The 5 Greatest Benefits of Home Ownership

Benefits of Home Ownership

Keeping Current Matters

Recently, Freddie Mac reported on the benefits of homeownership. According to their report, here are the five benefits that “should be at the top of everyone’s list.”

  1. Homeownership can help you build equity over time.
  2. Your monthly payments will remain stable.
  3. You may have some tax benefits.
  4. You can take pride in ownership.
  5. Homeownership improves your community.

Let’s expand on each of Freddie Mac’s points:

Homeownership can help you build equity over time.

Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a Forbes article, the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun reported that now the net worth gap is 45 times greater.

Your monthly payments will remain stable.

When you purchase a home with a fixed rate mortgage, the majority of the payment (principle and interest) remain constant. On the other hand, rents continue to skyrocket. Your housing expense is much more stable if you own instead of rent.

You may have some tax benefits.

According to the Tax Policy Center’s Briefing Book -“A citizen’s guide to the fascinating (though often complex) elements of the federal Tax System” – there are several tax advantages to homeownership.

Here are four items from the Briefing Book:

  • Mortgage Interest Deduction
  • Property Tax Deduction
  • Imputed Rent
  • Profits from Home Sale

You can take pride in ownership.

Most surveys show that a major factor in purchasing a home is the freedom you have to design the home the way you want. From paint colors to yard accessories, you don’t need a landlord’s permission to make the house feel like a home.

Homeownership improves your community.

The National Association of Realtors recently released a study titled ‘Social Benefits of Homeownership and Stable Housing.’ The study explained:

“Homeownership does create social capital and provide residents with a platform from which to connect and interact with neighbors…Owning a home means owning part of a neighborhood, and a homeowner’s feelings of commitment to the home can arouse feelings of commitment to the neighborhood, which, in turn, can produce interactions with neighbors.”

Bottom Line

There are many benefits to homeownership. That is why it is still a critical piece of the American Dream.

via The KCM Crew

7 Reasons Home Buyers Prefer New Homes vs. Used

Today’s new homes offer more benefits than ever before. Here’s a quick list from NewHomeSource.com giving 7 reasons why so many homebuyers prefer new homes to used houses:

1) All New, Under Warranty: A used home likely has tired products that may soon need replacing. Your new home — and the products that comprise it — are brand-new and under warranty. What’s the cost to replace a roof, appliances, countertops or a water heater on a used home? Those components of your new home feature the latest designs and building materials and should offer you years of comfort and enjoyment before needing replacement.

2) Energy and Cost Savings: Today’s new homes are far more energy efficient than homes built just five years ago. Versus homes built ten or 20 years ago, it’s game over, advantage new. Why settle for drafty, energy-wasting, single-pane windows in a used home? Many new homes offer double or even triple-pane windows. Special window coatings and inert gases between the layers of glass are often available, saving you even more energy and money in both heating and cooling season. In fact, a 2016 survey by the National Association of Homebuilders found that 90 percent of respondents listed Energy Star appliances as an essential or desirable feature in their most-wanted list.

3) Comfort and Indoor Air Quality: Today’s new homes meet stringent energy standards and codes not in place in the past. They combine high-performance energy efficiency with state-of-the-art ventilation and air filtration. The result is year-round, draft-free comfort and higher indoor air quality.

4) Low Maintenance: New cars today are computer-designed and computer-equipped. That’s why they perform much more reliably than a car that’s 15 or 20 years old. Homes are the same. Today’s new homes have open floor plans and high ceilings that reflect the way we live today. They’re also made of cutting-edge building products that require less care and maintenance. Another plus? The latest building systems and components are designed and engineered to work together.

5) Advanced Technology and Design: It’s possible to replace all of the single-pane windows in a resale home with today’s high-performance windows. It’s also possible to add insulation to a used home. However, it’s very expensive to replace dated appliances, cabinets and countertops in a used home — and you still won’t have the high ceilings you dream of on the first floor of an older two-story home. All are reasons to build your new home your way, to reflect the way you live today.

6) Safety: State-of-the-art circuit breakers. Electric garage door openers with infrared beams that stop if a tricycle or child is too near. High-efficiency furnaces and air conditioners that use the latest environmentally-friendly coolants. Cabinets, carpets and paints that use fewer volatile organic compounds, so that you and your family can breathe easier.

7) That New Home Feel: A used home was someone else’s dream, not yours. It reflects their choices and family memories. You may learn to love avocado-green appliances (and you may be willing to scrub stained countertops or grease-encrusted ovens and cooktops) but more and more people prefer that never lived-in feel.

After all, when was the last time you went to a department store and selected used clothes? Or visited a car dealer and paid more for a used car than a new car?

New homes offer the latest designs, style, comfort and quality. They provide a care-free lifestyle so that you can enjoy your home, not work on it.

Please give ‘BURG Development a call and learn about the NEW homes they have for sale in Northeast St. Petersburg.  727-571-5861

via Jay McKenzie who heads up content and social media for NewHomeSource.com and Builders Digital Experience.

Do You Want to Buy Your Dream Home?

Want to Buy Your Dream Home?

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.

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

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

This is truly 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.

For example, a survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans 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 Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in December (the latest data available) was $232,200, up 4.0% from last year. This increase also marks the 58th consecutive month with year-over-year gains.

If we look at the numbers year over year, CoreLogic forecasted a rise by 4.7% from December 2016 to December 2017. On a home that costs $250,000 today, that same home will cost you an additional $11,750 if you wait until next year.

What does that mean to you?
Simply put, with prices increasing each month, it might cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.

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 Fannie Mae have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:

Mortgage Rate Projections

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.

via Keeping Current Matters 

Who’s Afraid of Rising Interest Rates?

While mortgage rates remain “historically low,” many first-time buyers think they’re substantially more expensive because they don’t remember high-rate years.

1st Time Homebuyers

[Move.com] Rising mortgage rates have created an urgency for Experienced Purchasers to buy before further increases. Average listing views on realtor.com surged 40% to 80% in the last 3 weeks of December 2016 compared to December 2015.

“Rising rates have made demand even more intense,” realtor.com notes. However, the demand mostly seems to be coming on stronger from repeat buyers. For first-time buyers, rising mortgage rates are having an opposite effect and they’re showing signs of beginning to shy away from the market.

The number of 1st-time buyers planning to purchase this spring has dropped sharply and the rise in mortgage rates over the past few weeks may be to blame for their retreat, according to realtor.com® study. Repeat buyers, on the other hand, want to lock in rates right away.

Forty-four percent of active home buyers who plan to buy a home this spring are first-time home buyers, down from 55% last fall who said they were planning to buy in the spring. So what’s spooking them?

Average rates today are about a half percentage point higher than they were in 2016. That means a median-priced home financed with a 20% down would cost an extra $720 per year in added interest, realtor.com.

If you want to own your first home, now is STILL the time to buy!

First-time buyers are nearly 5 times more likely than repeat buyers to say they are facing challenges qualifying for a mortgage. Affordability topped first-time buyer concerns.

In November, first-time buyers made up 32% of all buyers, according to the National Association of Realtors.

“The rise in rates is associated with an anticipation of stronger economic and wage growth, both of which favor buyers,” adds Jonathan Smoke chief economist for realtor.com. “At the same time, higher rates make qualifying for a mortgage and finding affordable inventory more challenging. The decline in the share of first-time buyers since October suggests that the move up in rates is discouraging new home buyers already.”

On the other hand, repeat homebuyers realize mortgage rates – while moving higher overall – are still at historical lows. Before rates jump more, these buyers are in a rush to close before rates increase further, according to realtor.com’s study.

First-time buyers may need to lower their expectations a little and not insist on a dream home…  Their perfect home is out there, it just takes a different approach  and process to finding it.  Please give us a call, we would love to help you.

http://www.ForeSiteResidential.com

Why Do You Think Mortgage Interest Rates Are Increasing?

Mortgage Interest Rates

According to Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed rate mortgage interest rate recently jumped up to 3.94%. Interest rates had been hovering around 3.5% since June, and many are wondering why there has been such a significant increase so quickly.

Why did rates go up?
Whenever there is a presidential election, there is uncertainty in the markets as to who will win. One way that this is noticeable is through the actions of investors. As we get closer to the first Tuesday of November, many investors pull their funds from the more volatile and less predictive stock market and instead, choose to invest in Treasury Bonds.

When this happens, the interest rate on Treasury Bonds does not have to be as high to entice investors to buy them, so interest rates go down. Once the elections are over and a President has been elected, investors return to the stock market and other investments, leaving the Treasury to raise rates to make bonds more attractive again.

Simply put, the better the economy, the higher interest rates will go. For a more detailed explanation of the many factors that contribute to whether interest rates go up or down, you can follow this great link to Investopedia.

The Good News
Even though rates are closer to 4% than they have been in nearly 6 months, they are still slightly below where we started 2016, at 3.97%.

The great news is that even at 4%, rates are still significantly lower than they have been over the last 4 decades.

Any increase in interest rate will impact your monthly housing costs when you secure a mortgage to buy your home. A recent Wall Street Journal article points out that, “While still only roughly half the average over the past 45 years, according to Freddie Mac, the quick rise has lenders worried that home loans could become more expensive far sooner than anticipated.”

Tom Simons, a Senior Economist at Jefferies LLC, touched on another possible outcome for higher rates:

“First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there’s less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit.”

Key Take-Away

Interest rates are impacted by many factors, and even though they have increased recently, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Give us a call… we can and will help you find the perfect home in spite of this rate bump.  www.ForeSiteResidential.com

Thanks to Keeping Current Matters for their facts and narrative.

From Empty Nest to Full House… Multigenerational Families Are Back!

Multi-Generational Homes

Quick take-away…

Multigenerational households are making a comeback. While it is a shift from the more common nuclear home, these households might be the answer that many families are looking for as home prices continue to rise in response to a lack of housing inventory.

Multigenerational homes are coming back in a big way!

In the 1950s, about 21%, or 32.2 million Americans shared a roof with their grown children or parents. According to a recent Pew Research Center report, the number of multigenerational homes dropped to as low as 12% in 1980 but has shot back up to 19%, roughly 60.6 million people, as recently as 2014.

Multigenerational households typically occur when adult children (over the age of 25) either choose to, or need to, remain living in their parent’s home, and then have children of their own. These households also occur when grandparents join their adult children and grandchildren in their home.

According to the National Association of Realtors’ (NAR) 2016 Profile of Home Buyers and Sellers, 11% of home buyers purchased multigenerational homes last year. The top 3 reasons for purchasing this type of home were:

  • To take care of aging parents (19%)
  • Cost savings (18%, up from 15% last year)
  • Children over the age of 18 moving back home (14%, up from 11% last year)

Donna Butts, Executive Director of Generations United, points out that,

“As the face of America is changing, so are family structures. It shouldn’t be a taboo or looked down upon if grown children are living with their families or older adults are living with their grown children.”

For a long time, nuclear families (a couple and their dependent children) became the accepted norm, but John Graham, co-author of “Together Again: A Creative Guide to Successful Multigenerational Living,” says, “We’re getting back to the way human beings have always lived in – extended families.”

This shift can be attributed to several social changes over the decades. Growing racial and ethnic diversity in the U.S. population helps explain some of the rise in multigenerational living. The Asian and Hispanic populations are more likely to live in multigenerational family households and these two groups are growing rapidly.

Additionally, women are a bit more likely to live in multigenerational conditions than are their male counterparts (20% vs. 18%, respectively). Last but not least, basic economics.

Carmen Multhauf, co-author of the book “Generational Housing: Myth or Mastery for Real Estate,” brings to light the fact that rents and home prices have been skyrocketing in recent years. She says that, “The younger generations have not been able to save,” and often struggle to get good-paying jobs.

via KCM Crew

 

Ivy Zelman: ‘Now’ Is Best Time to Buy a House.

Ivy ZelmanHousing guru Ivy Zelman told CNBC’s “Fast Money Halftime Report” yesterday that “now” is the best time to buy a house.

“It’s the best time in the history of our country with mortgage rates that are below 4 percent that [renters] can actually lock in their fixed cost and create wealth for themselves,” she said.

The founder and chief executive of Zelman & Associates is known for calling the housing peak in 2005 and the housing bottom in 2012.

Zelman said this housing cycle is like a “tale of two markets.”

She said the entry-level market is beginning to accelerate, and builders’ trepidation is slowly beginning to fade as more people are beginning to move to the suburbs.

The market would seem to be in agreement with her on that. The SPDR S&P Homebuilders ETF (XHB) was trading up more than 1.15 percent Monday morning, and on pace for its best day since Sept. 22, when the XHB gained 1.11 percent.

On the other hand, she said the luxury markets in some cities are in the beginning see “a little bit” of a correction.

When asked about whether millennials will ever buy homes, Zelman said they are beginning to buy houses, but mainly those who are starting a family.

“What we’re seeing is that they want to go to the suburbs, millennials are buying and we have nearly 75 million of them just beginning to come through the pipeline,” she said.

Click here to see video.