As we kick off the new year, many families have made resolutions to enter the housing market in 2019. Whether you are thinking of finally ditching your landlord and buying your first home or selling your starter house to move into your forever home, there are two pieces of the real estate puzzle you need to watch carefully: interest rates & inventory.

Interest Rates
Mortgage interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. Despite the recent drop, interest rates are projected to reach 5% in 2019.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.
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The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000).

Inventory
​A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 3.9-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 81 straight months.

The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last six months.
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The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, since June, inventory levels have started to increase as compared to the same time last year.

This is a trend to watch as we move further into the new year. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and closer to a normal market.

Bottom Line
​If you are planning to enter the housing market, either as a buyer or a seller, make sure that you have an experienced local agent who can help you navigate the changes in mortgage interest rates and inventory.

With home prices on the rise and buyer demand still strong, some sellers may be tempted to try and sell their homes on their own without using the services of a real estate professional.
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Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.

Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interests of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house
• The termite company if there are challenges
• The buyer’s lender if the structure of the mortgage requires the sellers’ participation
• The appraiser if there is a question of value
• The title company if there are challenges with certificates of occupancy (CO) or other permits
• The town or municipality if you need to get the CO permits mentioned above
• The buyer’s buyer in case there are challenges with the house your buyer is selling

Bottom Line: The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Meet with a professional in your local market to see the difference that he or she can make in easing the selling process for you.

​What exactly happens to plastic beverage bottles that you put in the recycling bin? They are collected, sorted and ground into plastic flakes. Different types of plastic flakes are separated before being washed and dried. Then the processed flakes are used t make things like, cups, trays, clothing, carpet fibers and so much more – including new beverage bottles.
 
Recycling isn’t always convenient, but it’s worthwhile to do. When life is busy, it can be easy to forget to recycle. Consider these smart, easy-to-do tips that can help you make recycling part of your daily life.
 

• Location: Place your recycling bin near your trash bin as a visual reminder that your recycling can be just as fast as putting something in the garbage.
• Caps Included: Enjoy convenience drinks, empty them, replace the cap and recycle. It’s important to remember that both the bottle and the caps are made from valuable plastic that are in demand by re-claimers.
• Bring recyclable home: Outside of the home it can be difficult to locate recycling bins. Make a conscious decision to bring empty beverage bottles home so they can be recycled properly.
• Set Reminders: More than 90 percent of American homes have access to curbside and drop-off recycling programs. Set an alert on your phone so you remember to bring out the recycling on the designated day.
• Reuse: Think about how you can reuse items, such as transforming empty plastic bottle into a beautiful holiday wreath.
• Buy Recycled: Purchase goods made from recycled materials to support the ongoing life cycle of products

There are many things that can be recycled, but bottled water containers are the most common drink item in curbside recycling programs, recycled at a rate of 53.9 percent, according to the “Put It In The Bins” website.

With recycling, the possibilities are endless – but it all starts with one small personal choice to recycle. To learn more about how recycling makes a difference, visit putitinthebin.org