Credit Card Fraud Is On The Rise

29330911_sFirst, the bad news: If you use a credit card, there’s no way to fully protect yourself from credit card fraud. Even worse, fraud has been increasing: You’re more likely to find fraudulent charges on your credit card statement today than you were just a few years ago.

The good news is, there are still steps you can take to significantly reduce your risk, and to protect yourself from damages if your credit card should be compromised. Here are a few best practices to keep your data and your money as safe as possible.

Stay on top of your credit accounts. It’s hard to notice fraudulent transactions when you aren’t looking at your transactions! It’s smart to review your purchases daily to make sure they match up with all your authorized card uses. If you do notice something fishy, call your credit card issuer right away.

Use credit, not debit. Since debit cards pull straight from your accounts, theft could drain an account enough to put you at risk of checks bouncing and automatic transfers failing. Plus, you have a much smaller window during which you can report fraud on a debit card and not be liable for some of the money.

Take advantage of your card issuer’s fraud alert system. Most card issuers and financial institutions have built-in fraud alerts that you can sign up for. This allows them to contact you when certain suspicious activity occurs on your account, allowing you to identify fraud quickly.

Make mobile payments more secure. When shopping online, it’s best to use payments methods that use biometric authorization (like a fingerprint or face ID) to add an extra level of security to your purchases.

If you use a credit card, you’ll probably have to deal with credit card fraud someday. But the more cautious you are, the less of a target you are. If you can implement these best practices, you’ll be a lot less likely to wake up to someone using your credit card to order something on Amazon!

Thank you Sidney Stonecypher at People’s Bank Home Loan Center for this helpful information! If you have any mortgage questions you can reach her at 360-650-5365!

Is the Recent Dip in Interest Rates Here to Stay?

Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

Interest rates for a 30-year fixed rate mortgage climbed consistently throughout 2018 until the middle of November. After that point, rates returned to levels that we saw in August to close out the year at 4.55%, according to Freddie Mac’s Primary Mortgage Market Survey.

After the first week of 2019, rates have continued their downward trend. As Freddie Mac’s Chief Economist Sam Khater notes, this is great news for homebuyers. He states,

“Mortgage rates declined to start the new year with the 30-year fixed-rate mortgage dipping to 4.51 percent. Low mortgage rates combined with decelerating home price growth should get prospective homebuyers excited to buy.”

In some areas of the country, the combination of rising interest rates and rising home prices had made some first-time buyers push pause on their home searches. But with more inventory coming to market, continued price growth, and interest rates slowing, this is a great time to get back in the market!

Will This Trend Continue?

According to the latest forecasts from Fannie Maethe Mortgage Bankers Association,and the National Association of Realtors, mortgage rates will increase over the course of 2019, but not at the same pace they did in 2018. You can see the forecasts broken down by quarter below.

Is the Recent Dip in Interest Rates Here to Stay? | MyKCM

Bottom Line

Even a small increase (or decrease) in interest rates can impact your monthly housing cost. If buying a home in 2019 is on your short list of goals to achieve, let’s get together to find out if you are able to today.

Your 365-Day Mortgage Rate Forecast

If you plan on buying a home this year, it doesn’t make sense to wait! Mortgage interest rates and home prices are both projected to increase significantly throughout 2019. Let’s get together to discuss your home buying plans today!

Call us at 1-888-713-3056 or email us at Info@JohnsonTeamRealEstate.com to learn more about mortgage rates in the Bellingham housing market!

No Bubble Here! How New Mortgage Standards Are Helping

No Bubble Here! How New Mortgage Standards Are Helping | MyKCM

Real estate is shifting to a more normal market; the days of national home appreciation topping 6% annually are over and inventories are increasing which is causing bidding wars to almost disappear. Some see these as signs that the market will soon come tumbling down as it did in 2008.

As it becomes easier for buyers to obtain mortgages, many are suggesting that this is definite proof that banks are repeating the same mistakes they made a decade ago. Today, we want to assure everyone that we are not heading to another housing “bubble & bust.”

Each month, the Mortgage Bankers’ Association (MBA) releases a measurement which indicates the availability of mortgage credit known as the Mortgage Credit Availability Index (MCAI). According to the MBA:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).” *

The higher the measurement, the easier it is to get a mortgage. During the buildup to the last housing bubble, the measurement sat at around 400. In 2005 and 2006, the measurement more than doubled to over 800 and was still at almost 600 in 2007. When the market crashed in 2008, the index fell to just over 100.

Over the last decade, as credit began to ease, the index increased to where it is today at 186.7 – still less than half of what it was prior to the buildup of last decade and less than one-quarter of where it was during the bubble.

Here is a graph depicting this information (remember, the higher the index, the easier it was to get a mortgage):

No Bubble Here! How New Mortgage Standards Are Helping | MyKCM

Bottom Line

Though mortgage standards have loosened somewhat during the last few years, we are nowhere near the standards that helped create the housing crisis ten years ago.

*For more information on the MCAI, including methodology, FAQs, and other helpful resources, please click here.

Don’t Get Caught in the Rental Trap in 2019

Don't Get Caught in the Rental Trap in 2019 | MyKCM

Every year around this time, we take time to reflect and plan for next year. If you are renting your current home but have dreams of homeownership, your plan for the new year may include buying, and you wouldn’t be alone!

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years!

When those same renters were asked why they disliked renting, 52% said that rising rental costs were their top reason, and 42% of renters believe that their rent will rise every year. The full results of the survey can be seen below:

Don't Get Caught in the Rental Trap in 2019 | MyKCM

It’s no wonder that rising rental costs came in as the top answer! The median asking rent pricehas risen steadily over the last 30 years, as you can see below!

Don't Get Caught in the Rental Trap in 2019 | MyKCM

There is a long-standing rule that a household should not spend more than 28% of its incomeon housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again… why are they renting?

When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

If the majority of those who believe they haven’t saved a large enough down payment believe that they need 20% down to buy, that means a large number of renters may be able to buy now!

Bottom Line

If you are one of the many renters who is fed up with rising rents but may be confused about what is required to buy in today’s market, let’s get together to help you on your path to homeownership.

How to Simply Increase Your Family Wealth by Paying for Housing

Everyone should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of ‘forced savings’ that allows you to use your monthly housing costs to increase your family’s wealth.

Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equity. As your home’s value increases you also gain home equity.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

The latest data from their Q4 2018 Survey revealed that home prices are expected to round out the year 5.8% higher than they were in January. For the next 5 years, home values will appreciate by an average of nearly 3% a year.

This is still great news for homeowners!

For example, let’s assume a young couple purchases and closes on a $250,000 home in January. Simply through their home appreciating in value, those homeowners can build their home equity by nearly $40,000 over the next five years.

How to Simply Increase Your Family Wealth by Paying for Housing | MyKCM

Let’s look at the potential equity gained over the same period of time at some higher price points:

How to Simply Increase Your Family Wealth by Paying for Housing | MyKCM

In many cases, home equity is a large portion of a family’s overall net worth.

Bottom Line

If your plan for 2019 includes entering the housing market to purchase a home, whether it’s your first or your fifth, let’s get together to make your plan a reality!

Lookout Mountain Forest Preserve Hiking

We have some pretty awesome hiking locations in Whatcom County. If you love beautiful scenery, the addition of 4 miles of new trails in the Lookout Mountain Forest Preserve will definitely be something you will want to check out! These trailheads are the most recent trails built for Whatcom county parkland, and are accessed adjacent to Sudden Valley. The new trails span 8,844 acres on both sides of Lake Whatcom. The land used for the trails was transferred from the state to Whatcom County in 2014. Currently, all new trails are open for use, with the exception of Cougar Ridge Trail, as crews are working on this trails completion.

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The new trails include:

Rufus Creek Trail
Starting at the Lookout Mountain Trailhead, Rufus Creek Trail gently climbs for 4.3 miles. It goes through a variety of forest types, streams, wetlands, and has amazing views of sandstone cliffs.

Waterfall Trail
A stunning waterfall is accessed by a short loop trail near the junction of Rufus Creek Trail and the LM-2000 Road.

Baneberry Trail
This steep trail makes a large loop out of Rufus Creek Trail. Bikes travel uphill only on this trail.

Leila June Trail
This is a hiker only trail and is part of the original Lookout Mountain Loop. There are plenty of options for shorter or longer hikes with this trail!

Cougar Ridge Trail
Cougar Ridge Trail is a descending only mountain bike trail, and is more difficult with optional harder sections. This trail contains technical terrain including drops, steep sections, cliff edges, and sharp corners. Currently closed but is nearing completion.

With the new routes, there are currently over 8 miles of new trails. These new trailheads will eventually total about 98 miles when finished.  The network of larger and smaller trails allows you to decide how long (or short) of a hike you would like to take!

Parking is free, and there is a restroom at the trailhead. Dogs are allowed, as long as they are on a leash. The WTA also provides bus service to the trailhead on the 512 line.

How to get there:

The trailhead access point is at 2537 Lake Louise Road. The Lookout Mountain Forest Preserve trails connect to the mountain bike trails on Galbraith Mountain via 4000 Road. Get out there and do some exploring in our own back yard!!

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Wage Increases Make Home Buying More Affordable

Wage Increases Make Home Buying More Affordable | MyKCM

Everyone knows that housing affordability has been negatively impacted by rising prices and increasing mortgage rates, but there is another piece to the affordability equation – wages.

How much a family earns obviously impacts how easy or difficult it is for them to afford to own a home. Because of an improving economy, wages are finally beginning to increase – and that dramatically affects home affordability.

According to the National Association of Realtors’ (NAR) September 2018 Housing Affordability Index,wages have increased in every region of the country:

Wage Increases Make Home Buying More Affordable | MyKCM

After applying current salaries, home prices, and mortgage rates to their Home Affordability Index equation, the index, though still lower than this time last year (160.1 to 146.7), increased over the last month (141.2 to 146.7). For the complete methodology used by NAR, click here.

The percentage of income needed to own a home has also decreased each of the last three months. It currently sits at 17% which is substantially lower than historic numbers.

Wage Increases Make Home Buying More Affordable | MyKCM

Bottom Line

If you are a first-time buyer or a move-up buyer who believes that purchasing a home is not within your budget, let’s get together to determine if that is still true.

Are Homeowners Renovating to Sell or to Stay?

Are Homeowners Renovating to Sell or to Stay? | MyKCM

Over the past few years, two trends have emerged in the housing market:

  • Home renovations have shot up
  • Inventory of homes available for sale on the market has dropped

A ‘normal’ housing market is defined by having a 6-month supply of homes for sale. According to the latest Existing Home Sales Report from the National Association of Realtors, we are currently at a 4.4-month supply.

This low inventory environment has many current homeowners worried that they would be unable to find a home to buy if they were to list and sell their current houses, which is causing many homeowners to instead renovate their homes in an attempt to fit their needs.

According to Home Advisorhomeowners spent an average of $6,649 on home improvements over the last 12 months. If that number seems high, it also includes homeowners who recently bought fixer-uppers.

A new study from Zillow asked the question,

“Given a choice between spending a fixed amount of money on a down payment for a new home or fixing up their current home, what would you do?”

Seventy-six percent of those surveyed said that they would rather renovate their current homes than move. The results are broken down by generation below.

 

Are Homeowners Renovating to Sell or to Stay? | MyKCM

More and more studies are coming out about the intention that many Americans have to ‘age in place’ (or retire in the area in which they live). Among retirees, 91% would prefer to renovate than spend their available funds on a down payment on a new home.

If their current house fits their needs as far as space and accessibility are concerned, then a renovation could make sense. But if renovations will end up changing the identity of the home and impacting resale value, then the renovations may end up costing them more in the long run.

With home prices increasing steadily for the last 6.5 years, homeowners have naturally gained equity that they may not even be aware of. Listing your house for sale in this low-competition environment could net you more money than your renovations otherwise would.

Bottom Line

If you are one of the many homeowners who is thinking about remodeling instead of selling, let’s get together to help you make the right decision for you based on the demand for your house in today’s market.

The Difference An Hour Makes

Tomorrow we adjust our clocks back one hour for daylight savings. There is a lot that happens in one hour of the housing market across the United States!

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Every Hour in the US Housing Market:
596 Homes Sell
278 Homes Regain Positive Equity
Median Home Values Go Up $1.20