First-time homebuyers in the market today have a litany of woes. Home prices are at record highs. Saving for a down payment is tougher than ever due to soaring inflation. And now, mortgage interest rates are much higher than they were a year ago—making monthly housing payments even more expensive. Many first-time buyers have been forced to slash their expectations as they can no longer afford their dream homes or to live in their dream neighborhoods. Others have been priced out of homeownership or are considering holding off on making such a large purchase. But before you throw up your hands in defeat, take a deep breath. The homebuying situation might not be as bleak as it seems. Mortgage rates have been coming down—a little—over the past few weeks. And they aren’t set in stone. They typically move a bit up or down multiple times a day. They’re also negotiable. Though you may see a certain rate advertised or your lender quotes a higher-than-desired rate, it doesn’t mean you can’t get it down. There are a variety of things potential borrowers can do to bring down their rates, including boosting their credit profile, shopping around, and paying a little extra at closing. That’s why it really pays to score a lower rate. Here are some tips for buyers on how to bring down mortgage rates. 1. Raise your credit score, pay off debt 2. Make a larger down payment 3. Buy mortgage points to lower your rate 4. Consider new construction 5. Compare lenders—and make them compete for your business 6. Shop around for the best loan for you SOURCE: Article Written by Clare Trapasso
On the House: 6 Crucial Tips for Bringing Down Your Mortgage Rate
Needing places to either work from temporarily or vacation as they escaped pandemic restrictions, COVID fleers made South Florida one of their top destinations. And with them came an increased need for short-term housing, or vacation rentals. “It appears mostly in the Sunbelt states, particularly in Florida, in South Carolina, where we have beachfronts and parts of Texas,” says Ken H. Johnson, real estate economist at Florida Atlantic University. “If you were going to work from home and you were in the north or in the Midwest, and you wanted to get away from home or even work for a short while, you could do it from West Palm Beach or Miami.” At the same time, investments in short-term rentals in South Florida took off as investors sought to cash in on the soaring real estate market, according to real estate agents in South Florida. It’s a nice way for homeowners to earn some extra cash, but how does the proliferation of short-term rentals affect a community? The business end Agents witnessed the trend first-hand, and reported an uptick in people looking to buy these investment properties. “A lot of people came to the Airbnb market,” said Benjamin Gene, president of Keyes Property Management in Pompano Beach. “They saw the market and they saw that they could make almost three times the income in a vacation rental. They also saw the demand as compared to a hotel because people were scared [of public spaces.]” According to Gene, they saw an approximate 200% increase in their portfolio of vacation rentals over the course of the pandemic. Shannon Nowden, with the Nowden Group in Fort Lauderdale, has seen a similar trend over the past three years, as interest in acquiring such properties has only risen. In 2019, he said, about 10% of his clients were interested in buying a short-term rental property, while in 2020, the number jumped to 25%. By 2021, 60% of his clients were looking to get into the market. Investors in these properties are a mixed group: some are international buyers, some are people who were typically in the single-family rental market and were trying to break into the vacation rental space after seeing how profitable it was, and some are families that own a second home and want it to make money when they are not using it, agents said. “Most of these buyers that we’re seeing are coming from out of state. They are typically savvy investors who have experience in other investments like cryptocurrency and want to get in on the real estate market as well,” said Brian Peal with the Pearl Antonacci Group in Boca Raton. Recently, the market has begun to change as interest rates and home prices have both risen. “We’re still adding new investors every month. It is the slow season but we are seeing people hesitating a little bit more because the profitability is not where it was a year ago or two years ago,” Gene said, adding that while the market might be in a small flux, it will not take away from its longevity. Some cities are more conducive to short-term vacation rentals than others, with Fort Lauderdale being a big draw due to its vibrant downtown and beach access. Delray Beach is similar, with its proximity to the beach. Properties range from condos to single-family homes outside of the city to large waterfront mansions. Some real estate agents have even made short-term rental homes a specialty. The Nowden Group teaches short-term rental owners the ins and out of the business, how to upkeep their property and also serves as a property management company for these units. One of Nowden’s pitches to potential buyers is that there’s a steady flow of customers – South Florida is a vacation wonderland, and a short-term rental offers a good option for families that want to travel and not have to rent multiple hotel rooms to accommodate them, which brings shopping and spending to the local economy. The effects of the rental boom on neighborhoods, housing Though the trend may be a boon to some, various neighborhood associations in Broward aren’t happy with the uptick of short-term vacation rentals in their communities, as they say the influx of these properties bring with them a host of problems. Ric Buchanan, president of the Coral Ridge Isles Civic Association says that in the past six months in one of the quadrants of the Coral Ridge Isles neighborhood, three properties listed on Airbnb have popped up, and with it has come a host of trouble: large parties that violate the noise ordinance and improper parking on the side of the streets. “I’m concerned that it’s going to make it difficult for the average homeowner to buy something,” said Buchanan. “It’s going to make it hard for long-term residents to want to stay because their community is being eroded.” Hollywood Lakes Civic Association president Terry Cantrell said that 30% of the homes in their neighborhood are owned by an LLC, an issue that has been only growing over the years. “It’s a total disruption to a quiet neighborhood,” said Cantrell. “Nobody wants to live next door to a commercial operation. When we bought our homes here in Hollywood Lakes, we were buying in a purely residential neighborhood.” Airbnb, for its part, says on its website that guests who are reported for “throwing a disruptive party or violating our rules on gatherings of more than 16 people are subject to suspension or removal from Airbnb’s platform.” Another concern is that while South Florida suffers from a lack of housing, these properties – potential places for people to live full-time – are now essentially part of the hospitality industry. That might bring fresh customers to local shops and restaurants, but it could be exacerbating the housing shortage. “There is nobody living there year-round, so that unit is effectively off the market when we need them,” Johnson said. Source: South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.A three-year study of buyers’ incomes shows the impetus for rising home prices in many of the nation’s hottest cities. A study by Redfin created a top-10 list of metros where buyers’ median income grew the most between 2019 and 2021. Of those, four are in Florida. Nationally, buyers’ incomes grew 6.8%; in those Florida metros, it hovered around 17%. In the study, Boise, Idaho, topped the list. The typical Boise homebuyer earned $98,000 in 2021, up 24.1% from 2019. Boise experienced the biggest homebuyer income increase of the 100 most populous U.S. metros mostly because remote workers moved in from pricey coastal job centers during the pandemic. Buyers’ median income growth, 2019-2021: Top 10 metros Boise, Idaho: 24.1% growth to $98,000 income in 2021 (home prices rose 53%) Austin, Texas: 19.1% growth to $137,000 (home prices rose 48%) Cape Coral: 18.5% growth to $96,000 (home prices rose 48%) North Port, Florida: 18.5% growth to $109,000 (home prices rose 47%) West Palm Beach: 17.0% growth to $110,000 (home prices rose 33%) Miami: 16.9% growth to $104,000 (home prices rose 38%) Phoenix, Arizona: 15.9% growth to $95,000 (home prices rose 48%) Stockton, California: 15.3% growth to $113,000 (home prices rose 34%) Tacoma, Washington: 15.1% growth to $107,000 (home prices rose 39%) Salt Lake City, Utah: 13.8% growth to $91,000 (home prices rose 41%) Nationally, buyers’ median incomes rose 6.8% to $94,000, and median home-price growth was 29%, according to the study According to Redfin’s economists, the outsized income increases in those places – all popular migration destinations – are due largely to relocating remote workers with high hometown salaries. An influx of people also intensified competition for a limited supply of homes, with local buyers largely unsuccessful as they competed with out-of-towners. The average out-of-towner moving to Miami in 2021, for example, had 25% more to spend on a home than the average local resident. “For white-collar workers earning high salaries, remote work is a huge financial boon. It enables them to move from a tech center like San Francisco to a more affordable part of the country like Boise or Salt Lake City, get more home for their money and save some for a rainy day,” says Redfin Senior Economist Sheharyar Bokhari. However, it “can have the opposite effect on locals in those destinations – especially renters – who are watching from the sidelines as home prices skyrocket while their income stays mostly the same.” Pandemic boomtowns starting to slow Boise, Austin, Cape Coral, North Port, Phoenix and Tacoma are among the 20 housing markets that cooled fastest in the first half of 2022. And Boise, Cape Coral, North Port, West Palm Beach, Miami, Stockton and Salt Lake City are among the 25 housing markets most susceptible to home-price declines if the U.S. enters a recession. But even though they’re susceptible to a recession-driven downturn, these places are unlikely to see housing-market crashes precisely because homebuyers there have relatively high incomes. Source: Article Written By Kerry Smith (AUGUST 4, 2022), Fla. – July consumer confidence among Floridians increased four-tenths of a point to 61.4 from June’s revised figure of 61, a trend that also occurred nationally. Among the five components that make up the index, two increased, two remained unchanged and one decreased. Current conditions: Floridians’ opinions about current economic conditions were mixed. Views of personal financial situations now compared with a year ago decreased slightly by five-tenths of a point, from 53.8 to 53.3. On the other hand, opinions on whether it’s a good time to buy a major household item like an appliance increased 1.5 points, from 51.1 to 52.6. However, those hit hardest by inflation – households making $50,000 or less – were a bit more pessimistic. Future expectations: While Floridians’ attitudes about 2023 haven’t changed much, they’re a bit more excited about the U.S. economy five years from now. Expectations of personal finances one year from now stayed at 76.1 month-to-month. Similarly, expectations about U.S. economic conditions over the next year were unchanged at 57.8. However, the outlook of U.S. economic conditions over the next five years increased 1.1 points from 66.3 to 67.4. though lower-income Floridians with incomes less than $50,000 were, again, a bit more pessimistic. “Floridians are slightly more optimistic in July, but despite this positive change, confidence remains low at levels that are comparable to those observed during the Great Recession,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “It is noteworthy that Floridians with an annual income under $50,000 reported more pessimistic views in four of the five components that make up the index. This is not surprising, considering the rising cost of housing, groceries and gasoline, which account for a large portion of their budgets,” he says. “Inflation increased 9.1% from last year in June, the fastest pace since the early 1980s, indicating that soaring prices will remain as one of the major threats to the economy in the coming months.” Job gains remained strong. According to the Florida Department of Economic Opportunity, Florida’s unemployment rate declined two-tenths of a percentage point to 2.8% in June. Moreover, the state gained 453,600 non-agricultural jobs over the year with all ten major industries experiencing positive gains. Similarly, the U.S. labor market has remained strong. “However, the strong labor market coupled with elevated inflation will keep the Fed on track to approve further increases in interest rates, raising borrowing costs that are likely to dampen spending, and therefore increasing the risk of a recession,” says Sandoval. “Looking forward, we expect consumer confidence to remain depressed in the months ahead.” UF’s index is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150. SOURCE: Article Written By Kerry Smith (AUGUST 2, 2022), Fla. – The Florida Office of Insurance Regulation (OIR) issued a report July 1 that showed homeowners in different parts of the state pay widely varying amounts for property insurance. Average premiums for homeowners by county Monroe: $6,729 Miami-Dade: $5,093 Palm Beach: $4,811 Broward: $4,802 Martin: $4,373 Collier: $3,928 Franklin: $3,849 Walton: $3,603 Indian River: $3,144 Gulf: $2,787 Okaloosa: $2,782 Pinellas: $2,728 Escambia: $2,681 Brevard: $2,568 Santa Rosa: $2,535 Glades: $2,528 Okeechobee: $2,528 Bay: $2,519 Lee: $2,515 St. Lucie: $2,509 Sarasota: $2,470 Seminole: $2,459 Orange: $2,440 Hendry: $2,342 Hillsborough: $2,320 Calhoun: $2,317 DeSoto: $2,296 Hardee: $2,273 Charlotte: $2,201 Manatee: $2,144 St. Johns: $2,135 Nassau: $2,122 Liberty: $2,093 Washington: $2,093 Holmes: $2,092 Lafayette: $2,088 Jackson: $2,039 Volusia: $2,036 Dixie: $2,031 Jefferson: $2,013 Osceola: $2,005 Polk: $1,945 Duval: $1,943 Levy: $1,938 Taylor: $1,935 Madison: $1,934 Highlands: $1,897 Suwannee: $1,887 Gadsden: $1,869 Pasco: $1,859 Flagler: $1,847 Leon: $1,832 Union: $1,815 Hamilton: $1,805 Clay: $1,787 Putnam: $1,765 Bradford: $1,750 Wakulla: $1,749 Gilchrist: $1,734 Alachua: $1,733 Lake: $1,731 Columbia: $1,712 Citrus: $1,711 Hernando: $1,646 Marion: $1,585 Baker: $1,542 Sumter: $1,438 Note: Averages are based on data from the first quarter of 2022 Source: (JULY 28, 2022) Northeast Florida Association of Realtors (NEFAR) says single-family home sales in June showed the first signs of stabilizing following constant monthly increases for more than a year. Reasons for the slowing sales? Inflation and rising mortgage rates. Putnam, Clay and Baker counties saw median home prices increase, while they declined by $28,050 in St. Johns and by $18,975 in Nassau counties. In Duval County, the median price rose by $673. Overall, the median price of a single-family home in Northeast Florida’s six-county region is at a record high of $400,000. Sellers received 100.6% of their asking price in June, though that’s down slightly from 101% in May. Asking prices fell slightly in Duval, Clay, St. Johns and Nassau counties. Active inventory, meanwhile, increased in all six counties, as did the month’s supply of homes for sale. For the first time this year, there is a three-month supply in Baker and Putnam counties. Mark Rosener, 2022 NEFAR president says sellers still have opportunities to make money, but prices need to be attractive to buyers. Sales fell 4.1% in June while pending sales dropped 13.2%, but NEFAR says sales of condominiums and townhouses increased by 46%. The future for newly constructed homes slowed down a bit too, as the number of single-family building permits declined for the third consecutive month. Data from the Northeast Florida Builders Association (NEFBA) revealed that Duval, Clay, Nassau and St. Johns counties issued 1,193 permits in June, down from 1,195 in May and 1,208 in April. Despite the declines in permits, however, 2022 continues to be an active year, with numbers 31% higher than in 2020, notes NEFBA Executive Officer Jessie Spradley. SOURCE: Jacksonville Daily Record (07/22/22) Macdonald, DanTALLAHASSEE, Fla. – Florida regulators scrambled Thursday after they said a financial-ratings agency notified about 17 property-insurance companies of potential ratings downgrades. Insurance Commissioner David Altmaier and state Chief Financial Officer Jimmy Patronis questioned the ratings agency, Demotech, Inc., and warned that such widespread downgrades could affect homeowners across the state. The ratings are important for homeowners with loans owned by Fannie Mae or Freddie Mac because the lending giants require property insurers to maintain an adequate financial rating. If the rating isn’t considered adequate, homeowners must find other coverage. So far, the insurers have only been warned. In letters Thursday to leaders of the mortgage-finance giants and the director of the Federal Housing Finance Agency (FHFA), Patronis criticized Demotech and the possibility that downgrades would lead to insurers not meeting the ratings requirements and, as a result, creating problems for policyholders’ mortgages. “If (Fannie Mae and Freddie Mac) de-authorized a sizeable percentage of Florida’s insurers based on the dubious ratings of one company, it would create financial chaos for millions of Floridians,” Patronis wrote. The state Office of Insurance Regulation late Thursday afternoon released Patronis’ letters and a letter that Altmaier wrote to Demotech President Joseph Petrelli. The documents did not name insurers that could face downgrades, with Altmaier saying “approximately 17” could be affected. Downgrades would add to existing problems in the state’s property-insurance market, as many carriers have dropped customers and sought major rate increases because of financial losses. Four property insurers have been declared insolvent since late February, and thousands of policies a week pour into the state-backed Citizens Property Insurance Corp. Gov. Ron DeSantis called a special legislative session in May to try to help stem the problems. While lawmakers made a series of changes, they acknowledged that the market would not be fixed quickly. In a June 30 news release, Demotech said it was continuing to “review, analyze, and evaluate Q1 (first quarter) 2022 operating results, catastrophe reinsurance programs, disaster recovery plans, catastrophe response plans, the legislation emerging from the special session at the end of May 2022, and other considerations. These factors, and others, influence Demotech’s quarterly assessment of financial stability ratings assigned to carriers writing residential property insurance in Florida.” But in a three-page letter Thursday to Petrelli, Altmaier raised questions about issues such as Demotech’s ratings methodology. “Given the potential impact of Demotech’s financial ratings, OIR (the Office of Insurance Regulation) believes Demotech should perform a more comprehensive review, using consistent standards, of the proposed ratings prior to their effective date,” Altmaier wrote. “Additionally, in the interest of stabilizing the private market and ensuring companies have all necessary information to take appropriate corrective action, we strongly encourage Demotech to clearly communicate its rating standards and methodology prior to these ratings becoming effective.” SOURCE: Article written by Jim Saunders(JULY 22, 2022) housing starts fell 2.0% to a seasonally adjusted annual rate of 1.56 million units in June from an upwardly revised reading the previous month, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. A June reading of 1.56 million housing starts represents the number that would begin development if June’s pace continued for a full year. Within the overall number, single-family starts decreased 8.1% in June, to a 982,000 seasonally adjusted annual rate – its slowest pace since June 2020. The multifamily sector, which includes apartment buildings and condos, increased 10.3% to an annualized 577,000 pace. “Single-family starts are retreating on higher construction costs and interest rates, and this decline is reflected in our latest builder surveys, which show a steep drop in builder sentiment for the single-family market,” says Jerry Konter. “Builders are reporting weakening traffic as housing affordability declines.” “While the multifamily market remains strong on solid rental housing demand, the softening of single-family construction data should send a strong signal to the Federal Reserve that tighter financial conditions are producing a housing downturn,” says NAHB Chief Economist Robert Dietz. “Price growth will slow significantly this year – but a housing deficit relative to demographic need will persist through this ongoing cyclical downturn.” On a regional and year-to-date basis, combined single-family and multifamily starts are 4.4% lower in the Northeast, 4.7% higher in the Midwest, 11.1% higher in the South and 0.4% lower in the West. Overall permits – an indication of future building activity – decreased 0.6% to a 1.69 million unit annualized rate in June, with single-family permits down 8.0%. Multifamily permits increased 11.5%. Looking at regional permit data on a year-to-date basis, permits are 5.1% lower in the Northeast, 2.5% higher in the Midwest, 2.9% higher in the South and 3.0% higher in the West. Source: Article written by Kerry Smith (JULY 19, 2022) years after the onset of the COVID-19 pandemic, there are signs of growing confidence in Central Florida’s commercial real estate market as businesses continue to bring employees back to the office and resume more normal operations. While there remains a record amount of available office space on the market, asking rates in Orlando are up 4.5% over the previous year and rents (ranging from $25 to $27 per square foot) are the highest in the city’s history. John Gilbert, managing director for JLL’s Orlando office, provided some observations about Central Florida’s office market: Local vs. National: “What’s interesting about the Central Florida office market post-pandemic is that many local firms and businesses have already made their return to the office with most local companies being back in the office for about 18 months now. It is the large global or national Fortune 500 companies headquartered out of Orlando that are taking a more conservative approach to returning to an office setting.” Downtown: “Downtown Orlando’s office market is very busy right now, where we’re seeing a lot of leasing activity. We are seeing an increase in new office requirements from companies looking to upgrade their office space and building. We’re also seeing landlords make significant investments in upgrading their office properties, particularly the common areas and project amenities in order to attract these new office users.” Amenities: “When tenants are touring for office space, they are looking at buildings where their employees will enjoy coming to work. The office properties that are more heavily amenitized with cafes or restaurants, fitness centers, outdoor spaces and other unique amenities are generating more tenant interest because companies want an environment where their employees will be excited to work.” Source: Article Written by Amy Keller (6/30/2022) PALM BEACH, Fla. – The specter of Champlain Towers South came in an email alert this month for residents of a West Palm Beach waterside condominium. Insurance on the 12-story building across from the Lake Worth Lagoon increased 82%, requiring a special meeting to hike the budget and jack up dues. It was a blow for the association, which had planned for just a 25% rate jump on top of a 25% increase the previous year. “Everyone is shocked,” said Mary McSwain, who bought her one-bedroom unit in the 51-year-old Portofino South Condominium in January. “I’m just getting near retirement and I thought this was going to be my dream place but I’m getting priced out.” McSwain, 67, said her dues are going from $914 a month to $1,347 – a monetary burden that means she will work more and longer instead of scaling back her job as an attorney. While it’s impossible to tease out exactly how much of the insurance increase was a reaction to the collapse in Surfside, Portofino property manager Robert Gardner said “of course” some of it is a consequence of the tragedy that killed 98 people in the early morning darkness of June 24, 2021. Insurers in general statewide were already on the ropes before the tower fell, the collapse was a knock-down punch. Gardner had just three companies willing to give him a quote after the association got notices its insurance would not be renewed under the same terms. The reasons for denials ran the gamut – the building’s too old, it has cast iron pipes, there’s no sprinkler system, the roof is 21 years old. “It goes on and on,” Gardner said. “It’s just nuts right now.” And it’s likely to get more expensive for owners under the new condo law approved during a special legislative session. The new law took effect when Gov. Ron DeSantis signed it May 26, but most safety provisions do not kick in until late 2024. It requires maintenance accountability measures on older condos three stories or higher, such as engineering inspections and dedicated reserves to pay for fixes. For the 140-unit Portofino South, the insurance pinch is first. And it comes as the Portofino owners are looking at another hit, too. Unrelated to the Champlain Towers collapse, Portofino also must by law install a sprinkler system by Jan. 1, 2024 – an expense that will cost at least $7 million. The new, post-Champlain law requires a structural integrity reserve study to determine how much money is needed for future major repairs to be completed by Dec. 31, 2024. Following completion of the report, condo boards must reserve funds for projects identified in the report and cannot use those reserves for other purposes. West Palm Beach attorney Michael Gelfand, who served on the Condominium Law and Policy Life Safety Advisory Task Force set up after the Surfside collapse, said there is a concern people will not be able to afford what is coming. Years of lax state oversight, weak regulations, and volunteer condo boards reluctant to levy heavy dues on their friends and neighbors have allowed buildings to deteriorate, he said. Champlain Towers South had about $706,000 in its reserves as of January 2021, according to a review the year before by the company Association Reserves. But it needed more than $10 million for projected repairs. “After decades, the real cost of housing will be recognized for those who actually own and occupy condominiums,” Gelfand said. “If people can’t afford it, they will have to move. That is not an easy thing to say, but that is what it comes down to.” SOURCE: Copyright 2022 Palm Beach Newspapers, Inc. Kimberly Miller is a veteran journalist for The Palm Beach Post, part of the USA Today Network of Florida.