This weekly newsletter provides our valued business partners with a market summary along with a few short updates and/or tips to help you close more deals. We hope you’re enjoying News You’ll Use.
Move Away from Renting
Rising rent is a compelling reason for many first-time homebuyers to make the leap to homeownership. And with everyone so focused on fluctuating interest rates, it should be noted that rent is 100% rate and 0% equity.
Share this rent vs. buy calculator with your clients to help them set a purchase budget and not get so caught up in the rate game.
Weekly Market Update
Are rates going to fall in 2023? The consensus seems to be that while mortgage rates are expected to be lower in 2023, we won’t see them as low as they were in 2021. But it is worth noting that even if rates stay in the 5-7% range they would still be significantly lower than the historic 1981 mortgage rate of more than 18%.
Mortgage rates moved lower this week as we received positive inflation data in CPI continuing to come down. Besides the inflation data, there was not much economic data. With positive inflation data and hourly earnings data from last week also coming in lower, rates have made a significant move lower the last two weeks. It appears inflation has peaked, now the market will need to see what commentary the Federal Reserve members have for future rate hikes to determine if rates will continue to move lower.
•
US 10-year Treasury is at 3.44% on Thursday afternoon
•
CPI for December came in-line with analyst’s expectations (-0.1% m/m and 6.5% y/y)
•
Core CPI for December came in-line with analyst’s expectations (0.3% m/m and 5.7% y/y)
•
Initial Jobless claims came in under analyst’s expectations (205k vs expectations of 215k)
•
Mortgage Applications rose 1.2% this week
Why Homebuyers Should Purchase Owner’s Title Insurance
Purchasing real estate is a big investment. As a buyer, it is important to ensure that your property rights are protected. It would be a shame for someone to buy their dream home only to find out after closing that there was a defect in the chain of title of the real property arising out of past events outside of the buyer’s control. Such defect could result in loss of the buyer’s ownership or subject the homebuyer to paying a bill left unpaid by any previous owner. This is why purchasers of real estate should protect their investment (and their peace of mind) by getting an owner’s title insurance policy.
Unlike other types of insurance policies, an owner’s title insurance policy is a one-time premium, which is regulated by the state, and paid at closing. The policy will protect your property rights for as long as you or your heirs own the property up to the purchase price of your property (or more if you opt to purchase additional coverage value). An owner’s policy protects you from things undiscovered during the title exam process, including: unknown open mortgages, unpaid property taxes, mechanic’s liens, boundary issues, missing heirs who could claim the property belongs to him or her, and missed easements or rights of way that could limit your use of the property. It has been reported that title searches reveal problems on more than a third of all residential real estate transactions. In addition to protecting your investment, an owner’s policy also covers the legal fees and the cost of defending your property rights in the event a claim is made against the policy.
Notably, there may be exceptions to the owner’s policy coverage. Exceptions are items not covered by the title policy, which means the title company will not pay a claim or defend against a claim based on these excepted items. Common exceptions include the following: prior unreleased mortgages on the property, easements, building or use restrictions contained in recorded or filed maps, agreements or deeds, and survey issues.
In conclusion, purchasers of real estate should get owner’s title insurance to protect their investment and avoid being financially liable for undiscovered title defects that can remain undetected until after the closing.
