Real Estate Information Archive

Now What?

Things have played out pretty much as we expected: The Affordable Healthcare Act (Obamacare) was implemented on schedule. Congress and the president were unable to reach a budget agreement, hence the federal government shutdown.

Actually, the federal government didn't really shut down. Roughly 30% of the civilian government workforce was simply furloughed. Most government departments continue to function. So “shutdown” isn't the right word; “cutback” is more like it.

Whatever we call it, the furloughs and cutbacks have impacted the mortgage market. Because many IRS employees were furloughed, it's taking lenders longer to verify reported income with the IRS. Without verification, it's impossible to sell mortgage loans on the secondary financial markets. This liquidity is vital to mortgage lending.

Needless to say, delays are proving frustrating to lender and borrower alike, especially in light of lower mortgage rates. In the past weeks, we've opined that interest rates would likely fall with the rise in uncertainty the budget impasse and new healthcare legislation imparts. That's been the case: the yield on the 10-year U.S. Treasury note – a bellwether for long-term mortgage rates – has fallen 15 basis points to below 2.60%.

In turn, mortgage rates have fallen. Our best estimate was that we'd see the rate on the 30-year fixed-rate loan vacillate between 4.25% and 4.50%. Depending on which survey you look at, we are either right or somewhat right. Bankrate.com's national survey puts the average rate at 4.41%, while Freddie Mac's survey puts it at 4.22%.

The frustration on our end is raised because borrowers are having a difficult time exploiting today's lower rates. To be sure, lower rates are a nice relief, but if you're unable to close on a low-rate loan in a timely manner, what's the point?

But don't give up.

Anyone looking to refinance a mortgage or purchase a house shouldn't delay the financing process. If they are concerned about rates rising, they should consider locking their rate for a longer period. Admittedly, rates could go lower, but they could also go higher – and go higher in a hurry should a budget deal be announced.

Of course, none of us knows when that will happen. But with the long-term impetus for rates to rise, the benefits of waiting to capture a significantly lower rate is more than offset by the risk of waiting and being faced with a much higher rate.

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.

In the winter, your house is warm and cozy. And that’s great! You know who else loves a warm and cozy house? Mice. And sharing your house with a mouse – or a family of mice – is less great. Luckily, you can stop rodent roommates at the door by sealing these five entryways to your home.

Tip: Bring a pencil with an eraser with you as you check these areas. If a hole or crack is wider than a pencil eraser, a mouse can comfortably squeeze through!

Foundation. Inspect your foundation, paying special attention to the areas near windows and doors. If you find a hole or crack that’s larger than a pencil eraser, seal it up! Mice can chew through weak material, so opt for a sturdy material like concrete patch mortar. Follow the instructions on your concrete patch package to ensure that your foundation is properly sealed.

Windows and doors. Mice are most active at night, so if you ever keep your window open while you sleep, triple-check your window screens to make sure there aren’t any holes. Also, check your weather stripping. If it’s loose, repair it! A mouse can sneak underneath loose weather stripping and get into your home.

Garage. Unfortunately, mice have a pretty easy time sneaking around garage doors. That means you need to be extra vigilant with gaps connecting your garage to your house. Check the interior and exterior of your garage walls for any cracks or holes and patch them in the same manner as your foundation. Tip: Pay special attention to the wall that separates the garage from the main house to prevent mice from getting into your warm home.

Chimney. To a mouse, a chimney looks like a hollow tree and seems like a great place to build a nest. This is not ideal. Prevent mice from entering your chimney by installing a mesh-covered chimney cap. As an added precaution, close your damper – the metal hatch located above the firebox – anytime there isn’t a lit fire. 

Utilities and pipes. Mice use your pipes like interstates, to travel into and through your house. Take the time to inspect the places where pipes enter your house. If there’s any space between the pipe and the house siding, seal it up with steel wool and then cover the steel wool with concrete mortar. Otherwise, these cracks are basically like neon lights that say “Come inside!” to mice.

Information provided by 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.

Higher prices bring in more supply; more supply leads to lower prices.

This is how things are shaping up in the new-home market. Sales jumped 7.9% to an annual rate of 421,000 units in August. The number of new homes for sale rose 6,000 for the month. Supply stands at five months, a considerable improvement over the 4.6-month supply that prevailed a year ago.

More supply – more new homes – means pricing pressure. The median new home price slipped 0.7% to $254,600 in August, marking the fourth-consecutive monthly decline. This follows the news on existing-home sales, which showed a slight downtick in the median price to $212,100.

Over the past couple months, we've been warning that price appreciation will likely slow. The latest data from the S&P/Case-Shiller Home Price Index support our contention. Case-Shiller's 20-city index shows price growth slowed to 0.6% in July, down from 0.9% in the prior two months.

Trends don't last in perpetuity, so a slowdown in price-appreciation was (is) inevitable. Because trends don't last in perpetuity, we pounded the table hard in 2010 and 2011 for buyers to get in the game. We were adamant back then because we expected the downward price trend to soon reverse course, which it did.

We expect price-appreciation growth to continue to slow. More supply will come to market, because more sellers will see slowing price growth and will want to capture gains. In turn, their actions will further slow price-appreciation growth.

That said, if anyone is waiting for slow-to-no price growth, he or she needs to keep in mind that any money saved on a purchase price could easily be offset by higher financing costs.

 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.

Lower Mortgage Rates Prevail

Mortgage rates can be as difficult to forecast as the flight path of a butterfly, but forecast we do.

Last week, we said we expected to see the 30-year fixed-rate mortgage fall after the Federal Reserve announced there would be no tapering of quantitative easing. Our forecast was for the rate on the 30-year loan to fall below 4.5%, and possibly trade in the 4.25%-to-4.5% range for the near future.

It looks like we got it right. Bankrate.com's latest survey shows the 30-year loan averaged 4.47% nationally. Of course, some local markets didn't see quite that much reduction, while others saw more. But all in all, we are seeing rates lower than we've seen in the past four months.

We expect the 30-year loan to hold near today's levels.

The fact is that economic growth remains sluggish. The latest and final revision of 2 nd quarter gross domestic product (GDP) shows less growth than expected. The consensus estimate was for GDP to grow at a 2.7% annualized rate, but the final number shows a 2.48% growth rate. Sluggish GDP growth gives the Federal Reserve reason and room to continue buying $40 billion worth of mortgage-backed securities (MBS) each month.

In addition, concerns over a looming federal government shutdown, due to political wrangling over the debt ceiling, will keep interest in Treasury notes and bonds high. Investors are also pondering what impact the Affordable Healthcare Act (Obamacare) will have on businesses when it's implemented next month.

In short, there's a lot of uncertainty that will keep investors interested in haven securities like Treasury notes and bonds and MBS. Their interest should help hold mortgage rates at these lower levels.

To be sure, we see little impetuous for mortgage rates to move much high. But keep an eye on next Friday's employment report. Should that come in stronger than expected, rates could temporarily spike.

On the flip side, if the employment report comes in weaker than expected, rates will move lower. The past couple employment reports have disappointed, so it's likely most economists have proffered less-optimistic predictions.

Our crystal ball points to job growth meeting or slightly exceeding exceptions. In that case, we could see an uptick in mortgage rates at the end of the week. But with all the other uncertainties baked into the credit markets, we doubt rates would move meaningfully higher.

So we see an extended opportunity to take advantage of lower rates. Keep in mind, though, the long-term bias – an eventual tapering and higher inflation – points to higher mortgage rates down the road.

The risk, as we've said so often, remains in procrastinating.

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.