It doesn’t seem possible that we were blessed with a mild hurricane season and a drop in interest rates practically within the same month. But so far, home sales and a quiet hurricane season are both happening.
Last week, we reported the September sales statistics and I, for one, was pleasantly surprised. Now I’m looking at the national September sales reported by the National Association of Realtors and they’re confirming the same lift in September home sales as we saw in Manatee County.
Home sales rose in September to a seven-month high after buyers jumped on the declining mortgage rates. To be more specific, on a year-over-year basis, September home sales rose 4.1% nationally. In Manatee County for single-family homes, the same year-over-year comparison was 24.4% more properties sold. This offered some hope that the housing market could be improving on both a national level and, more importantly, locally.
Lower borrowing costs in September reflected contracts signed earlier in the summer when rates began to ease. The 30-year mortgage rate has gradually fallen from almost 7% at the start of the year and buyers are starting to make their moves. Some market analysts say they think the average 30-year, fixed-rate mortgage rate needs to drop below 6% to get things moving. Affordability is what buyers are looking at and 6% or less could be the magic number.
If you’re interested in buying this season, you probably need to review some basic buyer information I picked up from the Wall Street Journal:
- Why do you need a home appraisal when getting a mortgage? To ensure the property’s market value justifies the loan amount;
- Why is an adjustable-rate mortgage (ARM) different from a fixed-rate mortgage? The interest rate changes at predetermined times after an initial fixed period;
- How are property taxes calculated? The tax rate determined by the local government based on the assessed value of the property determines actual taxes;
- How much do married couples save on capital gains when selling their property? Up to $500,000 based on the purchase price of the property plus improvements, and years of ownership;
- If you’re listing your property with a broker, what is the main purpose of the listing agreement? To establish the duration of the broker’s representation and commission;
- If you own a property within a homeowner’s association (HOA), how are the rules stated? A binding document stating covenants, conditions and restrictions;
- When are borrowers required to pay for private mortgage insurance? When the down payment is less than 20% of the purchase price;
- What damage is most often not covered by standard homeowners insurance? Earthquakes and landslides; and
- What document outlines all of the loan terms, monthly payments and closing costs? The loan estimate.
These points are just the tip of the iceberg on what you really need to know when purchasing real estate, but even these broad items will at least get you started on your homebuying adventure.
I know what you’re thinking; there are still more than three weeks in this hurricane season. But when I wake up and it’s below 70 degrees, I can’t help feeling optimistic. Time to get ready for an active Florida buying season. Keep an eye on the rates and improve your buyer’s knowledge. Believe it or not, there is light at the end of the tunnel.
