1st Time Home Buyers

You Can Save for a Down Payment Faster Than You Think!

You Can Save for a Down Payment Faster Than You Think | Keeping Current Matters

In a study conducted by Builder.com, researchers determined that nationwide, it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.

Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage of income a renter spends on housing in each state, and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

You Can Save for a Down Payment Faster Than You Think | Keeping Current Matters

What if you only needed to save 3%?

What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

You Can Save for a Down Payment Faster Than You Think | Keeping Current Matters

Bottom Line

Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with us at Triple Crown Realty-Keller Williams, Guy & Joi McKinney your professional Realtors® who can help you evaluate your ability to buy today.

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You Can Save for a Down Payment Faster Than You Think

You Can Save for a Down Payment Faster Than You Think | Keeping Current Matters

In a study conducted by Builder.com, researchers determined that nationwide, it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home. Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage of income a renter spends on housing in each state, and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save. According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state: You Can Save for a Down Payment Faster Than You Think | Keeping Current Matters

What if you only needed to save 3%?

What if you were able to take advantage of one of the Freddie Macor Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below. You Can Save for a Down Payment Faster Than You Think | Keeping Current Matters

Bottom Line

Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with us your real estate professional who can help you evaluate your ability to buy today.

Past, Present & Future Home Values

Past, Present & Future Home Values | Simplifying The Market

 

Here are state maps for each category:

The Past – home appreciation over the last 12 months

Past, Present & Future Home Values | Simplifying The Market

The Present – home appreciation over the last month

Past, Present & Future Home Values | Simplifying The Market

The Future – home appreciation projected over the next 12 months

Past, Present & Future Home Values | Simplifying The Market

Bottom Line

Homes across the country are appreciating at different rates. As we have mentioned before, the rate of home price appreciation across the country is due to a strong housing market reacting to supply and demand, and not a new housing bubble.

If you plan on relocating to another state, and are waiting for your home to appreciate more, you need to know that the home you will buy in another state may be appreciating even faster.

Let’s meet up so I can guide you through your next steps and help you decide what’s right for you.

Study Again Finds Homeownership to be a Better Way of Producing Wealth

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Tuesday March 8th, 2016 First Time Home Buyers, For Buyers, Housing Market Updates, Move-Up Buyers

According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index homeownership is a better way to produce greater wealth, on average, than renting.
The BH&J Index is a quarterly report that attempts to answer the question:

Is it better to rent or buy a home in today’s housing market?

The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers use a “’horse race’ comparison between an individual that is buying a home and an individual that rents a similar quality home and reinvests all monies otherwise invested in homeownership.”

Ken Johnson Ph.D., Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states:

“The nation as a whole is in buy territory. Continued near record low mortgage rates, unsteady stock market performance, and rents (on average) now out pacing the cost of ownership (maintenance, taxes, insurance, etc.) all combine to favor owning and building wealth through home equity over renting and reinvesting in a portfolio of stocks and bonds.”
Dallas, Denver and Houston currently remain deep in rent territory but, “there is some degree of good news from these markets for homeowners as the cost of renting is now increasing at a faster rate than the cost of homeownership — reducing the advantage of renting over buying.”

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.

This Time “Mr. Wonderful” is just WRONG!!

 

Recently, on CNBC’s Closing Bell, Shark Tank investor Kevin O’Leary, also known as “Mr. Wonderful,” said Millennials “don’t give a poo-poo about owning a house.” This thinking couldn’t be further from the truth. Let’s give a few examples to make this point.

1.) In the recent National Housing Market Survey conducted by Fannie Mae, it was revealed that:

“…data indicates that millennial renters today have as much desire to own a home as the general population of renters. According to NHS data, the substantial majority of renters age 25-34 say that owning makes more sense than renting from a financial perspective. A majority also agree that owning makes more sense than renting from a lifestyle perspective. The vast majority of millennial renters tell us they plan to own a home at some point in the future.”

2.) A recent Merrill Lynch report found that 81% of Millennials agree that “homeownership is an important part of their personal American Dream”

3.) The most recent H.O.M.E. Survey explained that 85% of Americans ages 34 and under believe that “homeownership is a good financial decision”.

Bottom Line

Kevin O’Leary might be a great white shark when it comes to investing in companies. However, he is just a guppy when dealing with the residential real estate market.

Thinking of Buying a Home? 3 Questions Every Buyer Should Answer First

Thinking of Buying a Home? 3 Questions Every Buyer Should Answer First | Keeping Current Matters

If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Answering the following 3 questions will help you determine if now is actually a good time for you to buy in today’s market.

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money. They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.

What does that mean to you?

Simply put, if you are planning on buying a home that costs $250,000 today, that same home will cost you an additional $13,250 if you wait till next year. Your down payment will need to be higher as well to account for the higher home price.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

The Mortgage Bankers Association (MBA), the National Association of Realtors and Freddie Mac have all projected that mortgage interest rates will increase by approximately three-quarters of a percent over the next twelve months as you can see in the chart below:

Mortgage Rate Projections | Keeping Current Matters

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

Harvard: Why Owning A Home Makes Sense Financially

Piggy-Bank-with-Glasses

Monday February 1st, 2016 First Time Home Buyers, For Buyers

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

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard Universityexpanded on the top 5 financial benefits of homeownership in his paper –The Dream Lives On: the Future of Homeownership in America.

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 one of the many considering a purchase this year, let’s get together to discuss your options!