Louisville Real Estate Blog

Is Getting a Home Mortgage Still Too Difficult?

Getting a Home Mortgage

There is no doubt that mortgage credit availability is expanding, meaning it is easier to finance a home today than it was last year. However, the mortgage market is still much tighter than it was prior to the housing boom and bust experienced between 2003 - 2006.

The Housing Financing Policy Center at the Urban Institute just released data revealing two reasons for the current exceptionally high credit standards:

  1. Additional restrictions lenders put on borrowing because of concerns that they will be forced to repurchase failed loans from the government-sponsored enterprises or Federal Housing Administration (FHA).
  2. The concern about potential litigation for imperfect loans.

What has been the result of these concerns?

6.3 Million Less Mortgages

The Policy Center report went on to say:

“It was so hard to get a mortgage in 2015 that lenders failed to make about 1.1 million mortgages that they would have made if reasonable lending standards had been in place. From 2009 to 2014, lenders failed to make about 5.2 million mortgages thanks to overly tight credit. In total, lenders would have issued 6.3 million additional mortgages between 2009 and 2015 if lending standards had been more reasonable.”

In an interview with DSNews, Laurie Goodman and Alanna McCargo of the Policy Center further explained:

“Our Housing Credit Availability Index (HCAI)* measures the probability that mortgage...

Selling in the Winter Attracts Serious Buyers

Selling in the Winter Attracts Serious Buyers

A recent study of more than 7 million home sales over the past four years revealed that the season in which a home is listed may be able to shed some light on the likelihood that the home will sell for more than asking price, as well as how quickly the sale will close.

It’s no surprise that listing a home for sale during the spring saw the largest return, as the spring is traditionally the busiest month for real estate. What is surprising, though, is that listing during the winter came in second!

“Among spring listings, 18.7 percent of homes fetched above asking, with winter listings not far behind at 17.5 percent. While 48.0 percent of homes listed in spring sold within 30 days, 46.2 percent of homes in winter did the same.”

The study goes on to say that:

“Buyers [in the winter] often need to move, so they’re much less likely to make a lowball offer and they’ll often want to close quickly — two things that can make the sale much smoother.”

Bottom Line

If you are debating listing your home for sale within the next 6 months, keep in mind that the spring is when most other homeowners will decide to list their homes as well. Listing your home this winter will ensure that you have the best exposure to the serious buyers who are out looking now!

The study used the astronomical seasons to determine which season the listing date fell into (Winter: Dec. 21 – Mar. 20; Spring: Mar. 21 – June...

3 Questions to Ask Before Buying Your Dream Home

3 Questions to Ask Before Buying Your Dream Home

If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following 3 questions to help determine if now is actually a good time for you to buy in today’s market.

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a recent survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons people buy a home have nothing to do with money. They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.

What does that mean...

Will Increasing Mortgage Rates Impact Home Prices?

Increasing Mortgage RatesThere are some who are calling for a decrease in home prices should mortgage interest rates begin to rise rapidly. Intuitively, this makes sense as the cost of a home is determined by the price of the home, plus the cost of financing that home. If mortgage interest rates increase, fewer people will be able to buy, and logic says prices will fall if demand decreases.

However, history shows us that this has not been the case the last four times mortgage interest rates dramatically increased.

Here is a graph showing what actually happened:

Dramatic Mortgage Rate Increases

Last week, in an article titled “Higher Rates Don’t Mean Lower House Prices After All, the Wall Street Journal revealed that a recent study by John Burns Real Estate Consulting Inc. found that:

“[P]rices weren’t especially sensitive to rising rates, particularly in the presence of other positive economic factors, such as strong job growth, rising wages and improving consumer confidence.”

Last week’s jobs report was strong and the Conference Board just reported that the Consumer Confidence Index was back to pre-recession levels.

Bottom Line

We will have to wait and see what happens as we move forward, but a decrease in home prices should rates go up is anything but guaranteed.


Economic Commentary 3

Rodny Davidson
NMLS# 295739
Loan Originator
First Community Mortgage

More Stimulus from ECB Expected 

The decline in mortgage rates this year has caught investors by surprise. Due to increased expectations for additional monetary stimulus from the European Central Bank (ECB), the improvement continued this week, dropping mortgage rates to the lowest levels since last summer. 

While the economic recovery in the U.S. has been a bit choppy, most investors and Fed officials anticipate sustained growth in the 2% to 3% range for several years. The outlook in Europe is not as optimistic, however. In response to slow economic growth and the risk of deflation, ECB officials have increased their support for additional monetary stimulus. Investors expect new measures to be announced as soon as next week. One option is a bond purchase program similar to the one used in the U.S. over the last few years. Bond yields around the world have moved lower due to the potential added demand from the ECB. 

Home sales data for April was released over the past week. April Existing Home Sales rose modestly from March, the first monthly increase this year, and April New Home Sales increased 7% from upwardly revised March figures. Perhaps more significantly, total inventory of existing homes available for sale surged 17% from March to a 5.9-month supply.

Looking ahead, two major...

Economic Commentary 2

Rodny Davidson
NMLS# 295739
Loan Originator
First Community Mortgage

Improving Job Gains 
Better than expected labor market data was unfavorable for mortgage rates over the past week. Increased concerns about the situation in Ukraine had a greater impact, however, and the flight to safer assets more than offset the jobs data. Mortgage rates ended the week lower, at the best levels of the year.

The headline number for April job gains showed the largest monthly increase since January 2012. Against a consensus forecast of 215K, the economy added 288K jobs in April. Average job gains over the last three months were an impressive 238K, up from 167K over the prior three months. In addition, the Unemployment Rate dropped from 6.7% to 6.3%, the lowest level since September 2008. 

The results of the Employment report likely would have been worse for mortgage rates except that some of the details were less encouraging. According to the survey used to determine the Unemployment Rate, an enormous 806K people left the labor force in April, which was responsible for most of the decline in the Unemployment Rate. The Participation Rate, essentially the number of people able to work who are currently in the labor force, fell to 62.8% from 63.2%, near the lowest levels since 1978. Average Hourly Earnings, a proxy for wage growth, showed no gains. In short, job gains in April reflected a strong rebound from weather-related winter...

Kentucky Derby Festival Home Stretch

We are in the final stretch of the Kentucky Derby Festival.  This is the last week and here are some things that are going on.

Thursday – May 1
- Celebrity Day at the Downs
            - Event starts at 11:30 AM
            - Located at Churchill Downs

- The 59th Republic Bank Pegasus Parade
            - Event starts at 5 PM
            - Tickets cost $10 for bleacher seats, $12 for chairs, and $30 for Review Stand
               seats. Tickets can be purchased by calling the Kentucky Derby Festival hotline
                at (502) 584-FEST (3378).

- The 100 Black Men of Louisville Derby Gala
            - Event runs from 7 PM – 2 AM
            - Tickets cost $200 per person or $2,000 for a table of 10
            - For tickets and more information call (502) 457-9941 or visit www.100mol.org

- The Fray
            - Event starts at 8 PM
            - Located at Kroger’s Fest-a-Ville on the waterfront
            - Tickets can be purchased online at ...

Kentucky Derby Festival The Party Keeps Going

The Kentucky Derby Party keeps on going as we mark another week of fun off the party calendar.  Two weeks down and one to go, but don’t fret we are getting warmed up for the greatest two minutes in horse racing.

Thursday – Friday - April 24 – May 2
- Kroger’s Fest-a-Ville
            - Open Daily – 11 AM – 11 PM

- Chow Wagon
            - Open Daily – 11AM – 11PM; Except Sunday – 1PM – 11PM

Thursday – Saturday - April 24 – 26
- BalloonFest Takes Off
            - Thursday
                        - 6 PM – U.S. Bank Crew Challenge – Kroger’s Fest-a-Ville on the

Kentucky Derby Festival

It’s that time of year again it’s time to get ready for the Kentucky Derby!  Though one week of fun is almost done there is still two to go.  Don’t worry about missing out on the fun there’s still plenty to do.

 Saturday – Sunday - April 12 - 20

- The Mayor’s Week of Service – though it is almost over you can still get a
   couple days of service in.

Saturday – Sunday  - April 12 – 27
-Kentucky Derby Festival Volleyball Classic
            - Sand Division at Baxter Jacks – Sat 4/12 & Sun 4/13 – 9AM – 9PM
                                                                    -  Sat 4/26 & Sun 4/27 – 9AM – 9PM
            - Grass Division at Seneca Park at the Tennis Courts

Economic Commentary

Rodny Davidson
NMLS# 295739
Loan Originator
First Community Mortgage

Inflation Remains Low

While there was a great deal of intra-day volatility over the past week, mortgage rates ended the week with little change, remaining near the lowest levels of the year. Most of the volatility in mortgage rates was caused by big moves in the stock market and by news from Ukraine. Since these events had little impact on the long-term outlook for economic growth or inflation, their effect on mortgage rates was short-lived. 

Inflation expectations play a fundamental role in determining mortgage rates and influencing Fed policy. The low levels of inflation seen in recent months have been a major reason for the decline in mortgage rates since the beginning of the year. Fed officials have an inflation target of 2.0%, which they consider the optimal level for the performance of the economy. With readings well below this level for several months, there has been little pressure on the Fed to tighten monetary policy. 

The two big monthly...

Don't Know What To Do This Weekend

Don’t know what to do this weekend here are some events that are going on to get your weekend started.

Thursday February 27, 2014:

The Louisville Orchestra Performs Shostakovich 5
            - Located at The Kentucky Center for the Performing Arts
            - Performance starts at 10:30 am
            - Tickets start a $20.00 dollars and can be purchased through the Box Office by calling
               1-800-775-7777 or online at www.kentuckycenter.org

The Gibson Brothers
            - Located at The Clifton Center 2117 Payne St, 40206
            - Events starts at 7:30 pm
            - Tickets cost between $18 and $20 dollars and can be purchased online
               at www.cliftoncenter.tix.com

Friday February 28, 2014:

Disney Live! Mickey’s Music Festival
            - Located at Freedom Hall – 937 Phillips Ln, 40209
            - Show starts at 3:00 pm and 6:00 pm
            - Tickets cost between $19 and $53 dollars and can be purchased online at

5 Reasons to Buy a Home Now Instead of Spring

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five reasons purchasers should consider buying before the spring market arrives:

Supply Is Shrinking

With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

Price Increases Are on the Horizon

Prices are projected to appreciate by over 25% from now to 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.

Owning a Home Helps Create Family Wealth

Whether you are rent or you own the home you are living in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Fed, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.

Interest Rates Are Projected...

Winter Weather Indoor Fun

Although the weather has been frightful indoor fun is so delightful!  Here are some events taking place this weekend.

Thursday February 6, 2014:

Kosair Shrine Circus
            - Located at Broadbent Arena
            - Performances at 10:30am and 7:00pm
            - Tickets are $18.22 or $25 for reserved seating. Tickets can be purchased at the
            Kentucky Exposition Center and Kentucky International Convention Center ticket offices.
            Tickets can also be purchased through Ticketmaster by calling 1-800-745-3000 or online
            at www.ticketmaster.com

Lorin Walker Madsen – 21 and Over
            - Located at The Rudyard Kipling – 422 W Oak Street, 40204
            - Event starts at 7:00pm
            - For more information call 502-636-1311


Great Weekend Events

There is always something fun to do in the Great City of Louisville.  Here are some ways to have a great weekend.

Thursday January 30, 2014:

Green Day’s American Idiot
            - Located at The Kentucky Center for the Performing Arts – Whitney Hall
            - Event starts at 7:30pm
            - Tickets start at $25 dollars and can be purchased through the Box Office by calling
              1-800-775-7777 or online at www.kentuckycenter.org       

Tiempo Libre
            - Located at The Kentucky Center for the Preforming Arts – Bomhard Theater
            - Event starts at 8:00pm
            - Tickets start at $25 dollars and can be purchased through the Box Office by calling
              1-800-775-7777 or online at www.kentuckycenter.org

Ultraviolet Hippopotamus – Uv Hippo
            - Located at The New Vintage
            - Event starts at 9:00pm
            - Cost is $7 dollars

Friday January 31, 2014:

Fat Friday Trolley Hop

Local Weekend Events

Are you looking for something to do this weekend?  Here are a few ideas to get your weekend started early.

Thursday January 23, 2014:

Girl’s Night Out – Refresh Your Image for Spring
            - Girls Night Out is hosted by Boutique Serendipity and Tracy Varga, Image                               Consultant
            - Located in the Westport Village – 1201 Herr Lane, 40222
            - Event time are 6:00pm – 8:00pm

PBR Presents Parmalee
            - Located at 4th Street Live
            - Doors open at 7:00pm
            - Contact Brittany at 502-238-0357 for Happy Hour and VIP Reservations

Friday January 24, 2014:

Offstage at Actors Theatre: Our Town and Pirates of Penzance

Mortgage Rate Predictions For 2014

Predictions for 2014: Interest Rates Will Increase Significantly

Posted: 08 Jan 2014 04:00 AM PST

Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end.

The Fed announced last month that they would be pulling back some of their stimulus package which has helped the housing market by keeping long term mortgage rates at historic lows for the last few years. This should come as no surprise as the KCM Blog has been warning of this likelihood over the last several months.

Mortgage Rate Projections

Analyst                                    Projected Rate 4Q 2014

Fannie Mae                                            4.8%

National Assoc of Realtors                      5.3%


Tips to Save Energy and Add Value

When it comes to energy efficiency, look for smart features and expertise to help you save energy and money and add value to your home.

1. Begin with a Right-Sized Home.

If the home you buy is simply too large for you or your family’s needs or plans, you stand a good chance of wasting energy through excessive heating and cooling costs. If it’s too small, you’ll feel cramped and uncomfortable. It’s a big investment, so seek balance and buy it “right” from the outset. 

2. Purchase Energy Star Appliances Such as Your TV, Dishwasher, Washer and Dryer, and Microwave.

And especially the refrigerator, as it alone contributes about 10 percent of the energy use in a home. Also, unplug electronics not in use or turn off power strips to avoid phantom charges. 

3. Install Efficient Lighting Such as Compact Flourescent (CLF) or LED Bulbs in Every Fixture.

Lighting accounts for about 6 percent of an energy bill each year.

4. Get an Energy Audit and Have Tests Performed to Identify Ways of Improving Your Efficiency.

You can always upgrade your heating, ventilation, and air conditioning (HVAC) system as well as your thermal envelope, which includes insulation, windows, and doors  and the seals or weather stripping around them. Visit energy.gov/energytips for more tips.