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Preparing your home for hot weather

Preparing Your Home for Hot Weather             As warm weather rolls across most of the country, it’s time to start thinking about how to protect and care for your home when the mercury soars. What can you do to ensure the summer sun doesn’t cause damage to your home? 

Heat stays out, cool stays in.
That’s the general idea, right? Check the weather stripping around doors and windows to make sure you don’t have a leak where your air conditioning can escape. This is a good time to assess the state of your insulation as well. Many power companies also offer home energy-efficiency assessments — often at no cost — to help you pinpoint places where the heat is creeping in, and often they’ll supply solutions too.

Perform an A/C checkup.
Don’t wait until you really need the air conditioning to make sure it's working properly! If something goes wrong at the height of summer, it could be weeks before repairs can be made. Replace your HVAC unit’s filters, and consider having your air ducts and vents cleaned out and the seals checked.

Turn it around.
Your ceiling fan, that is: Many types have a way to reverse the direction they spin. In summer, the blades should rotate counterclockwise in order to maximize the fan’s beneficial effect on your home’s temperature. 

Scout the perimeter.
Most people spend more time outdoors when temperatures rise. Check the boundaries of your property for damage to fences, security lights, and gate locks. Clear away any long grass that may have grown up next to fences as they can harbor fleas and ticks. Reset timers on sprinklers and outdoor lights in consideration of the longer hours of daylight.

Paint: It’s not just for looks.
Although we generally think of a new coat of paint as a cosmetic indulgence, it actually helps to protect the home from the effects of strong heat and sun. While you’re at it, check the deck to see if it needs a fresh coat of sealant as well. Washing the windows will ensure you can enjoy the summer sunshine. And speaking of windows, check screens and shutters for damage too. 

Prepare to party.
If you love to entertain outdoors, or you want to live off barbecue for the next few months, your summer fun equipment will need a good once-over. Hose down patio furniture and check cushions to see if they would benefit from a good wash and a chance to dry in the fresh air or if they’ll need to be replaced. Clean off the bbq and fill the propane tank [or stock up on briquettes]. 

Scale the heights.
Before it gets too hot, an inspection of the roof and attic is a great idea. Check outside for missing shingles or other signs of damage. Trim back tree branches that could be used by local critters as stepping stones to get onto and then under your roof. Check out the gutters while you’re up there too. Then head inside to examine the attic for leaks, holes, and signs of animal trespass.    Know of anyone looking to Buy or Sell Real Estate? Give us a call - your trusted real estate resource - The Lynchburg Team - Lynchburg Real Estate Services 434-879-3275

Katherine Farber

Katherine Farber


Budget Ideas for People Who Hate to Budget

Follow these three tips to effectively budget your money, even if you hate spreadsheets. Raise your hand if you think sitting down with a spreadsheet full of numbers sounds like a good time. Chances are, there aren’t many hands in the air — but if you want to do more with your money and have a positive impact on your financial situation — whether or not you hope to buy a house someday, it’s critical. We’re talking about budgets. You need one so you can take charge of your finances and meet your biggest money goals. Before you roll your eyes and groan, understand that you have a lot of options here. Just because you hate boring spreadsheets or the hassle of keeping up with receipts does not mean you actually hate budgets. More likely, you haven’t found the right one for you yet. Let’s explore a few budget ideas you can try. 1. Make it automatic You don’t have to create a household budget that sucks away all your free time and mental energy. Instead, automate it with one of the tools and technologies available to help you do it. Mint.com can help you track your spending and understand where your money goes each month. You Need a Budget is budgeting software that promises to “implement a system that will require less time ‘managing’ your money.” Personal Capital combines your everyday finances with your investments so you can view the big picture of your financial situation all in one place. Setting up these tools can help you track your expenses and review your spending each month. They make budgeting easier and lots more fun. You can also set automatic transfers from your checking to savings accounts to fund important goals and create automatic bill pay so you never forget to handle a fixed expense. 2. Give yourself an allowance Weekly or monthly allowances aren’t just for kids. A grown-up spending allowance can help you better manage your money each month while also eliminating the need to track every last cent with a dreaded spreadsheet. For this budgeting alternative to work, you do need to put in some effort upfront. First, know how much you earn each month — and that means the amount of money hitting your checking account after taxes and withdrawals for things like your 401(k) and health insurance. Then calculate your fixed expenses. This includes things like rent, utilities, groceries, transportation, and other living costs and bills. Subtract your expenses from your income. If you haven’t already set up an automatic transfer to savings or investments, do so now. After taking into account your savings and expenses, what’s left over? This is your spending allowance for the month. You can spend it on whatever you want, but once that money is gone, remember, it’s gone. 3. Use various accounts for your buckets A twist on the allowance idea is to set up three accounts: one for expenses, one for fun money, and one for savings. Deposit percentages of your paycheck into each account, and pull from the appropriate one throughout the month to cover your living costs and your discretionary spending. You’ll need to do some legwork first to determine what percentage of your paycheck belongs in which bucket. But you don’t need to track every last cent throughout the month or worry about overspending before you get around to saving. Budgeting doesn’t have to be all checkbook balancing and spreadsheet managing. Have a little fun with it, try out different types of budgets, and learn what works — and makes the most sense — for you. - See more at: http://www.trulia.com/blog/budget-ideas-for-people-who-hate-budgets/?ecampaign=cnews&eurl=www.trulia.com%2Fblog%2Fbudget-ideas-for-people-who-hate-budgets%2F#sthash.i2AEB97f.dpuf  

Katherine Farber

Katherine Farber


The Lynchburg Team is going Over the Edge for HumanKind!

The Lynchburg Team - Lynchburg Real Estate Services is raising money to Go Over the Edge for HumanKind. HumanKind, formerly Presbyterian Homes & Family Services and Family Alliance is a non profit organization of more than 100 years of influence in the community. They serve more than 7,370 people through five main focus area: Early Childhood Development, Mental Health Services, Residential Care and Safe & Healthy Living, they strive to strengthen individuals & families through care, counseling and education in order to build a stronger community. Your generosity to send us Over the Edge for HumanKind will impact lives all over Lynchburg, Virginia and allow me to raise the bar, literally, on fundraising in my community. At HumanKind, they believe small acts of kindness can change the world - but that kind of impact begins right here with people like you. - See more at: http://give.humankind.org/site/TR/BecomeampEdger/General?px=1045201&pg=personal&fr_id=1080#sthash.KKv0Dn3G.5cg5007I.dpuf Send me over the edge for HumanKind - The Lynchburg Team - Lynchburg Real Estate Services is going over the edge for HumanKind in September but we need to raise a total of $3000 ($1000 for each team member that has volunteered to go over) in order to rappel off the top of the tallest building downtown Lynchburg. Jeremy Mason w/ The Lynchburg Team-Lynchburg Real Estate Services, Katherine Farber and Brandon Farber are all three supporting one of our team's favorite non-profit organizations. So please share and donate today - every little bit helps! Click the link below to donate today.  http://give.humankind.org/site/TR/BecomeampEdger/General?px=1045201&pg=personal&fr_id=1080    

Katherine Farber

Katherine Farber


Buying Vs. Renting your home

Owning a home has many benefits. When you make a mortgage payment, you are building equity-and that's an investment.Owning a home also qualifies you for tax benefits that may assist you in dealing with your new financial responsibilities-such as homeowners' insurance, real estate taxes,and upkeep, which can be substantial. But given the freedom, stability, and security of
owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.  But home ownership may not be for everyone. It's a big financial commitment starting with the initial shock of your purchase (including a down payment and fees paid to a real estate agent, the lender and others) followed by years of monthly mortgage payments, real estate taxes, property insurance, and maintenance costs. When you decide to purchase a home, you accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates: Property Taxes and Special Assessments, Home/Hazard Insurance, Utilities, Maintenance, Home Owner Association (HOA) Fee if applicable One of the advantages of renting is being generally free of most maintenance responsibilities and the flexibility of moving almost as soon as you decide. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing needs.  Consider these questions
when making your choice: Do you want to spend several years
in a house and in a neighborhood?

Do you enjoy lawn and garden

Might you need to move suddenly to
care for family?

Do you want to keep your assets
accessible in the bank, or do you
want to invest long-term in a home?  

Thomas Deans

Thomas Deans


3 Tips to Staging the Outside of Your Home Like a Pro

Are you considering putting your house up for sale, but not sure where to start? Afraid it will take too long to sell, or that you won’t get the price you want? Think about “staging” your home, or in other words, setting the scene for immediate buyer interest in your property. To be really effective, you need to look at both the outside and the inside of your home. Here are 3 tips to get you started with the outside of your home: 1. Go stand on the street to see what clients see when driving up to the house. Be aware that any negative impressions they get outside the house (landscaping not maintained or non-existent, peeling paint, etc.) is just going to make them think that the house itself has not been well taken care of. So even if you have spent the time and money to fix up the interior, it would all be wasted if the clients get a bad first impression as they drive up to the house. 2. Next, step outside your front door and close the door; then stand on the stoop and look around for 5 minutes. While the realtor fumbles for keys and tries to figure out how to open the door, the clients are standing behind and looking around. So what are they seeing? Dead plants, old Halloween decorations in the middle of January, cobwebs?  Again, not a good first impression! It’s definitely worth it to take some time and clean it up. Want to go a step further? Try a new coat of paint or some new furniture or accessories. 3. Don’t forget the backyard. While that might not be part of the potential buyers’ first impression experience, you still should make sure it’s in the best condition possible. Pull up weeds, water plants, do some sweeping (if that’s applicable in your case) and maybe even purchase new furniture or accessories (plant pots, bird houses, etc.) And the biggest tip of all? Imagine yourself as a potential buyer looking at your property for the very first time. What impressions are you getting? Would YOU buy your house? What would you like to see changed before you put an offer on your house? And don’t worry about spending several thousand dollars to get your house ready to sell – you’ll get it all back when your house sells. Proper staging helps you sell your house in a shorter time and at the price you want.

Katherine Farber

Katherine Farber



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Katherine Farber

Katherine Farber


Last Week's Economic News in Review

Incomes and spending saw growth, but it was behind expectations, while layoffs tumbled to their lowest point in 15 years, and construction spending contracted. 

Incomes and Spending 

Incomes and spending saw growth, but it was less than expected. Personal incomes skirted up a scant $6.2 billion (less than 0.1 percent) in March, with disposable personal income (DPI; income after taxes) increasing $1.6 billion (again, less than 0.1 percent), according to last week’s report from the Bureau of Economic Analysis.

Meanwhile, personal consumption expenditures (PCE), which describes household spending on goods and services, grew by $53.4 billion, or 0.4 percent. In contrast, economists had expected a 0.5 percent increase in spending and a 0.2 percent increase in incomes.

Personal savings — DPI less PCE plus interest payments and transfer payments — declined to $702.6 billion in March, from $758.6 billion in February. The personal savings rate, which calculates personal saving as a percentage of DPI, rang in at 5.3 percent in March, down from February’s 5.7 percent rate.

Initial Jobless Claims 

First time claims for unemployment insurance filed by the newly unemployed during the week ending April 25 plummeted to 262,000, a decline of 34,000 claims from the prior week’s revised level of 296,000, the Employment and Training Administration reported last week. This was he lowest point for layoffs since April 15, 2000’s total of 259,000 claims. 

Meanwhile, the four-week moving average, considered a more stable read on layoffs, ticked down to 283,750 claims, a decline of 1,250 claims from the preceding week’s revised average of 285,000 claims. 

“Initial jobless claims continue to signal tightening in the labor market,” RDQ Economics co-founders John Ryding and Conrad DeQuadros wrote in a note to clients. “[The data] suggest that the softening in job growth in March may well have been a temporary quirk.” 

Construction Spending 

Construction spending dipped 06 percent in March, falling to an annual rate of $966.6 billion, the Census Bureau reported last week. That said, March’s spending was still 2 percent higher than March 2014’s pace of $947.3 billion. 

Spending on private construction, which accounts for roughly 70 percent of all construction spending, dropped 0.3 percent to an annual rate of $704.7 billion, with residential construction dropping 1.6 percent to an annual rate of $349 billion. Spending on single-family homes dropped by 1.8 percent, and construction spending on multi-family units fell 2.1 percent. 

Economists projected a ramp-up in residential construction spending during the April-to-June timeframe as the weather warms and home-selling season gets underway in earnest. 

This week we can expect: Monday — March factory orders from the Census Bureau. Tuesday — March balance of trade from the Census Bureau. Wednesday — First quarter productivity from the Bureau of Labor Statistics. Thursday — Initial jobless claims for last week from the Employment and Training Administration; March consumer credit from the Federal Reserve. Friday — March wholesale inventories from the Census Bureau; April payrolls, unemployment rate, hourly earnings and average workweek from the Bureau of Labor of Statistics.




Are you looking to Downsize?!

Please join us for our upcoming downsizing seminar on May 28th. Free lunch will be provided for those registered to attend.  Please call 434-879-3275 to register or ask questions.  We look forward to seeing you there!




13 Rules Today’s New Home Buyers Can Learn From The Past

The zero-down, risk-everything days are over. Time to go back to money basics for buying your first home. Many of today’s first-time homebuyers are millennials — the generation born in the ’80s and ’90s. They are getting married, starting families, and stepping into the real estate arena for the first time. This generation grew up in a real estate boom, followed by a bust and an insane decade of home-price escalation, wide-scale underfinancing, and subprime lending. Having witnessed the housing market’s volatility, millennials may be wondering what new rules apply in this evolving real estate realm. Luckily, the “new rules” are the same tried-and-true rules of home buying from years past. Here are 13 rules for millennials looking to buy — while avoiding another burst housing bubble. If you can’t afford the home, don’t buy it. Don’t purchase a home blindly. Research and learn about the area, get advice from others, and study all the available data. Avoid “creative financing”: buy properties with a traditional 15- or 30-year loan. Sleep soundly knowing your mortgage payment will be the same each month for the entire mortgage term. Always put down 20% of the purchase price. Buy a house for 20% less than the amount the bank is willing to lend and you’ll never be house poor. You’re not just buying a house, you’re buying a neighborhood. It’s tough to qualify for a mortgage; plus, qualifications are more stringent these days. Keep great financial records, and be patient throughout the process. Don’t expect the market to appreciate and create more value in your home. Don’t overpay for a house you can’t really afford in hopes of market appreciation making up the difference. Less is more. A smaller, practical, easy-to-maintain house is the new, big, rambling mansion. Actively manage your credit, and shoot for an excellent score (above 750). Plan to stay in your home at least five years. Think you’ll need to sell before then? Then forgo homeownership and keep renting until you are ready to settle. Budget for all the costs of homeownership — not just the monthly mortgage payment. Be sure you have the funds for property taxes, insurance, upkeep, and even an emergency repair fund. If your job security is in question and your industry flat, don’t buy yet. For a generation who may think risking everything and buying homes with zero down is the norm, these rules may seem new. But as the saying goes, everything old eventually becomes new again. In this new era, millennials simply need to take a cue from the past to buy safely and securely in the current housing market.  




How To Tell If It's Time To Refinance Your Home Loan

To determine whether you should consider refinancing your home loan, you can compare the costs of getting a new mortgage with the savings you would get from a reduced interest rate. You may also want to consider refinancing to a different type of mortgage, such as switching from a 5-year balloon to a 15-year fixed rate mortgage. Here is an example and a work sheet that will help you determine if refinancing makes sense for you. You may want to print this article and use the worksheets. Refinancing Example Rick and Carol have a home they bought three years ago for $300,000 and they have five years remaining on balloon mortgage of $200,000 with an interest rate of 4.25 percent. Their monthly payments are $983.88. They intend to live in their home for several years and would like to lock in a 30-year mortgage with a 3.5 percent fixed rate. Rick and Carol
New Mortgage Costs
Discount Points (in $) $ -
Origination Points (if any) $ 1500
Application Fee $ 475
Credit Check Fee $ -
Attorney Fees (yours) $ -
Attorney Fees (lender's) $ -
Title Search Fee $ -
Title Insurance Fee $ -
Appraisal Fee $ -
Inspections $ -
Local Fees (taxes, transfers) $ -
Other Fees $ 360
Total cost of new mortgage $ 2335
Calculating the Savings
Monthly payment on current mortgage $ 983.88
Monthly payment on new mortgage $ 898.09
Difference between two mortgage payments $ 85.79
Divide total fees on new mortgage by monthly savings - This is the number of months to recover your costs 27 months In this example, Rick and Carol would save almost $1,030 annually in mortgage payments and lock in a 30-year fixed rate mortgage. Over the course of the mortgage they would pay about $31,000 less in total interest. Work Sheet for You to Use
New Mortgage Costs
Discount Points (in $) $
Origination Points (if any) $
Application Fee $
Credit Check Fee $
Attorney Fees (yours) $
Attorney Fees (lender's) $
Title Search Fee $
Insurance Fee $
Appraisal Fee $
Inspections $
Local Fees (taxes, transfers) $
Other Fees $
Total Cost of New Mortgage $
Calculating your Savings
Monthly payment on current mortgage $
Monthly payment on new mortgage $
Difference between two mortgage payments $
Divide total fees on new mortgage by monthly savings - This is the number of months to recover your costs $ Other Considerations When you’re thinking of refinancing, you may also wish to consider refinancing a larger or smaller amount than the current balance of your mortgage. If you have excess funds available and believe you will have a hard time earning a return from your investments that’s greater than the mortgage rate you’re paying, you may want to pay down your mortgage and get a new mortgage that is smaller. If you need cash for other things, like college tuition or a new car, you may want to refinance a larger amount to cash out some of the equity in your home. Remember that mortgage interest may be tax deductible if you itemize your deductions on your tax return. Consult your tax adviser to see how this may apply to your situation. Final Thoughts No interest rate environment lasts forever. Unfortunately there is no crystal ball that will tell you when rates have reached their lowest level. Take action now to evaluate whether refinancing makes economic sense. Evaluating the type of mortgage you want, can help you be in control of one of your largest household expenses.




Staging Your Home to Sell

In a manner of speaking, staging your home is putting its best foot forward: you're setting up each room to look inviting to prospective buyers of all types. Showcase your home’s best features, and minimizes any flaws. 

Clean and clear
Ideally, you’d start with a completely empty home, painted in neutrals and perfectly clean. In reality, you get as close to this ideal as you can by boxing up personal items, clearing out closets and stacking everything neatly in your tidy and [now] organized garage and attic. Items that must stay out in the open need to go in bins or baskets to keep your home free of clutter. This includes toys and kitchen and bathroom items you need to use daily. And of course everything must be dusted and cleaned of fingerprints and footprints! 

Start the staging
Your rooms should look inviting, but they still need to have the minimum furnishings possible so buyers can imagine their own belongings in there more easily. Play to the strengths of each room by accenting its best features. Create conversational groupings in common areas. 

Light it up
Bright lighting make the room look warm and welcoming. Chase away dark corners by using both ambient lighting and accent lights. 

Head outside
Your patio and yard should also be selling features. Clean up the furniture, make sure the cushions aren’t sun-faded, and get the garden in shape. If you don’t have a green thumb, large potted plants can dress up the exterior. 

Make every space count
Dress up a Spartan guest room with a comfy chair and pretty lamp to create a cozy reading spot. The guest room should be obviously a guest room; the same goes for the office. Ambiguity in a room’s purpose can be confusing to homeshoppers. Make it clear what each room is for. If you have an oddly shaped landing, or a little nook in the living room, don’t ignore it: show its potential. 

Keep up daily
This can be the hardest part! But while your home is on the market, you need to keep the garbage empty, the laundry folded, the pet toys out of sight, and the cap on your toothpaste. 

It’s hard to show your home while you’re still living in it, but you need to think about what a new homeowner will be looking for: a fresh start and a place for their family and their belongings. You want your home to appeal to the most number of people possible. Keep these tips in mind to help your home sell quickly and for more money! 




3 Ways To Leave Your House To Your Kids (Or Anyone Else)

Passing along real estate to your children or other heirs can be done with a minimum of stress, hassle and cost, as long as you’re willing to do a little planning. Here are three of the most popular ways to leave your home to your heirs: 1. Include your home in your will. When you draft your will, you can include your home in the assets you distribute. For example, you can leave it to multiple children and direct them to sell it and split the proceeds. Pros: It’s easy for you to include your home among the assets distributed after your death. All you have to do is ask your attorney to include it in your will. If they sell the property, they’ll likely pay capital gains taxes based on what the home was worth when they inherited it. Cons: Your heirs will have to go through the probate process, which can be expensive and time consuming. Your will may be a public record that anyone can view. 2. Put your home in a revocable living trust. A revocable living trust is a trust that you can change or cancel (revoke). In the trust, you name a trustee (that’s usually you) and a successor trustee (the person you want to inherit your home). Once you set up the trust, you transfer your home into it and when you pass away, your successor trustee takes control of the trust, and therefore, your home. Pros: Your heirs get your home upon your death without having to go through the expense and time of the will probate process. If they sell the property, they’ll likely pay capital gains taxes based on what the home was worth when they inherited it. Cons: Setting up a living trust can cost thousands of dollars. If your children are young, you’ll have to have a trustee manage the trust and home until they’re old enough to manage it on their own. 3. Add your children to the title of your home while you’re still alive. You can give your home to your children by adding them to the title of your property as joint tenants (or joint tenants with rights of survivorship). Pros: When you die, your heirs automatically own the property without going through the probate process. Cons: There are often significant tax consequences when you give someone a valuable property. If your heirs sell the property, they’ll likely pay capital gains taxes based on what you paid for the property back when you first bought it. You can’t change your mind and take back your home. Your heirs will have to agree if you want to refinance or take out a mortgage. Need help considering your options? I can refer you to an attorney who can explain these (and other) options. Tax laws and tax rules are constantly being updated and interpreted. This article contains general information, so please discuss your individual situation with a trusted tax adviser before making tax decisions.




Last Week's Economic News in Review

The economy continued to add jobs, but the growth was at its slowest pace in more than a year, while lay-offs saw unexpectedly good news, and personal incomes and spending saw modest gains. 


The U.S. economy added just 126,000 jobs in March, which, while an increase, was the slowest pace of job growth since December 2013. This kept the unemployment rate at 5.5 percent, unchanged from last month, according to figures released by the Department of Labor last week. 

Overall, the number of unemployed Americans saw little change, hovering at 8.6 million people, with the labor force participation rate — the percentage of employable Americans actively working or looking for work — also hovering at 62.7 percent. The number of long-term unemployed people saw little change at 2.6 million people, which represented 29.8 percent of overall unemployment. 

The number of Americans involuntarily employed on part-time basis, for economic reasons such as their hours work cut back or that was the only work they could find, totaled 6.7 million, which was the essentially the same as February. 

Analysts cautioned not to read too much into the March numbers, as one month’s performance does not represent a trend in terms of any employment slow-down. 

“Payrolls are always volatile even at the best of times, and we are coming off a run of almost unbelievably strong employment growth stretching back to last summer,” Capital Economics economist Paul Ashworth wrote in a statement to clients. “… this is most probably another temporary blip.” 

Initial Jobless Claims 

Lay-offs beat market expectations for an increase, and instead saw a healthy decline, with continuing jobless claims hitting a 15-year low. Initial jobless claims filed during the week ending March 28 fell to 268,000, a drop of 20,000 from the preceding week’s revised level of 288,000, the Employment and Training Administration reported last week. The performance completely reversed market expectations of a rise in jobless claims to 295,000. 

The four-week moving average, considered a more reliable gauge of jobless claims, also saw a significant drop, falling to 285,500, a decline of 14,750 claims from the prior week’s revised average of 300,250. 

Better yet, the number of unemployed Americans still covered by unemployment insurance fell to 2,325,000 people, a drop of 88,000 from the previous week’s revised level of 2,322,000. That’s the lowest continuing jobless claims have been since Dec. 16, 2000. 

“The trend in claims, now below the pre-recession trough, continues to impress and remains consistent with an improving labor market,” BNP Paribas analyst Derek Lindsey stated in a note to clients. 

Incomes and Spending 

Continued bad weather had an impact on consumer incomes and spending in February. Personal incomes for the month grew by $58.6 billion, or 0.4 percent, and disposable personal income (DPI; income after taxes) notched p $54.2 billion, or 0.4 percent, the Bureau of Economic Analysis reported last week. Meanwhile, personal consumption expenditures (PCE) notched up $11.8 billion, or 0.1 percent. 

Personal savings — which is DPI minus personal outlays — hit $768.6 billion in February, compared with $728.7 billion in January. The personal savings rate — which is personal savings expressed as a percentage of DPI — grew to 5.8 percent in February, compared with 5.5 percent in January. 

“It does look like weather might have been a disruption in the first quarter, just like we thought a year ago,” BNP Paribas economist Laura Rosner told the Wall Street Journal. “The question now is, is this going to persist or is it something that’s going to get reversed?” 

This week we can expect: Tuesday — February consumer credit totals from the Federal Reserve. Thursday — Initial jobless claims for last week from the Employment and Training Administration; February wholesale inventories from the Census Bureau. Friday — March budget from the Treasury Department; March import and export prices from the Census Bureau.




Will Inflation Affect Home Buying?

Mortgage rates have been low for quite a long time now. Even recently, when they’ve started to creep up, they’ve come back down again. But we all know this can’t last forever. In fact The Federal Reserve Chair, Janet Yellen, recently indicated rate increases can be expected in the not too distant future. 

Well, she may not have mentioned mortgage rates specifically. But when the Federal Reserve stops buying up bonds and allows inflation to take its natural course — that means it will rise — then mortgage interest rates will also be affected, along with many other costs associated with purchasing and owning a home. 

The Basics
So how does inflation affect mortgage rates? Let’s start with understanding what inflation is. Inflation basically means that prices are rising. When inflation runs its natural course, the cost of products slowly rises, so that you’re paying more for the same item. In a stable economy, wages will rise to match inflation, so that costs aren’t out of control and the people can still keep the economy moving by making purchases and circulating cash. 

As a country we are in a good place economically now, with low unemployment, rising wages, and robust consumer spending. However, if the people start spending more, and create a risk of supply not being able to meet demand for goods and services, the Fed may raise interest rates to slow things down. So a strong economy can itself trigger inflation to grow, affecting your clients’ purchasing power and home buying prospects. 

Show Your Clients Why They Should Buy NOW 
When inflation rises quickly, your clients’ buying power won’t keep up, and they won’t be able to buy the same items and services for the same cost as they once could. That includes their mortgages: Inflation will cause the mortgage interest rate, and possibly the fees associated with a home mortgage purchase, to rise. For some people this could put homeownership out of reach. Consider this example: When interest rates are at 5 percent, a homebuyer can pay around $1,600 per month on a $300,000 loan; but at 6 percent, $1,600 per month gets them a loan of $270,000. 

Additional Concerns
In addition to your clients’ mortgages costing them more, the house itself will cost them more. If you’re selling a homebuyer a brand-new home, the cost of lumber will have increased, raising the price. Even in an older home, clients will be paying higher rates: for new carpet, for the HVAC serviceman, for the home warranty. 

Of course, no one can say with certainty how prices and inflation will change over the next six months, or 12, or the next five years. What we do know is that mortgage interest rates are still at historic lows; that home prices are still incredibly affordable, but they are rising; and that inflation will probably soon be on the rise: all factors which make now the right time to buy a new home. Please share my contact information with your clients and encourage them to all me to review their personal financial situations. Together we can get your clients off the fence and into a new home!




Business Leadership: American National University

On April 2nd, 2015 Katherine Farber spoke for a class at American National University on Candlewood Ct in Lynchburg, VA about her experience as both a realtor for Keller Williams and as a business owner, being the owner of The Lynchburg Team - Lynchburg Real Estate Services, KW.  She fielded questions from the classroom of students about lead generating, lead tracking, the real estate process, the day to day challenges a realtor faces and the challenges of running a business.  She spoke about the hiring process for members of her team, focusing on her vision of training and focus - with The Lynchburg Team, Lynchbug Real Estate Services all team members undergo rigorous and continuing training to ensure that they are well versed on every aspect of the real estate transaction, and all team members have a very specific focus within the company to ensure that they are able to focus on their "One Thing". Each member of The Lynchburg Team is able to dedicate all of their time to their specific field of focus, ensuring our clients receive excellent customer service from someone who will only have that client's best interests in mind. Katherine routinely volunteers to teach about the home buying process, particularly for first time home buyers, and can often be found at colleges in the spring and early summer months helping educate the community.  In addition to the training and educating she volunteers for at local colleges, Katherine volunteers for several other local charities and causes.  For instance, currently The Lynchburg Team is coordinating a donation drive for Human Kind, accepting canned goods and non-perishable items.  

Brandon Farber

Brandon Farber


Last Week's Economic News in Review

Last week saw encouraging housing news with sales of existing homes reaching their best rate in 12 months, and new home sales hitting their fastest pace in seven years. Also, layoffs enjoyed a better-than-expected drop. 

Existing Home Sales 

Sales of existing homes hit their fastest pace in a year, rising 1.2 percent to an annual rate of 4.88 million in February, according to last week’s report from the National Association of Realtors. All told, sales of existing single-family homes, townhomes, condominiums and co-ops were 4.7 percent higher than the same period a year ago. 

That said, prices climbed as well. The median price for existing homes of all types hit $202,600 in February, which was 7.5 percent higher than February 2014’s price. This marked the 36th straight month of year-over-year price gains. It appeared that higher prices caused by winnowing supply were holding the market back, according to NAR chief economist Lawrence Yun. 

“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” Yun said in a public statement. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.” 

Looking at inventory, the total pool of existing homes for sale at the end of February grew 1.6 percent to 1.89 million units, representing a 4.6-month supply of available homes at February’s sales pace. 

New Home Sales 

New home sales hit a seven-year high in February, with sales of new single-family homes hitting an annual rate of 539,000, the Census Bureau and the Department of Housing and Urban Development reported last week. February’s pace was 7.8 percent higher than January’s revised rate of 500,000 and was 24.8 percent higher than February 2014’s pace of 432,000. 

John Johnson, chief executive of homebuilder David Weekley Homes attributed February’s gains to improved consumer confidence and low interest rates. 

“There’s evidence that buyers who had been forestalling or delaying their decision are now comfortable enough to buy,” Johnson told the Wall Street Journal. “And there’s some awareness that interest rates aren’t going to stay down forever.” 

Looking at price, the median sales price of new homes sold in February was $275,500, and the average sales price was $341,000. The estimated inventory of new homes for sale at the end of February was 210,000, representing a 4.7-month supply at February’s sales pace. 

Initial Jobless Claims 

First-time claims for unemployment benefits filed by the newly unemployed beat analysts’ expectations, and fell to their lowest level in five weeks. Initial jobless claims filed during the week ending March 21 dropped to 282,000, a decline of 9,000 claims from the preceding week's unrevised level of 291,000, the Employment and Training Administration reported last week. This beat job market watchers’ expectations that claims would come in at 290.000 for the week. 

The four-week moving average — considered a more stable measure of lay-offs — fell to 297,000, a drop of 7,750 claims from the prior week’s unrevised average of 304,750. 

All in all, a sustained low level in layoffs spells good things for the job market, because it typically corresponds with increased hiring. 

“If we continue to see claims down here, you can expect to see more payroll gains,” said Raymond Stone, managing director at Stone & McCarthy Research Associates, told Bloomberg. “The good, strong gains we’ve seen in payrolls will continue.” 

This week we can expect: Monday — Personal incomes and spending for February from the Bureau of Economic Analysis. Tuesday — Consumer confidence for March from The Conference Board. Wednesday — February construction spending from the Census Bureau; car and trucks sales for March from the auto manufacturers. Thursday — Initial jobless claims for last week from the Employment and Training Administration; February balance of trade from the Census Bureau and Bureau of Economic Analysis; February factory orders from the Census Bureau. Friday — March unemployment, payrolls, hourly earnings and average workweek from the Bureau of Labor Statistics.



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