Things to do 4-11-19

Real Estate update. For more info see www.fuscorealty.net

Mortgage Payments Drop $50 per Month on a Median Priced Home

Listings Under Contract Up 19% in 5 Weeks!

For Buyers:

Buyers got a break last month as 30-year mortgage rates dropped significantly from an average of 4.41% to 4.08%, which is the lowest they have been since January 2018. On a $267,000 home (the median sales price in Greater Phoenix) the drop equated to nearly $50 per month in savings on principle and interest, which was enough to get many buyers off the couch and looking for homes. This rate drop combined with an increased conventional loan limit up to $484K and a 32% increase in weekly seller price reductions meant that price ranges between $200K all the way up to $800K saw a combined 19% increase in contracts written over the last 5 weeks. Contract activity is expected to increase at this time of year anyway due to seasonality, but last year over the same 5 weeks it only increased 8.6%. For buyers who are still waiting for prices to begin declining, their wait just got longer.

For Sellers:

The drop in mortgage rates could not have come at a better time for sellers. Up until 6 weeks ago the negotiating advantage sellers have been enjoying for years in Greater Phoenix had weakened to the point where the market was on track to enter balance within a matter of months and price appreciation would have begun to slow even more. However by April 4th the average 30-year mortgage rate (as reported by Freddie Mac) had dropped to a 15-month low. This spurred buyer activity and resulted in Listings Under Contract, which were 10.2% below 2018 last month, to sharply increase and surpass 2018’s April count by 0.8%. Currently sales volume is down 9.6% from last April, however when these contracts close escrow over the next 4-6 weeks May and June should fare much better. Don’t get too excited though, the seller market is still much weaker than last year. Affordability and demand were helped by this interest rate drop but could quickly be negated as prices continue to rise. Sellers still need to be mindful of their asking price to get under contract before buyer activity seasonally begins to decline between May and the end of the year.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report

©2019 Cromford Associates LLC and Tamboer Consulting LLC

Consider These Creative Ways to Spend Your Tax Refund.

Consider These Creative Ways to Spend Your Tax Refund. Tax season is, perhaps, the one time of year that nearly everyone dreads. However, many people enjoy a silver lining in the form of a tax refund, which may provide an unexpected (although typically minor) infusion of cash. While it may be tempting to spend your tax refund on a temporary pleasure, such as a shopping spree or dinner at an expensive restaurant, using the extra money strategically can yield future benefits.

Here are a few creative ways to use your tax refund—that you probably won’t hear about from your financial advisor: - Start a “freedom fund.” Do you ever have days when you just want to quit your job and take some time to regroup until you figure out your next step? Should you ever decide to do so, a freedom fund is a savings account designed to financially sustain you. Ideally, it should be separate from your regular savings and left untouched until you need it. At the very least, a freedom fund will provide you with peace of mind that you have alternatives if your job becomes unbearable. - Invest in personal development. Between work, family, and all the other stresses of life, many people put personal development on the back burner. Personal development may include taking steps to improve your career in the long-term by cultivating your skill set, reaching fitness goals, pursuing a hobby or personal passion, or simply taking more time for relaxation and self-care. Regardless of what personal development means to you, the extra money from your tax refund may be used to help advance your goals. For example, you may consider using the funds to take a course, obtain a certification, or hire a life or career coach. - Check off an item on your bucket list. While tackling the items on your bucket list may be a splurge, it is a splurge that is strategically designed to fulfill important goals that you’ve set for your life. By applying your tax refund toward your dream vacation, a special item that you’d like to buy, or an experience you want to have, you will ensure that the money is spent on something meaningful to you rather than an indulgence you’ll ultimately regret. - Cultivate some goodwill. If you are interested in investing your tax refund in the joy of giving back, there are countless options for doing so. In addition to standard charities, microloans offer a great way to help someone else—either domestically or abroad—achieve their dreams. Microloans are small, short-term loans with low interest rates that are offered to entrepreneurs who may have trouble accessing traditional loans due to a lack of collateral or credit history. Source: lifeandmyfinances.com