Tag: Simplifying the Market™

We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own a home differ for each buyer, but there are many basic similarities.

Eric Belsky is the Managing Director of the Joint Center of Housing Studies (JCHS) at Harvard University. He authored a paper on homeownership titled – The Dream Lives On: The Future of Homeownership in America. In his paper, Belsky reveals five financial reasons why people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study: 

1) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2) You’re paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.” 

3) Owning is usually a form of “forced savings.”

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition. 

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, let’s get together and evaluate your ability to do so.

from Simplifying the Market™ http://ift.tt/1PWu9NP
via IFTTT

Some Highlights:

• Across the country, home prices are up by 5.67%.
• Each state is appreciating at a different rate, however, which is important to realize if you plan on relocating to a different state.
• Regionally, prices have appreciated year-over-year by as high as 8.15%.

from Simplifying the Market™ http://ift.tt/1tmgExd
via IFTTT

In many markets across the country, the amount of buyers searching for their dream home greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

But even if you are in a market that is not as competitive, knowing your budget will give you the confidence to know if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

1. Capacity:Your current and future ability to make your payments
2. Capital or cash reserves:The money, savings and investments you have that can be sold quickly for cash
3. Collateral:The home, or type of home, that you would like to purchase
4. Credit:Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

from Simplifying the Market™ http://ift.tt/1UCRyzB
via IFTTT

According to the National Association of Realtors’ (NAR) 2015 Profile of Home Buyers and Sellers, single women made up 18% of all first-time homebuyers last year, second only to married couples who made up 54% of total buyers.

Whether they are young, single and no longer want to rent, or newly divorced, the amount of single women becoming homeowners greatly outnumbers single males (11%). A survey of recent home buyers revealed some interesting trends about this rapidly growing group:

• Average Age: 32 years old
• Average Income: $49,400
• Single women are more likely to become preapproved for a mortgage in order to know their budget at the beginning of the home buying process and to be able to make a move if they find their dream home.
• Many female homebuyers think long-term when considering buying a home, often considering what amenities they may need in the near future.

“So what do women like best about homeownership? They believe that they are investing in their future by building equity and financial security. They are also very happy to no longer be paying their landlord’s mortgage payment. Being independent and having control over their environment is a key factor.”

It appears that it is not marriage before mortgage any longer, for either gender. As we reported yesterday, unmarried couples make up 13% of buyers, while single males account for 11%.

Bottom Line

If owning a home of your own has always been your dream, let’s get together to determine if your dream could become a reality sooner than you think.

from Simplifying the Market™ http://ift.tt/1PH8DfM
via IFTTT

There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family. Others may think they are too young. And still others might think their current income would never enable them to qualify for a mortgage.

We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first time buyer:

Bottom Line

You may not be much different than many people who have already purchased their first home. Let’s get together to see if your dream of homeownership can become a reality!

from Simplifying the Market™ http://ift.tt/1Zu9EIg
via IFTTT

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions, are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible) to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $208,700 compared to $235,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

Dave Ramsey, the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a Real Estate Professional?

from Simplifying the Market™ http://www.simplifyingthemarket.com/en/2016/06/06/5-reasons-to-hire-a-real-estate-pro/?a=265011-e4b80617de4ebaf47156
via IFTTT

Some Highlights:

• Paying rent is not a good investment, but owning is a great way to start building family wealth.
• Not only does homeownership allow you to provide your children with great education, but you can also decide whether or not your child grows up with a pet.
• Owning a home provides you with tax benefits while also providing you with more living space to move around in.

from Simplifying the Market™ http://ift.tt/1O7nHTs
via IFTTT

Yesterday, we ran a post quoting major housing experts on the increasing strength of the U.S. housing market. We were pleasantly surprised that, on the same day, the Wall Street Journal decided to run a front page story titled, “Housing Recovery Picks Up Steam” (article available to WSJ subscribers).

The first paragraph of the article says it best:

“Home prices are back to near-record highs across the U.S. amid rising demand and supply constraints, a sign that the lopsided housing-market recovery of the past five years is gaining some strength.” (emphasis added).

What about the struggles in the economy?

Some openly question how the real estate market can be gaining ground if the overall economy is still struggling. According to the WSJ, it is:

“Despite the unbalanced recovery, Federal Reserve officials have seen housing as a bright spot for the U.S. economy in recent years. Residential construction has contributed to overall economic output for eight straight quarters, expanding at a 17% annual rate in a first quarter marked by slow growth in other sectors.”

Bottom Line

The housing market is gaining strength and all indicators point to an even stronger real estate market moving forward.

from Simplifying the Market™ http://ift.tt/24kcroI
via IFTTT

We want to let you know that “rumors of a new market meltdown” are not based on any reputable data. As proof, we offer you the comments of the following experts who have a totally different view on the current housing market.

Lawrence Yun, Chief Economist at NAR:

“In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007.”

Jonathan Smoke, Chief Economist at realtor.com:

“We had a triple crown of April home sales reports, so 2016 is in the pole position to earn best year of home sales in a decade.”

Andrea Riquier, MarketWatch housing reporter:

“I’m calling the end of the housing “recovery.” On to ‘expansion.’”

Freddie Mac:

“Despite the disappointing economic reports, we still forecast housing to maintain its momentum in 2016.”

Steven Russolillo, Wall Street Journal housing reporter:

“A recent gauge of home builder sentiment held firmly in positive territory, according to the National Association of Home Builders. Perhaps more important, expectations for sales in the next six months jumped to the highest level of the year.”

Fannie Mae:

“Our latest housing tracker shows that the first quarter of 2016 was the second fastest first quarter pace of home sales in the past decade… Home sales typically rise in the spring and summer months, and we anticipate an acceleration in home sales that will surpass 2007’s pace by late summer.”

from Simplifying the Market™ http://ift.tt/1TXeHPZ
via IFTTT

As the economy continues to improve, more and more Americans are seeing their personal financial situations also improving. Instead of just getting by, many are now beginning to save and find other ways to build their net worth. One way to dramatically increase their family wealth is through the acquisition of real estate.

For example, let’s assume a young couple purchased and closed on a $250,000 home in January. What will that home be worth five years down the road? 

Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists every quarter. They ask them to project how residential prices will appreciate over the next five years. According to their latest survey, here is how much value that $250,000 house will gain in the coming years.

Over a five-year period, that homeowner can build their home equity to over $40,000. And, in many cases, home equity is large portion of a family’s overall net worth.

Bottom Line

If you are looking to better your family’s long-term financial situation, buying your dream home might be a great option.

from Simplifying the Market™ http://ift.tt/1WWb0gS
via IFTTT