According to the same CNBC article,

“For the first time, the average national credit score has reached 706, according to FICO®, the developer of one of the most commonly used scores by lenders.”

This is great news, as it means Americans are improving their credit scores and building toward a stronger financial future, especially after the market tumbled during the previous decade. With today’s strong economy and increasing wages, many Americans have had the opportunity to improve their credit over the past few years, driving this national average up.

Since Americans with stronger credit are now entering the housing market, we are seeing an increase in the FICO® Score Distribution of Closed Loans (see graph below):

But hang on – don’t forget that this does not mean you need a FICO® score over 700 to qualify for a mortgage. Here’s what Experian, the global leader in consumer and business credit reporting, says:

FHA Loan: “FHA loans are ideal for those who have less-than-perfect credit and may not be able to qualify for a conventional mortgage loan. The size of your required down payment for an FHA loan depends on the state of your credit score: If your credit score is between 500 and 579, you must put 10% down. If your credit score is 580 or above, you can put as little as 3.5% down (but you can put down more if you want to).”

Conventional Loan: “It’s possible to get approved for a conforming conventional loan with a credit score as low as 620, although some lenders may look for a score of 660 or better.”

USDA Loan: “While the USDA doesn’t have a set credit score requirement, most lenders offering USDA-guaranteed mortgages require a score of at least 640.”

VA Loan: “As with income levels, lenders set their own minimum credit requirements for VA loan borrowers. Lenders are likely to check credit scores as part of their screening process, and most will set a minimum score, or cutoff, that loan applicants must exceed to be considered.”

So, as you can see, plenty of loans are granted to buyers with a FICO® score that is lower than the national average. If you’d like to understand the next steps to take when determining your credit score, let’s get together so you can learn more.

According to the ‘2019 Home Buyer Report’ conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:

“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”

When potential homebuyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,

“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.” (as shown below):

The lack of knowledge about the home-buying process is unfortunately keeping many motivated buyers on the sidelines.

So don’t let a lack of understanding keep you and your family out of the housing market. Let’s get together to discuss your options today.

Some Highlights:

• Learning the lingo of homebuying is an important part of feeling successful when buying a home.
• From APR to P&I, you need to know the acronyms that will come up along the way, and what they mean when you hear them.
• Your local professionals are here to help you feel confident and informed from start to finish…and this infographic will help you as you go.

Naples Real Estate News

Naples Golf Guy Monthly Market Report – New

1. Existing Home Sales (closed sales) are up, marking two consecutive months of growth.

2. Pending Home Sales (contracts signed) are up with each of the four major regions reporting both month-over-month growth and year-over-year gains in contract activity. Here is the month-over-month growth:

• The Northeast rose 0.7%
• The Midwest increased 0.6%
• The South increased 1.4%
• The West grew 3.1%

3. Buyer Traffic (the number of people shopping for a home) is up compared to the same time last year, and for the first time in 13 months.

• The Northeast is up 5.9%
• The Midwest increased 1.3%
• The South is up 2.7%
• The West grew 2.2%

In their most recent report, ShowingTime Chief Analytics Officer, Daniil Cherkasskiy explained:

“The trend we saw in year-over-year buyer traffic in previous months continued across the United States. For all four regions there were more showings per listing this year compared to last year, making it the most competitive August in the last five years.”

Lawrence Yun, Chief Economist with the National Association of Realtors, believes the uptick in activity will continue into the future:

“It is very encouraging that buyers are responding to exceptionally low interest rates…With interest rates expected to remain low, home sales are forecasted to rise in the coming months and into 2020.”

So, if you are thinking about selling your house, there are purchasers out there who are ready, willing, and able to buy.

“In the U.S., energy costs eat between 5 and 22 percent of families’ total after-tax income.”

What should you spend on utilities?

Money Management says,

“If you’re working with a budget, and trust me, you should be, your utility costs should be no more than 8-10 percent of your monthly income.”

Home Improvements to Lower Your Energy Bill

EnergyEfficiencyDay.Org provides some handy tips that can help you improve the energy efficiency of your home. Here are a few simple ones to consider, and how to make them happen:

1. Make the Switch to LED

LEDs are a great example of how innovation and technology can make your life easier. They last at least 25 times longer and consume up to 90 percent less electricity than incandescent bulbs.

Tip: By switching five of your home’s most frequently used bulbs with ENERGY STAR® certified LEDs, it’s possible to save $75 on energy costs annually.

2. Seal Those Leaks

On average, heating and cooling account for almost half of a home’s energy consumption. In fact, all the little leaks can be equivalent to leaving open a 3-foot-by-3-foot window.

Tip: Take simple steps like caulking windows, sealing leaks around chimneys and recessed lighting, and sliding draft guards under your doors to save up to 20% on heating costs.

3. Heat and Cool Efficiently

Don’t waste money heating or cooling an empty home. Install a programmable thermostat and in colder weather schedule your home’s heat to lower when you are away or asleep and increase when you are returning home or waking-up. In warm weather, schedule the thermostat to raise the temperature when you are away or asleep, and lower it at other times.

Tip: Follow the U.S. Department of Energy recommended temperatures and be energy-efficient all year. 

4. Maintain Your HVAC System

Make sure to clean or change your furnace filters regularly. A dirty furnace filter will slow down air flow, making the system work harder to keep you warm (or cool) and costing you more money.

Tip: Consider getting a winter tune-up. Just as a tune-up for your car can improve your gas mileage, a semi-annual or yearly tune-up of your heating and cooling system can be vital to improve efficiency, saving you money and making your home more comfortable. 

So, by making a few key upgrades to your home, you’ll save on your energy bill and improve the energy efficiency of your home. When you’re ready to sell your house, these key features will make it even more attractive to potential buyers. Let’s get together to discuss what buyers are looking for when it comes to energy efficiency options in our area.

This contingency allows you to renegotiate the price you offered for the home, ask the sellers to cover repairs, or in some cases, walk away if challenges arise. Your agent can advise you on the best course of action once the report is filed.

How to Choose an Inspector for your  Home Inspection

Your agent will most likely have a short list of inspectors they’ve worked within the past to recommend to you. HGTV suggests you consider the following five areas when choosing the right home inspector for you:

1. Qualifications – Find out what’s included in your inspection and if the age or location of your home may warrant specific certifications or specialties.

2. Sample Reports – Ask for a sample inspection report so you can review how thoroughly they will be inspecting your dream home. In most cases, the more detailed the report,
the better.

3. References – Do your homework. Ask for phone numbers and names of past clients who you can call to discuss their experiences.

4. Memberships – Not all inspectors belong to a national or state association of home inspectors, and membership in one of these groups should not be the only way to evaluate your choice. Membership in one of these organizations does, however, often mean continued training and education are required.

5. Errors and Omission Insurance – Find out what the liability of the inspector or inspection company is once the inspection is over. The inspector is only human, after all, and it is possible they might miss something they should see.

Ask your inspector if it’s okay for you to tag along during the inspection, so they can point out anything that should be addressed or fixed.

Don’t be surprised to see your inspector climbing on the roof or crawling around in the attic and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating and air conditioning systems, ventilation, windows, fireplace and chimney, foundation, and so much more.

So, they say, ‘ignorance is bliss,’ but not when investing your hard-earned money into a home of your own. Work with a professional you can trust to give you the most information possible, so you can make the most educated decision about your purchase.

Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand).

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”

The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 3 of the 50 U.S. states, buyer demand is now very strong; only 2 of the 50 states have a ‘weak’ demand. Overall, buyer demand is slightly lower than this time last year but remains strong.

Seller Supply 

The index also asked: “How would you rate seller traffic in your area?”

As the map below shows, 18 states reported ‘weak’ seller traffic, 29 states and Washington, D.C. reported ‘stable’ seller traffic, and 3 states reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the buyers who are looking for homes.

So, looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet buyer demand, prices will continue to increase. If you are debating listing your home for sale, let’s get together to help you capitalize on the demand in our market now.