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  • 74% of Households in the US Now Have Significant Equity! | Simplifying The Market

    74% of Households in the US Now Have Significant Equity!

    CoreLogic’s latest Equity Report revealed that 92% of all mortgaged properties are now in a positive equity situation, while 74% now actually have significant equity (defined as more than 20%)! The report also revealed that 268,000 households regained equity in the first quarter of 2016 and are no longer under water.

     

    Price Appreciation = Good News for Homeowners

    Frank Nothaft, CoreLogic’s Chief Economist, explains:

    “In just the last four years, equity for homeowners with a mortgage has nearly doubled to $6.9 trillion. The rapid increase in home equity reflects the improvement in home prices, dwindling distressed borrowers and increased principal repayment.  

    These are all positive factors that will provide support to both household balance sheets and the overall economy.” 

    Anand Nallathambi, President & CEO of CoreLogic, believes this is a great sign for the market in 2016 as well, as he had this to say:

    “More than 1 million homeowners have escaped the negative equity trap over the past year. We expect this positive trend to continue over the balance of 2016 and into next year as home prices continue to rise.  

    Nationally, the CoreLogic Home Price Index was up 5.5% year over year through the first quarter. If home values rise another 5% uniformly across the U.S., the number of underwater borrowers will fall by another one million during the next year.” 

    Below is a map illustrating the percentage of households in each state with significant equity: 

    74% of Households in the US Now Have Significant Equity! | Simplifying The Market

    Many homeowners with more than 20% equity in their home would be able to use that equity as a down payment on either a larger home or even a retirement home.

    Bottom Line

    If you are one of the many Americans who are unsure of how much equity you have in your home, don’t let that be the reason you fail to move on to your dream home this year!

  • Here Comes the Housing Inventory!! | Simplifying The Market

    Here Comes the Housing Inventory!!

    Almost every real estate conversation revolves around the continuous rise in house values over the last four years. Some have even mentioned a concern about another possible bubble forming. However, the recent increase in prices can be attributed to a very simple principle: supply and demand.

    DEMAND

    Demand for single-family housing has continued to increase as the economy slowly moves forward. Recent surveys have shown that over 80% of each generation still believes that homeownership is a part of the American Dream. And a recent Gallup survey showed that Americans believe that real estate is the best long-term investment.

    SUPPLY

    Over the last several years, many homeowners were unable to put their homes on the market for an assortment of reasons (family finances, no or limited equity in the home). There has been a pent-up supply of sellers who have wanted to move but couldn’t. Below is a graph depicting the number of years families have historically stayed in a home. We can see there is pent-up seller demand.

    Here Comes the Housing Inventory!! | Simplifying The Market

    As the economy improves and more families reach the point of significant equity (20%), we will see these homes come to market. As supply then matches demand, the acceleration of home price increases will begin to slow.

    Bottom Line

    If you are one of the families that have been chained to your current home over the last 5-7 years, now may be the time to break free and find the home of your dreams.

  • Serious About Home Buying? Get Pre-Approved | Simplifying The Market

    Serious About Home Buying? Get Pre-Approved

    In many markets across the country, the amount of buyers searching for their dream home greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

    But even if you are in a market that is not as competitive, knowing your budget will give you the confidence to know if your dream home is within your reach.

    Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

    “It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

    One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

    Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

    1. Capacity:Your current and future ability to make your payments
    2. Capital or cash reserves:The money, savings and investments you have that can be sold quickly for cash
    3. Collateral:The home, or type of home, that you would like to purchase
    4. Credit:Your history of paying bills and other debts on time

    Getting pre-approved is one of many steps that will show home sellers that you are serious about buying and it often helps speed up the process once your offer has been accepted.

    Bottom Line

    Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

  • Is Your First Home Within Your Grasp Now? | Simplifying The Market

    Is Your First Home Within Your Grasp Now?

    There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family. Others may think they are too young. And still others might think their current income would never enable them to qualify for a mortgage.

    We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first time buyer:

    Is Your First Home Within Your Grasp Now? | Simplifying The Market

    Bottom Line

    You may not be much different than many people who have already purchased their first home. Let’s get together to see if your dream of homeownership can become a reality!

  • The Presidential Election and Its Impact on Housing | Simplifying The Market

    The Presidential Election and Its Impact on Housing

    Every four years people question what effect the Presidential election might have on the national housing market. Let’s take a look at what is currently taking place. The New York Times ran an articleearlier this week where they explained:

    “A growing body of research shows that during presidential election years — particularly ones like this when there is such uncertainty about the nation’s future — industry becomes almost paralyzed. A look at the last several dozen election cycles shows that during the final year of a presidential term, big corporate investments are routinely postponed, and big deals are put on the back burner.

    The research is even more persuasive on the final year of an eight-year presidential term, when a new candidate inevitably will become president.”

    We are seeing this take form in the latest economic numbers. However, will this lead to a slowdown in the housing market? Not according to Fannie MaeFreddie Mac or the National Association of Realtors.

    The Impact on Housing Throughout 2016

    Let’s look at what has happened and what is projected to happen by these three major entities.

    National Association of Realtors

    “In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007.”

    Freddie Mac

    “Recent data darkened the growth outlook for the first quarter of 2016. However, despite the disappointing economic reports, we still forecast housing to maintain its momentum in 2016.”

    Fannie Mae

    “Consumers and businesses showed caution at the end of the first quarter…(but) Home sales are expected to pick up heading into the spring season amid the backdrop of declining mortgage rates, rising pending home sales and purchase mortgage applications, and continued easing of lending standards on residential mortgage loans.”

    Bottom Line

    Even during this election year, the desire to achieve the American Dream is greater than the fear of uncertainty of the next presidency.

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