US Mortgage Rates Rise for Seventh Week to Highest in 16 Years:  Borrowing costs for home loans have reached their highest point in 16 years, with the interest on a conventional 30-year mortgage hitting 6.7% on Wednesday, according to Freddie Mac.  Mortgage rates have now more than doubled since the beginning of 2022. As measured by their “effective” rate, which factors in the compounding period for a loan and which thus offers a truer picture of the cost to homebuyers, mortgage rates are now just above 7%, according to Oxford Economics.   A percentage point increase to a mortgage rate can add hundreds of dollars to a property’s monthly payments, depending on the size of the loan.  Those sharply higher costs are chilling the housing market. The number of mortgage loan applications dropped roughly 14% during the final week of September, according to the Mortgage Bankers Association.   Some relief for buyers may be on the horizon, as home prices are starting to fall and are likely to continue declining in certain real estate markets, economists predict.  Economists expect mortgage costs to stay elevated as the Federal Reserve continues to hike its benchmark interest in an effort to cool inflation, including two more hikes by year end. 

The Real Estate Market is Not In A Free Fall (and This is Why):  Reading recent headlines, you’d assume that the real estate market was about to collapse.  Although it’s undeniable that the real estate market is wrestling with lingering supply issues, as well as less-than-ideal interest rates, the industry is far stronger than it was a decade ago. Since 2012, the number of new home constructions has risen roughly 67% and homes home are still selling quickly, averaging 17 days on the market according to NAR’s most recent existing home sales report.  Across the country, current data does show the real estate market is taking a breath. It would seem that buyers are trying to grasp the current economic conditions.  In short, the real estate market is not in free fall. Despite ongoing difficulties caused by the COVID-19 pandemic, it remains stronger than it was since before the Great Recession of 2008.  Factors that lead to the housing decline of 2008 included a lack of jobs and income, the over-valuation of homes, the subprime mortgage crisis and the burst of the housing bubble.  Today’s scenario is less about an overinflated economy on the verge of rupture and more about the lingering after-effects of a generally slower economy. 

Most homeowners find renovations worth it despite the expense:  Many homeowners put off by high mortgage rates and home prices opted to renovate their spaces rather than move, even if it meant spending more than they planned, a recent study by House Method said.  The study surveyed 1,000 homeowners and said that 93% of them found renovations to be worth the time, money and any temporary discomfort that was caused.  The number one reason homeowners said they decided to renovate was to enjoy their living spaces more, and more than 75% said they intended to stay in their homes after the project’s completion. Roughly three quarters (76%) of respondents also said they planned on tackling another home renovation, whether in their current home or a new one in the future. 

Let Lighting Set the Tone:  When moving in or remodeling, homeowners are wise to focus on the power of light to illuminate rooms, add decorative panache and color, pare energy consumption and improve safety.  So much of the time, plans to decorate or fix up a home focus on big fun projects such as kitchens, bathrooms, paint palettes and furnishings. Other projects, like lighting, are often an afterthought.  Choosing where to cut holes for recessed ceiling cans or install light switches in walls may seem ho-hum and boring, but these decisions and others should be part of any plan because there’s so much new lighting technology to take advantage of.