According to the Pew Research Center, around 37% of U.S students will be going back to school soon and the rest have already started the new academic year. With school-aged children in your home, buying or selling a house can take on a whole different approach when it comes to finding the right size, location, school district, and more.
Recently, the 2019 Moving with Kids Report from the National Association of Realtors®(NAR) studied “the different purchasing habits as well as seller preferences during the home buying and selling process.” This is what they found:
When Purchasing a Home
The major difference between the homebuyers who have children and those who do not is the importance of the neighborhood. In fact, 53% said the quality of the school district is an important factor when purchasing a home, and 50% select neighborhoods by the convenience to the schools.
Buyers with children also purchase larger, detached single-family homes with 4 bedrooms and 2 full bathrooms at approximately 2,110 square feet.
Furthermore, 26% noted how childcare expenses delayed the home-buying process and forced additional compromises: 31% in the size of the home, 24% in the price, and 18% in the distance from work.
When Selling a Home
Of those polled, 23% of buyers with children sold their home “very urgently,” and 46% indicated “somewhat urgently, within a reasonable time frame.” Selling with urgency can pressure sellers to accept offers that are not in their favor. Lawrence Yun, Chief Economist at NARexplains,
“When buying or selling a home, exercising patience is beneficial, but in some cases – such as facing an upcoming school year or the outgrowing of a home – sellers find themselves rushed and forced to accept a less than ideal offer.”
For sellers with children, 21% want a real estate professional to help them sell the home within a specific time frame, 20% at a competitive price, and 19% to market their home to potential buyers.
Buying or selling a home can be driven by different priorities when you are also raising a family. If you’re a seller with children and looking to relocate, let’s get together to navigate the process in the most reasonable time frame for you and your family.
According to experts, fertilizing your lawn in autumn protects it over the winter and helps it green up faster come springtime. Fall feeding is especially important in areas with dry summers.
Dosing your lawn with fertilizer in autumn will trigger the renewed growth of both blades and roots, so your grass will be thick and healthy again before winter’s colder temperatures set in.
2. Get Your HVAC Serviced
Your AC has been faithfully chugging along all summer. Now it’s time to give it a rest. Before you tuck it away for the winter, be sure to clean the coils. You can find YouTube videos showing how to do this safely.
If you’re done using the AC for the year, cover the outdoor unit to keep debris and ice from damaging your system. Then move indoors and switch your thermostat from cooling to heating. Change the filter, too. You should also make sure all indoor vents are uncovered, and maybe clean your own air ducts while you’re at it.
3. Clean The Gutters
Clogged gutters will channel water down the side of your home where it eventually damages the foundation and can flood your basement. So get a ladder and pull debris out of the gutters by hand. If you have a one-story house, you can use this leaf-blower attachment to blast the stuff. Still too much work? Hire a gutter cleaning company — they’re worth it.
4. Drain And Store Your Lawn Equipment
Over time, unused fuel goes through chemical changes that create deposits and destroy your lawn equipment. So drain the tanks of your lawn mower, leaf blower, and weed eater before storing them. Fall is also an excellent time to get your lawn mower blades sharpened so they’ll be ready for next Spring.
5. Turn Off And Drain Outdoor Faucets And Sprinklers
Outdoor hoses and pipes will burst if they’re full of water when the temperatures plunge below freezing. While replacing a garden hose isn’t that difficult, it’s incredibly expensive to dig up your lawn’s sprinkler system to deal with burst pipes. So, disconnect your outdoor hoses and turn off the outdoor water supply. Open outdoor faucets and run your sprinkler system to drain any remaining water.
6. Inspect And Clean Your Chimney
When I think of chimney cleaning, I always picture Dick Van Dyke in Mary Poppins singing “Chim-chim-e-ny, chim-chim-e-ney, chim, chim, cheroo.” It’s a charming song!
Nothing is charming about filling your home with soot, smoke, and carbon monoxide because your chimney isn’t working correctly. Even gas fireplaces need an inspection to ensure the pipe is free of cracks that can allow smoke to enter your home. This job is best left to pros. The cost runs around $100-200.
7. Get Your Ice Melt And Snow Blower Ready
By the time winter arrives, it’s often too late to find snow gear. Stock up on such things in autumn when they’re plentiful and lower-priced. Even if you think you’ve got enough left from last year, or that your snow blower or shovel are in good shape, take a few moments to check. You don’t want to get caught out in the cold finding out you’re wrong.
As with most home maintenance tasks, preparing your home for fall isn’t tricky, just time-consuming. Putting it off causes problems that can wind up costing you an enormous amount of money, though, so set aside time on the next couple of months to get these jobs done. Texas heat will last a while longer, but fall will come in early October, and you never know the weather it brings!
Mold is a primary concern for many homeowners. The main reason for this is it can arise abruptly and for a variety of reasons: A damp bathroom, leaky pipe or the dreaded flooded basement.
Generally, there are two types of issues you can encounter with mold: Minor issues like mildew in your bathroom or major issues like drywall saturated with water from a flooded basement. In either case, the goal is to tackle and resolve the issue as quickly as possible. A failure to do so could result in significant property damage.
Given all this, the biggest concern with mold reaches much farther than unsightly mildew or even extensive property damage. The biggest fear is the health risks associated with mold that can affect you and our loved ones: Mainly allergies, infections, and upper respiratory issues. For these reasons, it’s important not to drag feet and tackle the issue head on.
As soon as you notice the onset of mold, follow these steps to mitigate any property damage that may be caused and more importantly, to protect the health of you and your loved ones.
1) Bathroom Ground zero for mold is generally the bathroom, making it the most important room to monitor. The grout lines in your shower are the most common place to find mildew. For this reason, it’s important to keep your shower clean; you will find that mildew accumulates in this area weekly.
Mildew can be easily removed by scrubbing it with diluted bleach (6 parts water, 1 part bleach). It should come off generally easy, but be meticulous and remove all visible mildew. Once you are confident it has been removed, rinse and dry.
A good strategy to greatly reduce the presence of mildew in your shower is to keep a squeegee handy. Anytime you take a shower squeegee all the water off of your walls. Coupled with a good bathroom fan, this strategy can greatly reduce the presence of mold and mildew in your shower.
2) Walls If you have mold in your drywalls, the good news is, like in the bathroom, it’s generally easy to eliminate. The bad news is it may be part of a larger issue like a leaking pipe.
First thing’s first, identifying the problem. If dark circles are forming on your wall, the odds are almost certain that it’s mold. Once you have identified the problem area, it’s important to tackle it immediately to prevent it from spreading.
Always protect yourself when removing mold. Since mold is generally detrimental through inhalation, the most important first line of protection is a safety mask. A pair of gloves and safety goggles to boot will ensure you’re fully protected.
Once you’re protected, make a diluted bleach solution (6 parts water, 1 part bleach) and use a stiff brush to scrub the mold off. Once you are confident you have removed all the mold, rinse the affected areas thoroughly and dry the area as best as possible.
If you notice mold recurring in the same areas after thoroughly removing it, then your problem is deeper and it’s important to seek professionals to diagnose and eliminate the problem. Remember, time is of the essence.
It seems you can’t find a headline with the term “housing affordability” without the word “crisis” attached to it. That’s because some only consider the fact that residential real estate prices have continued to appreciate. However, we must realize it’s not just the price of a home that matters, but the price relative to a purchaser’s buying power.
Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by 3.5% over the last year.
Let’s look at three different reports issued recently that reveal how homes are very affordable in comparison to historic numbers, and how they have become even more affordable over the past several months.
Here is a graph showing the index going all the way back to 1990. The higher the column, the more affordable homes are:We can see that homes are less affordable today (the green bar) than they were during the housing crash (the red bars). This was when distressed properties like foreclosures and short sales saturated the market and sold for massive discounts. However, homes are more affordable today than at any time from 1990 to 2008.
NAR’s report on the index also shows that the percentage of a family’s income needed for a mortgage payment (16.5%) is dramatically lower than last year and is well below the historic norm of 21.2%.
This report reveals that as a result of falling interest rates and slowing home price appreciation, affordability is the best it has been in 18 months. Black Knight Data & AnalyticsPresident Ben Graboske explains:
“For much of the past year and a half, affordability pressures have put a damper on home price appreciation. Indeed, the rate of annual home price growth has declined for 15 consecutive months. More recently, declining 30-year fixed interest rates have helped to ease some of those pressures, improving the affordability outlook considerably…And despite the average home price rising by more than $12K since November, today’s lower fixed interest rates have worked out to a $108 lower monthly payment…Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15%.”
While affordability has increased recently, Mark Fleming, First American’s Chief Economist explains:
“If the 30-year, fixed-rate mortgage declines just a fraction more, consumer house-buying power would reach its highest level in almost 20 years.”
Fleming goes on to say that the gains in affordability are about mortgage rates and the increase in family incomes:
“Average nominal household incomes are nearly 57 percent higher today than in January 2000. Record income levels combined with mortgage rates near historic lows mean consumer house-buying power is more than 150 percent greater today than it was in January 2000.”
If you’ve put off the purchase of a first home or a move-up home because of affordability concerns, you should take another look at your ability to purchase in today’s market. You may be pleasantly surprised!
The kitchen takes first place in expenses, as renovations can take quite a bite out of our budget. The runner-up is the bathroom. Marble tile, whirlpool baths, and rain showers are just a few examples of why bathroom renovations can often take a lot of money to go through. Apart from upgrades, is there any other way of achieving that luxurious, high-class image? There are several things you can do to make your bathroom more comfortable, and give it a touch of personality along the way.
One of the easiest ways to transform a home is to repaint the walls. This simple trick works with your bathroom as well. A black and white contrast does wonders, making the room seem more spacious than it is. Whether it is a smaller bathroom or a large one, this simple combination will help smaller details stand out. If this isn’t to your taste, there really is a huge variety of combinations.
Why not try out a wallpaper? Even though it may be time-consuming and costly, you might like the style. This type of change can easily be undone and is a good decision if you’re not thinking of a full renovation any time soon.
If nothing else is to your liking, you could take the more expensive route and tile your bathroom. Whether you’re going for a playful tone or a classy marble tile, there truly is a wide variety of choices. Some recommend neutral colors and simple designs for bathroom tiles, as they’ll always be trendy. On the other hand, if you find single-color tiling boring, feel free to express yourself. Whether you choose glass tiles or simply play with colors to create patterns, there’s enough room to have some fun. Another option is simply tiling halfway up the wall; this creates a sense of space and saves some money along the way.
If you can get the right combination of lighting and color, you’re more than halfway there. First of all, if you have a skylight, it is obvious how much of a luxurious lighting setting you could have. Natural lighting always makes the strongest impact, but sadly, not everyone has natural lighting as an option. Apart from bringing in some light, do some thinking on the source. For instance, instead of a traditional light bar above your bathroom mirror, try placing a sconce or two on the sides of the mirror. Overhead lighting is also a good choice, as the atmosphere it creates is often overlooked. If you’ve spent a lot of time gathering the right accessories, mats, and jars for your bathroom you want to shed the proper light on them.
A Custom Touch
What most people don’t realize is that they can achieve the luxurious look they’re after without much advice in the first place. In most cases, it’s about self-expression. In high-end bathrooms, you’ll find a stool or an ottoman, for instance. You won’t have trouble finding a use for them, and they’ll personalize your bathroom somehow. Also, art is second to none in creating a grandiose setting. If you like a certain artist, why not decorate a wall with one of his pieces? If you like being classy, a vintage record player might be right up your alley. Jars are also an increasingly popular way of storing your bathroom supplies. Another way to use these jars is to fill them with potpourri, to create an enjoyable aroma.
Do you have a bathmat? Apart from keeping you safe from slippery tiles, they help a bathroom look complete. You’d be surprised at the wide variety of rugs and custom linoleum mats you can buy to fill up that space. Keep them clean, and they’ll keep your bathroom looking fancy with beautiful colors and patterns.
When it comes to upgrades, people often fear that it’s going to be a costly endeavor, but this doesn’t necessarily need to be the case. What’s most important is that you don’t forget any part of your bathroom, as you want the pieces to work together. For example: if you want to exchange your shower heads for an overhead rain shower, you may want to upgrade your shower screen along the way. There is a wide variety of luxurious shower screens which won’t take a large bite of your funds, and will only add to the luxury.
A Green Touch
We’ve already mentioned potpourri, but how about another natural decoration to fill that empty corner? A vase with your favorite flowers shows you have taste, and makes the room itself seem larger. It’s no wonder that people decorate their homes with flowers wherever they can. While it is true that less is more, when it comes to these types of decorations, you won’t make a mistake.
The bathroom, alongside your kitchen, will consume the most money when it comes to renovation and improvement. Spending a lot of money isn’t necessarily the way to go if you want to create an image of luxury. People are often surprised at the results they get after playing with colors for a bit. Let your personality spill, and put up a few flowers or bring an accessory or two into the bathroom. If wallpapers aren’t your taste, tiling is still an option, although a costly one. Remember that you want all of the pieces to fall in perfectly with each other. Lastly, don’t forget that light can only help with the image you’re aiming for.
*Article first published on https://tourwizard.net/.
The U.S. Census Bureau recently released their 2019 Q2 Homeownership Report. Some began to see the sky falling, believing the report showed Americans may be stepping back from their belief in homeownership.
The national homeownership rate (Americans who owned vs. rented their primary residence) increased significantly during the housing boom, reaching its peak of 69.2% in 2004. The Census Bureau reported that the second quarter of 2019 ended with a homeownership rate of 64.1%, which is down from the 64.8% rate for the fourth quarter of 2018. Based on this news, some started to question the consumer’s belief in the idea of homeownership as a major part of the American Dream.
Everyone Calm Down…
It is true the homeownership rate did fall. However, if you look at the national rate over the last 35 years (1984-2019), you can see that the current homeownership rate has returned to historical norms. The 64.1% rate is equivalent to the rates in 1984 and 1994.
What Will the Future Bring?
Part of the reason the homeownership rate slipped is a lack of inventory available for purchase for first-time home buyers. The demand is there, but currently, the supply is not. It seems, however, that is about to change.
In a recent report, Ivy Zelman explained that builders have finally started to increase the number of homes they’re constructing at the lower-end price points:
“Robust growth in the entry-level price point of late should translate to a reacceleration in homeownership rates moving forward.”
Today, the homeownership rate sits at historic norms. In all probability, it will increase as more inventory becomes available. There is no reason for concern.
More Optimistic Than Millennials, Generation Z Is Here to Revolutionize the Housing Market
To better understand the difference in attitude between Generation Z, Millennials and Generation X towards homeownership, intergenerational living and saving for a down payment, PropertyShark conducted a generational survey on their preferences.
Generation Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
College debt is the #1 obstacle towards homeownership for Millennials and Generation Z
Generation X chooses intergenerational living to care for relatives more often than any other generation
Generation Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
Generation Z to pose serious competition to Millennials on the real estate market
Living at home is all about practicality for Generation Z
Gen X as those born before 1980, Millennials as those born between 1981 and 1994, and Gen Z as those born between 1995 and 2010. All survey respondents were over the age of 18. As such Gen Z respondents only include those born between 1995 and 1999.
Many of the questions currently surrounding the real estate industry focus on home prices and where they are heading. The most recent Home Price Expectation Survey (HPES) helps target these projected answers.
Mid year market update: Three things you need to know:
Shifting trends and industry-leading research are pointing toward some valuable projections about the status of the housing market for the rest of the year.
If you’re thinking of buying or selling, or if you just want to know what experts are saying is on the horizon, here are the top three things to put on your radar as we head into the coming months:
Home prices are appreciating at a more normal rate: Home prices have been appreciating for about ten years now. Experts at the Home Price Expectation Survey, Mortgage Bankers Association, Freddie Mac, and Fannie Maeare forecasting continued growth throughout the next year, although it should be leveling-off to normal appreciation (3.6%), as we move into 2020.
Interest rates are low: Over the past 30 years, the average mortgage rate in the United States has been 8.27%, and rates even peaked as high as 18% in the 1980s. Today, at 3.81%, the rate is considerably lower than the historical 30-year average. Although experts predict it may climb into the low 4% range in the near future, that’s still remarkably lower than our running average, suggesting a great time to get more for your money over the life of your loan.
An impending recession does not mean there will be a housing crash: Although expert research studies such as those found in the Duke Survey of American CFOs and the National Association of Business Economics, are pointing toward a recession beginning within the next 18 months, a potential recession isn’t expected to be driven by the housing industry. That means we likely won’t experience a devastating housing crash like the country felt in 2008. Expert financial analyst Morgan Housel tweeted:
“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”
In fact, during 3 of the 5 last U.S. recessions, housing prices have actually appreciated!
With prices appreciating and low interest rates available, it’s a perfect time to buy or sell a home. Let’s get together to discuss how you can take the next step in the exciting journey of homeownership.
If you’re ready to put your home up for sale, know this: Buyers and their agents are going to zero in on all those things that need doing in your home —as well as some things you hadn’t even noticed yourself.
So why not get ahead of the curve by hiring a licensed home inspector who can pinpoint what needs fixing?
Of course, most sellers don’t get their homes inspected before listing them, because the buyer usually orders an inspection during escrow, and who wants to pay for something they don’t have to?
But if you’re willing to invest the time and money, a thorough inspection before listing your property can make it easier to price your home, manage repairs, and even help sell it faster—and for more money.
So what are the some of the reasons why a pre-listing inspection makes sense? Let’s take a look.
It can save you if you’ve neglected home maintenance
If you have a busy life—or maybe even if you don’t—chances are that obsessing over regular home maintenance might not be your No. 1 priority during downtime. Trouble is, letting painting, roof repairs, and other routine chores slide can lead to bigger issues down the road, says Chicago-based Frank Lesh, ambassador for the American Society of Home Inspectors.
“In a lot of cases, people think, ‘I’ve been here for 30 years; the house is fine. There’s nothing wrong with it,’” he says. “But they’re looking at it with rose-colored glasses.”
Instead of worrying what a buyer’s inspector will uncover—and which could potentially kill the sale—be proactive with a pre-listing inspection, Lesh says. This way, rather than being blindsided, you can then decide whether to make the necessary repairs or to account for that deferred maintenance by reducing the list price. Which leads us to…
You can make a bigger profit on your sale
Sure, a home inspection that you don’t have to do is going to cost money. (An inspection for a 1,200- to 1,500-square-foot house in an average market, for instance, will cost between $350 and $600, Lesh says.) But as the saying goes: Sometimes you have to spend money to make money.
After all, if you invest a little more to repair and spruce up anything the pre-inspection reveals, you can justify listing your home at a higher price, plus, in most states, home improvement repairs you carry out before selling your house are deductible from the profit you make from the sale.
Sometimes, just knowing that a pro has given the house a proper once-over can persuade a buyer to make a bid (assuming that you actually follow the inspector’s recommendations).
You won’t have to scramble to fix things at the last minute
Once a buyer’s inspector submits a report, sellers are usually faced with two choices: If problems are found with the house, they can then either slash money from the sale price, or opt to carry out repairs before the closing date. That often leaves sellers in the lurch, having to get work done pronto—and sometimes paying a premium for the rush work.
After a pre-listing inspection, sellers can research contractors and make the necessary repairs within a time frame of their choosing, so that everything is ready before potential buyers even visit the property.
It’ll minimize back-and-forth negotiation
Buyers often use their home inspection as leverage, asking the seller (that’s you!) for steep discounts based on what their inspector’s report reveals. Not surprisingly, the buyer’s inspection is often where the deal falls apart.
If you’ve already uncovered the issues and addressed them, you can raise the price of your home accordingly, that gives the buyer less leverage in the request for repair process.
Also, in red-hot markets where multiple bids come fast and furious, there’s always a chance that buyers might accept your pre-listing inspection without insisting on doing their own. This can make for a quicker sale.
But make sure a pre-inspection doesn’t work against you
As advantageous as a pre-inspection can be, don’t forget that the inspector’s report could be a double-edged sword: Once you know about a problem, you can’t ignore it.
Sellers are legally obligated to disclose any problems that a home inspection unearths.
For sellers unwilling to do repairs, their own inspection could be used as leverage to negotiate on price and in the request-for-repair process.
Before committing to a pre-inspection, find out what other sellers in your area are doing. Norma can help guide you on whether it’s necessary to sell for more, or if there’s a better—and more affordable—strategy for getting your home sold.
Homes priced at the top 25% of the price range for a particular area of the country are considered “premium homes.” In today’s real estate market, there are deals to be had at the higher end! This is great news for homeowners wanting to upgrade from their current house.
Much of the demand for housing over the past couple of years has come from first-time buyers looking for their starter home. Many of the more expensive homes listed for sale have not seen as much interest.
According to ILHM’s Luxury Report, this mismatch in demand and inventory of luxury and premium homes has created a Buyer’s Market. For the purpose of the report, a luxury home was defined as one that costs $1 million or more.
“A Buyer’s Market indicates that buyers have greater control over the price point. This market type is demonstrated by a substantial number of homes on the market and few sales, suggesting demand for residential properties is slow for that market and/or price point.”
The authors of the report were quick to point out that current conditions at the higher end of the market are no cause for concern.
“While luxury homes may take longer to sell than in previous years, the slower pace, increased inventory levels and larger differences between list and sold prices, represent a normalization of the market, not a downturn.”
Luxury can mean different things to different people. To one person, luxury is a secluded home with plenty of property and privacy. To another, it could be a penthouse at the center of a bustling city. Knowing what characteristics mean luxury to you will help your agent find you the home of your dreams.
If you are debating upgrading your current house to a premium or luxury home, now is the time!
Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.
The top 5 reasons are listed below:
1. Online Strategy for Prospective Purchasers
Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the home they actually purchased?
50% on the Internet
7% from a yard sign
28% from a Real Estate Agent
1% from newspapers
The days of selling your house by putting up a sign and listing it in the paper are long gone. Having a strong Internet strategy is crucial.
3. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
The buyer who wants the best deal possible
The buyer’s agent, who solely represents the best interest of the buyer
The buyer’s attorney (in some parts of the country)
The home inspection companies, which work for the buyer and will almost always find some problems with the house
The appraiser, if there is a question of value
4. FSBOing Has Become Increasingly Difficult
The paperwork involved in the process has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 7% over the last 20+ years.
5. You Net More Money When Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
The more buyers that view a home, the greater the chance of a bidding war for the property. The study found the difference in price between comparable homes of size and location is currently at an average of 6%.
Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent without additional cost?
Before you decide to take on the challenge of selling your house on your own, let’s get together to discuss your needs.
According to CoreLogic, from 2006 to 2014 “there were 7.3 million housing foreclosures and 1.9 million short sales.” The hesitation some Americans feel after experiencing a foreclosure brings to mind the old saying: “Fool me once- shame on you. Fool me twice- shame on me.”
According to the 2019 Home Buyer Report from NerdWallet,
“Thirteen percent of Americans have lost a home due to a financial event such as foreclosure in the past 10 years. More than 6 in 10 of them (61%) have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again.”
This makes sense. They don’t want to go through the same pain again. As a cornerstone of the American dream, nobody wants to lose homeownership. But let’s illustrate this simply: Recall learning to ride your first bike during your childhood. Did you stop riding it because you fell on the ground and scraped your knees? Or did you get back on and try again until you were able to ride without falling?
Purchasing a home is not as simple as learning to ride a bike, but the concept is the same! There are many things necessary to learn that affect the ability to get the financing needed to purchase a home. Past occurrences can determine if there is a waiting period. In other words, you need to let your knees heal before you try again!
As we’ve mentioned in the past, homeownership has many financial and non-financial benefits. Each person needs to go over the pros and cons, taking the time to figure out what is best for their family. Should they continue renting, or should they try to buy again?
The good news is that some “boomerang buyers” are getting back into the market. They’re getting back on their bike!
“Of 2.8 million former homeowners whose foreclosures, short sales or bankruptcies dropped off their credit reports from January 2016 to November 2018, 11.5% have obtained a new mortgage, according to a study by credit rating agency Experian for USA Today.”
NerdWallet’s report also mentioned:
6% plan to buy a house this year.
39% intend to buy over the next 3 years.
58% say they will purchase within 5 years.
If you lost a home due to a financial event but would like to review your options, let’s get together to help you create a plan to obtain a home in the future!
When buying a home today, why is there so much paperwork mandated by the lenders for a mortgage loan application? It seems like they need to know everything about you. Furthermore, it requires three separate sources to validate each and every entry on the application form. Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.
There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any other time in history.
1. The government has set new guidelines that now demand that the bank proves beyond any doubt that you are indeed capable of paying the mortgage.
During the run-up to the housing crisis, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.
2. The banks don’t want to be in the real estate business.
Over the last several years, banks were forced to take on the responsibility of liquidating millions of foreclosures and negotiating an additional million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they have to double (maybe even triple) check everything on the application.
However, there is some good news in this situation.
The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a low mortgage interest rate.
The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process, but also paid a higher interest rate (the average 30-year fixed rate mortgage was 8.12% in the 1990s and 6.29% in the 2000s).
If you went to the bank and offered to pay 7% instead of around 4%, they would probably bend over backward to make the process much easier.
Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.
A lot is happening in the world, and it’s having a direct impact on the housing market. The reality is this: some of it is positive and some of it may be negative. Some we just don’t know yet.
The following three areas of the housing market are critical to understand: interest rates, building materials, and the outlook for an economic slowdown.
1. Interest Rates
One of the most important things to consider when buying a home is the interest rate you will be charged to borrow the money. In our recent post we posed the question, “Are Low Interest Rates Here To Stay?” The latest information from Freddie Mac makes it appear they are. We are currently at a 21-month low in interest rates.
2. Building Materials
Talk of tariffs could also affect the housing market. According to a recent article, the National Association of Home Builders reports that as much as $10 billion in goods imported from China are used in homebuilding. Depending on the outcome of the tariff and trade discussions between several countries, there could be as much as a 25% boost in the cost of building materials.
3. Economic Slowdown
We began the year with many economic leaders thinking we could expect a recession in late 2019 or early 2020. As spring approached, economists had started to push that projection past 2020. Now, three leading surveys indicate that it may begin in the next eighteen months.
We are in a strong housing market. Wages are increasing, home prices are appreciating, and mortgage rates are the lowest they have been in 21 months. Whether you are thinking of buying or selling, it’s a great time to be in the market. However, it is vital to be familiar with and understand the data and closing comps in your local market, this is where I come in. Contact me and let me go through the latest market information with you so you can better understand your real estate options in this market.