We Still Aren't Recovered From Financial Crash, but Give It 2 More Years

by Jeff Brown, msn money
February 21, 2015

Two years and change — that's how long until home prices finish recovering all the losses from the financial crisis, according to a survey from Zillow.com.

The home sales and data firm says that by May 2017 the median home price should exceed its pre-recession peak of $196,400. If so, it will have taken roughly nine years to get back into the black after the home-price crash — a disturbing figure for homeowners who had long thought a house or condo to be not just a home but a key asset for retirement and other needs.

The survey of experts, conducted for Zillow by the research and consulting firm Pulsenomics, forecast a 4.4% price gain this year, well below the double-digit increases of a few years ago but still ahead of the long-term average of around 3% a year.

"During the past year, expectations for annual home value appreciation over the long run have remained flat, despite lower mortgage rates," says Pulsenomics founder Terry Loebs. "At 4.4%, overall expectations for nationwide home value growth in 2015 are one-third lower than the actual 6.6% appreciation rate recorded last year."

While homeowners prefer big price gains, the slowing pace is actually good news because it signals a soft landing, not another bubble likely to burst. Because a home is a big asset that is hard to sell, price volatility is hazardous to the owner's financial health.

Among the factors that muddy the situation: the high cost of renting. High rents give renters an incentive to buy, but they also make it hard to save up a down payment. Pulsenomics says it will take a couple of years for this situation to ease, arguing there's not much the federal government can do to make rents more affordable, though policies to lift wages and employment can help.

"Housing markets in general and rental dynamics in particular are uniquely local and demand local, market-driven policies," Zillow Chief Economist Stan Humphries says.

Tight supply of rental housing could be eased by making it easier for developers to build new units. That could involve speeding the approval process or changing zoning codes.

The pace of housing sales and home price gains is, in a sense, not a clear measure of supply and demand because many would-be buyers are shut out of the market by tight lending standards.

The credit availability index calculated by the Mortgage Bankers Association rose to 117.8 in January, compared with 100 in March 2012. But this is still far below the levels of 300 to nearly 900 in the Wild West days of 2004 to early 2007. While few experts recommend a return to the no-questions-asked policies that helped bring on the financial crisis, many feel today's standards are too tight, shutting out borrowers who are good risks.

Fortunately, there is some hope on this front.

"Several new initiatives aimed at making mortgage credit more available and affordable to consumers were recently announced and resulted in a net loosening of credit over the month," MBA Chief Economist Mike Fratantoni says.

Those include new Fannie Mae and Freddie Mac programs requiring down payments of only 3%, and a reduction in mortgage insurance premiums on FHA loans.

Those moves could bring more buyers into the market, ensuring that home prices continue to rise at a healthy pace.

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How to Choose the Right Tile Layout

Yanic Simard

Houzz contributor, Houzz.com

Whether you’re splurging on a rare natural stone or standing by classic porcelain, choosing a tile type is only part of the design decision. The way the tile is installed also matters. To help you figure out the best layout for your kitchen, bathroom and beyond, here are some of the most popular options.

Lisa Gabrielson Design

Brick

This is the classic layout for subway tile. In a brick pattern, each row of tiles is typically offset by half a tile width, which results in long, horizontal lines that can subtly widen a room. It’s a timeless layout that can work for any rectangular tile, making it a great option for virtually any space.

A brick layout can look especially stylish when paired with a contrasting grout color, such as gray grout with white tile, emphasizing the geometric pattern.

Where to use a brick pattern: Anywhere, but especially in spaces where one simple tile is used throughout.

EM DESIGN INTERIORS

Vertical Brick

Choosing a brick pattern but orienting it vertically takes the widening effect and rotates it, emphasizing the height of a space instead. It also adds a touch of contemporary appeal by being a little unexpected but still classic, for a fun twist that isn’t too trendy.

When to use a vertical brick pattern: To lift the ceiling height, such as in a compact bathroom.

Thomas Buckborough & Associates

Large Brick

An oversize brick pattern is not technically different from a standard brick, but the effect can be different, especially with rich stone tiles. Here the pattern helps minimize the visual impact of the grout, allowing the tiles to have a more seamless appearance.

When to use a large brick layout: When you want oversize tiles to appear as a continuous plane of stunning unbroken material.

Tip: Use color-matched grout to enhance the effect.

Architect Mason Kirby Inc.

Stacked

This is the simplest layout. In a stacked pattern, the tiles are aligned to form a basic repeating grid. This results in a modern look that works well with clean shapes and crisp angles, and plays against the organic forms of exotic woods.

Where to use a stacked layout: In a modern space with rectilinear forms, especially with a beveled-edge tile or bright grout, which emphasizes the Zen-like simplicity.

John Lum Architecture, Inc. AIA

Mosaics

While the word “mosaic” may bring to mind complex forms that create lively patterns and images, in design terms a mosaic is simply any small tile in a repeated shape (or set of shapes), typically attached in small sheets to matting for easy installation. A very common example is a 1-inch by 1-inch square, although endless shapes and patterns are available.

Pinney Designs

Mosaics are more common for accent areas (rather than full-height walls), because they require more grout. This means they can require more maintenance if exposed to heavy soil or moisture, which can be an issue in mildew-prone bathrooms.

However, they can create a rich and subtle multi-tonal effect that has the appeal of luxe stone without the luxe cost, making them a popular backsplash option.

Jonathan Raith Inc.

In the case of a shower stall floor, the additional grout can be a benefit, as it helps create a less slippery surface.

In general, mosaic makes a great counterpoint to larger tiles, because the dramatic shift in scale makes the mismatch clearly intentional. (Here a hexagonal mosaic beautifully contrasts oversize Corian planks.)

When to use a mosaic layout: To highlight an accent wall, on a shower floor or lining a niche.

Mahogany Builders

Herringbone

A herringbone pattern is achieved by laying tiles at right angles into zigzag formations or by a preformed mosaic. Either way, the look is sophisticated and has high-end appeal, even with a simple material. However, this pattern will inevitably require additional cutting of tiles at the borders, so it can create some extra material waste.

Dyer Grimes Architecture

The angular nature of this pattern creates a dynamic energy, which can be perfect for accent walls but a little overwhelming if used on too large a surface.

Where to use a herringbone layout: In a traditional or transitional kitchen (especially in classic white on white), or with a long, thin tile to form a powerful accent anywhere.

Carrara White Marble Subway Tile - $13.89 

Basket Weave

Basket-weave and similar patterns that turn subway tiles into square units are effective for adding a sense of drama similar to a herringbone layout, while avoiding the extra cutting of material. In fact, this sort of pattern can potentially avoid any cutting at all when filling a rectangular area, making it a good secret weapon for DIYers.

When to use a basket-weave layout: To add subtle energy to contemporary decor.

Buy

Amoroso Design

Other Considerations

Accent borders. Although a border strip of accent tile can be added purely for visual interest, it can serve another important function beautifully with just a little planning. When tiling a full wall, it’s common to find that the ceiling height is not an exact multiple of the desired tile size, meaning tiles at the top or bottom will have to be cut to fit. By including a slightly wider or narrower stripe, your tiles can add up to the exact height of the wall and avoid costly (and possibly unattractive) cuts.

Richardson Homes Ltd

For example, when using a 3-inch-high tile with a 7-foot, 2-inch ceiling, using a 2-inch border at any height will leave a remaining even 7 feet for the tiles to fill perfectly. Of course, grout size can affect the way the tiles stack up, so talk to your designer or installer to figure out the exact math in advance, and you can achieve a perfect result with no headaches.

See how to install tile flawlessly

Toronto Interior Design Group | Yanic Simard

Solid slabs. The opposite of a tile pattern, a single slab is a popular choice for contemporary backsplashes. Although typically more of an investment than patterned tile, a slab can be an excellent choice for compact kitchens where not much material is required. It achieves a very open look and can be created with one single material piece cut to form a matching backsplash and counter.

For a budget-friendlier option, you can also look for off-cut slab pieces to create a short backsplash in a luxe stone, and use a less expensive material for the counter that picks up on the veining tones to coordinate beautifully.

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Weekly Mortgage Rate Update

A positive outlook for the US economy caused investors to shift assets from bonds to stocks this week. The economic data was highlighted by Friday's strong labor market report. Mortgage rates ended the week higher.

THIS WEEK'S RATE TREND IS UP

Loan Amounts under $417K, Shown as Note Rate/APR

Conforming 30 year fixed: 3.875/3.943

FHA 30 Year Fixed: 3.500/4.572

Conforming 5/1 ARM: 3.000/3.056

Conforming 7/1 ARM: 3.250/3.172

Loan Amounts over $417K up to County Limits, Shown as Note Rate/APR

High Balance Conf. 30 Year Fixed: 4.000/4.047

FHA High Balance 30 Year Fixed: 3.750/5.264

High Balance 5/1 ARM: 3.500/3.116

Loan Amounts Exceeding County Limits, Shown as Note Rate/APR

Jumbo 30 Year Fixed: 4.000      /4.039

Jumbo 5/1 ARM:  3.125/3.065

Jumbo 7/1 ARM: 3.500/3.253

Jumbo 10/1 ARM: 3.875/3.559

Loan Limit Snapshot

Conforming

All Counties: $417,000

High Balance Conforming

Santa Barbara: $625,500

Ventura: $603,750

San Diego: $546,350

LA/Orange: $625,500

FHA

Santa Barbara: $625,500

Ventura: $598,000

San Diego: $546,250

LA/Orange: $625,500

Kelly Marsh

Branch Manager

805-563-1100 ext. 106

KellyM@BroadviewMortgage.com

Licensed by the Department of Corporations under the California Residential Act License #813G136.  Subject to applicant and property qualification and availability of funds. Subject to change without notice. Rates and terms apply only to subject programs. Unless otherwise noted, rates shown are based on the purchase of a primary residence with one point loan origination. Rates vary by situation, so please call for a personalized rate quote.  This is intended to be informational to the real estate industry only and is not to be used with respect to an individual consumer who may be seeking mortgage credit, as certain information is not included, such as the APR.  Registered with the Nationwide Mortgage Licensing System and registry, NMLS #245822.

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