lake county real estate. and then some…

selling homes…a family tradition


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Real Estate ranked #1 long term investment. Do you agree?

Americans Rank Real Estate #1 Long Term Investment

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The Gallup organization recently released a survey in which Americans were asked to rank what they considered to be the “best long term investment.” Real estate ranked number one, with 35% of those surveyed saying it was a better long term investment than stocks & mutual funds, gold, savings accounts or bonds.

Here is the breakdown:

Americans Rank Real Estate #1 Long Term Investment | Simplifying The Market

The survey revealed that real estate was the number one choice among each of the following groups:

  • Men
  • Women
  • People between the ages of 18-29
  • People between the ages of 30-49
  • People between the ages of 50-64
  • People 65 and older
  • People with annual earnings of less than $30,000
  • People with annual earnings between $30,000 and $74,999
  • People with annual earnings of over $75,000
  • People with a college degree
  • People without a college degree

Even stock investors ranked real estate number one. According to the report:

 

“With housing prices showing a steadier path upward in recent months, even stock investors are about as likely…to choose real estate (37%) as stocks (32%) as the best long-term investment.”


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What is your cost of waiting?

The cost of waiting is derived by calculating the increased expense of property value appreciation and higher mortgage payments due to rising interest rates.

http://goo.gl/8MGqCd


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Do you believe that “owing a place of your own” is one of the most appealing aspects of homeownership?

You aren’t along. Twenty-six percent of US households agree with you. What’s the number one reason…  
 

The Most Appealing Aspects of Homeownership | Keeping Current Matters

The National Association of Realtors (NAR) just released their first issue of the Housing Opportunities & Market Experience Survey (HOME). In the report, NAR revealed what Americans believe to be the most appealing aspects of homeownership.

Here is a graph showing the results:

The Most Appealing Aspects of Homeownership | Keeping Current Matters

It is interesting to see that the two most appealing aspects had nothing to do with money, but instead, addressed the non-financial benefits of homeownership.

 


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Owning a home has always been considered to be a big part of “living the American Dream”…

According to a recent survey by the National Association of Realtors, Americans still believe in home ownership.  
 
 Homeownership Still Part of the American Dream | Keeping Current MattersThe National Association of Realtors (NAR) just released the first edition of their Housing Opportunities and Market Experience Survey (H.O.M.E.). NAR explained that the report covers:

“…core topics that will be tracked on a monthly basis such as views on housing as a good financial investment, whether homeownership is part of the American Dream…”

The current survey confirmed two long standing beliefs regarding homeownership:

1. Americans at every income level believe homeownership is part of the American Dream

Homeownership is a Part of the American Dream | Keeping Current Matters

2.)  Americans at every age believe that homeownership is a good financial decision

Homeownership is a Good Financial Decision | Keeping Current Matters

Bottom Line

Americans in all age groups and income levels believe in homeownership as a piece of their American Dream. If you are ready and willing to buy your dream home, meet with a local real estate professional who can help you determine if you are able to.


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How long will it take…

Depending on your housing region, it may take a lot longer to save up for a down payment on a house than you had anticipated. But what if you look at other mortgage options that require a lower down payment? You could shorten that wait by years… 

 

  In a recent study conducted by Builder.com, researchers determined that nationwide it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.

Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage a renter spends on housing in each state and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

What if you only needed to save 3%?

What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

Bottom Line

Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.


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Rumor has it…

…that mortgage interest rates are at risk of rising as much as 1% over the course of the next year.  Thinking of moving?  Act sooner than later!

The Impact of Higher Interest Rates | Keeping Current Matters

Last week, an article in the Washington Post discussed a new ‘threat’ homebuyers will soon be facing: higher mortgage rates. The article revealed:

“The Mortgage Bankers Association expects that rates on 30-year loans could reach 4.8 percent by the end of next year, topping 5 percent in 2017. Rates haven’t been that high since the recession.”

How can this impact the housing market?

The article reported that recent analysis from Realtor.com found that –

“…as many as 7% of people who applied for a mortgage during the first half of the year would have had trouble qualifying if rates rose by half a percentage point.”

This doesn’t necessarily mean that those buyers negatively impacted by a rate increase would not purchase a home. However, it would mean that they would either need to come up with substantially more cash for a down payment or settle for a lesser priced home.

Below is a table showing how a jump in mortgage interest rates would impact the purchasing power of a prospective buyer on a $300,000 home.

Buyers Purchasing Power | Keeping Current Matters

Bottom Line

If you are considering a home purchase (either as a first time buyer or move-up buyer), purchasing sooner rather than later may make more sense from a pure financial outlook.


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Not quite sure how equity works? Here’s a quick explanation…

 

Equity Matters A Lot... Just Ask Freddie Mac | Keeping Current Matters

There are many reasons, both financial and non-financial, that homeownership remains an important part of the American Dream. One of the biggest reasons is the fact that it helps build family wealth. Recently, Freddie Mac wrote about the power of home equity. They explained:

“In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home’s appreciation. In a nutshell, your money is working for you and contributing toward your financial future.”

They went on to show an example where a person bought a home for $150,000 with a down payment of 10% ($15K), resulting in a loan amount of $135,000. The buyer secured a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance).

The chart below demonstrates the home equity built after 7 years of making mortgage payments and assuming the historic national average of 3% per year home appreciation:

Home Equity Earned | Keeping Current Matters

And that number continues to build as you continue to own the home.

Merrill Lynch published a report earlier this year that showed the average equity homeowners have acquired by certain ages.

Average Home Equity | Keeping Current Matters

Bottom Line

Home equity is important to building wealth as a family. Referring to the first scenario above, Freddie Mac explained:

“Now, if you continued to rent, and made the same payment of $684.03 per month, you’d have zero equity and no means to build it. Building equity is a critical part of homeownership and can help you create financial stability.”

Put your housing cost to work for you and your family. Meet with a real estate professional today to explore your options.


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Want to build your family wealth? Build your home equity…

Family Wealth Grows as Home Equity Builds | Keeping Current Matters

With residential real estate values rising quite substantially in most parts of the country over the last few years, many homeowners are seeing a major increase in their family’s wealth as equity continues to build in their house.

A recent study by the Joint Center of Housing Studies at Harvard University revealed that home equity grew nicely last year and has grown dramatically over the last five years…

Inflation & Home Equity | Keeping Current Matters

Buyers looking today may not see the same build-up in equity but could still do quite well.

Let’s assume you went into contract in the next six weeks and closed on a $250,000 home in January. If we take the house value projections from the last Home Price Expectation Survey, here is how your equity would grow over the next four years:

Home Price Expectation Survey Equity | Keeping Current Matters

Bottom Line

Homeownership has historically been a great way for the average American family to build wealth over time.


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Have you ever wondered…

… what the impact of owning a home has on financial stability in your retirement years?

Homeownership:¬ A Key to Well-Being in Retirement | Keeping Current Matters

There has been much talk about homeownership and whether it is a true vehicle for building wealth. A new report looks at the impact owning a home has on the financial wellbeing of people closing in on their retirement years (ages 55-64).

In recently released study by the Hamilton Project, Ten Economic Facts about Financial Well-Being in Retirement, it was revealed that:

1. Middle-class households near retirement age have about as much wealth in their homes as they do in their retirement accounts.

“Over the past quarter century the largest single source of wealth for all but the richest households nearing retirement age has been their homes, which accounted for about two-fifths of net worth in the early 1990s and accounts for about one-third today.”

2. Home equity is a very important source of net worth to all but the wealthiest households near retirement age.

“Home equity is an important source of wealth for middle income households, accounting for more than one-third of total net worth for the second, third, and fourth quintiles of the net worth distribution… The fifth quintile has a much larger share in business equity—almost a quarter—than any other quintile. (The figure leaves out the bottom quintile of households because they have negative net worth. It is likely that these households will rely almost exclusively on Social Security in retirement.)”

Here is an asset breakdown for the middle 20% of Americans determined by median net worth ($165, 720):

Components of Net Worth | Keeping Current Matters

Obviously, the data again proves that homeownership has a big role in building wealth for American families.