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How Your Tax Refund Can Move You Toward Homeownership This Year

Posted by on Mar 25, 2020 in Home Ownership | 0 comments

If you’re looking to buy a home in 2020, have you thought about putting your tax refund toward a down payment? Homeownership may be one step closer than you think if you spend your dollars wisely this year. Based on data released by the Internal Revenue Service (IRS), Americans can expect an estimated average refund of $2,962 when filing their taxes this year. The map below shows the average tax refund Americans received last year by state:According to programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, many first-time buyers can purchase a home with as little as 3% down. Truth be told, a 20% down payment is not always required to buy a home, even though that’s a common misconception about homebuying. Veterans Affairs Loans allow many veterans to purchase a home with 0% down. How can my tax refund help? If you’re a first-time buyer, your tax refund may cover more of a down payment than you ever thought possible. If you take into account the median home sale price by state, the map below shows the percentage of a 3% down payment that’s covered by the average tax refund:The darker the blue, the closer your tax refund gets you to homeownership in one of these programs. Maybe this is the year to plan ahead and put your tax refund toward a down payment on a home. Bottom Line Saving for a down payment can seem like a daunting task, but the more you know about what’s required, the more prepared you’ll be to make the best decision for you and your family. This tax season, your refund could be your key to...

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The Many Benefits of Aging in a Community

Posted by on Mar 18, 2020 in Neighborhoods | 0 comments

There’s comfort in being around people who share common interests, goals, and challenges. That comfort in a community doesn’t wane with age – it actually deepens. Whether it’s proudly talking about grandchildren or lamenting the fact that our eyes aren’t as good as they used to be, it helps to be around people who not only understand what we’re saying but actually feel the same joys and concerns as well. That’s why many boomers are deciding to move into an active adult community. In the latest 55places National Housing Survey, they were described by one out of three seniors as an “outgoing, social community of likeminded people.” Bill Ness, Chief Executive Officer and Founder of 55places.com, explains: “Baby boomers are now reaching the age when moving to an active adult community is the ideal opportunity for them…Many boomers now want to downsize, experience a maintenance-free lifestyle, and pursue more social opportunities. It’s exciting that there are so many choices for baby boomers.” There’s still a desire, however, among many seniors to “age-in-place.” According to the Senior Resource Guide, aging-in-place means: “…that you will be remaining in your own home for the later years of your life; not moving into a smaller home, assisted living, or a retirement community etcetera.” The challenge is, many seniors live in suburban or rural areas, and that often necessitates driving significant distances to see friends or attend other social engagements. A recent report from the Joint Center for Housing Studies of Harvard University (JCHS) titled Housing America’s Older Adults addressed this exact concern: “The growing concentration of older households in outlying communities presents major challenges for residents and service providers alike. Single-family homes make up most of the housing stock in low-density areas, and residents typically need to be able to drive to do errands, see doctors, and socialize.” The Kiplinger report also chimed in on this subject: “While most seniors say they want to age in place, a much smaller percentage of them actually manage to accomplish it, studies show. Transportation is often a problem; when you can no longer drive, you can’t get to medical appointments or to other outings.” Driving may not be a challenge right now, but think about what it may be like to drive 10, 20, or 30 years down the road. There are also health challenges brought on by a possible lack of socialization when living at home versus a community of seniors. Sarah J. Stevenson is an author who writes about seniors. In a recent blog post for A Place for Mom, she explains: “Social contacts tend to decrease as we age for reasons such as retirement, the death of friends and family, or lack of mobility.” Thankfully, research from the same article suggests if you’re spending time with others in a community, thus reducing the impact of loneliness and isolation, there’s less of a risk of developing high blood pressure, obesity, heart disease, a weakened immune system, depression, anxiety, cognitive decline, Alzheimer’s disease, and early death. Though the familiarity of our current home may bring a feeling of warmth, comfort, and convenience, it’s important to understand that staying there may mean missing out on crucial socialization opportunities. Living with adult children, joining a retirement community, or moving to an assisted living facility can help us continue to be with people we enjoy every day. Bottom Line “Aging-in-place” definitely has its...

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Impact of the Coronavirus on the U.S. Housing Market

Posted by on Mar 13, 2020 in Real Estate Market | 0 comments

Impact of the Coronavirus on the U.S. Housing Market The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, let’s also acknowledge the true impact it continues to have on lives and families around the world. With all this uncertainty, how do you make powerful and confident decisions in regard to your real estate plans? The National Association of Realtors (NAR) anticipates: “At the very least, the coronavirus could cause some people to put home sales on hold.” While this is an understandable approach, it is important to balance that with how it may end up costing you in the long run. If you’re considering buying or selling a home, it is key to educate yourself so that you can take thoughtful and intentional next steps for your future. For example, when there’s fear in the world, we see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions. According to the National Association of Home Builders (NAHB): “The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.” This is exactly what we’re experiencing right now as mortgage interest rates hover at the lowest levels in the history of the housing market. Bottom Line The full impact of the Coronavirus is still not yet known. It is in times like these that working with an informed and educated real estate professional can make all the difference in the...

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The #1 Misconception in the Homebuying Process

Posted by on Mar 11, 2020 in Home Ownership | 0 comments

After over a year of moderating home prices, it appears home value appreciation is about to reaccelerate. Skylar Olsen, Director of Economic Research at Zillow, explained in a recent article:  “A year ago, a combination of a government shutdown, stock market slump and mortgage rate spike caused a long-anticipated inventory rise. That supposed boom turned out to be a short-lived mirage as buyers came back into the market and more than erased the inventory gains. As a natural reaction, the recent slowdown in home values looks like it’s set to reverse back.” CoreLogic, in their January 2020 Market Pulse Report, agrees with Olsen, projecting home value appreciation in all fifty states this year. Here’s the breakdown: 21 states appreciating 5% or more 26 states appreciating between 3-5% Only 3 states appreciating less than 3% The Misconception Many believe when real estate values are increasing, owning a home becomes less affordable. That misconception is not necessarily true. In most cases, homes are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by almost a full percentage point since this time last year. Another major piece of the equation is a buyer’s income. The median family income has risen by 5% over the last year, contributing to the affordability factor. Black Knight, in their latest Mortgage Monitor, addressed this exact issue:  “Despite the average home price increasing by nearly $13,000 from just over a year ago, the monthly mortgage payment required to buy that same home has actually dropped by 10% over that same span due to falling interest rates… Put another way, prospective homebuyers can now purchase a $48K more expensive home than a year ago while still paying the same in principal and interest, a 16% increase in buying power.” Bottom Line If you’re thinking about purchasing a home, realize that homes are still affordable even though prices are increasing. As the Black Knight report concluded: “Even with home price growth accelerating, today’s low-interest-rate environment has made home affordability the best it’s been since early...

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Entry-Level Homeowners Are in the Driver’s Seat

Posted by on Mar 4, 2020 in Home Ownership | 0 comments

One thing helping homeowners right now is price appreciation, especially in the entry-level market. In the latest Home Price Insights report, CoreLogic reveals how home prices increased by 4% year-over-year and projects prices will rise 5.2% by December 2020. Why is this good news for the homeowners? When prices appreciate, homeowners gain equity. In addition, those planning to sell this year, especially in the entry-level market, can potentially earn a substantial profit. Dr. Frank Nothaft, Chief Economist at CoreLogic, says: “Moderately priced homes are in high demand and short supply, pushing up values…Homes that sold for 25% or more below the local median price experienced a 5.9% price gain in 2019, compared with a 3.7% gain for homes that sold for 25% or more above the median.” As Dr. Nothaft indicates, the lack of inventory continues to drive home price growth. This means there’s a high demand for homes in this tier of the market, making it a great time to consider using your equity to move up to a bigger or more premium home. When you upgrade your home, you may be able to find the amenities or features you’ve dreamed of – such as a yard to plant or garden in with your family this spring, or more outdoor space for entertaining this summer. Maybe it’s the master bath you’ve always hoped for, or a garage to finally park your car inside. Whatever you choose, if you’re moving out of an entry-level house, you’re likely going to be in the driver’s seat as a seller. Bottom Line If you’d like to own a bigger home, let’s get together to discuss your situation. You may be surprised by the current value of your home and the equity you’ve...

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The #1 Reason It Is Difficult to Find Your Dream Home

Posted by on Feb 26, 2020 in Real Estate Market | 0 comments

The headlines in real estate today all revolve around one major point: there is a shortage of homes available for sale. Price appreciation is accelerating again because there is a shortage of homes available for sale. First-time buyers are taking longer to purchase a home because there is a shortage of homes available for sale in the lower price points. Boomers are staying in their current homes longer because there is a shortage of homes available for sale to which they would move. In certain markets, affordability is becoming more challenging because there is a shortage of homes available for sale. What’s the major reason for this lack of housing inventory? The issue was examined in a recent article by the National Home Builders Association (NAHB). In the article, Robert Dietz, Chief Economist for NAHB, explained: “Home building in the 2010s was a story of the Long Recovery. After the Great Recession, the number of home builders declined significantly, and housing production was unable to meet buyer demand…Years of population and household formation growth, combined with relatively reduced levels of home building, have left the market with a critical supply shortage.” Here are the single-family home construction starts by decade for the last six decades:Obviously, there’s a current shortage of homes for sale because not enough houses were built over the last ten years. To add to the challenge, the U.S. population expanded by more than 20 million people during the 2010s. Below is a graph showing the number of starts per every million in population. The last decade shows that starts per population were less than half the average of the previous five decades. There’s good news coming! The NAHB article explains that there is light at the end of the tunnel. How confident home builders are in the housing market is a great indicator of how much building is about to get started. The NAHB/Wells Fargo Housing Market Index (HMI) gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as “good” than “poor.” Here are the HMI readings going back to 2008:The 2019 confidence reading of 76 was the highest since 1999. The January 2020 index came in one point lower at 75. These readings indicate we should see an increase in new residential construction in 2020. Just last week, NAHB Chairman Greg Ugalde stated: “Low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020.” The increase in housing starts has already begun. According to the January report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, single‐family housing starts were up 11.2% and attained the highest level in thirteen years. Bottom Line Whether you’re a first-time buyer or a seller thinking of moving up or down, 2020 could be your year with more new construction homes coming to...

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Should I Sell My House This Year?

Posted by on Feb 19, 2020 in Selling a Home | 0 comments

If one of the questions you’re asking yourself today is, “Should I sell my house this year?” the current Housing Opportunities and Market Experience (HOME) Survey from the National Association of Realtors® (NAR) should boost your confidence as it relates to the current selling sentiment in the housing market. Even with all the information overload in the media circling around talk of a possible recession, the upcoming 2020 election, and more, Americans feel good about selling a house now. That’s some news to get excited about! As the graph below shows, as of Q4 2019, 75% of people surveyed indicate they believe now is a good time to sell a home:In the case of those with a yearly salary of $100,000 or more, the results jumped even higher, coming in at an 82% positive sentiment. When the study divided the outcomes by region, the results still consistently showed Americans feeling good about selling: Northeast: 71% positive Midwest: 76% positive South: 72% positive West: 81% positive In addition to looking at income and region, the report also divided the results by generation, as shown in the graph below:As you can see, many believe that, despite everything going on in the world, it is still a good time to sell a home. According to NAR, the unsold inventory available today “sits at a 3.0-month supply at the current sales pace,” which is down from a 3.7-month supply in November. The current inventory is half of what we need for a normal or neutral housing market, which should have a 6.0-month supply of unsold inventory. This is good news for sellers, as Lawrence Yun, Chief Economist at NAR, says: “Home sellers are positioned well, but prospective buyers aren’t as fortunate. Low inventory remains a problem, with first-time buyers affected the most.” Bottom Line If you’re ready to list your home, you can feel good about the current sentiment in the market. Let’s get together today to determine the best next step when it comes to selling your house this...

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Three Reasons Why Pre-Approval Is the First Step in the 2020 Homebuying Journey

Posted by on Feb 12, 2020 in Buying a Home, Home Ownership | 0 comments

When the number of buyers in the housing market outnumbers the number of homes for sale, it’s called a “seller’s market.” The advantage tips toward the seller as low inventory heats up the competition among those searching for a place to call their own. This can create multiple offer scenarios and bidding wars, making it tough for buyers to land their dream homes – unless they stand out from the crowd. Here are three reasons why pre-approval should be your first step in the homebuying process. 1. Gain a Competitive Advantage Low inventory, like we have today, means homebuyers need every advantage they can get to make a strong impression and close the deal. One of the best ways to get one step ahead of other buyers is to get pre-approved for a mortgage before you make an offer. For one, it shows the sellers you’re serious about buying a home, which is always a plus in your corner. 2. Accelerate the Homebuying Process Pre-approval can also speed up the homebuying process, so you can move faster when you’re ready to make an offer. In a competitive arena like we have today, being ready to put your best foot forward when the time comes may be the leg-up you need to cross the finish line first and land the home of your dreams. 3. Know What You Can Borrow and Afford Here’s the other thing: if you’re pre-approved, you also have a better sense of your budget, what you can afford, and ultimately how much you’re eligible to borrow for your mortgage. This way, you’re less apt to fall in love with a home that may be out of your reach. Freddie Mac sets 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.” Local real estate professionals also have relationships with lenders who can help you through this process, so partnering with a trusted advisor will be key for that introduction. Once you select a lender, you’ll 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 also describes the ‘4 Cs’ that help determine the amount you’ll be qualified to borrow: Capacity: Your current and future ability to make your payments Capital or Cash Reserves: The money, savings, and investments you have that can be sold quickly for cash Collateral: The home, or type of home, that you would like to purchase Credit: Your history of paying bills and other debts on time While there are still many additional steps you’ll need to take in the homebuying process, it’s clear why pre-approval is always the best place to begin. It’s your chance to gain the competitive edge you may need if you’re serious about owning a home. Bottom Line Getting started with pre-approval is a great way to begin the homebuying journey. Let’s get together today to make sure you’re on the fastest path to...

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The New Spring Real Estate Market is Here. Are You Ready?

Posted by on Feb 5, 2020 in Real Estate Market | 0 comments

Which month do you think most people who are considering buying a home actually start their search? If you’re like most of us, you probably think the surge happens in the spring, likely in April. Not anymore. According to new research, January 2019 was only 1% behind February for the most monthly views per listing on realtor.com. So, what does that mean? The busiest season in real estate has just begun. The same research indicates, “Historically, April launched the kickoff of the home shopping season as buyers would come out of their winter hibernation looking for their new home. However, the spring shopping season now starts in January for many of the nation’s largest markets.” With the reality of fewer homes on the market in the winter, and that supply naturally increases as we head to the spring market, waiting for more competition to list in your neighborhood this year might put you behind the curve. Perhaps now is the time to jump into the market. George Ratiu, Senior Economist at realtor.com says, “As shoppers modify their strategies for navigating a housing market that has become more competitive due to rising prices and low inventory, the search for a home is beginning earlier and earlier.” There is a lot of speculation in the market about why the search for a home is shifting to an earlier start. The one thing we do know is if you’re thinking about buying or selling a home this year, the earlier you get started, the better. Reminder: When should you sell something? When there is less of that item for sale and the greatest number of buyers are in the market. That’s exactly what is happening in real estate right now. Bottom Line The new spring market for real estate is underway. If you’re considering buying or selling, let’s connect, so you have the advantage in this competitive...

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Buying a Home Early Can Significantly Increase Future Wealth

Posted by on Jan 29, 2020 in Buying a Home | 0 comments

According to an Urban Institute study, homeowners who purchase a house before age 35 are better prepared for retirement at age 60. The good news is, our younger generations are strong believers in homeownership. According to a Freddie Mac survey, “The dream of homeownership is alive and well within “Generation Z,” the demographic cohort following Millennials. Our survey…finds that Gen Z views homeownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median homebuying age (33).” If these aspiring homeowners purchase at an early age, the Urban Institute study shows the impact it can have. Based on this data, those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-20s and early-30s had close to $50,000 left, but traditionally purchased more expensive homes.Although the vast majority of Gen Zers want to own a home and are somewhat confident in their future, “In terms of financial awareness, 65% of Gen Z respondents report that they are not confident in their knowledge of the mortgage process.” Bottom Line As the numbers show, you’re not alone. If you want to buy this year but you’re not sure where to start the process, let’s get together to help you understand the best steps to take from...

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