Homeownership is a Cornerstone of the American Dream

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“The rumors of my death are greatly exaggerated.”

The famous quote attributed to Mark Twain can apply to homeownership in the United States today. During the housing bubble of the last decade, the homeownership rate soared to over sixty-nine percent. After the crash, that percentage continued to fall for the next ten years.

That led to speculation that homeownership was no longer seen as a major component of the American Dream. That belief became so widespread that the term “renters’ society” began to be used by some to define American consumers.

However, the latest report by the Census Bureau on homeownership shows that over the last two years, the percentage of homeowners has increased in each of the last eight quarters.

Homeownership is a Cornerstone of the American Dream |MyKCM

Going forward…

It appears the homeownership rate will continue to increase.

The 2019 Aspiring Home Buyers Profile recently released by the National Association of Realtors revealed that 84% of non-owners want to own a home in the future. That percentage increased from 73% earlier last year.

Bottom Line

In the United States, the concept of homeownership as part of the American Dream is very much alive and well.

Homebuying Myths

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Home Buying Myths

Buying a home can seem like a huge undertaking. You don’t need to be a first time homebuyer to find the process overwhelming. There is so much information available, how can youtell what’s true and what’s a myth? Understanding the difference can help you make the best decision for you and your family goals.

Top Home Buying Myths – And the Truth

  •   The First Step is finding the Right House – Before you head out shopping, speak with a lender to understand your financial options and how much house you can afford.
  •   You Can’t Buy a Home Without Perfect Credit – The truth is there are many loans available which still offer good interest rates for those without that perfect score.
  •   You Need 20% Down Payment – First time home buyers can use FHA financing for as low as 3.5% down. There are other programs too, such as VA and some conventional loans with less than 20% down also.
  •   You Don’t Need an Agent – An agent not only knows the market and can help you with value, but also customary charges, negotiations and solutions to common hiccups.
  •   Schools Don’t Matter if you don’t have Kids – The neighborhood is always important to home values, regardless of whether you yourself have children.
  •   New Homes Don’t Need a Home Inspection – Every home should have a home inspection by a licensed inspector to check for existing or potential problems.

    Buying a home is one of the most important financial decisions you’re likely to make in yourlifetime. Take the time you need to understand the process and learn from the professionals; don’t assume that everything you read is true.

Why an Economic Slowdown Will NOT Crush Real Estate this Time

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Last week, the National Association for Business Economics released their February 2019Economic Policy Survey. The survey revealed that a majority of the panel believe an economic slowdown is in the near future:

“While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.”

Their findings coincide with three previous surveys calling for a slowdown sometime in the next two years:

  1. The Pulsenomics Survey of Market Analysts
  2. The Wall Street Journal Survey of Economists
  3. The Duke University Survey of American CFOs

That raises the question: Will the real estate market be impacted like it was during the last recession?

A recession does not equal a housing crisis. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, prices fell dramatically because the housing collapse caused the recession. However, if we look at the previous four recessions, we can see that home values weren’t negatively impacted:

  • January 1980 to July 1980: Home values rose 4.5%
  • July 1981 to November 1982: Home values rose 1.9%
  • July 1990 to March 1991: Home values fell less than 1%
  • March 2001 to November 2001: Home values rose 4.8%

Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained:

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

The housing market is just “normalizing”. Inventory is starting to increase and home prices are finally stabilizing. This is a good thing for both buyers and sellers as we move forward.

Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. As renowned financial analyst, Morgan Housel, recently tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”