Real Estate Information Archive


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New Program Pays Portion of Homebuyer’s Closing Costs

by Tim Hart

Fannie Mae announced a new program to help first time home buyers take the final step in their home purchase. Fannie Mae rolled out their new Home Path Ready Buyer Program this last week, designed to help buyer’s who may be cash poor or credit poor.

First time home buyers can now receive up to 3% off the purchase price in closing cost assistance. Depending on the price of the home, that can mean big savings. For example, a $150,000 home can receive up to $4,500 in closing costs savings.

This past year, Fannie Mae also released new low down payment loans to entice buyers to start their home buying process. This program was created for similar purposes.

Any homebuyer who wants to take advantage of the new program will need to take an online course, which includes 9, 30 minute sessions. That may sound like a good chunk of time, but when you break down the previous example, that’s $1,000 in savings for each hour of class. Not bad.

For anyone interested, you can take the course here:


Home Buyer Demand Rising In Real Estate Housing Market

by Tim Hart

Home buyers may soon look like the picture above, as they wait to see that perfect home listing. Ok, maybe not to that degree, but of late, buyers have been lining up to get their chance in the US housing market.

Buyer demand has increased over March and into April across the United States due to low mortgage rates and more, new constructions start-ups adding cheaper inventory to the market.

Mortgage applications rose in the week ending April 4th for the 3rd consecutive week. Applications rose by 7% week over week and were up 12% from the same week in 2014. Mortgage applications are the best barometer for homebuyer demand, so seeing an increase in applications is always positive.

Applications rose by 17% from March compared to February as well. Most attribute the rise in mortgage activity to be due in part to the low mortgage rates seen recently (3.66% for a 30 year fixed-rate mortgage).

Buyer demand has also increased for new construction. Many buyers have opted to wait for a new home, rather than competing with other buyers on an existing home. New construction homes sales have gone up recently because they have found a price point that is appealing for many buyers.




Buying Cheaper than Renting Across Most of United States

by Tim Hart

A new study released by RealtyTrac suggests that in most places across the United States, renters are better off buying a home than paying to rent a home. In fact, in 76% of US counties, buying has become more affordable than renting a home.

Currently, the average price of rent on a 3-bedroom property takes 28% of the average homebuyer’s median income. Rental prices have been rising of late due to the high demand across the nation.

With current low mortgage rates, a monthly payment on a median priced home—inclusive of a 10% down payment, property taxes, home insurance, and mortgage insurance—only took 24% of the average homebuyer’s median income. Basically, if a buyer can afford the down payment, there is very little positive to renting over buying in most US markets.

The Gallatin County and Bozeman may still offer advantages for renting, due to the rising home values of both single-family and multi-family properties in the area and high demand from out of town buyers. Home values have gone up nationally, but Bozeman has been outpacing national home value growth by a good margin.

Bozeman’s high demand as a top mid sized town in the US has continued to grow, leading to higher home values. Both Bozeman and its builders are working on solutions to make homes in Bozeman more affordable—both to rent and buy. General growth may not be the sole solution, as building permit applications and approvals have seen high numbers in the past years, but rental rates and home values have not fallen.

However, any financial advantage to renting in Bozeman has become razor thin due to the rising rental market and lack of spaces for rent.

Bozeman has seen higher rental prices due to its proximity to MSU. MSU enrollment hit an all time high this year, increasing demand for properties near campus. Not many college age students can afford to buy a home, raising rental rates in the area. Bozeman Public School enrollment has also increased, showing general buyer interest in Bozeman, helping keep prices high.

Many renters have had to look to Belgrade and other surrounding areas to find affordable rental prices.

Still, in general, for any renters who have saved any form of down payment, whether in Bozeman or the United States in general, now is certainly the time to consider home ownership and turn a never improving rental situation into an improvable, equity building investment.




Bozeman to Reconsider Historic District Regulations?

by Tim Hart

The City of Bozeman will pay $60,000 for an in depth study reviewing the effects of its Historic Conservation Overlay District on the local real estate market. There will be a meeting at 6 pm on Tuesday in City Hall to discuss Bozeman’s next steps.

The Historic Conservation Overlay district is in the heart of Bozeman and is designed to protect old historic structures that contribute to Bozeman’s look and culture. The district encompasses 3,000 properties in Bozeman.

If any of these 3,000 properties want to adjust, renovate or change the exterior appearance of their home, city planning needs to review and approve the changes. On average, the city deals with around 300 applicants a year.

The Overlay District was first enacted when 3 historic homes were demolished for a now closed Pizza Hut on Babcock Street. Since its enactment, the district has succeeded to preserve the historic character of Bozeman. Bozeman recently was honored as a top 100 location in the US for livability--and the city's character certainly affected that rating.

Now, Bozeman has grown concerned that they are over impacting home affordability in town. Each new application for approval takes time and money, not just from the property owner, but from the city as well, and therefore the taxpayers. The city and builders alike have tried to find alternatives to help lower home values in Bozeman. The district has also become a highly sought after location in town and the district has seen property values rise. Those values could also be rubbing off on nearby neighborhoods and even affecting all of Bozeman’s affordability.

Bozeman would like to find out whether this is the case or not. The study will make its final presentation to City Commissioners in September.




2015 May Bring Millennials to Home Buying Table

by Tim Hart

Realtor Magazine believes that this year will be the year when millennials, or Generation Y buyers, come out of the weeds and take a seat at the housing market table. The magazine has pointed to rising rent prices, a strengthening job market, and the impending Federal Reserve decision to raise interest rates.

Last year, the number of first time homebuyer purchases sank to its lowest level in 30 years. However, millennials comprised 32% of the U.S. housing market, suggesting they have not been shifting into home ownership as expected. Many experts have pointed to 2015 as the year that trend shifts.

Rent prices have driven or are expected to drive many millennials to purchase a home. Whether locally or nationally, vacancy rates have been extremely low, leading to high prices. Many people have complained about getting priced out of the city they call home. In the United States, leasing costs have risen every quarter since 2010. In the 4th Quarter of 2015, apartment rents in the US increased by 4.6 percent.

The job market has continued to strengthen. Wages and employment totals have been rising over the past year and for those aged 25-34, unemployment fell to 5.4 percent. In Gallatin County, unemployment numbers are even lower. In October of 2009, millennial unemployment was at 10.6 percent.

The Federal Reserve continues to hint at an impending hike to interest rates, so many millenials are expected to get a home under contract before they see mortgage rates increase. Currently, mortgage rates are still below 4 percent.

Finally and a bit obviously, millennials are getting older each year. Each year that passes gives a millennial more time to potentially save the needed money for a home purchase. Financing had been the major factor holding back millenials from a home purchase in 2014.

Whether or not millennials become major players on the housing front is yet to be seen. However, the climate seems right to push the next generation of homebuyers into the housing market.

To read about how each generation falls into the home buyer profile, click here.




The Gallatin County and southwest Montana, along with a few select regions in the state, have helped raise the average wage for the state and lower unemployment numbers.

The Bozeman Daily Chronicle analyzed numbers released by the Montana Department of Labor and Industry and split the state into its major regions.

The Billings region, lead Montana with an average wage of $40,733 in 2013. Southwestern Montana came in just behind that with an average wage of $39,698. In Gallatin County, 66% of its residents earned their income through a wage or salary disbursement.

Despite the Gallatin County leading the state in economic growth, the average wage still came in second to the Billings region. Perhaps the slightly lower wages reflect the consequences of being a major tourist hub for the state. In an area with high tourism, many retail and service industry jobs that pay minimum or close to minimum wage will find greater success. The minimum wage was raised from $7.90 an hour to $8.05 an hour across the state at the beginning of 2015.

The highest earners in the state were physicians and surgeons at $243,000 per year. The lowest average wage came from gaming dealers—at $18,150 a year.

Montana and the Gallatin County both had unemployment rates below national averages. The seasonally adjusted unemployment rate in the United States currently sits at 5.7 percent. Currently, 4.4% of Montanans are unemployed. In Gallatin County, only 3.6% of people are unemployed.






New and Existing Home Sales Increase

by Tim Hart

New home sales increased in February, rising to a seasonally adjusted pace of 539,000 homes sold this year. That number is up 7.8% from 500,000 in January.

Total home sales rose by 1.2% in February after a slow January start. Annually adjusted home sales for February 2015 are 4.7% higher compared to February 2014. Rising total home sale numbers reflect more movement in the market—a positive sign for the overall growth of the housing sector.

Home inventory dropped to 210,000, or a 4.7 month supply, after it had already dropped in January. Low home inventory continues to burden low-income buyers as home values rise. Lack of rentals across the nation have also made the demand for homes on the market even higher. However, low inventory will lead to more new home sales in the future as more builders will be willing to build, knowing there may be a buyer out there waiting for them.

Home Buyers Paid Larger Down Payments in 2014

by Tim Hart

The average home buyer had more capital to put down on a home in 2014, according to an analysis of nearly 20 million home sales. The average down payment made by home buyers in the United States was $58,496. On average, buyers were able to put down 15.4% of the purchase price. Having buyers across the country with more money to put down in 2014 shows the positive turn both the economy and housing market have taken in the past few years.

The average down payment has been between 13 and 15% over the past decade and only 2013 and 2014 have risen above that standard.  

Only a quarter of home buyers with conventional loans put down less than 3% on their home. That same number was nearly at 37% in 2006, just before the housing crisis. Most of the buyers putting little money down in 2014 were first time home buyers.  The average sale price on homes receiving less than a 3% down payment was $190,304.

When buyers have more money to spend, that’s great news for everyone involved in the housing market. Buyers can manage their mortgage payments easier while sellers can sometimes get higher prices. Healthy activity from both sides will lead to a normalized growing market, shielding buyers and sellers from the pitfalls of a volatile market.




Builders Address Bozeman Home Affordability

by Tim Hart

Local Bozeman builders have tried to come up with viable solutions to the affordable housing scenario in Bozeman. Although more building permits have been issued in the last few years, many of these homes are aiming at prices above $300,000 (read some stats on 2014 single family residence homes here). As the Gallatin County has seen high economic prosperity, home prices have gone up as local buyers find themselves able to buy more expensive homes. However, several local builders have tried to come up with designs that would be both affordable and useful to future buyers.

One design has called for a 2 story economy home. The 2 bedroom, 2 bathroom home would be 1,336 square feet and would come with a garage. The home design would sell on average for around $220,000.

Another design would build 720 square foot dwellings with a single bedroom and a flex space area. For this design, the builders would be able to put multiple units on a single lot and the homes would sell for $198,000 each.

Unfortunately, current city set back requirements would need to be changed to make either option possible.  A set back is the space between the home and the lot edge. Current set backs are designed to allow adequate privacy to residents while providing access for repair vehicles and equipment.

The city commission has set a May deadline for builders to brainstorm potential solutions before they move forward on the Bozeman affordable housing issue. In late February, the city postponed a potential zoning change that would require builders to build homes at certain price points on some of their lots. The city has also tried to raise home inventory and looked into lowering impact fees to lower prices. Builders will also want to decide if the options are viable – based on buyer interest in these models. Without a consistent market of buyers, homebuilders would have to take on serious financial risk building these homes. 




Mortgages Rates Rising, Still Below 4 Percent In March

by Tim Hart

Mortgage rates in the United States have fluctuated over the last few weeks, but with a general upwards trend. Homebuyers will want to keep their eyes on the mortgage rates over the next few weeks to see if they continue to remain low. If they do not, home buyers may want to speak with lenders sooner as oppose to later, to lock in a more favorable loan.

30 year fixed rate mortgages returned to the start of year averages (to see January rates click here). A 30 year fixed rate mortgage gave a 3.86% interest rate in the week ending March 14th. The rate has risen from the 3.8% in late February. The rates had dropped in the first week of March to 3.75% but have now risen again. Although the rates are going up, they are all well below the 4.37% interest rate given in March of last year.

Since October, interest rates have not really risen above 4 percent, minus a couple of weeks. Coupled with the FHA lowering mortgage insurance rates, its no wonder buyers took out more mortgages in 2014 than years previous.

The 15 year fixed rate mortgage rate rose to 3.1% from 3.03% last week. In October 2014, 3.08% was the lowest the rate had fallen since 2013. Since then, it has remained pretty steady.

As mortgages rise, homebuyers will want to be aware that their buying power will be diminished. Of course, the rates are very low in general so there will still be mortgages available for most buyers. However, for buyers walking the line between buying and renting, the current low rates may be needed to get loan approval.




Displaying blog entries 1-10 of 129