Atlanta Newsletters Archives - Metro Atlanta Homes

Metro Atlanta Real Estate News – September 2015

In our Metro Atlanta Real Estate News for September 2015 we look at "Metro Atlanta Mortgage Rates after the Stock Selloffs" last week, "Changes That May Affect Those Closing on a Metro Atlanta Home This Fall", and we say goodbye to this Newsletter Category at our Blog:

Metro Atlanta Mortgage Rates Fall After Stock Selloff

Metro Atlanta mortgage rates fell again last week after the massive selloff on Wall Street

Metro Atlanta Mortgage rates fell last week after market turmoil sent the yield on a 10-year Treasury briefly below 2 percent.

Freddie Mac says a 30-year fixed-rate Metro Atlanta mortgage averaged 3.84 percent tin the week ending August 27, down from 3.93 percent the previous week, and the lowest since May. A year ago, 30-year rates averaged 4.1 percent.

This is the fifth straight week that 30-year rates have stayed below 4 percent. A 15-year fix averaged 3.06 percent, down from 3.15 percent last week. A one-year adjustable rate mortgage averaged 2.62 percent, unchanged from last week.

"Events in China generated eye-catching volatility in equity markets worldwide over the past week," according to Freddie Mac chief economist Sean Becketti. "Interest rates rocked up and down — although to a lesser extend than equities — as investors alternated between flights to quality and bargain hunting among beaten-down stocks."

Freddie Mac expects 30-year Metro Atlanta mortgage rates to remain subdued in the short-to-medium term.

A separate report last week showed home sales continue to gain. The National Association of Realtors says pending sales of existing homes in July were up 7.4 percent from a year ago, to the third highest level this year.

Let's look at what this means, along with what a change in RESPA procedures may mean for anyone buying a Metro Atlanta home this fall…

Buying a Metro Atlanta Home? Changes Are Coming

If you're buying a Metro Atlanta home this fall, get ready for a change in the TILA/RESPA Integrated Disclosure rule, which includes the acronym that may end all acronyms: Truth in Lending Act/Real Estate Settlement Procedures Act. (You may also see the acronym TRID refer to this as well.)

What the heck are we talking about?

The changes to the process of getting a Metro Atlanta mortgage are significant, especially for those real estate professionals who have been working in the residential side of the business for quite some time.

The first major change is in the paperwork. The existing Truth-In-Lending statement is getting merged (somewhat) with the existing HUD-1 settlement statement.

What does this mean for most home buyers?

Closing agents, title companies and closing attorneys will now deliver a “Closing Disclosure” to the borrower. The Closing Disclosure is a five-page form that combines many aspects of the Truth-in-Lending form and the old HUD-1 settlement statement (also affectionately known as the RESPA statement).

In addition to the Closing Disclosure that is given to the borrower and not to the seller, the buyer and seller will sign a Settlement Statement. This new settlement statement has a very different look than the old HUD-1 settlement statement. Since most buyers and sellers found the old HUD-1 form to be fairly incomprehensible, you’d hope that a redesign would make it more clear where the cash is coming from and going to in the closing.

Unfortunately, it doesn't appear that the new form will strike most buyers and sellers as much of an improvement. The key to clarity in the closing of real estate transactions is the person working with the buyer/borrower at the closing. And that brings us to the next new issue coming down the line.

The government has always had a rule that requires lenders to give you the closing cost disclosure in the form of the HUD-1 one day before closing. But frequently, the HUD-1 has been given to borrowers on the actual day of the closing or late on the day before closing. The borrower then has little time to review the closing statement and understand it before going to closing on their new home.

The government is trying to fix the timing issue, hence, the new timing requirement that will come on October 1.

The new rules will require lenders to give a borrower three days to review the Closing Disclosure, and that must be at least three days before closing. In other words, about seven days before closing, a lender must send the disclosure to the borrower. The borrower would then have three days to sit and review the disclosure and the closing could occur three days after the end of that first three-day period.

There is a bit of confusion in the industry relating to the impact the change will have on the timing requirements, on the calculation of certain fees (in particular owner’s and lender’s title insurance policies) and whether other last minute changes to the Closing Disclosure would require a new three-day disclosure period and push closings out at the last minute. This will play out in real time during hundreds, or even thousands of closings set for the end of September and into the beginning of October — and that’s what’s making everyone in the real estate business so nervous.

We’ll all be watching to see what the regulators come up with for Oct. 1.

Our Final (Official) Metro Atlanta Real Estate Newsletter

This will be the final issue of our "Metro Atlanta Real Estate Newsletter." We keep this website completely updated every couple of days throughout each and every month, and therefore, retiring what is categorized as a "Newsletter" doesn't really mean much, other than the fact that we'll continue to bring you the most up to date news we possibly can, only itemized more in our other categories to your right.

We made the decision to dissolve the "Metro Atlanta Real Estate Newsletters" category in lieu of making the information we include in the newsletters easier for you to find in the specific categories for which they have covered in the past.

For example, instead of being buried in a library of past newsletters, articles we included in this issue will now be expanded on further and listed in the category for which it most applies. This month, the two articles above would fall under the Metro Atlanta Mortgage Info and Metro Atlanta Real Estate categories to your right, so it will make our news easier for you to find and look back on.

We hope you will continue to enjoy the information we provide for you here at our website/blog, and find that by us breaking these stories down and into the categories they would fall under, it will make finding the information you want much easier.

Metro Atlanta Real Estate News – August 2015

In our Metro Atlanta Real Estate News for August 2015 We're Taking an In-Depth Look at Millennials and Why They Can't be Blamed for Low Home Ownership Rates:

Millennials Are Not Why Metro Atlanta Home Ownership Rates Are Down

Lower Metro Atlanta home ownership should not be blamed on Millennials

Metro Atlanta home ownership rates are the lowest they’ve been in 48 years, and there are several factors involved, including a strong rental market and a lack of traditional household formation. But let's look at why millennials are NOT to blame for the lower rate in Metro Atlanta home ownership.

Some stats about Millennial homebuyers — those aged 34 and younger — that show that they are not only buying homes, but also what trends they're following as they do.

According to a study of generational trends (namely, Millennial home buyers) by the National Association of Realtors, 65% are married couples, 14% are unmarried couples, 12% are single females, 8% are single males and other combinations create the last 1%. So, being unmarried isn’t keeping Millennials from joining the ranks of Metro Atlanta home ownership.

Millennials are also working more now than they were even compared to last year, with unemployment down to 5.3% as of June 2015, as opposed to last year’s 6.1% in June, according to the US Department of Labor.

Stats and trends show that Millennials are moving out of the rental market and buying the homes they once rented. Forty-nine percent are buying in the suburbs, 21% in urban areas, 17% in small towns, 13% in rural districts, and 1% are buying in resort towns. This is a more diverse buying pattern then those from 35-49, who are buying 60% of their homes in the suburbs.

Not only are Millennials buying homes, but they’re relying on real estate agents to make the deal happen. The study shows 90% of Millennials used an agent to close their deals, with only 5% going through a builder and 4% buying directly from the previous owner.

Technically, if you wanted to blame a generalized age group for the dip in use of real estate agents, Gen X, those in the 35-49 age range, could qualify, since only 88% of those homebuyers used an agent.

Millennials are definitely joining the ranks of Metro Atlanta home ownership, but let's look deeper into the trends of this age group to see why more are not buying a home.

Why the Metro Atlanta Housing Market is Changing for Millennials

The Metro Atlanta housing market may be changing due to more Millennials preferring to walk rather than commute by driving

According to the same recent study by the NAR, Millennials prefer walking over driving by 12 percentage points. Millennials want to live within walking distance to shops and restaurants, and have a short commute to work. They also favor expanding public transportation and alternatives such as biking. This is the largest margin in favor of walking for any generation, ever.

The Metro Atlanta housing market may be seeing a drop in overall numbers of those owning homes now versus past years because of the disinterest in traditional single-family homes by these Millennials prefering to walk rather than commute to and from work and recreation.

Nearly half of Americans participating the recent survey by the NAR said they would prefer to live in neighborhoods that have small yards but are in easy walking distance to stores and restaurants, vs neighborhods with large yards but where driving is required to get to amenities.

Around 60 percent of Americans live in detached, single-family houses, but one in four of these individuals would rather live in an attached home in a more walkable neighborhood.

Even though the job market is improving, it seems that more and more Millennials are living with their parents today than they were at the height of the Great Recession. We'll look deeper into this in a moment.

It's no secret that Millennials have had a tough time getting started with careers, families and saving for retirement. And this struggle has carried over into home ownership as well.

Everything from the recession, to the rising cost of higher education, to the increasing scarcity of better-paying jobs has taken its toll on people born in the last two decades of the 20th century.

Many Millennials feel there is no hurry to own their own Metro Atlanta home, because of how the economy has changed. Our current economy has shifted to a knowledge-based or connection-based economy, and we are seeing people now work well into their 70s, 80s and beyond. So many Millennials feel they have plenty of time to become home owners.

More Millennials Live With Parents

More Millennials seem to be content living with their parents than ever before

According to a new Pew Research Center analysis of U.S. Census Bureau, which found that the share of young adults living in their parents' homes has increased from 24 percent in 2010 to 26 percent in the first quarter of 2015. During the same period, the unemployment rate for adults ages 18 to 34 dropped from 12.4 percent in 2010 to 7.7 percent this year.

Despite the fact that there are 3 million more Americans in the 18-34 range now than there were in 2007, the number who are living independently has fallen from 42.7 million in 2007 to 42.2 million today.

This trend could be one reason why the economy, and namely, the Metro Atlanta housing industry, isn't growing stronger than it is.

The growing young adult population has not fueled demand for Metro Atlanta housing units and the furnishings, telecom and cable installations, and other ancillary purchases that accompany newly formed households according to the Pew Research Center.

Millennial women, by the way, are more likely to leave the nest than millennial men, and fewer women tend to buy a home on their own than do men.

So what do we glean from all this Millennial data?

Trends have changed. Potential Metro Atlanta homebuyer desires have changed. Has the real estate market failed to change with the demand? Something to think about!

Metro Atlanta Real Estate News – July 2015

In our Metro Atlanta Real Estate News for July 2015:

American Dream: Not What It Used to Be

Owning a home is no longer the American Dream it once was.

Owning a home is no longer the American dream it once was. The lingering effects of the Great Recession and housing bust have altered Metro Atlanta homeownership – a change likely to ripple through the Metro Atlanta housing market for years to come, according to a recent study conducted by the Joint Center for Housing Studies of Harvard University.

Because of a lack of jobs, slow income growth and other financial factors – including the weight of student and other debt, homeownership continues to lose steam, sales of existing homes are lagging and single-family construction is at near historic lows.

The homeownership rate stands at 64.5 percent, where it stood in 1993. The rate fell for eight consecutive years after peaking in 2004 at nearly 70 percent.

While homeownership has dropped off, those living in apartments continues to increase along with rental rates.

Rents on a national basis have nudged up by 3.2 percent, meaning affordable housing is becoming out of reach for a segment of the population.

The flip side of falling Metro Atlanta homeownership rates has been exceptionally strong demand for rental housing, with the 2010s on pace to be the strongest decade for renter growth in history. With no signs of a slowdown in renter household growth, rental markets are likely to remain tight in the near term.

Meanwhile, if you are renting and plan to continue doing so, or if you’re an up and coming first time renter, the next article is for you…

5 Tips for Renters This Summer

Roughly 45 million people will choose to rent a home instead of buy this year– many for the first time.

When they move into their new place, they will quickly discover a number of things they didn’t realize they needed – whether it’s something aesthetic like wall art or essential like a recycling bin. Here are five rental reminders before the next big move:

1. Make Sure You Can Afford It

Popular advice insists that renters should not spend more than one third of their annual salary on rent – but that doesn’t necessarily mean that’s how much you actually end up spending. Rent is only one of your monthly expenses; so don’t forget to budget for things like utilities, cable, Internet or even weekly groceries.

2. Know Your Landlord

Surprisingly, not a lot of new renters research their landlord or rental company before signing a lease. People research restaurants before dining, so why not do the same with someone you’ll be paying rent to for a year?

3. Get Renters Insurance

Studies show that 66% of burglaries happen in the home, and renters are just as likely to be victimized as homeowners, yet fewer than 45 percent of them actually purchase insurance. The average price of renters insurance is only $15 a month, and saves you from financial disaster in the event of theft, accidents or property damage.

4. Pay Your Rent On Time Every Month

It’s important to build a good credit score in case you want to buy a Metro Atlanta home someday. The easiest way to do that is to pay rent on time each and every month, and if you do miss a payment or have to pay late, include a formal letter of apology to your landlord with your rent for his or her records.

5. Think Safety

A neighborhood can seem safe and active during the day, but nighttime can tell a whole different story. Familiarize yourself with your new neighborhood by looking up local crime maps and signing up for sites like EveryBlock, which aggregates crime news from local outlet sources, public police reports and comments from local residents. Do your research and find a safe and fun neighborhood that suits you.

Why is the rental market so hot everywhere? Partly because being able to afford a home is shrinking…

Metro Atlanta Home Affordability is Shrinking

Home sales could be off to their best year since the housing and economic downturn, with May marking the fifth straight month that contract signings have climbed, according to the National Association of Realtors.

The Realtor’s Pending Home Sales Index, which is based on contract signings, climbed 0.9 percent to 112.6 in May from a slight downward revision of 111.6 in April and is now 10.4 percent above May 2014 (101.9).

The index has now increased year-over-year for nine consecutive months and is at its highest level since April 2006

This year’s stronger sales — coming with similarly tight housing supplies from a year ago — have caused Metro Atlanta home prices to rise to an unhealthy and unsustainable pace.

Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages. Without meaningful gains in new and existing supply, there’s no question the goal post will move further away for many renters wanting to become Metro Atlanta homeowners.

Metro Atlanta Real Estate News – June 2015

In our Metro Atlanta Real Estate News for June 2015:

Buyers Still Positive On Metro Atlanta Housing

Buyer’s views toward Metro Atlanta housing have not varied much over the past year, and they are still positive on homeownership as a good financial investment.

According the Federal Reserve Bank of New York’s 2015 housing survey, U.S. households, on average, expect home-price growth to continue at a 4.4% pace for the next year, comparable to the average year-ahead expectation reported in last year’s survey.

Metro Atlanta home price change expectations

Last year’s survey was the first in the series, with this year’s survey getting administered to 1,205 U.S. heads of household in February 2015.

Survey respondents were asked for the current value of a typical home in their zip code, and what they expected the value of that home to be in one year and in five years.

With regard to longer-term expectations, the average expected annualized change in home prices over the next five years was 2.9%. These figures were slightly lower than the corresponding figures in the 2014 survey, where the mean expected annualized change in home prices over the longer horizon was 3.1%. Overall, respondents expected home price growth to continue, but at a slower pace at a horizon beyond one year.

Respondents were asked about Metro Atlanta housing being a good or bad investment

The survey found that more than 60% of both renters and owners think that buying property in their zip code is a (very or somewhat) good investment, while only about 10% think it is a bad investment.

When it comes to renters answering this question, there was little difference in how they answered compared to 2014.

Here in Metro Atlanta, owners seem to have become more bullish since last year’s survey. The proportion of owners who think that Metro Atlanta housing is a good investment increased from 58.5% in the 2014 survey to 63.2%, while the proportion thinking that Metro Atlanta housing is a bad investment declined from 11.9% to 9.8%.

5 Things About the Current Metro Atlanta Home Buying Season

Many analysts are saying the Metro Atlanta housing market has normalized amid the pickup in activity since the recession doldrums. But all is not well for people trying to buy–especially if they’re first-time buyers or on the lower end of the price spectrum. Here’s what you need to know to compete as 2015’s spring Metro Atlanta home buying season swings into the home stretch.

Inventory is Still Short

There are a lot of potential buyers in the market, but supply of available homes for sale is just not enough to satisfy demand, which is causing prices to be on the high side. As of the end of April, the number of available homes for sale—both newly constructed and previously owned—was well below the six-month supply considered a balanced market: 5.3 months for pre-owned homes and 4.8 months for new ones, according to NAR.

Prices Are on the Rise

Inventory constraints coupled with demand for real estate are pushing prices up. In many locations around the Metro Atlanta area, homes are selling at or above their list price. Don’t expect the price gains to go away. Freddie Mac predicts an average home price gain of 4.5% in 2015 (on a national basis), while the National Association of Realtors is now forecasting that homes will rise by 6.7% this year.

Competition is Easing from Investors

For buyers the good news is, in 2015 there’s less competition shaping up from investors in general. In the depths of the housing crisis, institutional investors were the big winners, snapping up single-family homes by the thousands. But they’re less of a force today. In the first quarter of 2015, a total of 14,621 single-family homes were sold to institutional investors nationwide (defined as entities that purchase at least 10 properties per year), according to RealtyTrac. That’s about 3.4% of all sales, down from 6.2% a year ago, and the lowest share for institutional investors in four years. All-cash deals are also down: of non-owner-occupied buyers, 44.7% were all-cash, compared to 61% a year ago and also the lowest level in four years.

Lower Priced Homes are Moving Fast

Markets are moving slightly faster than they were last year, so it’s going to be a little more difficult overall for homebuyers to find a home they want in a reasonable time frame. Homes priced at the lower end of the market are moving quickest: only 50% of homes priced in the lower one-third were still on the market after two months, compared with 65% of higher-priced homes.

Financing Eases, But Mortgage Rates Are Rising

In the worst days of the housing crisis, it was tough to get credit. These days credit availability is at its highest level since the housing downturn, but watch out: interest rates have stayed at historic lows for months now, and Freddie Mac is predicting increased volatility. This past week, rates rose to the highest level in 2015. (See our next article below).

Where Metro Atlanta Mortgage Rates Are Moving

With summer now in full swing (even though the calendar hasn’t officially welcomed it yet), more potential home buyers are looking around. There is good news as Metro Atlanta mortgage rates remain at near historic lows, although they are rising, according to Freddie Mac.

Although existing home sales slipped 3.3% to a seasonally-adjusted pace of 5.04 million units, sales are up 6.1% on a year-over-year basis. The S&P/Case-Shiller 20-city home price index also posted a solid gain of 5% over the 12-months ending in March 2015.

The average 30-year fixed mortgage sits at 3.87 percent this week, an increase from 3.84 percent the previous week. The recent boost has brought Metro Atlanta mortgage rates to their highest levels of 2015.

15-year fixed rates this past week averaged 3.11 percent with an average 0.5 point, up from last week when it averaged 3.05 percent. A year ago at this time, the 15-year fixed rate averaged 3.21 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged 2.90 percent this week with an average 0.5 point, up from last week when it averaged 2.88 percent. A year ago, the 5-year ARM averaged 2.96 percent.

1-year Treasury-indexed ARM’s averaged 2.50 percent this week with an average 0.3 point, down from last week when it averaged 2.51 percent. At this time last year, the 1-year ARM averaged 2.41 percent.

However, a year ago, 30-year rates averaged 4.21 percent. The rise in Metro Atlanta mortgage rates was due to positive housing data as U.S. home sales climbed 7 percent in April. Overall lower mortgage rates are playing a role in bringing out local home buyers. The historic low for 30-year rates was 3.31 percent in November 2012.

Metro Atlanta Real Estate News – May 2015

In our Metro Atlanta Real Estate News for May 2015:

Pending Metro Atlanta Home Sales Up

Pending Metro Atlanta home sales were up in March, even though the low supply of available homes for sale is still a concern.

The National Association of Realtors said this week that its seasonally adjusted pending home sales index rose 1.1 percent to 108.6 last month. The index has climbed 11.1 percent over the past 12 months after having dipped in 2014.

Pending Metro Atlanta home sales were up in March 2015 with inventory of homes for sale still down

Overall, figures suggest strengthening demand from would-be buyers, even though there are relatively few new listings on the market and sales prices are rising at a faster rate than wages.

NAR says new home construction needs to increase and more existing homes need to come to market. Traditional buyers continue to replace investors paying cash. The association says that indicates this year’s activity is being driven by more long-term homeowners.

Pending Metro Atlanta home sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale, meaning that the gains should appear in April and May sales numbers.

With pending Metro Atlanta home sales up, greater buying activity has yet to bring more sellers into the market, with a mere 4.6 month supply of homes on the market. Economists consider a standard market to have at least a 6 month supply of homes for sale.

Right now, new homes are coming onto the market at about half of historic norms, creating a supply-and-demand mismatch that keeps younger households on the sidelines.

Building more new homes would help boost supply, but home construction has been weak. Developers are focused increasingly on building apartments and more expensive homes for wealthier buyers.

One factor pushing up prices is a steady decline in so-called "distressed" sales, which include foreclosures and short sales. Short sales occur when the seller owes more on a home mortgage than the house is worth. Both usually sell at steep discounts to traditional Metro Atlanta home sales.

Lowest Home Ownership Rate in 20+ Years

While Metro Atlanta home sales continue to rise, the home ownership rate in the U.S. has fallen below 64 percent for the first time in over 20 years.

The U.S. Census Bureau announced that the seasonally adjusted 63.8 percent rate in the first quarter of 2015 is far below the 69 percent rate just 10 years ago – a time when homebuying may have been the easiest for Americans.

As investors continue to buy single-family homes to feed rental demand, and first-time buyers remain unable to afford rising prices, U.S. homeownership is taking a big hit.

Rentership has increased dramatically since the financial crisis and Great Recession, and continues to do so as the economy improves and more young people move out of their parents' homes into rental apartments. Many of them straddle jobs while managing student loan debt or other expenses, finding it impossible or extremely challenging to come up with a down payment in the current seller's market.

With millions of properties still underwater — those homes worth less than owners owe for their mortgage — there is still a stigma attached to owning a home in the wake of the 2007-2008 housing market meltdown and foreclosure crisis.

However, longer-term trends seem to be pushing homeownership rates back to "normal" levels, according to Sam Khater, deputy chief economist at CoreLogic.

In the mid-1990s pro-homeownership policies led to an expansion in mortgage credit and the homeownership rate peaked in 2004 at 69 percent. Homeownership rates are back to roughly their long-term trend between the 1960s and 1990s.

Metro Atlanta Housing Market Could Face Problems

With pending Metro Atlanta home sales up and not a lot of new inventory coming on the market to help slow that down, and the home ownership rate now at it's lowest level in over 20 years, could there be trouble brewing in the housing industry?

The future of the Metro Atlanta housing market depends on jobs, and people earning enough to buy houses. But experts at a recent forum are predicting problems due to income levels. Until incomes improve across the board and hurdles to credit access are eased, it is expected that the Metro Atlanta housing market will continue to perform below capacity.

Some of the nation's top economists meeting at a forum at the National Association of REALTORS®' Washington, D.C., office last week all echoed the same sentiment.

Households could be trying to save more because of the "unique uncertainty" in people today. There's a general tendency now for people to want to save more, because they're afraid. They're afraid for their jobs. What do you do? You don't spend money lavishly; you try to accumulate some. But they don't succeed.

Economists at the forum said today's Metro Atlanta housing market represents just a partial recovery from the severe downturn that hit the country about seven years ago, but they differed on how much of a role overly tight credit is playing in the slow return to a full recovery.

The problem today doesn't seem to be a credit issue. It's more of a demand issue. Borrowers have less money now after millions went into foreclosure. We're facing a whole new ball game in the Metro Atlanta housing market, and it's anyone's guess if the lower income problem will be overcome soon enough to save the industry.

Metro Atlanta Real Estate News – April 2015

In our Metro Atlanta Real Estate News for April 2015:

Renters Squeezed By Higher Metro Atlanta Housing Costs

Renters are being squeezed in the Metro Atlanta housing market by a disproportionate growth in rental costs on one side and stagnant income on the other.

New research finds that rent growth is far exceeding wages, according to the National Association of Realtors.

The NAR reviewed data on income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years across the country. Lawrence Yun, NAR chief economist, says the disparity between rent and income growth has widened to unhealthy levels and is making it harder for renters to become homeowners.

Income Not Keeping Up With Metro Atlanta Housing Costs

The Metro Atlanta housing market is seeing a disproportionate growth in rental costs and stagnant income

In the past five years, typical rent rose 15 percent while the income of renters grew by only 11 percent. The gap has worsened in many areas as rents continue to climb and the accelerated pace of hiring has yet to give workers a meaningful bump in pay.

The share of renter households has been increasing and homeownership in the Metro Atlanta housing market is falling. Those financially able to buy a home in recent years were insulated from rising Metro Atlanta housing costs since most take out 30-year fixed-rate mortgages with established monthly payments.

Moreover, a typical homeowners’ net worth climbs because of upticks in home values and declining mortgage balances. The result has been an unequal distribution of wealth as renters continue to feel the pinch of increasing Metro Atlanta housing costs every year.

Meanwhile, current renters seeking relief and looking to buy are facing the same dilemma: home prices are rising much faster than their incomes. With rents taking up a larger chunk of household incomes, it’s difficult for first-time buyers – especially in high-cost areas – to save for an adequate downpayment.

NAR’s research analyzed changes in the share of renters and homeowners, mortgage payments, median home prices, median household income for renters and the rental costs in 70 metro areas. Even with the tax benefits of owning versus renting, affordability is still the major stumbling block for many who would like to enter the Metro Atlanta housing market as an owner rather than a renter.

Speaking of taxes and the benefits of owning versus renting, we’re devoting the rest of this month’s newsletter to the subject of taxes…

Some Last Minute Moves for Taxes

Here we are, time to do taxes, and this is no April fools joke.

Taxes are due April 15th. Here are some tips for you last minute filers

With just two weeks left of tax-season 2015, here are a few actions worth taking to save you money on your 2014 taxes, jumpstart savings for you or a relative, or possibly get a tax break on health coverage for 2015.

Contribute to an IRA. You have until April 15th to contribute to a 2014 traditional IRA, potentially reducing your taxable income. The maximum deductible contribution is $5,500 for those under age 50 and $6,500 for those age 50 and older. Your deduction will be limited based on income and whether you or your spouse has a retirement plan at work. Do you own a small business? Then you might be eligible for higher income and contributions limits through a simplified employee pension (SEP) IRA. Go to irs.gov and search for IRS Publication 590, “Individual Retirement Arrangements,” for details on contributions and income limits.
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Contribute to the IRA of a young relative or someone else starting out. Lower-income workers of all ages will benefit in three ways: more savings, less taxable income, and, if they’re not medically insured through your plan or one at work, a larger insurance premium tax credit.
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Apply for health-insurance coverage. Taxpayers in states with state-run health-insurance Marketplaces who didn’t realize they would owe a penalty for lack of coverage in 2014 can take advantage of extended sign-up periods for 2015 coverage, through April 17th or even later. They may find themselves eligible for income-based tax credits to use toward premiums.

Don’t Let Tax Identity Theft Happen to You

While we’re on the subject of taxes, let’s look at a growing problem and hopefully help you avoid calamity.

Tax-related identity theft can turn your life upside down and take years to resolve. You may know of someone who has had this happen to them. Someone submits an electronic tax return containing personal information about the person along with a bogus return address. The mess takes piles of paperwork, a tax advocate, and can take years to resolve.

Fortunately, consumers are more aware of the problem, and the IRS has made strides to educate the public, help victims, and prevent a recurrence. Here’s some advice to flag potential problems:

I.D. Protection Tips

Protecting sensitive information in the first place and following up quickly to minimize the damage are paramount. Healthy skepticism can go a long way. For instance:

Ignore e-mails and social media purportedly from the IRS. The IRS will NEVER contact taxpayers by e-mail, text message, Facebook, Twitter, or other social media. Nor does it send e-mails stating that you’re being audited or getting a refund. That’s a “phishing” scam, which you should report at phishing@irs.gov.

Confirm the authenticity of letters from the IRS. Check the agency’s official contact page.

Check the URL of “IRS” tax information pages. The agency’s website begins with www.irs.gov. Others are fakes.

If You Become a Victim

Hundreds of thousands of people have been victimized by identity thieves. To help those taxpayers, the IRS is:

Assigning victims a unique personal identification number. It must be included on their tax returns. This has given a lot of people peace of mind. It means faster processing and a speedier refund.
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Speeding up victim case resolution. Because resolving I.D. theft cases can take up to six months, the IRS has assigned more employees to sort through the details and streamline the process.
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Lending an ear. The IRS now has a dedicated section on its website devoted to the problem. In addition, it has implemented a special phone number for victims. The IRS Identity Protection Specialized Unit is available at 1-800-908-4490.

If you haven’t already filed your taxes, good luck over the next two weeks. And remember, filing an extension for your taxes doesn’t mean an extension to pay. You still must submit what you think you’ll owe whenever you get around to filing or face penalites and interest from April 15th to the day you finally pay up.

Metro Atlanta Real Estate News – March 2015

In our Metro Atlanta Real Estate News for March 2015:

Home Prices Up Year-Over-Year

Home prices across most of the country were down for December, but still faired better than they were a year ago.

Black Knight Financial Services released its latest Home Price Index Report this past week, which showed that home prices nationwide were down an almost-flat 0.1 percent in December. At the same time, 2014 ended with home prices doing 4.5 percent better than a year prior.

According to the report, the average home prices in the U.S. in December were around $241,000, up from $230,000 a year before and inching closer to the June 2006 peak of $268,000.

The Northeast and Midwest showed the most notable price drops in December, while a few metro areas actually showed rising home prices for the month.

It's not unusual to see home prices and sales drop off during December, as most people have their focus on the holidays. However, data suggests that's all about to change…

Why Metro Atlanta Home Prices May be Ready to Lift Off

Data suggests that Metro Atlanta home prices are about to accelerate.

Earlier this week, the S&P/Case-Shiller Home Price Index, on a month-over-month nonseasonally adjusted basis, posted an increase for the first time since August. Winter's chill is beginning to thaw, even though old man winter is still clinging on in many areas. On a seasonally adjusted basis, the index posted its best price gain since 2014. Prices, however, are still more than 16 percent below their prerecession peaks.

A few things have been holding back Metro Atlanta home prices lately. For one, inventories have dried up a little, limiting choices. The National Association of Realtors (NAR) notes that families are staying in their homes longer, an average of 10 years vs. the long-term norm of seven years. Wage gains have also been lukewarm so far in the recovery, which is hampering first-time buyers. And evidence shows that student loan debt is limiting the ability of many Millennials to get a mortgage.

Yet positives are showing up.

The household formation rate has increased to its highest level since the housing bubble. New-purchase mortgage applications are inching higher, thanks to the recent decline in home loan interest rates. (See our next story below)

New first-time homebuyer affordability, according to the NAR, has returned to early 2014 levels. And thanks to deleveraging efforts — defaults, short sales and the like — household mortgage debt has returned to 2001 levels, according to data from the Federal Reserve.

While some hurdles still remain, including relatively tight mortgage credit conditions, Metro Atlanta home prices look ready to accelerate as winter — which has been brutal in much of the country — gives way to the summertime peak in housing activity. Plus, this year's prices could get a boost because relatively fewer homes are available. As Metro Atlanta home prices rise, new construction activity will follow, providing a lift to U.S. economic growth later this year.

Metro Atlanta Mortgage Rates Rise for Third Straight Week

Metro Atlanta mortgage rates are still well below year-ago levels, but rates rose for the third consecutive week this past week.

Freddie Mac says the average rate on a 30-year fixed-rate mortgage rose to 3.80 percent in the week ending Feb. 26, up from 3.76 percent last week. A year ago, 30-year rates averaged 4.37 percent.

A 15-year fix averaged 3.07 percent this week, up from 3.05 percent. A one-year adjustable-rate mortgage averaged 2.44 percent, down from 2.45 percent.

Freddie Mac says rates rose this week, in part, on strong housing data. New home sales topped expectations in January, hovering near a six year high. The monthly S&P/Case-Shiller Home Price Index showed prices in December in the 20 largest cities were up an average of 4.6 percent from a year earlier.

Stay plugged in with us right here, and we'll keep you up to date on Metro Atlanta mortgage rates, as well as news affecting interest rates overall.

Metro Atlanta Real Estate News – February 2015

In our Metro Atlanta Real Estate News for February 2015:

Protect Your Metro Atlanta Mortgage Until It's Funded

Getting a Metro Atlanta mortgage does not just entail applying for the loan and getting an approval letter. There are still things that can go wrong, and you need to be aware of these so you don't find yourself out all the cash to get the loan, and still not get the funds you thought you were approved for.

Why Your Metro Atlanta Mortgage May Not Get Funding

Your Metro Atlanta mortgage can still fall apart even after you think you are approved.

You've gotten the call that your Metro Atlanta mortgage was approved, and your lender coordinates a closing date with you. You get the movers all lined up, you notify the utility companies to switch the untilites over to your name effective on your closing date, and you send out the change of address notices. Everything's all set to move in, until you get another call from your lender that says, your loan has fallen through.

There are no formal statistics on deals that are approved but then don't actually close. These 11th hour disapprovals happen more often than many people realize. What they also don't know is that losing the loan at the last moment is almost always preventable and possibly fixable.

The most common mistake people make after their loan has been approved but before it closes is taking out additional credit after the lender has reviewed your credit report. Buying furniture on credit after you've been approved, or new appliances for the house, are both big no-no's! If your income to debt ratio was close during the initial documentation review, taking on more debt might push you into a debt ratio the bank deems unacceptable.

The bottom line is — just don't do it. Wait until your deal has completely closed before taking on any new debt. Your normal purchase of gas and a night at the movies isn't likely to cause any problems. It's a major purchase or opening new accounts that will get your loan denied.

Another mistake that may or may not be repairable is changing jobs during the loan funding process. Lenders almost always verify your employment shortly before the loan is set to close. If anyone that submitted financial documentation for your loan is planning to changed employers or stop working, it's best to wait until after the loan closes.

One you will never recover from is if you submit fraudulent income statements. When getting a Metro Atlanta mortgage, there are no undocumented income statements. The lender will validate your income statement with the IRS or other taxing authority. What you submit to the lender must be exactly what you submitted to the IRS. Often the original loan approval is based on a contingency that your income be validated by the IRS.

Between the time you are initially approved for your Metro Atlanta mortgage and when the deal closes, try to keep everything the same regarding your financial situation.

Metro Atlanta Mortgage Rates Up

Metro Atlanta mortgage rates ticked up this week for the first time in 2015 following positive home sales reports.

Freddie Mac says a 30-year fixed-rate Metro Atlanta mortgage averaged 3.66 percent this week, up from 3.63 percent last week. A year ago, 30-year rates averaged 4.31 percent. The all-time low of 3.31 percent was set in November 2012.

A 15-year fix averaged 2.98 percent this week, up from 2.93 percent. A one-year adjustable-rate mortgage rose to 2.38 percent.

New-home sales in December rose 11.6 percent, a better monthly gain than had been expected. Existing-home sales rose 2.4 percent in December.

A separate report from the National Association of Realtors said pending sales of existing homes, a more forward-looking gauge of housing market activity, fell in December, though contract signings remained above year-ago levels.

We'll continue to keep you updated here on any news that might affect Metro Atlanta mortgage rates, either up or down.

Metro Atlanta Real Estate News – January 2015

In our Metro Atlanta Real Estate News for January 2015:

Metro Atlanta Housing – What to Expect in 2015

As we turn the calendar to 2015, it seems only fitting that we explore Metro Atlanta housing and some of the things to watch for in the new year.

2015 Metro Atlanta housing forecast and what to expect in the new year.

Metro Atlanta Housing – Prices, Inventory and Sales

Let's start our look at Metro Atlanta housing with Prices, and what's expected to happen in 2015.

When all the figures are in, it appears Metro Atlanta housing prices – as measured by the national repeat sales index (Case-Shiller, CoreLogic) – will be up about 5% or so in 2014 (after increasing about 12% in 2013).

Some of the key factors in 2012 and 2013 were limited inventory, fewer foreclosures, investor buying in certain areas, and a change in psychology as buyers and sellers started believing house prices had bottomed. In some areas, there appeared to be a bounce off the bottom – but that bounce appears to have ended in 2014. The investor buying has slowed – as have distressed sales.

The consensus of housing analysts appears to be for price increases of around 3.5% to 4.0% in 2015.

Inventory – It appears housing inventory bottomed in early 2013. The question is, will inventory increase further in 2015, and, if so, by how much?

Inventory is not seasonally adjusted, and usually inventory decreases from the seasonal high in mid-summer to the seasonal lows in December and January as sellers take their homes off the market for the holidays.

The Metro Atlanta housing market is slowly moving back to normal, and real estate is very local, as we all know. But our best guess at this point is, available inventory will increase further in 2015. If this holds true, it will keep home price increases from going to high too fast, which is never a good thing for the Metro Atlanta housing market.

Sales – CoreLogic released its 2015 Housing Outlook that shows home sales will increase by 9 percent. The most important economic trend is that employment growth for millennials began to improve in 2014, with the 25- to 29-year-old segment experiencing a 3 percent improvement in employment growth — one percentage point higher than the overall employment growth rate. That's important because this age group is the key first-time homebuyer segment.

When it comes to the Metro Atlanta housing market, 2015 may be the year first-time home buyers make a comeback. With rents rising faster than incomes, many Millennials are expected to start looking to buy homes of their own.

Here are two more Metro Atlanta housing market trends economists and other industry experts expect to see in the year ahead, in additon to the price expectations and inventory projects we just covered.

Looser Lending Standards – In early December, Fannie Mae and Freddie Mac put new lending guidelines in place and started offering 3% down payment mortgages that will make it easier for more first-time buyers to qualify for a mortgage.
Add to that a strengthening job market, and prospects look much brighter for young home buyers.

First time home buyers are important to the overall Metro Atlanta housing market because a spike in the number of first time home buyers should spark a chain reaction by enabling existing homeowners to sell their homes and buy more expensive ones.

Mortgage Rates – If there's any single market trend that real estate industry pros have gotten consistently wrong lately, it's the direction of mortgage rates. But most do expect rates to rise at some point in 2015.

In December, the Federal Reserve signaled that it would not raise the Federal Funds rate until the summer of 2015 or perhaps even later.

With the mortgage rate guessing game continuing as we start the new year, many experts believe rates will peak in 2015 at 4.75% for a 30-year fixed rate mortgage, and even if they hit 5.00%, that's still a very favorable rate, historically.

An increase to 4.5% from the current 4% adds about $60 a month to mortgage payments on a loan with a principal balance of $200,000. Not enough to keep buyers away, when rental rates are increasing much faster, comparitively speaking.

As the economy improves and salaries rise, Millennials are expected to become a bigger force in the Metro Atlanta housing market in the new year. Households headed by Millennials are expected to see significant growth in 2015, particularly as the economy continues to make gains.

Millennials are expected to drive two-thirds of household formations over the next five years, according to a report from the National Association of Realtors. The forecasted addition of 2.5 million jobs next year, as well as an increase in household formation, are the two factors that realtor.com® points to in driving more first time home buyers to the Metro Atlanta housing market.

As always, we'll continue to track all of these Metro Atlanta housing trends for you throughout the new year and keep you updated right here.

Metro Atlanta Real Estate News – December 2014

In our Metro Atlanta Real Estate News for December 2014:

Metro Atlanta Lease Purchase Full of Pittfalls

In a Metro Atlanta lease purchase, in most cases, you will rent at a higher cost than the going market rate. Prior to moving in, you agree on a potential purchase date and purchase price for the home. You may buy the property at any point during the rental period up until the lease option expires, providing the allowance to do is spelled out clearly in your agreement. The lease option period can be any length of time that you and the seller agree to, ranging from several months to several years.

Entering into a Metro Atlanta lease purchase agreement can be full of pitfalls for the buyer

If you do end up buying the property, the seller will usually credit part of your rent back to you, often-times the portion of your rent that was above market rate. You can opt to put this money toward a down payment and closing costs, or keep it. The purpose of the above-market rent is to give the seller an incentive to complete the transaction. If you do not purchase the property, all of the rent you paid remains with the seller, giving the seller an incentive for taking the property off the market during the time you were renting it.

How a Metro Atlanta Lease Purchase Benefits Sellers

A Metro Atlanta lease purchase favors the seller if he or she is having a hard time selling their property. The rent-to-own option provides the seller with an alternative to lowering the price, taking the home off the market, or renting the home long-term. In the meantime, the Metro Atlanta lease purchase helps the seller pay the mortgage, property taxes and insurance. Unlike a traditional rental, tenants are more likely to take special care of the property because they hope to own it at the end of the lease purchase time period.

How a Metro Atlanta Lease Purchase Benefits Buyers

The biggest advantage a buyer would have with a Metro Atlanta lease purchase is financial, of course. If buyers don't have the down payment saved or adequate monthly income to qualify for a mortgage but believe they will within the next couple of years, a Metro Atlanta lease option allows them to accelerate the path to homeownership. By signing a contract now, the buyer locks in a purchase price, which means no worrying about rising home prices.

Also, a seller will usually continue to pay the property taxes, insurance and maintenance and repairs on the property. And by living in the home, the buyer gets a lengthy test drive before diving into the financial commitment of owning the home themselves.

Best of all, if the buyer decides to walk away from the deal, the only real consequence is the loss of that portion of rent paid that was above market rate. If the buyer ends up buying the property, the seller will credit part of the rent back to the buyer, often more than the portion of rent that was above market rate.

Metro Atlanta Lease Purchase Full of Risks For The Buyer

A would-be buyer should be aware of the many things that can go wrong in the process before getting involved in a Metro Atlanta lease purchase agreement. Before entering a rent-to-own agreement, a potential buyer should:

Check the seller's credit report. – Look for potential warning signs that the seller may be in financial trouble, such as delinquent accounts or a large amount of outstanding debt. Even after a satisfactory credit check, a potential buyer who currently lives in the home should still pay attention to any warning signs that would indicate that the seller is in financial distress. Some examples include phone calls from debt collectors and suspicious-looking notices that are sent to the house.

Understand that the seller could lose the property during the rental period. – This could occur for any number of reasons such as if he or she is unable to make the mortgage payments, a tax judgment is placed on the property, he or she goes through a divorce, is being sued, etc. If the seller loses the property, the potential buyer loses the possibility of buying the property, forfeits the extra rent paid and will have to find a new place to live. There is one possible exception: if the home becomes bank-owned through foreclosure, the bank might consider selling the home as soon as possible to the Metro Atlanta lease purchase buyer in order to avoid the hassle of maintaining and marketing the property to a different buyer. In this case, the rent-to-own buyer would have to decide whether the purchase is feasible at the new date, and possible new terms of purchase.

Ensure that the Metro Atlanta lease purchase option clearly states who is responsible for maintenance or repairs. – This agreement should also specify the types of changes or improvements (if any) the potential buyer is allowed to make to the property during the lease term.

Be sure to enter a "lease-option agreement" rather than a "Metro Atlanta lease purchase agreement". – The former grants the option to buy at any time during the rental period, while the latter requires purchase by the end of the lease period and has legal ramifications for backing out.

Do market research and obtain a home inspection. – This is how you can be sure the home purchase price is fair before ever signing a contract.

Be aware that if the seller is unscrupulous, he or she can refuse to sell at the end of the lease-option period. – This means that all the above-market rent money paid will be lost. A seller may also try to back out of the contract if the real estate market has appreciated rapidly and the property significantly increases in value. Of course, neither of these actions is legal, but if the buyer doesn't have the financial resources to hire a lawyer, there won't be much recourse against dealing with a shady seller.

Understand that if the market declines, the buyer will still have to pay the higher price stipulated in the contract to own the home. – However, if the price is too high, the lessee can just walk away and shop for a different property. However, the buyer will lose that portion of the rent that would have gone toward a down payment, so it's important to do the math necessary to determine whether walking away is the best option.

Talk to a mortgage broker and ensure that you're in a position to buy the property. – Even if the lessee decides to buy the house, it is possible that he or she will not qualify for the mortgage loan required to make the purchase. Finding this out before entering a Metro Atlanta lease purchase agreement, therefore, can save a lot of grief down the line.

Obtain a condition of title report. – This can help a buyer learn how long the seller has owned the property. The longer the seller has owned it, the more equity and stability he or she should have built up in it.

While Metro Atlanta lease purchase arrangements can have many potential pitfalls, they can be a win-win situation between a trustworthy seller and a prudent, financially responsible buyer. If you can find an arrangement that you can agree on and a house that you'd like to own one day, this could be the perfect way for you to step out of your apartment and put down some roots.

It is also strongly advisable to find yourself a buyer's agent or broker to help you with this whole Metro Atlanta lease purchase agreement. They will have experience dealing with the pro's and con's, and can point out things you may never think of on your own.