|Keeping Current Matters nails it with this graphic about pricing your house|
Baby Boomers Are Moving
According to a Merrill Lynch study, “an estimated 4.2 million retirees moved into a new home last year alone.” Two-thirds of retirees say that they are likely to move at least once during retirement. As one participant in the study stated:
“In retirement, you have the chance to live anywhere you want. Or you can just stay where you are. There hasn’t been another time in life when we’ve had that kind of freedom.”
The top reason to relocate cited was “wanting to be closer to family” at 29%, a close second was “wanting to reduce home expenses” at 26%. A recent Freddie Mac studyfound similar results, as “nearly 20 percent of Boomers said they would move closer to their grandchildren/children compared to 13 percent who said they would move to a warmer climate.”
Not Every Baby Boomer Downsizes
There is a common misconception that as retirees find themselves with fewer children at home, they will instantly desire a smaller home to maintain. While that may be the case for half of those surveyed, the study found that three in ten decide to actually upsize to a larger home. Some choose to buy a home in a desirable destination with extra space for large family vacations, reunions, extended visits, or to allow other family members to move in with them. According to Merrill Lynch:
“Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations.”
If your housing needs have changed or are about to change, meet with a local real estate professional in your area who can help with deciding your next step.
Another great article from Keeping Current Matters!
Buying a Home is 36% Less Expensive Than Renting
In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers actually show that the range is an average of 5% less expensive in Orange County (CA) all the way up to 46% in Houston (TX), and 36% Nationwide!
Other interesting findings in the report include:
- Interest rates have remained low and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
- Some markets may tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
- Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.
Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.
Keeping Current Matters
If You Are Thinking of Selling, Now Is The Time
A great article from Keeping Current Matters
If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market. Jonathan Smoke, the Chief Economist of realtor.com, in a recent article revealed that:
Smoke goes on to say:
In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction including the inspection, appraisal and financing contingencies.
As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas
Past, Present & Future Home Values
| From Keeping Current Matters
In CoreLogic’s latest Home Price Index, they revealed home appreciation in three categories: percentage appreciation over the last year, over the last month, and projected appreciation over the next twelve months.
Here are state maps for each category:
The Past – home appreciation over the last 12 months
Homeownership Produces Wealth
Study Again Finds Homeownership to be a Better Way of Producing Wealth
Keeping Current Matters wrote this great article
According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index homeownership is a better way to produce greater wealth, on average, than renting. The BH&J Index is a quarterly report that attempts to answer the question:
Is it better to rent or buy a home in today’s housing market?
The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers use a “’horse race’ comparison between an individual that is buying a home and an individual that rents a similar quality home and reinvests all monies otherwise invested in homeownership.” Ken Johnson Ph.D., Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states:
“The nation as a whole is in buy territory. Continued near record low mortgage rates, unsteady stock market performance, and rents (on average) now out pacing the cost of ownership (maintenance, taxes, insurance, etc.) all combine to favor owning and building wealth through home equity over renting and reinvesting in a portfolio of stocks and bonds.”
Dallas, Denver and Houston currently remain deep in rent territory but, “there is some degree of good news from these markets for homeowners as the cost of renting is now increasing at a faster rate than the cost of homeownership — reducing the advantage of renting over buying.”
Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now. To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.
Future Home Values
Here is another great article from Keeping Current Matters:
Future Home Values: Where Do The Experts Think They Are Headed?
The results of their latest survey:
Home values will appreciate by 3.7% over the course of 2016, 3.3% in 2017 and 3.2% in the next two years, and finally 3.1% in 2020 (as shown below). That means the average annual appreciation will be 3.3% over the next 5 years. The prediction for cumulative appreciation slowed slightly from 21.6% to 17.7% by 2020. The experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 10.9%.
Individual opinions make headlines. We believe the survey is a fairer depiction of future values
Your Home Loan Application
There are numerous home loans available today, including FHA, VA and Conventional. All of these loans will require you to fill out a loan application. This process is much easier if you are prepared. Here is a list of required items you are going to need:
1. Latest 2 paycheck stubs
2. Last 2 years W-2’s or 1099’s
3. If self-employed; last 2 years tax returns
4. Most recent bank statements (all your accounts for 2 months)
5. Loan and lease information on other real estate owned
6. Drivers license or other form of ID
Your lender may want more information and if they do, they will ask for it. Like the Boy Scouts, “Be prepared”, and you will have completed your loan application in no time.