Sudden Move Brings New Jitters for Mortgage Rate Stability
Seaford, DE homeowners and the Seaford, DE Realtors® and mortgage professionals who serve them aren’t the only ones who keep an eye on the day-to-day gyrations of home loan interest rates. Every move is so consequential to the rest of the national economy that even minor tics get national attention.
That was why the January 4 pronouncement from trusted analysts at Bankrate.com, “Rates poised to stay low in new year,” came as reassuring news. Their reasoning was cogent. In addition to the Federal Reserve’s unusual promise not to raise their key Fed Funds rate “through 2023,” Bankrate pointed out that it also had “a number of tools at its disposal…that can push rates to where the Fed wants them to be.”
The goal in 2021 would be to stabilize markets, firm up debt prices, and extend the benefits that accompany a soaring stock market. Home loans were more than side issues. “Keeping a lid on mortgage rates in particular” would be a key to stabilizing the wider economy since lower mortgage rates would invigorate consumer spending. Bankrate elaborated on what Seaford, DE Realtors, buyers, and home sellers have already experienced: the stimulative effect when “homeowners can cut their payments by $150, $200, $300 or more per month…”
If such expectations prove out, continued low mortgage interest rates would allow prospective Seaford, DE home sellers to bide their time. There would be little pressure to seize the historically favorable opportunity.
For once, there would be at least one low-stress situation!
But—not so fast. By last Monday, the actual markets seemed oblivious to what the Fed governors and Bankrate were propounding. “Rates Rising at Fastest Pace in Months,” headlined the authoritative Mortgage News Daily. Last Monday’s rates reflected “the roughest week since June 2020 by some measures …” and, “if this drama were to conclude now, it would be that big of a deal.”
The concerns were being fueled by the changing of the guard in Washington. Increased spending, if it were to result, might help the economy in the long run—“but it does bad things for interest rates” [the bolded type was the Daily’s]. Because the government sells US Treasuries to finance spending, the result is higher yields/rates, and “Treasures correlate significantly with mortgage rates.”
By week’s end, rates had steadied—Seaford, DE homeowners and prospective buyers could still avail themselves of undeniably advantageous mortgage rates. Yet, it was hard to completely ignore the shadow cast over Bankrate’s reassuring future. The soundly reasoned portrayal of sustained low-interest rates hadn’t lasted the month.
Interest rates are only one element of the complex decision to buy or sell Seaford, DE homes. Call me anytime for a rundown on the latest information to help make a well-grounded decision. Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com.
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- Written by Jimmie Bachand
Downsizing Alone Doesn’t Guarantee Moving Success
If “downsizing” figures large as a goal many Seaford, DE homeowners are seriously considering, The Washington Post is now citing a newer phenomenon that many older home buyers are discovering: “smart sizing.” It’s a cute phrase that might sound like a real estate feature writer’s invention—but the details will probably ring true for some retirement-bound adults who plan to be moving from or to Seaford, DE in the near future.
The cut-to-the-chase definition for “smart sizing” is the recognition that retirees who automatically equate downsizing with affordability might not necessarily be accurate. Retirees usually need to transition to fixed income living, so affordability is a primary priority. But downsizing alone can overlook other needs—some of which can turn out to be equally important.
The Post recounts examples of home buyers whose presumptions in moving turned out to be wide of the mark. Most convincing is a statistic from active-adult communities, where home sizes average 1,500-1,800 square feet. A housing research firm reports that about 30% of those who move to age-restricted (55 or older) communities “move to a larger place within the community after they’ve lived there for a while.” Since they remain in those communities, apparently the only reason for moving again is over-estimating the degree of downsizing.
Other anecdotes deal with other preconceptions. One couple thought their ruling priority was in “not having three levels.” But after seeking one-level houses that would fit their needs, they wound up with a multi-story home. Reality dictated that being close to their two adult daughters was at least equally important—and the basement level of their ultimate choice was perfect as a playroom for their grandkids!
Seaford, DE homeowners whose plans have centered on downsizing alone might well include such “smart-sizing” examples in their thinking. Experience teaches that moving to a new residence never fails to be a multi-dimensional undertaking. For help in nailing down the priorities that will make your own next move a true success—just give me a call! Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com.
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- Written by Jimmie Bachand
Price-to-Rent Ratio isn't the Bottom Line for Seaford Renters
Last week, Seaford residents who keep their eyes on real estate trends got some fresh information about one factor that seeks to put numbers to the relative benefits of buying versus renting. When real estate values head south, buying may seem to be a particularly risky proposition…even though later it’s clear that the value proposition was actually improving. The trade-offs are hard to quantify. Even now, if Seaford listings reflect prices on the rise, renters who failed to lasso the most extreme bargains may assume they’ve missed the boat.
Putting numbers to the problem is a complicated, pencil-snapping exercise. In addition to current dollars spent, it involves speculating on future market values. But Seaford readers who checked into CoreLogic’s Insights blog found some new data toward the end of last week, presented in an interesting way. It arrived in an article that looked at one particular aspect of today’s national real estate landscape “seven years after the last housing bubble.”
What CoreLogic’s market trend analyst Shu Chen did was to calculate the ratio of median home listing prices versus home rental prices, and chart it over the past decade. To come up with the numbers, national median home prices in key markets were divided by median annual rent figures. The beginning 2005 ratio was set at (indexed to) 100: the starting point for this “Price-to-Rent” ratio. The idea would be that when the ratio shows less than 100, it’s a good time to buy; when it goes over 100, the relative advantage has faded. It’s all relative, of course…and it doesn’t work out to be much more than a footnote to history—but you have to check the graph carefully to come to that conclusion.
Tracking the ratio’s movement over the past ten years, the graph shows a more or less steady Price-to-Rent ratio from 2005 until sometime in 2007. English translation: until the onset of the housing crisis, the financial incentives to continue renting versus buying remained pretty much unchanged. But then we see a bumpy but pronounced drop from 2007 until 2012. Aha! The housing crisis/mortgage meltdown! This would verify that listing prices were falling even as rent levels were rising. This would mark a point where purchasing became more advantageous—even though the risk level at the time seemed daunting.
Then, beginning in 2012, the graph does an about-face. It shows a steady rise as the Price-to-Rent ratio returned to previous heights. Right at the end, as we near today’s data, there is a minor drop: but it’s only slightly below the peak—which you’d think should coincide with the least advantage to buying versus renting.
That this conclusion is the opposite of our area’s current situation is because the Price-to-Rent ratio isn’t the only game in town. The spoiler on the US Price-to Rent Ratio graph is a second line (a faint orange one that all but disappears next to the in-your-face deep purple of the Price-to-Rent line). The orange one is the mortgage interest rate curve. It mimics Price-to-Rent’s ups and downs almost exactly…until it doesn’t. At some point in 2012, the mortgage interest rate flat-lines near the bottom, then stays there, hugging the depths even as Price-to-Rent’s purple line heads skyward.
In other words, the relative advantage to buying versus renting, which should have all but disappeared as Seaford home prices climbed, did no such thing. Today’s historically low mortgage interest rates continued to make buying a fantastic opportunity. If you’re one of those who’d like to check into those current opportunities in Seaford, I’ll stay close to the phone! Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com.
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- Written by Russell Stucki
In the Sport of Seaford Property Searching, You are the Captain!
For anyone who has never participated in a serious house-hunting effort, their mental image of how the experience will unfold may be a little off. They might imagine that, after narrowing down their requirements for a Seaford home (size, price range, and the like) they will agree on a day and time, then just climb into their Seaford agent’s car and settle back to have the likely prospect properties exposed before them.
In fact, the house-hunting procedure is almost like that, except for one major detail:
A property search is a participation sport!
Experienced Seaford property searchers have learned to husband their energy on any day that includes home showings. Especially when their property search doesn’t immediately yield a find that fits their target criteria, they know that it may take a while—and more than a few house-hunting outings—before they identify a suitable house.
What takes so much energy? Sophisticated home buyers know that every showing holds the possibility that they could be setting foot in what might just become their future home. Every showing is literally the only time they will ever have a valid ‘first impression’ of the place that might become a major purchase. And each of those first impressions often come as part of a day that includes multiple showings—one that can easily result in a jumble of impressions, where homes with similar features are easily confused in memory. Since second and subsequent showings should be reserved for properties that qualify as serious contenders, wasted time and effort (not to mention inconvenience to the homeowners) can be avoided by alert, sharp-eyed property searchers. It takes stamina!
That’s why more experienced prospects know from the outset that a home showing isn’t a passive experience. It’s not a bad idea to have a pen handy for jotting notes on the listing sheets the Seaford agent provides—notes about distinguishing features (good and bad!) that will help with comparisons at the end of the day.
For those who are veterans of previous property searches, this is old news: they remember reviewing sessions that include, “No – that was the one with the bay windows, not the one with the [fill in the blank].” For first-timers, it’s good to know in advance: a property search is a participation sport. And you’re the team captain!
If you are about to embark on the search for a Seaford property, or have one that’s soon to be listed, do give me a call. Properly arranging efficient home tours is only part of my track record of helping successful home sales happen! Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com.
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- Written by Russell Stucki
