You don’t have to be an accomplished art collector, historian, or aficionado to curate and hang a well-crafted, visually appealing gallery at home. Hanging a gallery wall will give your collection of photos, drawings, and other works of art a place to be displayed. It can also give life to bland stretches of empty wall space, helping to tie together the spaces in your home. So, before you touch nail to drywall, keep the following information in mind to hang the perfect gallery wall for your home.
How to Create a Gallery Wall at Home
The first step to hanging a gallery wall at home is to assemble your artwork. Once you’ve gathered the artwork you intend to hang, take measurements of each piece to determine their framing dimensions. You’ll have an easier time finding frames for the pieces in your art collection with common dimensions—such as 5” x 7” or 8” x 10.” For artwork with uncommon dimensions, you can either shop around for custom framing or simply buy a larger frame with the appropriate matting to fit the artwork. Applying a mat can also give your pieces an elevated, professional look. Once you’ve taken your measurements, it’s time to shop for supplies.
Gather your gallery wall essentials first: a hammer, nails, hooks, and picture hangers. If you have a large piece of artwork in your collection, be sure to find a hanging apparatus certified to hold its weight. You may find it helpful to use paper and tape to “sketch” your desired layout on the wall before you start hanging, and while you’re hanging, use a level or framing square to determine when your artwork is level. During installation, start in the center of your wall space and work towards the edges. It may also be helpful to hang larger works first and work your way down in size. This way, if you need to make adjustments, you can easily adjust your smaller artworks around a focal point.
A living room gallery wall may be just the remedy for that large, blank space behind your couch. Because living room walls tend to be one of the larger surface areas in a home, it is a fitting place for large pieces of art and intricate collages of frames. Consider how the proportions of your gallery wall can create balance in your living room.
With the recent increase in remote work, home offices are more important now than ever before. Keeping your home office fresh and lively is the key to staying productive and inspired while working from home, and a gallery wall can help to do exactly that. Experiment with different combinations of artwork, photos of friends and family, and other cherished collectibles.
Hanging a gallery wall on the space above your headboard or on an adjacent wall is a quick and easy way to upgrade your bedroom. Fill the space with inspiring paintings, memorable photos, motivational quotes, or whatever artwork best compliments the color and décor throughout the room.
These are just a few of the ways you can incorporate a gallery wall into your home. Hanging a gallery wall in a children’s playroom can be a fun way to highlight their artwork. Curating a cascading gallery along a staircase between floors will create a flow between the levels in your home. The options are endless.
Some expenses that come with buying a home are easier to account for than others. Knowing the costs associated with buying a home will not only help you budget accordingly but will also pinpoint which homes are truly affordable for you. In no particular order, here are ten costs you can expect to encounter when buying a home.
10 Costs Associated with Buying a Home
1. Down payment
The down payment is a lump sum paid by the buyer upfront. The exact amount required varies by lender and loan type, but in general, a substantial down payment will help decrease your monthly payments. Making a traditional twenty percent down payment means less risk for your lender, opening the door for lower interest rates and avoiding the need for private mortgage insurance (PMI). But if you can’t come up with that much, it’s not a dead end. PMI and its various alternatives can help close the gap and provide a path to homeownership.
2. Homeowners insurance
Once you’ve purchased a home, there’s no time to delay in protecting it. A standard homeowners insurance policy typically covers your home, your belongings, injury or property damage to others, and any living expenses in the event of an insured disaster that renders your home unlivable. Homeowners insurance policies provide coverage for the owner(s) living on the property. If you plan on renting out your home or dwellings on your property, you’ll need to purchase separate landlord insurance to cover your tenants.
3. Mortgage payment
There’s a give and take with mortgage payments—the more you pay down your home, the more equity you build. Unless you’re making an all-cash offer, you can expect to budget for mortgage payments. Use the general rule that your house payments should be roughly 25% of your take-home pay. Use an online mortgage calculator to get an idea of what you can afford.
4. Closing costs
Before your home purchase is a done deal, you can expect to pay closing costs, which usually total somewhere between 2-5% of the total mortgage value. The terms of the purchase agreement will dictate how you and the seller will split the closing costs. They include but are not limited to underwriting fees, credit check fees, title insurance and title search, escrow fees, and more. These expenses can add up, so be sure you’re prepared when it comes time for closing day.
5. HOA fees
For those who are buying in developments governed by a homeowner’s association or are purchasing a townhouse or condo, you’ll likely have to pay HOA fees on top of your monthly mortgage payment. HOA fees, usually paid monthly, go towards maintaining the shared spaces, property, and amenities within the community. Before moving forward with your purchase, determine if the property is under the governance of a homeowner’s association and the cost of the fees.
6. Property taxes
Your annual property tax is calculated by multiplying the assessed value of your home by the tax rate. This figure is broken down into monthly installments and added on top of your mortgage payment. Because property taxes are based on the assessed value of your home, they are subject to change. If the assessed value of your home increases over time, so will your property taxes.
7. Repairs and remodeling
Unless you’re buying new construction, your new home will likely need repairs. Even after having completed a thorough home inspection, underestimating repairs expenses can be a costly mistake. Certain repairs may require the help of a professional, and while hiring them will ensure your home is in good hands, their services come with a price. If you’re buying with the intention of remodeling, remember to leave room for the other costs on this list before breaking ground on any projects.
8. Appraisal and inspection fees
Not only will a home inspection allow you to negotiate repairs and concessions with the seller, but it will also help you budget for the home repairs you’ll need to make in the future. An appraisal, carried out by a licensed third party, will determine your home’s appraised value—or in other words, how much the bank thinks your home is worth. Both fees can cost upwards of a few hundred dollars each.
9. Utilities
One of the first steps you’ll take in your new home is setting up your utilities. In general, the larger the property the more you can expect to pay in utilities. Electricity, gas, water, sewer, and trash and recycling pickup are just a few of the utilities you can expect to arrange for your new home. Get an early start on this list to avoid a situation where you need heat or running water, only to realize they haven’t been set up yet.
10. Moving costs
Often buyers can be so taken with the prospect of living in their new home that they forget to account for the costs it will take to move there. Set a timeline, take inventory of the items in your home, and stay organized throughout the process to make the moving process as efficient as possible. For more moving tips, read our guide on how to Make Your Move.
To understand more about how to navigate the buying process, give me a call.
This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.
Hello there! I’m Windermere Real Estate’s Chief Economist, Matthew Gardner, and welcome to the latest episode of Mondays with Matthew.
Before I get started, I wanted to let you know that this will be the final episode of Monday with Matthew for 2021 as I’m going to be taking Christmas off. So it’s time to offer you my forecasts for the U.S. economy and the country’s housing market in 2022.
Although many people – including myself – had hoped that COVID-19 would have become a somewhat distant memory by now, and that the economy would have recovered this was – sadly – not to be the case, and the pandemic’s influence on the economy is still being felt and all the datasets I track tell me that, although we are certainly healing, COVID continues to act as a drag on economic growth and I expect that to continue through the spring of next year – if not a little longer.
Economic Recovery & Growth
And it’s because of this that I – along with many other economists – have spent the last few months lowering our forecasts for economic growth – at least through the middle of 2022. So, let’s look at this a little closer.
Here is my forecast for economic growth through the end of next year and you will note that, even though I am cautious in regard to the economy as we move through the winter and into 2022, I am still expecting to see a fairly decent bounce back in the fourth quarter of this year following the very disappointing rate that we saw in Q-3.
And on an annualized basis, I believe that the economy will have expanded by just shy of 5% this year and come in a little below 4% in 2022.
Simply put, the impacts of COVID-19 are going to continue to act as a drag on virus sensitive consumer services next year and ongoing supply chain issues will also delay inventory restocking. Both of these impacts have a depressing effect, in more ways than one, on economic growth, but I don’t see any chance that we will fall back into a recession.
Looking at the employment picture this chart shows my forecast for average monthly growth in jobs during a quarter and to give you some context, over the last decade or so the country has added an average of around 200,000 jobs per month during any one quarter and my forecast is for more robust employment growth as we move through 2022 and, if correct, I expect to see the country return to pre-COVID employment levels in the second half of the year.
And with jobs continuing to return I’m looking for the unemployment rate to continue trending lower and breaking south of 4% during the final quarter of the year. With the expiration of enhanced unemployment benefits – in concert with wages rising significantly in many face-to-face industries such as leisure and hospitality – prospects for people currently unemployed are looking rather good. That said, there are still millions of unemployed Americans who are not looking for work even with wages rising, the labor force still down by 3 million from its pre-pandemic peak, and this is worrying as businesses continue to have a hard time finding employees which raises the expectation that inflation will remain higher for longer than I would have liked to see.
Measures of Inflation
And that leads nicely into my final economic forecast and that is my outlook for inflation. As we have discussed, supply chain issues and labor shortages have increased prices significantly and this top chart shows annual changes in all consumer prices which I expect to remain around 5% until next spring, before gradually dropping down to below 3% by the end of the year.
But the core inflation rate – which excludes the volatile food and energy sectors – won’t peak until early next year before it too starts to gradually pull back and, at these levels, the Federal Reserve will undoubtedly have started to raise interest rates to counteract inflationary pressures. This is not pretty, but I absolutely do not believe that we are in some sort of inflationary spiral, or that “stagflation” will raise its ugly head again.
U.S. Housing Market
Okay! Now it’s time to turn our attention to the U.S. housing market which was a beacon of hope during the pandemic period and, given the massive spike in demand that started last June, I’m looking for a little more than 6 million existing homes will have changed hands in 2021, but I don’t see this level increasing in 2022 – mainly due to ongoing supply limitations as well as rising affordability issues, and I’m therefore forecasting sales to pull back – albeit very modestly – next year. That said, the country has never seen more than 6 million home selling in a single year since records were first kept so the number is still very impressive.
And with the market as tight as it has been so far this year, it shouldn’t be any surprise to see median sale prices skyrocketing and, even though we have 3 more months of sales data yet to be released, I still anticipate prices will have risen by almost 16 and a half % in 2021- a quite remarkable number. This pace of appreciation has never been seen before. In fact, the closest was back in 2005 – when the housing bubble was inflating rapidly – but even then, prices only rose by 12.2%.
But, as I mentioned in my sales forecast, this pace of growth is unsustainable and I am expecting to see some of the heat to come off the market next year but, a growth rate of 7.3% is certainly nothing to sniff at.
There are three major reasons why we will see the pace of growth slow. I have already mentioned my concerns regarding housing affordability, but mortgage rates and new supply will both influence the slowdown in sales and price growth in the resale arena.
Although I do not prepare a forecast for housing affordability, this is my where I expect to see mortgage rates through the end of next year and I am looking for them to continue “stair-stepping” higher but still ending 2022 below 4% – very low by historic standards given that the long-term average for a conventional 30-year mortgage is somewhere around 7 1/2%.
Obviously, as rates notch higher that starts to compress price growth as it puts a lower ceiling on how much a buyer can afford to pay for a home.
And slowing growth in existing home prices and sales will also be a function of additional supply and this chart shows my forecast for single-family starts this year and next. I expect more than a million homes to start construction in 2022 – continuing the trend that started in mid-2020 – but I am sure that some of you may be asking yourselves that if starts are already robust, how have existing home sales been able to increase so significantly if there has been solid supply coming from homebuilders – and that would be a great question.
And I would answer this by telling you that the way the Census gathers data on start is to count the number of home foundations that have been poured, but vertical construction has not necessarily started. And what we have been seeing is a lot of foundations but not so many homes actually being built – and we know this by looking at the number of homes that are for sale but have yet to be started. So, it’s important to look at a separate number that the Census Bureau also puts out which counts the number of units actually under construction, and that number has been growing significantly over the course of the last 18 months or so.
Builders have been hamstrung with rising labor and material costs which will lead new home sales this year to fall below the number seen in 2020; however, I do expect this to pick up significantly next year and my current forecast calls for 927,000 new homes to be sold in 2022.
So, there you have it, my economic and housing market forecast for 2022.
Of course, there are still a number of variables that could lead me to revise this forecast but, as an old economics professor of mine used to tell me, “Gardner, forecast well, but forecast often!”
If everything goes according to my plan, you should expect to see the housing market start to move towards some sort of balance next year, but I am afraid that it will still remain out of equilibrium until at least 2023.
And if you’re wondering, no, I don’t see a housing bubble forming and I’m also not at all concerned about homeowners currently in forbearance, but it would be silly to say that there aren’t any issues in the housing market that concern me because there are and the biggest of which is housing affordability and this will have a significant impact on the millennial generation who are continuing to get older, and they are all – well most – thinking about settling down and, possibly, having children, and I wonder how hard it will be for many of them to be able to afford to buy their first home because most really do want to become homeowners. Will builders figure out how to build to this massive pent-up demand? I guarantee you that whoever can solve this puzzle will do very, very well.
COVID-19 caused an unparalleled shock to the US economy and the rise of the delta variant has certainly impacted the speed of our recovery but, rest assured, this particular forecaster firmly believes that we will recover and that the economy will continue to grow.
Demand for ownership housing remains remarkably buoyant and, in fact, it is quite likely that demand may actually increase with the work from home paradigm that will start to gain momentum next year. It will be fascinating to watch how this impacts not just demand, but where these buyers will ultimately choose to live.
For many homeowners, their ideal bedroom is that of a minimalist sanctuary—a place where you can kick your shoes off, relax, and get some shut eye. For others, making their bedroom as cozy as possible is their idea of perfection. No matter what kind of bedroom you’re dreaming of, keep the following information in mind as you prepare to make your upgrades.
A Guide to Upgrading Your Bedroom
How much does it cost to remodel a bedroom?
The total cost to remodel a bedroom depends on the size of the room and the scope of the remodel. According to a recent nationwide report by Fixr, the national cost range to remodel a bedroom is between $14,000 and $40,000, with the national average cost being roughly $21,000. While this might sound like a lot, it includes everything from hardwood floors and painted walls to new furniture and a custom closet.
Another factor that will dictate your budget is whether you plan on doing the remodel DIY or hiring a professional. Taking a DIY approach to your bedroom upgrades will save on labor costs and allows you to complete the project on your own schedule. However, if you get in over your head on a project and things go sideways, it can be costly to fix, and you may end up having to hire a pro to get things back on track.
Before you begin your remodel, create a list of tasks and all the sub-tasks involved to assess whether they are within your skill level to DIY. Determine whether the project requires a permit and check your local zoning regulations before making any additions or extensions to your bedroom.
Which bedroom projects are best for home value?
Adding a bedroom or converting a space into a bedroom can increase your home’s value. That’s because you increase the livable square footage while also making it more appealing to a wider variety of buyers. If your home has fewer bedrooms than other recently sold homes in your area, a bedroom addition may allow you to list at a more competitive price. Talk with your agent to get an idea of what types of upgrades buyers in your area are paying top-dollar for.
Simple Bedroom Upgrades
With costs for a small bedroom remodel averaging up to $20,000, a full-scale renovation may not be in the cards for every homeowner. Fortunately, there are plenty of budget-friendly ways to rejuvenate your bedroom. Here are a few tips to get you started:
Upgrade your décor: Appealing to the senses will help transform your bedroom in a snap. Add texture by swapping out your bed spread, pillows, and blankets. Go for plush to make it feel like you’re sleeping on a cloud or try vintage elements like knit fabrics for a more traditional comfort. Add natural elements like wood and stone to create an earthy atmosphere. Essential oils and scented candles can bring some added relaxation into the space.
New hardware and lighting: A simple trip to the hardware store can change the look and feel of your bedroom. Switch out your door handles, drawer pulls, shelves, and lighting fixtures to upgrade your bedroom in the span of a few hours. Select pieces that reinforce the theme you’re going for. For an industrial vibe, select rustic metals and materials. For a minimalist look, choose sleek metals like gold and chrome.
Decorate with plants: Not only will decorating your bedroom will plants spruce up the space, but they also help to improve air quality. If you have vaulted ceilings, shop around for vertical plants and hanging gardens that can make the most of your empty wall space. If you consider yourself a beginner gardener, consider low maintenance plants like cacti and succulents.
The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.
REGIONAL ECONOMIC OVERVIEW
The emergence of the of COVID-19 Delta variant had a palpable impact on the region’s economy, which, naturally, impacted the job recovery. Employment levels in Western Washington had been picking up steam in the spring but started to slow quite dramatically over the summer. To date, the region has recovered more than 201,000 of the jobs that were lost due to the pandemic, but we appear to be in a bit of a holding pattern. That said, the ending of enhanced unemployment benefits has led many business owners to see more applicants for open positions, so I am hopeful the numbers will pick back up as we move into the winter months. The most recent data (August) shows the region’s unemployment rate at a respectable 5%, but we still have a way to go before we reach the pre-pandemic low of 3.7%. On a county level, the lowest unemployment rate was in Kitsap County (4.4%) and the highest was in Grays Harbor County (6.6%). There are still many hurdles in front of us, but I believe we will continue to add jobs and reach full employment recovery by mid-2022.
WESTERN WASHINGTON HOME SALES
❱ Sales in the third quarter rose 6.4% year over year, with a total of 27,280 homes sold. The increase matched what we saw in the second quarter of this year.
❱ I was pleased to see sales growth continue. This rise was supported by a 28.4% increase in the number of homes for sale. Listings rose the most in Grays Harbor (+62.6%), Lewis (+53.6%), and Skagit (+52.0%) counties.
❱ Sales activity was mixed. Nine counties saw year-over-year growth, but sales slowed in six counties. That said, sales were up in every county other than King and San Juan compared to the second quarter of 2021.
❱ The ratio of pending sales (demand) to active listings (supply) showed pending sales outpacing listings by a factor of 4.6. Even with the increase in the number of new listings, the market is far from balanced.
WESTERN WASHINGTON HOME PRICES
❱ Home prices rose 18.9% compared to a year ago, with an average sale price of $726,168—another all-time record.
❱ When compared to the same period a year ago, price growth was strongest in Clallam, San Juan, and Jefferson counties, but all markets saw prices rise more than 12% from a year ago.
❱ Average sale prices pulled back 1.1% compared to the second quarter of this year. Given the massive increase in value over the past few years, it is not at all surprising. The key indicator has been a softening in list prices and that naturally translates to slower price growth. This is nothing to be worried about. It simply suggests that the market may finally be heading back to some sort of balance.
❱ Relative to the second quarter of this year, all counties except San Juan (-0.1%), Island (-0.5%), and Whatcom (-0.5%) saw higher sale prices.
DAYS ON MARKET
❱ It took an average of 17 days for a home to sell in the third quarter. This was 19 fewer days than in the same quarter of 2020, and 1 fewer day than in the second quarter of this year.
❱ Mirroring the second quarter, Snohomish, Kitsap, Thurston, and Pierce counties were the tightest markets in Western Washington, with homes taking an average of 9 days to sell in Snohomish County and 11 days in the other three counties. The greatest reduction in market time compared to a year ago was in San Juan County where it took 102 fewer days for homes to sell.
❱ All counties contained in this report saw the average time on market drop from the same period a year ago, but eight counties saw market time rise from the second quarter; however, the increases were minimal.
❱ Even with inventory levels increasing in most markets, the region’s housing market remains remarkably tight. That said, I do see some of the heat dissipating and I am hopeful that if inventory levels continue rising, we will start a slow move back toward a balanced market.
CONCLUSIONS
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
Even given the speedbump that hit the region’s economy with the emergence of the Delta variant, the housing market remains remarkably resilient. Demand from buyers continues to be very strong, and modestly increasing inventory levels appear to have—at least for the time being—reduced some of the fever from the market. Mortgage rates remain very favorable, and my current forecast is for them to stay in the low- to mid-3% range until next summer. Rising inventory levels have led price growth to slow and days on market to start increasing, which may be a sign that the market is retreating from a prolonged period of exuberance.
As we move through the balance of the year, I believe demand will remain solid, but we will continue to see price growth soften as more listings compete for the buyers that are out there. That is not to say price growth will turn negative; rather it suggests that we are slowly moving back toward a more balanced market. That said, the market certainly still favors home sellers. As such, I am leaving the needle in the same position as the second quarter. I may move it a little in the direction of buyers next quarter if the current trend continues through the winter months.
ABOUT MATTHEW GARDNER
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
This video is the latest in our Monday with Matthew series with Windermere Chief Economist Matthew Gardner. Each month, he analyzes the most up-to-date U.S. housing data to keep you well-informed about what’s going on in the real estate market.
Hello there! I’m Windermere Real Estate’s Chief Economist, Matthew Gardner, and welcome to the latest episode of Mondays with Matthew.
A few weeks ago, one of my viewers on You Tube sent me a note asking when I was expecting mortgage rates to start to rise and, if I believed that they were going to go up, how fast will they rise, and what impacts will higher rates have on home prices.
Well, I would like to thank this particular viewer for the question, and it’s going to be the topic of today’s video.
How Mortgage Rates Are Set
But before we start looking at the future of mortgage rates, I was speaking to some of our interns here at the office a while ago and one of them asked me to explain how mortgage rates are set and – because this is somewhat pertinent to today’s topic – I thought that I’d take just a minute or two to explain to you how this all works.
Of course, there are a lot of factors that impact the rate that a home buyer themselves will get, and they include credit quality, loan-to-value ratios and the like, but the base rate is set not by looking at a home buyer, but at the economy itself and, specifically, the bond market – and even more specifically, the interest rate of 10-year US treasuries.
Now, if you’re asking yourself why 30-year mortgages are based off 10-year bonds and not 30-year? Well, that would be a good question, and this is the answer. You see we move, on average, every 10 years and that’s why!
Here is a chart showing the average yield – or interest rate – on 10-year treasury bills by month going back to 2010 in light blue, and the average 30-year mortgage rate in dark blue. I hope that you can see the tight relationship they have to each other.
Of course, there are times when bond yields can go down and mortgage rates rise, and vice-versa but, in general, they track each other pretty closely.
And if you’re wondering why the rates aren’t simply the same, well it’s because a treasury bond has no risk – as its backed by the US government – but there is some risk associated with a mortgage, so buyers of mortgage bonds expect a premium to be added because of this risk, and this has averaged just over 1.5% since the 30-year mortgage came into being back in the early ‘70’s.
Now, there are some people out there who think that the interest rate on 10-year treasuries doesn’t set mortgage rates, rather its better to track the interest paid on mortgage bonds and, although I do see why they might think this, the base mortgage rate is actually set by treasury yields and the interest on mortgage bonds is set using that base and adjusting it to manage the prevailing risk tolerance that investors are prepared to accept so I believe that watching movements in the interest paid on 10-year treasuries is the right way to go.
And that, in essence, is how the 30-year mortgage rate is set.
The History of Mortgage Rates
If you are a regular viewer of these videos you will now that I like to start off with some context to the subject I am addressing and this chart will show the average rate for conforming 30-year fixed rate mortgages going back to their genesis in the early 1970’s.
Back in ‘71 rates were in the mid-7% range, rising to just under 10% in ‘74, before pulling back but, as you can clearly see, they started to spiral upward in ’77, ending the decade at almost 13% and if you’re wondering what led to this massive jump, well this was because the country had entered a period of high inflation.
In the ‘70s the country was pushed into a recession basically due to an oil embargo that led to the price of oil quadrupling and that led to a period of so-called stagflation which is when inflation rises, and economic activity slows.
And in the early ‘80’s we entered a period of so-called hyperinflation, as another oil embargo was took hold and the Fed was forced to step in and raised short-term rates which led rates along the yield curve to rise and this – of course – included 10-year treasuries which hit 15.3% in the fall of 1981 and that, as we have discussed, caused mortgage rates to hit an all-time high in October of 1981 at close to 18.5%. Rates then started to pull back and
In the 90’s, rates started to trend lower but jumped again in ’94 as the Fed tightened monetary policy given the significant growth that the country was seeing, but they started to pull back in the second half of the decade, falling to the mid-6’s before notching higher in ’99.
In the 2000’s, rates dropped to 5.3% in 2003 as the housing market boomed but, as we all know, it wasn’t all unicorns & rainbows in this decade of what was then – historically low rates.
The housing crash led the Fed to jump in by cutting interest rates, but they also started a massive purchase of mortgage bonds at very low interest rates as they were happy to take a low return as long as it stabilized the housing market. As a result of their efforts, mortgage rates fell almost a full percentage point, averaging just a hair above 5 % in 2009.
Riding the wave of low bank borrowing costs, mortgage rates entered the new decade around 4.7% and continued to fall steadily, dropping to the mid-3’s by 2012. But in 2013 you can see that rates headed higher. Why? Well, a big part of this has to do with some panic in the bond market, but we will get to that shortly.
Anyway, rates went up in 2014 before dropping to 3.85% in 2015 as the market calmed down.
They rose again after the 2016 presidential election, reaching their peak at the end of 2018 and start of 2019, but still ending the decade below 4%.
As for the current decade, well, it’s all been about COVID-19.
To understand what’s happened over the past couple of years, we need to look at the weekly average rate and I am sure that you have noticed the first spike in the graph.
And it was totally due to the Coronavirus which created an unprecedented situation for all rates (not just mortgages, but US Treasuries and everything else).
You see, investors were panicking during the early stages of the pandemic, not just because the country – essentially – shut down for a brief period, but there were rumors about a thing called forbearance, and investors were panicking that they would not get paid for the mortgage bonds they held, and they did what we all do when we get worried about the economy and, specifically, our investments. They get out of their investment positions and into cash and that’s absolutely what they did, but I should add that I am not talking about them stashing dollars under the mattress. No, they moved into cash positions in financial markets, which are the most liquid, nimble place an investor in the US can be.
And with a lot of institutions and individuals getting out of bonds and not many buyers out there, what happened to rates? That’s right, they rose to attract buyers and rise they did. So much so, in fact, that on a single day in March of 2020, mortgage bonds prices changed 5 times! Quite unprecedented.
Anyway, the Fed reverted to their old playbook and went on a massive bond buying spree with the biggest ever purchase of mortgage-backed securities on Thursday March 19 but, quite remarkably, they announced the very next day that they were going to buy even more. How much more, you ask… Well, they decided to buy three times more than the record purchase they made just the day before!
And because of this, rates dropped dramatically and continued to pretty much head lower for the rest of the year and into early 2021.
But then the music stopped, as you can see in the second highlighted spike in the above graph.
You see, a special election was being held in Georgia and the bond market decided to take a conservative stance prior to the election and that led rates higher again. But the election wasn’t the only reason why rates rose.
You see, COVID 19 cases that were dropping, improved vaccine distribution appeared to be in place, there were several stronger than expected economic reports released, and progress on a fiscal stimulus package. All of these factors led rates higher because, as you know, when economic news is positive, that is actually bad for bond yields as people move back into equities and out of bonds which is obviously bad for mortgage rates as bonds need to offer a higher interest rate to attract the few buyers that were out there.
Mortgage Rate Forecast
So that’s where we are today, but what of the future?
Here is my forecast for 10-Year treasuries through the end of next year and you will see that I am looking for rates to rise gradually as we move into next year and this will lead mortgage rates to start notching higher as well.
And here is my forecast for mortgage rates. Although they should move higher, I am still not seeing rates break above 4% until 2023 at the earliest and – even as they start to increase – I really don’t see it as a major deterrent to home buyers.
But before you start to say that this is only one person’s forecast and it could be wrong, lets look at my forecast compared to some of my industry colleagues.
As you can see, we are all in a pretty tight range when it comes to forecasting the average rate this year and next.
The bottom line is that although rates will rise, they will remain very competitive when compared to historic averages and the upward trend in rates is unlikely to have any significant impact on prices. That said, many markets are already having an affordability crisis and rising rates will certainly act as an additional headwind to price growth; however, it would take a significantly greater increase in rates to negatively impact prices.
Well, I hope that you have found this month’s discussion to be interesting. As always if you have any questions or comments about this topic, please do reach out to me but, in the meantime, stay safe out there and I look forward the visiting with you all again, next month.
Windermere offices across the Western U.S. have remained committed to serving their communities in 2021, collectively raising nearly $1.5 million so far this year alone, pushing the foundation’s grand total raised since 1989 to nearly $45 million. After a successful Community Service Day in June and a first half of the year which saw over $1 million raised, Windermere offices have continued to give back this summer. Here are some recent highlights from across our network.
Windermere Utah
Windermere Utah has always been deeply rooted in its community, and 2021 has been no different. This year alone, they have hosted multiple fundraisers and supported several organizations to affect positive change in their community.
One of the greatest challenges the COVID-19 pandemic has put on schoolchildren is access to technology. After searching for a way to provide digital access to local schoolchildren, Windermere Utah came across the organization Spy Hop, based in Salt Lake City. Spy Hop is a digital media arts center that provides classes in film, music, audio, and design for students between the ages of nine and nineteen. They offer mentoring and host technology drives to provide computers for students in need through a program called the Technology Liberation Project. Windermere Utah donated $3,000 to support Spy Hop’s programs while sponsoring their technology drive in August.
The office also rallied together to support Lincoln Elementary School. As a Title I school, they cannot ask for supplies or funds, often leaving them underfunded compared to other schools in the area. Windermere Utah donated $1,000 for kids to purchase the supplies they need for the school year.
From Left to Right: Misty Medina, Laurann Turner, Lincoln Elementary Rep, Shawnee Cooper, Lincoln Elementary Rep, Michelle Adkins, Chelle Preslar, Kelly Silvestor, and Stephanie Vera
Windermere Evergreen – Evergreen, CO
Windermere Evergreen has close ties to the local Rotary Wildfire Ready program and given the prevalence of wildfires across the Western U.S. in recent years, the office was inspired to tap their Foundation resources to support local wildfire relief efforts. John Putt–managing broker at Windermere Evergreen—is a member of the Rotary Wildfire Ready leadership council. A former paramedic and firefighter, he is passionate about providing resources and education to mountain communities regarding wildfire preparedness. After trying to come up with ways to support the program, they settled on a classic method of bringing the community together—a good old tailgate party. The office donated $1,000 to support the Rotary Wildfire Ready program, and the first annual Windermere Foundation Tailgate Party saw members of the community come together from all corners of town.
The Evergreen, Colorado Rotary Wildfire Ready firetruck.
Windermere Spokane – Spokane, WA
After hosting a blood drive earlier this year, Windermere Spokane has continued to find ways they can provide for those in need in their community. In early September, they turned their attention toward Spokane’s youth. When they saw the Spokane branch of Volunteers of America announce that they were planning to move their Crosswalk Youth Shelter across town to a new facility, the office jumped at the opportunity to help. Windermere Spokane held a matching fundraiser that ultimately raised over $21,000 for the new shelter. But the office’s recent foundation efforts didn’t stop there.
In preparation for the new school year, the office held their Spokane Sock and Shoe Event to support local low-income and homeless grade school-aged kids with new pairs of shoes and socks. This year’s event provided new shoes and socks for 116 kids.
Left to Right: Windermere agents Blythe Thimsen and Brenda McKinley
Windermere agent Brenda McKinley
Kritsonis Lindor Team — Windermere Bellevue South – Bellevue, WA
Windermere agents John Kritsonis and Karl Lindor of Kritsonis Lindor have been strong supporters of the Issaquah Food & Clothing Bank in years past, but the continued challenges of the COVID-19 pandemic made it clear that the IFCB needed their support more than ever. After food insecurity for children in their county jumped 54% in 2020, John and Karl knew they had to go all-in for their community. They doubled down on their fundraising campaign with a $25,000 match, ultimately raising $55,958. On August 20, their team spent the day volunteering at the food bank, putting together produce bags, and passing out groceries to families. All in all, they were able to provide groceries to over 120 families and over 350 kids. Their donations will support IFCB’s summer lunch program, which feeds roughly 300 children weekly during the summer.
To learn more about the Windermere Foundation, visit windermerefoundation.com.
Generally, a real estate transaction involves a listing agent representing the seller and a buyer’s agent representing the buyer. Listing agents will conduct a Comparative Market Analysis (CMA)—which uses recent housing market data to compare the seller’s home to other listings in their area—to accurately price the property. The agent will list the home, coordinate showings and open houses, and negotiate with buyers’ agents to find the best offer for their client. Once the transaction is complete, the listing agent and buyer’s agent will split the commission of the sale.
Hiring a listing agent removes the risks of selling your own home by placing the selling process in the hands of an experienced licensed professional. Once you’ve found the right agent, you can begin working together to form your selling strategy.
Advantages of Working with a Listing Agent
Accurately Pricing Your Home
Your listing agent will begin the selling process by finding the value of your home. There are various factors that influence home prices, including seasonality, market conditions, home features, and more. Agents have exclusive access to the data behind these trends, allowing them to conduct a thorough CMA to accurately price your home. Of all the costly mistakes in the selling process, an inaccurately priced home is perhaps the most consequential. An overpriced home will attract the wrong buyers, increase your home’s days on market, and could lead to serious post-sale complications, that, in some cases, could jeopardize the sale. An underpriced home leaves money on the table. With a listing agent’s CMA, you can rest assured that the price of your home is backed by current market data, which will set you and your agent up for successful negotiations.
Marketing Your Home
Listing agents are experienced professionals who possess a wealth of knowledge on how to market your home. Your agent will list your property on the Multiple Listing Service (MLS), an online database to which they have exclusive access. Getting your home listed on the MLS will greatly increase its exposure to interested buyers. Your listing agent will coordinate showings and open houses, opening the door to conversations with buyers and their agents.
Your agent will also make recommendations and help coordinate all marketing efforts, like staging and photography. They’ll also be able to recommend what, if any, repairs need to be made before you go live. Their expertise will streamline the selling process, getting your house ready and on the market quickly.
Offers / Negotiations / Closing
The complexities of the critical stages in the selling process highlight the value of an agent’s expertise. A listing agent will work on your behalf to field and assess incoming offers, communicate with buyers and their agents during negotiations, and ultimately, see the deal through to closing.
Local market conditions can often dictate how your agent approaches offers and negotiations. In a seller’s market, there’s a good chance you will have multiple competing offers on the table, contingencies are often waived, and all-cash offers may arise. Trying to pin down the best offer in these competitive situations can be overwhelming, but listing agents specialize in understanding the terms of these kinds of offers to identify the one that best aligns with your goals. If you’re selling in a buyer’s market, the buyer will have the leverage. Your listing agent will work with the buyer’s agent to reach an agreement on the buyer’s contingencies and finalize the terms of purchase.
From list to closing, your listing agent is there to answer any questions you may have, allay your fears, and guide you toward a successful sale. When searching for an agent, keep in mind that their ability to connect with you on a human level is just as important as their professional qualities. Selling your home can be an emotional roller coaster, and you’ll want someone by your side who you can trust on the journey ahead. Contact me and learn more about how I can help you sell your home.
All of us at Windermere Real Estate are proud to kick off another season as the “Official Real Estate Company of the Seattle Seahawks.” Since 2016, we’ve partnered with the Seahawks to #TackleHomelessness by donating $100 for every Seahawks defensive tackle made in a home game. And for the third season in a row, the money raised will go to Mary’s Place, a non-profit organization dedicated to supporting homeless families in the greater Seattle area. Mary’s Place works to provide safe and inclusive shelter and services that support women, children, and families through their journey out of homelessness.
Mary’s Place’s mission and the work of the Windermere Foundation go hand-in hand. Last year, we were able to donate $32,100 which brought our #TackleHomelessness total to $160,300 donated over the past five seasons. We look forward to raising even more this year!
Interested in following along with our progress this season? Follow us on Facebook, Twitter, Instagram, and LinkedIn for updates. Go Hawks!
Each object in a home serves a purpose, but for those who experience dizziness and numbness, many of them can also be a potential hazard. Taking steps to reduce the risk of falling in your home is a worthy exercise for any homeowner, especially if you have elderly family members or young children living in your home or visiting often. Here are some ways you can fall proof the rooms in your home.
How to Fall Proof Your Home
Kitchen
The kitchen is synonymous with spills and messes. When these accidents happen, be sure to clean them up quickly and thoroughly to reduce the risk of a falling injury. Slippery floors have been the culprit of countless broken bones and bruises, so it’s best to wait until the cleaned spot is dry until you resume cooking.
Stay low to the ground as much as possible by keeping your most used items like spices, cooking utensils, and hand towels within reach to reduce the number of times you need to use a step stool.
Bathroom
In the bathroom surfaces are often slippery and slick, and the hard tile makes for an unforgiving landing spot. It’s common for homeowners to place a non-slip mat in the shower or tub to reduce the risk of slipping and falling. Grab bars are a more permanent option for making the bathroom safer. For those interested in installing a grab bar but have reservations about the aesthetics of installing a grab bar, look at pieces that align with your existing décor. Match the grab bar with your shower head, shower rod, and towel racks to make it fit with the space.
Bedroom
The key to preventing falls in the bedroom is visibility. Bedrooms are cozy, intimate spaces, which means that space can often be limited. Keep all pathways clear and make sure that your nightstands and bedside lamps are well within reach. Stow any cords next to your bed to avoid tripping over them in the night.
Staircases
We’ve all taken a tumble on the stairs at some point or another. To mitigate the risk of falling, keep your stairs organized at all times. It’s easy for clutter to build up at the top or bottom of the stairs or on platforms between floors, but these objects are tripping hazards. Consider installing a handrail if you don’t have one or add a second one if you currently only have a handrail on one side.
Facebook
X
Pinterest
Copy Link
