Mortgage Rates by Decade Compared to Today


Some Highlights:

The interest rate you secure for your mortgage greatly influences your monthly housing costs.
In the 1980s, 30-year fixed mortgage rates averaged in the high 12s making the monthly principal and interest payment over $2,000.
Interest rates are still at historic lows; this is a great time lock in your housing cost and protect yourself from increasing rents, or refinance your current mortgage.

Source: Simplifying The Market

Naples/Ft. Myers region shows an increase in new construction 10.9% from 1Q16 and up 11.1% from 2Q15.

NAPLES / FT MYERS HOUSING 2Q16: 20 Consecutive Quarters of Growth: Annual New Home Starts Up 13.7% YoY

Annual New Home Starts up 13.7% YoY & 2.7% QoQ, marking 20 consecutive quarters of growth.

Annual Closings Up 25% YoY & 8.2% QoQ, delivering gains for 17 consecutive quarters.

Collier County continued to show strong demand with annual closings up 45% YoY and annual starts increasing for 29 consecutive quarters.

Metrostudy’s 2Q16 survey of the housing market in the Naples/Ft. Myers region shows there were 1,286 quarterly starts, an increase of 10.9% from 1Q16 and up 11.1% from 2Q15. The annual starts pace increased 2.7% over the previous quarter to 4,959, and is up 13.7 % YoY. The annual starts pace in Naples/Ft. Myers has increased for 20 consecutive quarters. Closings in 2Q16 totaled 1,131, down 8 % from the previous quarter, but up 43 % from 2Q15. The annual closing rate of 4,474 was up 8.2% from 1Q16 and 25% higher than one year ago. Naples/Ft. Myers has now seen quarterly closings rise for 17 consecutive quarters.

“The Naples/Ft. Myers market remained strong, as annual starts delivered 20 consecutive quarters of growth and annual closings have now increased for 17 consecutive quarters,” said David Cobb, Metrostudy’s Regional Director in South Florida. “However, softer sales this spring has resulted in some communities carrying excess inventory into the second quarter, and the use of incentives to move inventory has become common in the market.”


Vacant, developed lot inventory decreased 0.9% from the previous quarter, to 11,623 lots, but lot deliveries increased 45% to 1,186, compared to the first quarter.

Lee County – Lee County is comprised of the Ft. Myers-Cape Coral MSA. Active master-planned subdivisions in Cape Coral and Lehigh Acres are included in our research, but scattered lot activity is not. Quarterly starts numbered 670, up 15% from 1Q16, while quarterly closings of 589 declined 14% from the previous quarter. The annual starts rate of 2,502 was up 9% from 2Q15 and the annual closings rate of 2,279 was up 11% from the same quarter in 2015. Housing inventory totaled 1,380 units in 2Q16 and remains below equilibrium in Lee County at 7.3 months of supply. Nine months of supply is considered normal. The supply of VDL inventory declined 3% QoQ to 6,554, a 31-months’ supply. There were 664 lot deliveries in the quarter, up 14% from the previous quarter and up 28% YoY. Future lot inventory was up 21% YoY to 37,959.

Collier County – Collier County is comprised of the Naples-Marco Island MSA. Active master-planned subdivisions in Collier County are included in this research but the scattered lot activity, primarily in Golden Gate and Golden Gate Estates, is not. Quarterly starts increased to 616 by 6.4% from 1Q16, while quarterly closings dropped 1.1% from the previous quarter. The annual starts rate of 2,457 was up 19% from 2Q15, and annual closings of 2,195 were up 45% from 2Q15’ s pace. The annual starts rate now has risen for 29 consecutive quarters, but this quarter’s paltry 0.3% increase QoQ suggests this streak may soon end. Housing Inventory totaled 1,967 units, slightly elevated at 10.8 months of supply, a higher-than-normal level due in part to labor constrains and the above-average size of the homes. VDL inventory decreased 1.9% QoQ to 4,993, a 24 months of supply. Lot deliveries surged 84% from the previous quarter to 711. Future lot deliveries decreased 2.4% from 1Q16 to 28,934.

Source: Metrostudy

Luxury Home Sales & the Impact of the Stock Market


In a recent post, CoreLogic looked at the correlation between stocks and the sales of upper-end properties ($1 Million+ sales price). The report revealed:

“The powerful ‘wealth effects’ generated by the rapid rise in equities between 2009 and 2015 drove a large rise in the sales of homes that sold for $1 million or more.

Historically, sales of homes priced $1 million or more averaged 1.2 percent of all home sales. The spread between high-end sales and equities widened during the housing bubble but then moved more closely in unison. By the time the equity markets had peaked in May 2015, the $1 million or more share of the market had nearly doubled, averaging 2.2 percent for the remainder of the year.”

This makes sense. As people see their wealth increasing, they feel more confident in their purchasing power. And, of course, that would also impact their decisions regarding real estate. The stock market dipped earlier this year and there was quite a bit of anecdotal evidence that the upper-end market was beginning to soften.

As we can see in the chart below, the market is again flourishing. That may rejuvenate the luxury market as we move through the rest of the year.


As we proceed through 2016 and enter 2017, the strength of the stock market will be a key factor in the strength of the luxury home sales. If the stock market falters, look for high-end sales to slow. If the market advances, as it has shown signs of doing most recently, the high-end market will advance.

Source: Keeping Current Matters

Buying Remains 36% Cheaper than Renting!

In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 5% less expensive in Orange County (CA) all the way up to 46% in Houston (TX), and 36% Nationwide!

A recent study looked at the cost of renting vs. owing a home at the state level and concluded that in 36 states it is actually ‘a little’ or ‘a lot’ cheaper to own, represented by the two shades of blue in the map below.


One of the main reasons that owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that rates fell again last week to 3.43%.

Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters who would like to evaluate your ability to buy this year, let’s get together and find you your dream home.

Source: Simplifying the market

Do You Know the Impact Your Interest Rate Makes?


Some Highlights:

Interest rates have come a long way in the last 30 years.

The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford if you plan to stay within a certain budget.

Interest rates are at their lowest in years… RIGHT NOW!

If buying your first home, or moving up to the home of your dreams is in your future, now may be the time to act!

Source: Keeping Current Matters

Home Sales Accelerate During The “Dog Days of Summer”


Some Highlights:

Existing home sales have accelerated to the highest pace since February 2007 at an annual pace of 5.57 million.

Inventory of homes for sale remains below the historically normal 6-month mark at a 4.6-month supply, down 5.8% year-over-year.

Median home sales prices rose to $247,700, 4.8% higher than a year ago and replaced the previous peak in May of $238,900.

Source: Keeping Current Matters

Real estate is top investing choice, with stocks only tied for third, survey finds

According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.

Bankrate asked Americans to answer the following question:

“Which would be the best way to invest money you did not need for more than 10 years?”

Real Estate came in as the top choice with 25% of all respondents, while cash investments (such as savings accounts and CD’s) came in second with 23%. The chart below shows the full results:


Sterling White, co-founder of Holdfolio, gave one reason as to why real estate may have ranked so high.

“Houses are tangible. You can physically see and feel the product. So you know where your money is going.”

July’s poll also found that for the “26th consecutive month, Americans’ sense of financial well-being improved when taking into account debt, savings, net worth, job security, and overall financial situation.”

Source: Simplifying The Market

The Top Reason to List Your House For Sale Now!


If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:

“With demand holding firm and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale.

Realtors are acknowledging, with increasing frequency lately, that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market.”
The latest Existing Home Sales Report shows that there is currently a 4.6-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and 5.8% lower than June 2015.

The chart below details the year-over-year inventory shortages experienced over the last 12 months:


Anything less than a six-month supply is considered a “Seller’s Market”.

Homes Are Selling at a Rapid Clip

Home For Sale Real Estate Sign and Beautiful New House.

Homes are selling an average of a week faster than they did a year ago, meaning home shoppers should be prepared to move quickly in a competitive housing market, according to the June Zillow Real Estate Market Report.

Tight inventory continues to be a major factor for home shoppers. The supply of homes for sale is nearly 5 percent lower than it was a year ago, and 38 percent lower than its peak level in 2011. With fewer available options, home shoppers are moving quickly to buy homes, with the average U.S. home closing after 78 days on the market.

The 78-day average includes the time it takes to close, which is usually one or two months after the home goes under contract. This means that homes are pending within about a month of being listed.

The length of time homes stay on the market before selling has been steadily decreasing since 2010, when homes took an average of five months to sell. The average time home buyers had in Pittsburgh, Philadelphia and Charlotte, N.C. dropped by at least two weeks, the biggest change among the largest U.S. metros.

The low inventory and quick-moving market combine to create a competitive home shopping market, especially for potential buyers looking for less expensive homes. The most expensive third of the market has experienced the smallest drop in available inventory compared to the rest of the market.

“Homes are selling faster than ever as the home shopping season hits its peak,” said Zillow Chief Economist Dr. Svenja Gudell. “If you’re looking for a home, be prepared to move quickly. Adding to this difficult buying environment is low inventory—there simply aren’t many homes to choose from. And while this looks like a good time to be a seller, potential move-up buyers may hesitate to list their homes and become buyers. Until the supply increases, it will remain a tough market to find a home.”

Source: National Mortgage Professor Magazine

Rents Skyrocket at Highest Rate in almost a Decade


The Consumer Price Index (CPI) was released by the Labor Department last week. An analysis by Market Watch revealed the cost of rent was 3.8% higher than a year ago for the second straight month in June. That’s the strongest yearly price gain since 2007.

This coincides with a report released earlier this month in which AxioMetrics announced that rents are continuing to increase in 2016. The report revealed:

There was a 3.7% increase in effective rents in the second quarter of 2016 as compared to the same period last year.
That the effective rent growth this quarter compared to last quarter was 2.3%.
Annual effective rent growth was positive in 49 of the top 50 markets, based on number of units. Only Houston was negative, at -1.4%, as the fallout from energy-industry job losses and excess construction continues.