participants are expecting the Fed to wind down sooner than later.

The point we need to emphasize is that waiting for 3.5% 30-year fixed-rate mortgages will likely mean waiting for quite a while. At this point, 5% is the more likely future rate, which makes today's rates, in the mid-4% range, look attractive in comparison.

 Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Mortgage Rates Hit Two-Year High

We know more than a few people who are smacking themselves on the forehead these days, frustrated they didn't take advantage of the mortgage rates that prevailed two months and 75-basis points ago.

Frustration stems from holding out for another 25-basis point drop. You may know it by the popular idiom “penny wise, pound foolish:” Hope to save 25-basis points, but loose 75-basis points in the process.

Of course, no one knows with certainty where mortgage rates are heading, but whenever a market has been in a sustained trend, and mortgage rates were in a sustained downward trend for years, the probability grows that each successive day will bring a reversal of that trend. (Economists refer to this phenomenon as Minsky's “Financial Instability Hypothesis.”)

To be sure, mortgage lending rates are higher, but not unreasonably so. Today's rates still remain attractive from a historical perspective.

The good news is that there have been a few positives associated with rising rates. Though they have slowed refinance activity considerably, they have prompted more homebuyers into action, for fear rates could go higher still. We're not surprised; we've noted many times in the past that anticipation rules people's actions.

With all the focus on mortgage rates over the past few weeks, it's worth noting that the housing market nationally is as healthy as it has been in years.

CoreLogic's latest data on distressed properties reveal just how healthier the market has become. The inventory of properties in a state of foreclosure fell 29% year over year in May, which means fewer than 2.3 million mortgages – or 5.6% of home loans – remain seriously delinquent. This is the lowest level since December 2008.

At the same time, Lender Processing Services data show the number of borrowers who remain underwater fell 47% from the first quarter of 2012 to the first quarter of 2013, which means the percentage of underwater borrowers has dropped to 14.7% of all active loans. This, too, is a multi-year low.

Rising home prices and rising consumer demand for homes will continue to reduce distressed inventory and lift more homeowners into positive equity. When stronger job growth is factored in, we're looking at a very healthy outlook for both existing- and new-home sales over the next 12 months.

With that said, many pundits remain focused on rising mortgage rates, but we believe unduly so. As long as the economy continues to improve and create jobs, the housing market will continue to improve regardless if rates rise.

We were in the minority a year ago when we said mortgage rates were no longer the key variable in the recovery. It appears we were right on that account.

 Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

A lot of people may say they’ll lend a hand when it’s time for you to move, but when the big day finally arrives, good help can be hard to find. If your friends and family pull a disappearing act on moving day, don’t stress! Most items in your house can be moved with just one person.

Here are six tips for the solo mover:

Safety Note: Don’t try to be a hero! If you don’t feel in control of a heavy piece of furniture, don’t move it! A hospital bill is a lot more expensive than a mover’s fee, and sometimes hiring help is the only safe option. If you’re on a budget, check out these eight ways to cut your moving costs by $100 or more.

1. Strip it. If you struggle to shift your dresser just a few inches, getting it down a flight of stairs can be downright intimidating. But, a lot of heavy furniture can be disassembled, which makes it much lighter and easier to move. Take out drawers, remove cushions, mirror or glass tops, knobs and feet. Basically, anything that’s screwed on can be taken off to lighten the load. Tip: Use an ice cube tray to keep track of small parts during the move.

2. Rent moving gear. One dolly can prevent a lot of sweat and frustration (and possibly a hernia). Plus, the cost of renting a few moving tools for the day is a drop in the bucket compared to hiring professional movers. Visit your local hardware store and check out their furniture jacks, scissor lifts and dollies. They’ll do the heavy lifting for you!

3. Don’t lift, slide. You could rent commercial sliders, but a large blanket or throw rug all work just as well! Lift the legs of your furniture one at a time and put them onto your makeshift sliders. Then, drag! Patience is key – move slowly to avoid damaging your floor, walls or furniture. Tip: If you get the furniture onto sliders, but still can’t move it with your arms, use your leg strength! Lie on your back, place your feet on the furniture and push with your legs.

4. Walk it out. If you don’t have a slider handy, and you’re moving a chair, use it’s legs. It’s time consuming, but you’ll avoid the heavy lifting! Put the chair on its back two legs and “walk” the chair left foot and then right foot. You’ll eventually get it out the door.

5. Remove the hinges. If you ordered some furniture and then had it assembled inside of a room, getting it outside can be tricky! Before you think about sawing that entertainment center in half, try taking the doors off of their hinges. You’ll gain a few inches of wiggle room – which can sometimes be enough to slide that bulky furniture right on out!

6. Beware of the second floor. If you have extremely heavy pieces of furniture on a second or third floor – such as a big sofa or desk – it’s really not safe to move it by yourself. This is because once you angle something down the stairs, gravity will actually increase the weight of the furniture, and it’s very easy to lose control!

Information from BrightNest.com.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

We refer to the point when the Federal Reserve will withdraw from the MBS market.

Job growth is the tipping factor, according to most market watchers. On that front, it appears the Fed will likely remain MBS buyers for a while longer. The Fed has targeted an unemployment rate of 6.5% before it seriously considers tapering QE3. The unemployment rate is a full percentage point above the Fed's target, so we still have a ways to go.

Job growth, therefore, is key. If the economy added 150,000 jobs monthly, the unemployment rate could fall to 6.5% in seven months. But there's an extenuating factor: participation rate. If more people enter the employment market, higher job growth will be needed to absorb more participants.

If we were to make an educated guess when the Fed will begin to taper its MBS purchases, we would guess that early next spring is the most likely scenario. So we don't expect rates to rise much higher, at least through the summer, but neither do we expect them to move lower either.

With that said, the probability of higher rates is higher than the probability of lower rates at this point; thus further buttressing our argument on the dangers of waiting.

Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.