With housing prices appreciating at levels that far exceed historical norms, some are fearful that the market is heading for another bubble. To alleviate that fear, we just need to look back at the reasons that caused the bubble ten years ago.Last decade, demand for housing was artificially propped up because mortgage lending standards were way too lenient. People that were not qualified to purchase were able to attain a mortgage anyway. Prices began to skyrocket. This increase in demand caused homebuilders in many … [Read more...]
Gallup: Real Estate is Best Long-Term Investment 4 Years Running
Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks/mutual funds, gold, savings accounts/CDs, or bonds.For the fourth year in a row, Real Estate has come out on top as the best long-term investment! This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26%. The full results are shown in the chart below.The study makes it a point to draw attention to the contrast of the … [Read more...]
Is 2017 the Year to Move Up to Your Dream Home? If So, Do It Early!
If you are considering moving up to your dream home, it may be better to do it earlier in the year than later. The two components of your monthly mortgage payment (home prices and interest rates) are both projected to increase as the year moves forward, and interest rates may increase rather dramatically. Here are some predictions on where rates will be by the end of the year:Freddie Mac“While full employment and rising inflation are signs of a strong economy, they also have the potential to push mortgage … [Read more...]
Buying a Home? Do You Know the Lingo?
Buying a home can be intimidating if you are not familiar with the terms used during the process. To start you on your path with confidence, we have compiled a list of some of the most common terms used when buying a home.Freddie Mac has compiled a more exhaustive glossary of terms in their “My Home” section of their website.Annual Percentage Rate (APR) – This is a broader measure of your cost for borrowing money. The APR includes the interest rate, points, broker fees and certain other credit … [Read more...]
Is the Current Pace of Home Sales Maintainable?
There are some experts questioning whether the current pace of residential home sales is maintainable. Are too many people buying homes like in 2004-2006? Are we headed for another housing crisis? Actually, if we look closely at the numbers, we can see that we are looking at a very healthy real estate market.Why the concern?Some are looking at the last four years of home sales and comparing them to the three years just prior to the housing bubble. Looking at the graph below, we can understand that thinking.However, … [Read more...]
Measuring Your Ability to Achieve the American Dream
Forbes.com recently released the results of their new American Dream Index, in which they measure “the prosperity of the middle class, and…examine which states best support the American Dream.”The monthly index measures several different economic factors, including goods-producing employment, personal and commercial bankruptcies, building permits, startup activity, unemployment insurance claims, labor force participation, and layoffs.The national index score was rounded out to 100 in January and … [Read more...]
US Housing Market Continues the Move into ‘Buy Territory’!
According to the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, the U.S. housing market has continued to move deeper into buy territory, supporting the belief that housing markets across the country remain a sound investment.The BH&J Index is a quarterly report that attempts to answer the question:In today’s housing market, is it better to rent or buy a home?The index examines the entire US housing market and then isolates 23 major cities for comparison. The … [Read more...]
Is Your First Home Within Your Grasp? [INFOGRAPHIC]
Some Highlights:‘Millennials’ are defined as 18-36 year olds according to the US Census Bureau.According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 31 years old.More and more ‘Old Millennials’ (25-36 year olds) are realizing that homeownership is within their reach now! … [Read more...]
Home Mortgages: Rates Up, Requirements Easing
The media has extensively covered the rise in mortgage interest rates since last fall (from 3.42% last September to the current 4.1% according to Freddie Mac). However, a less covered aspect of the mortgage market is that requirements to get a mortgage have eased while rates have risen.The Mortgage Bankers Association (MBA) quantifies the availability of mortgage credit each month with their Mortgage Credit Availability Index (MCAI). According to the MBA, the MCAI is:“A summary measure which indicates the … [Read more...]
Millennials Flock to Low Down Payment Programs
A recent report released by Down Payment Resource shows that 65% of first-time homebuyers purchased their homes with a down payment of 6% or less in the month of January.The trend continued through all buyers with a mortgage, as 62% made a down payment of less than 20%, which is consistent with findings from December.An article by DS News points to the new wave of millennial homebuyers:“It seems that the long-awaited influx of millennial home buyers is beginning. Ellie Mae reported that mortgages to … [Read more...]
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