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  • Over Half of Americans Planning on Buying in the Next 5 Years | Simplifying The Market

    Over Half of Americans Planning on Buying in the Next 5 Years

    According to the BMO Harris Bank Home Buying Report, 52% of Americans say they are likely to buy a home in the next five years. Americans surveyed for the report said that they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also included other interesting revelations.

    Those Looking to Buy

    • 74% of those looking to buy a new home will consult with a real estate agent
    • 59% said they will visit online real estate websites
    • 37% will seek recommendations from friends and family
    • 78% plan to get pre-approved before seriously searching for a home

     Those Who Already Own

    • 75% of current homeowners set a budget before looking for a home, and 16% ended up spending less while 13% went over their budget.
    • 63% of American homeowners spent under six months looking for a new home before they made a purchase.
    • 8% bought their home without participating in an active real estate search - or even any plan to buy at all - because a specific property caught their attention.

    The last point is very interesting: Of those who purchased a home, 8% bought “without any plan to buy at all”. A property caught their attention and they acted on it.

    Why Are More People Not Planning Their Next Move?

    Why are people that are considering a move not putting their home search to a plan, and instead, buying only when a property catches their attention? An article by Fannie Mae reveals evidence that a large number of homeowners are dramatically underestimating the equity they have in their current home. The report explains that:

    “Homeowners may be underestimating their home equity. In particular, if homeowners believe that large down payments are now required to purchase a home, then widespread, large underestimates of their home equity could be deterring them from applying for mortgages, selling their homes, and buying different homes.”

    Bottom Line

    Let's meet up to determine the actual equity you have in your house and to take a look at the opportunities that currently exist in the real estate market. This may be the perfect time to move-up, move-down or buy that vacation home your family has always wanted.

  • Real Estate: 2016 Will Be the Best Year in a Decade | Simplifying The Market

    Real Estate: 2016 Will Be the Best Year in a Decade

    A few weeks ago, Jonathan Smoke, the Chief Economist at realtor.com, exclaimed“All indicators point to this spring being the busiest since 2006.”

    Now, Freddie Mac has doubled down on that claim and is saying that 2016 will be the best year that the real estate industry has seen in a decade. In their March Housing Outlook ReportFreddie Macexplained:

    “Despite the challenges facing the housing market, we expect this to be the best year for housing in a decade. Home sales, housing starts, and house prices will reach their highest level since 2006 according to our latest forecast…Challenges remain, with low housing supply and declining affordability being a key concern in many markets, but on balance, the housing markets in the U.S. are poised for the best year since 2006.”

    The key indicators that have given Freddie Mac such a positive outlook are:

    • Low interest rates
    • A resilient labor market
    • An increase in household formations
    • A projected increase in newly constructed homes

    Bottom Line

    2016 looks to be shaping up as a great year for residential real estate. Whether you are thinking of buying or selling, we should meet up to discuss the new opportunities that are arising in your market.

     
  • Rent or Buy: Either Way You’re Paying A Mortgage | Simplifying The Market

    Rent or Buy: Either Way You’re Paying A Mortgage

    There are some renters that have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

    As The Joint Center for Housing Studies at Harvard University explains:

    “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

    That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

    Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

    “With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

    As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

    The graph below shows the widening gap in net worth between a homeowner and a renter:

    Rent or Buy: Either Way You’re Paying A Mortgage | Simplifying The Market

    Bottom Line

    Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.

  • Don’t Wait! Move Up To Your Dream Home Now! | Simplifying The Market

    Don’t Wait! Move Up To Your Dream Home Now!

    Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates have stayed near historic lows.

    Sellers should realize that waiting to make the move when mortgage rates are projected to increase probably doesn’t make sense. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain budget for your monthly housing costs. 

    Here is a chart detailing this point:

    Don’t Wait! Move Up To Your Dream Home Now! | Simplifying The Market

    According to Freddie Mac, the current 30-year fixed rate is currently around 3.75%. With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, by $10,000).

    Freddie Mac predicts that mortgage rates will be closer to 4.7% by this time next year.

    Act now to get the most house for your hard-earned money.

  • Sales Contracts Hit Highest Level in Months | Simplifying The Market

    Sales Contracts Hit Highest Level in Months

    The National Association of Realtors (NAR) just announced that the February Pending Home Sales Indexreached its highest reading since July 2015.

    What is the Pending Home Sales Index (PHSI)?

    NAR’s PHSI is “a forward-looking indicator based on contract signings”. The higher the Pending Home Sales Index number, the more contracts have been signed by buyers that will soon translate to sales. February’s Index rose 3.5% month-over-month to 109.1.

    What does this mean for the market?

    Lawrence Yun, NAR’s Chief Economist explained:

    "After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory."

    "Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what's being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau."

    So What Does This Mean For Buyers?

    There is a lot of competition out there right now for your dream home. Prices are going to continue to climb, act now before you are priced out of your future home.

    What Does This Mean For Sellers?

    If you are on the fence about listing your home for sale and debating whether now is the time to move on with your plans of relocating… don't wait!

    There are more buyers that are ready, willing and able to buy their first, second, third, vacation, or investment property now than there has been in years! The supply of homes for sale is not keeping up with the demand of these buyers.

    Listing your home for sale now will give you the most exposure to buyers and the best sales price.

    Bottom Line

    Whether you are planning on buying or selling a house this year, waiting to act no longer makes sense.

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