J. Kent Erickson, Broker Associate
Direct / 208.447.7848

Is Mortgage Debt out of Control?

Posted by on Jul 12, 2019 in Mortgage & Finances, Real Estate Market | 0 comments

The housing crisis of the last decade was partially caused by unhealthy levels of mortgage debt. Homeowners were using their homes as ATMs by refinancing and swapping their equity for cash. When prices started to fall, many homeowners found themselves in a negative equity situation (where their mortgage was higher than the value of their home). As a result, they walked away. This caused prices to fall even further. Headlines are again talking about record levels of mortgage debt, making the comparison to the challenges that preceded the housing crash. However, cumulative debt is not an important data point. If we look at the debt as a percentage of disposable personal income, we are at an all-time low. Here’s a visual representation of mortgage debt as a percent of income:Furthermore, according to a new report from ATTOM Data Solutions, more than 1-in-4 homes...

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3 Things to Know in the Housing Market Today!

Posted by on Jun 22, 2019 in Mortgage & Finances, Real Estate Market | 1 comment

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...

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How Homeownership Delivers Unsurpassed Family Wealth

Posted by on Jun 4, 2019 in Home Ownership, Mortgage & Finances, Real Estate Market | 0 comments

There are many financial benefits to homeownership, but probably none more important than its ability to create family wealth. How Housing Matters is a joint project of the Urban Land Institute and the MacArthur Foundation. It is an online resource for research and information on how homeownership contributes to individual and community success. Their article, The First Rung on the Ladder to Economic Opportunity Is Housing, explains the importance of homeownership to a family’s financial health. In that article, they simply stated: “The ladder to economic success can stretch only so high without the asset-building power of homeownership.” To this point, National Association of Realtors’ (NAR) Economists’ Outlook Blog revealed in a recent post: “Housing wealth contributes positively to the homeowner’s and children’s economic condition, because home equity can be tapped for expenditures such as investing in another property (which can generate rental income), home renovation (which further...

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The Ultimate Truth about Housing Affordability

Posted by on May 31, 2019 in Mortgage & Finances, Real Estate Market | 0 comments

There have been many headlines decrying an “affordability crisis” in the residential real estate market. While it is true that buying a home is less affordable than it had been over the last ten years, we need to understand why and what that means. On a monthly basis, the National Association of Realtors (NAR), produces a Housing Affordability Index. According to NAR, the index… “…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.” Their methodology states: “To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income...

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2 Things You Need to Know to Properly Price Your Home

Posted by on May 28, 2019 in Home Inspection, Mortgage & Finances, Real Estate Market, Selling a Home | 0 comments

In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly. In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal. Every month, the Home Price Perception Index (HPPI) measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is. Over the last five months, the gap...

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4 Most Popular Bottom Line Investments in America

Posted by on May 26, 2019 in Mortgage & Finances, Real Estate Investments | 0 comments

Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks, gold, and savings accounts. For the sixth year in a row, real estate has come out on top as the best long-term investment! That has not always been the case. Gallup explains: “Between 2008 and 2010, covering most of the Great Recession period that saw plummeting home and stock values, Americans were as likely to name savings accounts or CDs as the best long-term investment as they were to name stocks or real estate.” This year’s results showed that 35% of Americans chose real estate, followed by stocks at 27%. The full results are shown in the chart below. Bottom Line Now that the real estate market has recovered, so has the belief of the American people in the stability of...

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