3-Questions-KCM

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

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.

 

Article by KCM

 

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How To Get The Most Money When Selling Your House

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensuring you get the highest price possible.

1. Price it a LITTLE LOW

This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

How To Get The Most Money When Selling Your House | Keeping Current Matters

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. In that way, the seller will not be fighting with abuyer over the price, but instead will have multiple buyers fighting with each other over the house.

Realtor.com, gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This too may seem counter intuitive. The seller may think they would net more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

Research posted by the Economists’ Outlook Blog revealed that:

“The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 – nearly $40,000 more for the typical home sale.”

How To Get The Most Money When Selling Your House | Keeping Current Matters

Bottom Line

Price your house at or slightly below the current market value and hire a professional. That will guarantee you maximize the price you get for your house.  Article by KCM.

 


 

 

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Best-Investment

Real Estate Again Seen as Best Investment

We are almost back to ‘pre-housing crash’ home values. The inventories of distressed properties (foreclosures & short sales) are shrinking dramatically. The economy is improving. The job numbers are headed in the right direction.

The big question that still remains: Have Americans regained their confidence in real estate as a worthy investment?

According to a survey conducted by Princeton Survey Research Associates, Americans have put real estate back into first place as the best of all investments.

Here are the results of the survey:

Best Investment | Keeping Current Matters

Bottom Line

Homeownership never lost its place as a key component of the American Dream for a host of financial and non-financial reasons. It is good to see that it has regained the top spot as best overall investment.

 

Article by KCM

 


 

 

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Family Wealth Grows as Home Equity Builds

 

With residential real estate values rising quite substantially in most parts of the country over the last few years, many homeowners are seeing a major increase in their family’s wealth as equity continues to build in their house.

A recent study by the Joint Center of Housing Studies at Harvard University revealed that home equity grew nicely last year and has grown dramatically over the last five years…

Inflation & Home Equity | Keeping Current Matters

Buyers looking today may not see the same build-up in equity but could still do quite well.

Let’s assume you went into contract in the next six weeks and closed on a $250,000 home in January. If we take the house value projections from the last Home Price Expectation Survey, here is how your equity would grow over the next four years:

 

 

 

Home Price Expectation Survey Equity | Keeping Current Matters

 

 

 

 

 

 


 

 

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0320

Low Inventory Causes Home Prices to Accelerate

The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price report earlier this month. The report revealed that home prices are not only continuing to rise but that the increases are accelerating. Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

“Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead.”

Here are the percentage increases of home prices for the last two quarters:

Low Inventory Causes Home Prices to Accelerate | Keeping Current Matters

What this means to sellers

Rising prices are a homeowner’s best friend. As reported by CoreLogic in a recent blog post:

“With demand strong and inventory thin, the share of homes selling for the list price or more has also returned to pre-bust levels. With inventory tight, homes are more likely to sell above the asking price.”

What this means to buyers

In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year. However, asConstruction Dive reported, the amounts of cash necessary to buy a home will also increase.

“These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

Bottom Line

If you’re thinking of selling and moving down, waiting might make sense. If you are a first time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

 


 

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www.RedRockManagementLV.com
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0217

Mortgage Rates Again at Historic Lows

Just two weeks ago, we posted an article discussing where mortgage interest rates may be heading over the next twelve months. We quoted projections from Fannie Mae,Freddie Mac, the Mortgage Bankers’ Association and the National Association of Realtors. Each predicted that rates would begin to rise slowly and steadily throughout 2016.

However, shaky economic news and a volatile stock market have actually caused rates to drop six out of the last seven weeks, and have remained at 3.65% for the past two weeks.

Mortgage Rates Again at Historic Lows | Keeping Current Matters

Rates have again fallen to historic lows yet many experts still expect them to increase in 2016. The only thing we know for sure is that, according to Freddie Mac, current rates are the best they have been since last April.

Bottom Line

If you are thinking of buying your first home or moving up to your ultimate dream home, now is a great time to get a sensational rate on your mortgage. Article by KCM


 

 

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Thinking of Buying A Home? What Are You Waiting For?

With spring right around the corner, you may be wondering if you should wait to enter the housing market. Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained below 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost three-quarters of a percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way You Are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Bottom Line

If you are ready and willing to buy, find out if you are able to. Meet with a local real estate professional who can help you find your dream home.

 

Article by KCM


 

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Home-Equity-

Do You Know How Much Equity You Have In Your Home? You May Be Surprised!

CoreLogic’s latest Equity Report revealed that 256,000 properties regained equity in the third quarter of 2015. This is great news for the country, as 92% of all mortgaged properties are now in a positive equity situation.

Price Appreciation = Good News For Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

“Home price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market. In the last three years, borrowers with at least 20 percent equity have increased by 11 million, a substantial uptick that is driving rapid growth in home equity originations.” 

Anand Nallathambi, President and CEO of CoreLogic, believes this is a great sign for the market in 2016 as well, as he had this to say:

“Homeowner equity is the largest source of wealth for many Americans.The rise in home prices, expected to be at least 5% in 2016, will continue to build wealth and confidence across America. As this process continues, it will provide support for the housing market and the broader economy throughout [the] year.”

This is great news for homeowners! But, do they realize that their equity position has changed?

study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their home as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 8% of homes are in that position (down from 9% in Q2).

The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%), when in actuality, 74% do!

Do You Know How Much Equity You Have In Your Home? You May Be Surprised! | Keeping Current Matters

This means that 37% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).

Fannie Mae spoke out on this issue in their report:

“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

Bottom Line

If you are one of the many Americans who are unsure how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2016! Meet with a local real estate professional today, who can help you evaluate your situation and assist you along the way!

 


 

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0212-KCM

Homeowner’s Net Worth is 45x Greater Than a Renter’s

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 EconomistLawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.

The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

Homeowner’s Net Worth is 45x Greater Than a Renter's | Keeping Current Matters

Put Your Housing Cost to Work For You

Simply put, homeownership is a form of ‘forced savings’. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, meet with a real estate professional in your area who can guide you through the process.

 

Article by KCM


 

 

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0208-

Homes Selling Quickly Across The Country

According to the National Association of Realtors’ (NAR) Existing Home Sales Report, homes were on market for an average of 58 days in December. This was slightly longer than the 54 days in November, but still better than the 66 days experienced in December 2014.

32% of homes across the country were on the market for less than a month!

Colorado, Utah and Delaware led all states as homes are selling in 30 days or less on average. The map below was created using results from NAR’s Monthly Realtor Confidence Survey.

Homes Selling Quickly Across The Country | Keeping Current Matters

Bottom Line

Buyer demand remains strong. The inventory of homes available for sale remains low. If you are thinking about listing your home for sale this year, meet with a local real estate professional who can help you take advantage of current market conditions!

 

Aritcle by KCM

 

 


 

 

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