Archive | May 2015

Homeownership Still A Dream

Attaining the American Dream: The 5 Financial Reasons to Buy

Attaining The American Dream: The 5 Financial Reasons to Buy | Keeping Current Matters

We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own differ for each buyer, with many basic similarities.

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership his paper – The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You’re paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, contact a local professional who can help evaluate your ability to do so.

Happy, Happy, Happy

 

What do singer Pharrell Williams, the movie franchise Despicable Me and global color authority Pantone have in common? Well, if you’ve seen the first two films in the series, then you probably know that Williams wrote and sang several tracks for the popular animated flicks (including the toe-tapping, Grammy Award–winning song “Happy” from Despicable Me 2). But how does Pantone fit into the picture, you ask? Look to the launch of Pantone’s newest color, Minion Yellow, a sunny shade inspired by and named after the lovable, kooky creatures from the series, who will return to the silver screen later this year in a Despicable Me spin-off movie, Minions.

Smile and say cheese!

ARE YOU READY TO SELL YOUR HOUSE?

The spring market has arrived and along with the forsythia come the buyers ready to look for their new home.
Every home must sell twice, first the viewing on the internet and then the decision to visit the listings that are camera ready! And this means, ” Less is more.” I work with Sheila Black of Home Highlighting LTD. We walk through every room to de-clutter. She always reminds me that staged homes seller faster and for more money. A buyer needs to picture their family living in your space. Just putting on makeup or slimming clothes for a picture is not enough. You need to smile pretty and you need to do the same for your home. We have all viewed pictures on the internet that do nothing to enhance the qualities of a home but rather detract from it’s beauty. Every home is unique. Before your home says cheese to the camera for pictures that will be posted to the internet it is critically important for your home to be sparkling and neat as pin. It will be captured for all to see. Highlighting you home’s features will get you more showings and a good real estate ending, a sale!

SPRING IS THE BEST TIME TO MOVE-UP

4 Reasons To Move-Up This Spring

Spring is in full force; the summer months are right around the corner. If you are debating moving up to your dream home, here are four great reasons to consider buying today instead of waiting.

1.) Buyer Demand is High & Inventory Is Low

Recent numbers show that buyer demand is at the highest peak experienced in years, and inventory for sale is at a 4.6 months supply, which is still markedly lower than the 6.0 months needed for a historically normal market.

The National Association of Realtors, Chief Economist, Lawrence Yun put it this way, “Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer.”

Listing your home today can greatly increase exposure to buyers who are out in force and ready to act.

2.) Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 11.7% (most pessimistic) and 27.5% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting for your current home’s value to increase before selling could price you out of your new home if you aren’t careful.

3.) Mortgage Interest Rates Are Still Near Record Lows

As we reported last week, interest rates have remained below 4% for some time now, and are substantially lower than the rate previous generations paid when getting a mortgage.

The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will rise over the next 12 months.

An increase in rates will impact YOUR monthly mortgage payment. Even an increase of half a percentage point can put a dent in your family’s net worth. Whether you are moving up or buying your first home, your housing expense will be more a year from now if a mortgage is necessary to purchase your home.

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. Have you always wanted to live in a certain neighborhood? Would a climate change be just what the doctor ordered? Would you like to be closer to family?

Bottom Line

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