There are many benefits to homeownership,
one of top ones, is being able to protect yourself from rising rents and lock
in your housing cost for the life of your mortgage. The National Association of Realtors
(NAR) just released their findings of a study in which they studied “income growth, housing costs and
changes in the share of renter and owner-occupied households over the past
five years in metropolitan statistical areas throughout the US.”Don’t Become TrappedThe study revealed that over the last five years, a typical rent rose 15%, while the income of renters grew by only 11%. If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment. The top 5 markets where renters have seen the highest increase in rents since 2009 are:
- New York, NY (50.7%)
- Seattle, WA (32.4%)
- San Jose, CA (25.6%)
- Denver, CO (24.1%)
- St. Louis, MO
(22.3%)
Homebuyers, who were able to purchase their
home over the same five-year period and lock in their housing costs, were
able to grow their net worth as home values have increased and their mortgage
balances have gone down. |
The 30-year
fixed mortgage interest rate is currently still below 4%. Many buyers may be
on the fence as to whether to act now and purchase a new home, or wait until
next year, believing they still have time to lock in a low rate. If you look
at what the experts are predicting over the course of the next 12 months, it
may make the decision for you.
Predictions for 2016
2Q:
§ 4.2% - Fannie Mae
§ 4.7% - Freddie Mac
§ 4.9% - Mortgage Bankers Association
§ 5.3% - National Association of Realtors
Even an
increase of half a percentage point can put a dent in your family’s net
worth.
Let’s look at it
this way…
The monthly
payment (principal & interest only) on a $250,000 home today, with the
current 3.86% interest rate would be $1,173. If we take that same home a year
later, the Home Price Expectation Survey projects that prices will rise about
4.4% making that home cost $11,000 more at $261,000. If we take Freddie Mac’s
rate projection of 4.7%, the monthly mortgage payment climbs to $1,354. Some
buyers might not think that an extra $181 a month is that bad. But over the
course of 30-year mortgage you have spent an additional $65,160 by waiting a year.
Looking to Buy, Sell, or Invest? Contact:
David Demangos
858.232.8410
Locally Known, Globally Connected
Luxury Home Marketing Specialist
Global Property Specialist
David@AwesomeSanDiegoRealEstate.com |
 A recent Bloomberg Business article reports that both Lowes and Home Depot experienced fourth quarter profits that beat revenue projections by the most in six quarters. So what does that mean to the housing market? Consumer Confidence Lowe’s Chief Executive Officer Robert Niblock said, “Consumers are feeling better about their jobs, their wages and certainly feeling better about the value of their home, they are re-engaging in projects that they have put off.” Sales to professional contractors have increased significantly as well, and were a driving factor in the quarter. Home Depot’s Chief Financial Officer Carol Tome calls this a “sign of health. If they are putting more items in their basket, it means they have work coming at them.” Home Values Rising In a quarterly consumer survey conducted by Lowe’s since 2007, the percentage of respondents who said that the value of their home is rising increased to its highest value ever, at 50%. Whether Americans are finally adding that man-cave they’ve always wanted, or renovating a master suite, an increased confidence in the value of one’s home often sparks homeowners to invest in big-ticket projects. The National Association of Realtors (NAR) reports that the median price of an existing home (for all housing types) rose year-over-year for the 35th consecutive month. Not all who are renovating are planning on staying in their home. The Demand Institute reports that “nearly half of American households plan to move at some point in the future.” For those who are planning on listing their home this spring, spending the time and money needed to update that 1950’s bathroom or kitchen can fetch higher prices in today’s market. Bottom Line Meeting with a local real estate professional can give you insight into the small (or big) improvements your home could use to draw the highest price and return on investment this spring.
Looking to Buy, Sell, or Invest? Contact:
David Demangos 858.232.8410 Locally Known, Globally Connected Luxury Home Marketing Specialist Global Property Specialist David@AwesomeSanDiegoRealEstate.com www.AwesomeSanDiegoRealEstate.com Our Team Goes to Extremes to Fulfill Your Real Estate Dreams! |
“At current foreclosure rates, we expect to see the foreclosure inventory in the U.S. drop below 500,000 homes sometime in the first quarter of 2015 which would be another milestone in the healing of the housing market.” The map below shows the percentage of foreclosure inventory in each of the 50 states and Washington, D.C. Thirty-six states have inventory below the national rate of 1.4% and can be seen in two shades of green.  Bottom Line
Even though
some states have not recovered completely from the foreclosure crisis, the
nation as a whole is on the right track as inventory decreases.
Looking to Buy, Sell, or Invest? Contact: David Demangos 858.232.8410 Locally Known, Globally Connected Luxury Home Marketing Specialist Global Property Specialist David@AwesomeSanDiegoRealEstate.com www.AwesomeSanDiegoRealEstate.com Our Team Goes to Extremes to Fulfill Your Real Estate Dreams! |
