What Causes Home Prices to Fluctuate?

The median sales price of a house in the United States is currently between $188,900- $279,500. There is such a large price range because many different factors can play into a home’s sales price. If you are looking to buy or sell soon, keep the following factors in mind when determining costs.

The price of a home can vary depending on the location. A more populous area, like a downtown neighborhood or a highly sought-after suburb, can boost the sales price because there is a high demand for borrowers wanting to live there. A less popular area, or even an up-and-coming neighborhood, may show lower home prices, even if the homes are similar in size to those in more expensive areas.

The season may also have an impact on home prices. Once the spring buying season starts heating up, there will be a larger demand for homes to purchase. Prices may also increase because there is a higher chance the home will be bought. With a hot buying market, bidding wars may ensue, which can also increase the price of a home. In colder seasons home prices may decrease since fewer people are shopping for a new home. Since the demand is low, sellers may consider a lower price tag, giving way to a better deal for borrowers.

A strong or weak economy can also impact home prices. When a strong economy is present, individuals and families may have a more secure financial mindset. With this in mind, buyers are more likely to feel comfortable obtaining a larger mortgage, which could lead to higher home prices. In an unstable economy, prices tend to be lower.

If you aren’t sure whether now is a good time to buy a new home, get in touch with one of our loan officers to learn more about the current market. We are happy to help and answer any questions you may have.

Why Is a Home No Longer Pending?

A pending sale means the seller has accepted an offer but the deal hasn’t closed yet. A property is placed in pending status when the contract is executed; when the contract is executed, in other words, the property is no longer defined as an active listing. A home will remain pending until all legal work has been processed and the loan closes. If your dream house is currently listed as pending, don’t lose all hope. Some sellers will still allow offers to be made on the house, just in case the deal falls through. Here are a few reasons a deal may fall through.


Homebuyers are often not aware of how an innocent transaction, such as making a large credit card purchase or moving cash from one back account to another, can jeopardize the mortgage process. Applying for any new kind of credit or accruing any new debt can affect your eligibility to continue with the loan. If any type of financial transaction is made that disqualifies you from continuing with the loan, the pending sale will fall through and the home will likely go back on the market. Always discuss your financial situation with your loan officer during the loan process.

Title Issues on the Property

Once a contract has been written up and the buyers start the loan process, title work on the property will be reviewed. Sometimes there are delinquent liens/bills on the property from the current owner, among other issues, that can affect closing. If the liens are not taken care of by the seller and cleared from the title, a lender will not allow the sale to go through. Errors of public records on title work can also stop a sale from continuing. Clerical or filing errors of the deed or survey of the property can cause financial strain to resolve, so they are not taken care of and the sale falls through.

‘Subject To’ Conditions

A smart buyer will have a property inspection done on the house before closing. An inspector will take a look at the foundation of the house, roof, attic, appliances, and list of other items to make sure everything is in working condition. If issues are found in the house that need to be fixed, the borrower may list “subject to” or “contingent upon” conditions on the contract. If these items are not fulfilled by the seller, the borrower is allowed to exit the contract, thus removing the pending status.

While it is not common for a deal to fall through once a contract is written up, it could happen. It’s a good idea to still follow the sale of the home and keep it in the back of your mind. Contact one of our loan officers if you have any questions, they will be happy to help!

Tiny House, Large Living: The Tiny House Movement

Living large doesn’t necessarily mean owning a mansion and filling it with an abundance of possessions. Just ask those who have joined the tiny house movement. You may be asking, what exactly is the tiny house movement? The latest trend involves homeowners downsizing to a home, generally measuring 400 square feet or less. Small, right? How can one live in such a small space? It’s definitely a lifestyle change and it’s not for everyone, but those who have joined this movement have benefited big time!

So why would someone choose this lifestyle? There are many benefits to going tiny. Affordability is a major factor; the cost of a tiny home is substantially cheaper than a normal-sized home. Typically, tiny homes can range from $10,000-$50,000 depending on the type of home, amenities and if you build it yourself or purchase a pre-built home. That is a fraction of the cost of an average house in the suburbs. The cost of upkeep of a tiny home tends to be less as well since there is less square footage to maintain.

Going tiny can also simplify your life. Since your home is smaller, there is less room for material items and possessions. Freedom from objects will allow you to focus on experiences and connecting with people and nature rather than focusing on “things”. The less time you spend focusing on things, the more time you can focus on yourself and finding activities that make you happy.

Another benefit of going tiny is being more mobile and not tied down to one location. Some tiny homes can be placed on a trailer bed and towed and some are fixed on wheels. Either option lets you travel often and experience adventures you may not have been able to if you were tied down with a non-mobile home or a large mortgage payment.

Sounds great so far, doesn’t it? While there are many advantages of a tiny home, they do have a few drawbacks as well. Some states and/or counties have their own set of strict rules regulating where owners can place/park their tiny homes, making it difficult to stay in one place for a long period of time. Their small size creates limited storage areas, so renting a storage unit may be an additional cost homeowners need to budget for. If you decide to grow your family and need to move out of your tiny home, there is a very small market for tiny home buyers, so selling could be an issue.

As mentioned before, tiny house living isn’t for everyone, but those who choose to live this lifestyle have the financial and personal freedom to live how they want and where they want.

Open House Red Flags

You have found a few properties online that you love and notice they are having open houses soon, great news! The pictures certainly make the house look perfect, but seeing the house in-person will give you an opportunity to see its true appearance. When attending an open house, it is important to look past the sparkling new kitchen appliances and really focus on the bones and details of the home. By doing this, you will be able to identify any red flags that may raise concern. Be sure to pay attention to the following items.

Nearby Properties for Sale

Right off the bat, one of the first things you should notice is how many other properties are for sale in the neighborhood. If there are a handful of other homes for sale, this could be a sign the area is undesirable or possibly becoming unsafe. If you are still interested in the property after the open house, drive by the home at different times of the day to get a feel of the neighborhood.

Condition of the Roof

Another one of the first things you should examine is the roof. If there are shingles missing or it looks like shoddy repair work has been completed, it may lead to leaking which could be costly. Once inside, ask the agent if there have been any roofing issues and examine the ceiling for signs of leakage.

Smell/Scent of the House

If you smell any kind of musty or mildew smell, this could be an indicator there are leaks or mold present. Mold and water damage can hit your wallet hard if they are not taken care of immediately. Also take note if the house has a severely strong smell of air fresheners; the sellers could be trying to blanket a foul odor.

Electric and Lights

When walking through the home, make sure all the light switches and outlets work. Electrical problems can be a huge inconvenience to new homeowners, causing financial worries and even safety hazards. Also take notice if you switch on a light or appliance and another light dims or an appliance falters, there could be an underlying issue.

If you want to make an offer on the house but are concerned about some red flags, there are some things you can do about it. You are able to negotiate with the seller and see if they will repair the issues. Minor problems like chipping paint or damaged hardware may be easy fixes for sellers and will save you some money and time in the future. If larger issues like landscaping hazards or a damaged roof is worrying you and the seller will not fix it, consider a renovation loan. A renovation loan allows you to combine home improvement costs into your mortgage, fixing the repairs.

Bottom line- if you are seriously interested in a property, inspect everything at the open house so you can address any issues in advance.

Will Your Home Value Sink or Swim?

It’s been a long, hot summer so far; thank goodness for that backyard swimming pool to cool you off! There’s really no better feeling than walking out your back door and jumping in your own swimming pool. But what happens to that tropical paradise when those cold, winter months roll in? And when it comes time to sell your home, is your pool adding value to your home or hurting the resell value? Many factors can come in to play when deciding if a pool will increase or decrease your home’s value.

How much use do you get from the pool?
If you live in an area where it is warm for most of the year, then a pool may be a good investment. Keeping up with the maintenance costs won’t seem like as much of a burden when you are actually using the pool. However, if you live in an area where only 3-5 months of the year are suitable for swimming, it may be a turn off to keep up with monthly costs.

How does your house compare to your neighbor?
If you live in a neighborhood where most of the homes have pools, then having your own pool could increase your home’s value. Since this is a desirable feature in the area, when ready to sell your home, it will probably be a little bit easier. If you live in a neighborhood where pools are uncommon, or there is a great community pool down the street, it may not make sense to have one in your backyard.

Is an in-ground pool better than an above-ground pool?
In-ground pools have the potential to add more value to your home than above-ground pools. An in-ground pool will typically last longer and require less refurbishing every few years. Since above-ground pools can be easily dismantled and removed, they most likely will not add any extra value to your home. If selling your home, potential buyers might see an above-ground pool as an eye sore, especially if there is no landscaping surrounding the pool to help it blend more easily into the backyard.

Has the pool been property maintained?
Pool maintenance costs can add up, but it may be more costly to you if you don’t keep up with proper care. A well maintained pool will look attractive to potential buyers, making your entire home more sellable. Neglecting to take proper care of your pool may make it harder to sell your home because it would be an added expense and hassle for the new owners. If a pool is in poor condition, it could decrease the value of your home.

If you are looking to purchase a home that already has a swimming pool, or are thinking of adding a pool to your own backyard, take the above factors in to consideration. Try not to think of a swimming pool as an asset to your property, but rather an added value to your lifestyle and personal enjoyment.

7 Reasons to Own a Home

For most, it is the American Dream to own a home.  It has always been an important milestone of adulthood.  But as a first-time home buyer, how do you know it is the right thing to do?  Besides the obvious benefits of owning a home, here are additional advantages of owning rather than renting.

Tax Benefits

The bulk of your house payment each month goes toward interest.  Mortgage interest is tax deductible unless your mortgage loan is greater than $1 million.   You can also deduct the property tax your lender pays on your behalf.


Over time, houses generally go up in value.  A $200,000 house after 30 years becomes a $545,313 house.  According to the Price-Shiller Index, existing homes increased 3.4% annually on average from 1987 to 2009.  Over a 30-year period, this increase is a big deal.


Equity is the difference between the home’s value and how much is owed to the mortgage lender.  The reduction of your mortgage every month increases your equity and builds interest in your home.


Having a mortgage is having a forced savings plan.  When you pay your mortgage every month, you are ultimately being forced to save because you are building more valuable equity in your home.  Making an extra payment on your mortgage each quarter could potentially save you money on interest resulting in your loan retiring earlier.


As a borrower, you are able to accurately predict your future payments with a fixed-rate mortgage.  Your interest rate doesn’t fluctuate during the loan period, keeping your payments relatively the same.  Rent payments are unpredictable and may rise every year.


Owning a home gives you the freedom to do what you want with it, especially aesthetically.  Decorate it how you please, paint whatever color you’d like and upgrade amenities that suit your sense of style.


You are officially planting your roots in an area you choose that benefits you and your family the most.  From here, you will build long-lasting relationships with your neighbors and will offer the benefit of life-long friendships and education continuity to your children.


Want to learn more about the home buying process? Contact a First Home Loan Officer today!

Why Are Rates Going Down?

In the past couple weeks, there have been some international events driving interest rates down. Well what really drives mortgage rates? The old story from George Bailey in “It’s a Wonderful Life” is still true, for those that need a reminder there is a run on the Bank, and George explains that the money is in lent out to build the neighborhood.

Unfortunately, what happened in It’s A Wonderful Life happened many times in American history, and rarely had a positive outcome. The problem was one of liquidity. Liquidity, loosely is the ability to exchange something for cold hard cash quickly and cheaply.  George Bailey couldn’t just trade the loans for cold hard cash during that era.

Today, that isn’t quite the case. If that happened today, George could underwrite the mortgages to Fannie Mae’s standards and have something that he could trade to another bank for cash. The market for Fannie Mae loans is one of the most liquid in the world and allows American’s to borrow at rates as low as they are today! This is also because the liquidity allows other mortgage investors to painlessly invest in loans to American consumers. If you have a pension, or a life insurance policy, almost assuredly some of those funds are invested in mortgages. Anyone who has cash and wants to invest it in American mortgages can do so, and they even include international financial institutions.

That brings us to the main reason mortgage rates are so low today. The American economy and financial markets are much more stable compared to those internationally. In Japan, and Europe, interest rates are even lower than they are here, so money has been flowing from their banks and financial institutions into American’s mortgages.

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