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Once the outcome of the presidential election was known, 30-year mortgage interest rates slowly decreased through the end of 2024 from the high 6% range, into the mid-to-low 6% range. Forecasters predicted that they’ll continue to soften, sinking below 5%, just in time for the spring 2025 homebuying season.

• Wells Fargo agrees that rates will dip below 6% in Q2 2025.
• Fannie Mae predicts that mortgage rates will average 5.7% in 2025.
• The Mortgage Bankers Association says rates between 2024 and 2025 will drift between 6.3% by Q4 2024 and 5.9% by Q3 2025.
• The National Association of Home Builders predicts that rates will average 5.94% in 2025, with “sustained, sub-6% mortgage interest rates” beginning in Q2 2025.

Federal Reserve chair Jerome Powell says that forecasting interest rates is highly uncertain. While there are trends that suggest that the interest rate forecast for spring 2025 will be lower, it all depends on developing economic conditions. For that reason, don’t try to time the market. You can always refinance if interest rates drop.

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An older home can be a bargain, depending on how much work and money you put into it. Understanding functional obsolescence can help you get the most value for your money.

Professional real estate appraisers value properties in two parts—land value and structural enhancements, such as a house. When the home’s design and technologies are too outdated, the house is functionally obsolete and requires renovations. In worse cases, the structure’s condition has deteriorated to the point where the property’s value is only in the land, also known as “lot value.” This generally means the house is a tear-down, and a new structure can be built in its place. However, you can inadvertently create functional obsolescence when you over-improve a home for the surrounding neighborhood or install features that homebuyers don’t like or want, also known as superadequacy.

Before you buy an older home that needs either work or demolition, ask your Berkshire Hathaway HomeServices network professional for advice. They’ll show you market trends, neighborhoods and homes that will support the improvements you want to make.

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Thanks to social media, some homebuyers can be ruthless in describing your home to others. If they call your home cheugy (choo-gee), they believe you’re pursuing trends a little too hard, or your home is outdated. What makes a home cheugy is hard to pin down, but these are a few things that writers, redditors, and designers have called out:

Swap inspirational signs like “Live, Love, Laugh” with vintage or abstract art. Ditto for obvious statement signs like “Eat.”

Giant TVs taking over the living room. The trend of discreet tech: “hidden speakers, wireless charging furniture, and voice-controlled lighting” along with hidden TVs are now preferable.

Shower curtains, bath rugs, and old towels seldom look fresh and clean. Better to install a glass enclosure or buy new bath accessories.

Gray paint, the new neutral following the Great Recession, is now old and well…gray.  Try a bolder grayed blue, sage green, or mushroom instead.

It’s ironic, but the word cheugy will soon be cringy, too.

Filed under: Blog by Jane Sullivan Horne
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To sell your home this spring, you should repaint, declutter and deep clean, but details will make the most difference.

• Before you paint, scuff up the surface with a light sanding or a fine abrasive pad. Clean walls and floors of dust and dirt so painter’s tape will adhere tightly and your paint job looks more professional.
• Be ruthless when you declutter. Donate items you don’t use or like very much. Closets look bigger with fewer clothes. Organize kitchen and bath cabinets and drawers for more appeal.
• Deep cleaning should include windows. Vacuum dust and dirt from sills, then apply a generous spray of window cleaner. Use a squeegee to remove wet streaks, which works better than a cloth. Fluff curtains in the dryer and wipe off curtain rods in the meanwhile. Open all window coverings for showings to homebuyers.
• Pay attention to smells. Wash all bedding, and apply baking soda to the mattresses, then vacuum. Wash or replace pet beds. Put orange peels down stinky disposals to help clean smelly blades.

Filed under: Blog by Jane Sullivan Horne
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The “American Dream” of homeownership is supported by federal programs that either insure loans made by lenders (such as FHA, VA, and USDA) or purchase loans from lenders to package them into mortgage-backed securities (like Fannie Mae and Freddie Mac).

Loans that meet the standards set by Fannie Mae and Freddie Mac are called conforming loans, and can only be used for borrower-occupied, single-family homes up to four units.

FHA conforming loan qualifications include:

• FICO® score at least 580 = 3.5% down payment.
• FICO® score between 500 and 579 = 10% down payment.
• MIP (Mortgage Insurance Premium) is required.
• Debt-to-Income Ratio < 43%.
• The home must be the borrower’s primary residence.
• Borrower must have steady income and proof of employment.

VA loans require a Certificate of Eligibility, but require low or no down-payments. USDA loans also require no money down and are only eligible for qualifying rural homes.

Conventional loans are not government-insured. Borrowers must have 620 or higher credit scores.

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According to the U.S. Department of Housing and Urban Development (HUD), affordable housing means that you should be paying no more than 30% of your gross income for housing costs, including mortgage principle and interest, property taxes, home insurance premiums, and utilities. In reality, home ownership costs much more when HOA fees, maintenance, and repairs are included.

You can avoid becoming over-extended by taking the following steps:

Buy below your means. Your lender will qualify you for the maximum you can afford, so be wise and buy a less expensive, smaller home. Use the difference for savings and investments. You can always move later.

Plan for rising costs. Property taxes are based on sales prices, so you’ll only pay the seller’s rate until the next assessment which will be much higher next year. Home insurance, utilities, etc.  will rise in cost most years.

Plan for the long-term. It takes time to build equity in real estate. When you buy a home, plan to live there for at least seven years, then rent it out.

Filed under: Blog by Jane Sullivan Horne
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Accessory dwelling units (ADUs) are small stand-alone or attached homes built on lots occupied by larger single-family homes. Also known as granny flats, ADUs can allow aging parents to live close to family or give adult children a chance to save money to launch their lives. They can also be rented to small households for additional income.

ADUs can expand density in already-built neighborhoods replete with utilities, streets, schools, hospitals, etc., and there are those who resist ADUs for short-term rentals, due to more noise, traffic, people moving in and out, and, possibly, lower home values if ADUs don’t integrate well esthetically within the neighborhood. Fortunately, the opposite has proven true—ADUs can improve home values by as much as 35% in big cities.

Instead of restricting ADUs, a better idea is to improve zoning which limits the size (400 sq. ft. to 1,000 sq. ft.) and placement of units on a property. Other provisions can include design standards, minimum lot sizes, limits on the number of occupants, and off-street parking for vehicles.

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Slang in popular culture often has confusing meanings. Bougie (boo-zhee) and Boujee (boo-ghee), for example, are both adjective derivatives of the French noun bourgeoisie, which means “of middle-class status.” A bougie person may flaunt expensive tastes to elevate their social and financial status, while a boujee person is wealthy but unpretentious, according to hip-hop culture.

If you own or aspire to buy a middle-class home, here are three ways to give it the bougie-boujee refinement you desire. Focus on serenity, privacy, and comfort.

Serenity. The finest homes are decorated in calming neutrals, but instead of grays and beiges, try a subtle pink like Sherwin-Williams’ Fancy Pink or Benjamin Moore’s Fruited Plains.

Privacy. Create privacy without the heaviness of window drapes or the flimsiness of blinds. Plantation shutters are high end and, as attachments, add value to the home when you sell one day.

Comfort. High-quality insulation can prevent drafts, lower utility bills, and dampen noise. Decluttering can eliminate the feeling of being crowded. Ottomans can provide recliner-like comfort with better style and versatility.

Filed under: Blog by Jane Sullivan Horne
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To buy a home in spring 2025, you should organize your finances, choose the right team members, and understand the market.

Check your credit history and scores for free at Annualcreditreport.com. Look for any mistakes, liens or unpaid balances and get proof that you’ve resolved the issue. Determine sources to help you make a down payment, including savings, gifts, and grants.

Your team. Your real estate agent should be part of a vast network of contacts and have expertise in the neighborhood and the type of home you want to buy, such as a condominium or high-rise apartment. Your lender should offer a range of loan products that will fit your unique financial situation, whether you’re self-employed, an investor, or a co-borrower.

The market. Your agent will help you understand the market by showing you reports on housing prices, days on market, price reductions, and so on. This will help you choose the best neighborhood and home in your price range, replete with the services, transportation and other amenities you’ll need.

Filed under: Blog by Jane Sullivan Horne
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Real estate agency is a legally binding relationship between real estate agents and their clients during the buying and selling process. Each state has its own rules regarding the licensing and duties of real estate professionals, as well as how they’re allowed to work with consumers.

First, there are two levels of licensure—broker and agent. Brokers can own their own agencies and work independently, while agents must work under a broker’s supervision. When you hire an agent, you’re really hiring the broker.

Because brokers and agents can represent either or both parties to a real estate transaction, agency relationships must be disclosed to both the seller and the homebuyer. In most states, dual agency isn’t permitted, but a broker may assign another agent in the firm to represent one of the parties as a designated agent with limited fiduciary obligations.

In some regions, new industry rules or existing state laws may require homebuyers to sign temporary or long-term representation contracts with a buyer’s agent before they can begin touring homes. The contents of these agreements vary depending on the location of the property and other factors; consult with a local broker or sales professional for more specifics.

Filed under: Blog by Jane Sullivan Horne
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