The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure.
Homes priced between $100-250K showed a modest increase at 3.4%. This not only points to the lower inventory of homes available for sale in this price range but also speaks to the overall strength of the housing market.
Sales of homes over $250,000 increased by double digit percentages with sales in the $750,000- $1 million range showing the largest increase, up 16.7%!
As prices in many markets continue to accelerate, it is no surprise to see the percentage of homes in the higher price ranges increasing.
Here is the breakdown:
What does that mean to you if you are selling?
Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to sit with your agent and see if it is priced appropriately to compete in today’s market.
No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it’s a certain scent or a favorite chair, the emotional reasons why we choose to buy our own home are, more often than not, the more powerful or compelling ones.
Every year, The Joint Center for Housing Studies at Harvard University conducts a survey to find driving factors behind why Americans decide to buy a home.
The top 4 reasons to own a home cited by participants of the survey were not financial.
1. It means having a good place to raise children & provide them with a good education
From the best neighborhoods to the best school districts, even those without children at the time of purchase may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.
2. You have a physical structure where you & your family feel safe
It is no surprise that having a place to call home with the means for comfort and security is the number two reason.
3. It allows you to have more space for your family
Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.
4. It gives you control over what you do with your living space, like renovations and updates
Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building, or do you want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?
The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:
5. Owning a home is a good way to build up wealth that can be passed along to my family
Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?
Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.
According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.
Bankrate asked Americans to answer the following question:
“Which would be the best way to invest money you did not need for more than 10 years?”
Real Estate came in as the top choice with 25% of all respondents, while cash investments (such as savings accounts and CD’s) came in second with 23%. The chart below shows the full results:
Sterling White, co-founder of Holdfolio, gave one reason as to why real estate may have ranked so high.
"Houses are tangible. You can physically see and feel the product. So you know where your money is going."
July’s poll also found that for the “26th consecutive month, Americans’ sense of financial well-being improved when taking into account debt, savings, net worth, job security, and overall financial situation.”
There are several reasons, both financial and non-financial, as to why homeownership makes sense. It is nice to see that Americans have returned to a belief in homeownership as the best investment.
Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).
In a Forbesarticle, the National Association of Realtors’ (NAR)Chief Economist Lawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.
The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:
Put Your Housing Cost to Work for You
Simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.
The latest National Housing Pulse Surveyfrom NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:
“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”
If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, let’s get together to discuss your next steps.
Summer is here! The temperature isn't the only thing heating up right now, so too is the housing market in many areas of the country! Here are four great reasons to consider buying a home today instead of waiting.
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 5.9% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.3% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will be up almost a full percentage point by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
3. Either Way You are Paying a Mortgage
As a paper from the Joint Center for Housing Studies at Harvard Universityexplains:
“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.”
4. It’s Time to Move On with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.