DECEMBER 2019
Winter IS the Best time to Buy a Home.
According to ATTOM Data Analysis, buyers willing to close on a home purchase the day after Christmas realize the biggest discount below full market value of any day in the year. This analysis of more than 23 million single family home and condo sales over the past six years is evidence of the continuation of a hot sellers' market. But do not expect the money to make much of a difference. A few billion dollars does not buy much in the states punitively expensive housing market. The biggest question is the one California has long wrestled with: how to get much-needed housing built when local governments and homeowners do everything they can to prevent it.
Closing on a home purchase the day after Christmas or on New Year's Eve can be one of the most financially beneficial holiday season gifts you can get. This is a far cry from buying during June, when you are likely paying about a 7 percent premium.
Holiday & Winter Fire Safety
Help keep your loved ones and your home safe during the holidays with these smart precautions:
1. Check holiday light strands for damaged or broken wires and plugs.
2. Enjoy indoor lights only while someone is home and turn them off before going to bed.
3. Keep live Christmas trees in a sturdy, water-filled stand and check daily for dehydration. Dried-out trees are dangerous and should be discarded immediately.
4. Always use non-flammable decorations both indoors and outdoors.
5. Be sure to keep space heaters away from bedding, curtains, and paper or anything flammable. Never leave space heaters unattended while in use.
6. Children should not have access to or be allowed to use matches, lighters or candles.
7. Candles add lovely ambience to your holiday home. They need to be placed in stable holders and kept away from flammable items, drafts, pets and children or use an LED candle for peace of mind.
8. Busy with holiday cooking and baking? Kitchen fires are the leading cause of house fires. Keep an all-purpose fire extinguisher within easy reach and know how to use it.
Conforming Loan Limit Increased to $510,400
The conforming loan limit for most of the US will, quite predictably, move higher on January 1. The Federal Housing Finance Agency announced recently that the maximum origination balance for loans purchased or acquired by the GSEs Fannie Mae and Freddie Mac during 2020 will increase to $510,400. The conforming limit for 2019 is $484,350.
In areas where the median home value is 115 percent of the new baseline loan limit the confirming limit is higher than that baseline but cannot exceed 150% of it. That calculation caps the loan limit for these "high cost" areas at $765,000, or 150% of $510,400. The high cost limit this year is $726,525.
The Housing and Economic Recovery Act requires that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average US home price. There are higher limits for properties that contain two, three or four units. The baseline limits for multi-unit properties range from $653,550 to $981,700.
FHA and VA loan limits typically are identical to those issues for Fannie Mae and Freddie Mac but have not yet been announced.
Home Sellers to Remain on the Sidelines for 2020
A Realtor.com forecast predicts inventory to evaporate making it more challenging for buyers to find a home despite attractive interest rates.
The forecast predicts that despite some relief from new construction, moderating home prices and relatively low interest rates, first-time buyers will continue to struggle with affordability. Sellers will contend with flattening price growth and slowing activity. These trends will drive existing home sales down 1.8 percent to 5.23 million.
Highlights of the realtor.com 2020 forecast include:
Home prices will flatten, increasing just 0.8% nationwide. Prices will decline in more than 25% of the 100 largest metros, including Chicago, Dallas, Las Vegas, Miami and San Francisco.
Inventory shortages will prevail and could reach historic lows, especially the entry-level category. Mortgage rates will remain reasonable, averaging 3.85% throughout the year. Affordability will remain a key driver for buyers, benefitting mid-sized markets.
Millennials-with the oldest members approaching 40 and the biggest cohort turning 30 in 2020-will surpass 50 percent of all home purchase mortgages.
With little incentive to sell, baby boomers will continue to hold onto their homes, while Gen X is more likely to upsize, freeing up some entry level inventory.
"Housing remains a solid foundation for the U.S. economy going into 2020," said George Ratiu, senior economist at realtor.com. "Although economic output is expected to soften-influenced by clouds of uncertainty in the global outlook, business investment and trade-real estate fundamentals remain entangled in a lattice of continuing demand, tight supply and disciplined financial underwriting. Accordingly, 2020 will prove to be the most challenging year for buyers, not because of what they can afford, but rather what they can find."