52% of Americans Plan to Buy A Home in Next Five Years.


According to the recently released 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 they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also had other interesting revelations.

Those Looking to Buy

74% of those looking to buy a new home will consult 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 home owners set a budget before looking for a home. 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 that 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? A recent article by Fannie Mae may give us that answer, there is evidence that a large numbers of homeowners are dramatically underestimating the equity they have in their current home. The report explains:

“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

Perhaps it is time to sit with a real estate professional to determine the actual equity you have in your house and 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.

4 Reasons To Buy A Home Before Winter Hits!

  
It’s that time of year; the seasons are changing and with them bring thoughts of the upcoming holidays, family get-togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don’t have to look much farther to find four great reasons to consider buying a home now, instead of waiting.
1. Prices Will Continue to Rise
The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 10.5% (most pessimistic) and 25.5% (most optimistic). 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
Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year. An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
3. Either Way You are Paying a Mortgage
As a recent paper from 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.”

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 it is time to buy.
Bottom Line
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.

#1 Reason to List Your House Today!

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If you are debating listing your house for sale this year or even early next year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

According to the National Association of REALTORS’ (NAR) Foot Traffic report, there are more buyers out in the market right now than at any other time in the past three years.

The graph below shows the significant increase in foot traffic experienced this year compared to 2014.

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The latest Existing Home Sales report shows that there is currently a 5.2-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below August 2014 numbers.

The chart below details the year-over-year inventory shortages experienced so far in 2015:

Supply-KCM

Bottom Line

Meet with a local real estate professional who can show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy today!

Don’t Wait To Buy Your Dream Home!

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As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first-time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

Let us explain.

There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen over the next 12 months?
According to CoreLogic’s latest Home Price Index, prices are expected to rise by 4.7% by this time next year.

Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.7% in that same time.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Cost-of-Waiting

Why You Should Stop Renting & Buy Today!

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There are many young people debating whether they should renew the lease on their apartment or sign a contract to purchase their first home.

Housing Cost & Net Worth

Whether you rent or buy, you have a monthly housing cost.

As a buyer, you are paying YOUR mortgage.

Every mortgage payment is a form of what Harvard University’s Joint Center for Housing Studies calls “forced savings.”

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

The principal portion of your mortgage payment helps build your net worth through building the equity you have in your home.

As a renter, you are paying YOUR LANDLORD’S mortgage.

Below is an example of the home equity that would be accrued over the course of the next four years if you were to buy a home by the end of this year; based on the results of the Home Price Expectation Survey.

HPES-Equity

In this example, simply by paying your mortgage, you have just increased your net worth by over $34,000!

Bottom Line

Use your monthly housing cost to your advantage! Meet with a local real estate professional who can explain the opportunities available in your market.

They’re Back – Boomerang Buyers


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SEBRING, Fla. – Sept. 9, 2015 – Three years ago, her husband lost his job, and Mary Ford quit two part-time jobs to take care of her mother, who had been diagnosed with lung cancer.

“We lost our house to foreclosure and had to file bankruptcy,” said Ford. That was her dream house.

But the Fords are back from the brink of the real estate market: they’ve bought a trailer on a half-acre.

Seven years ago, the Great Recession hit Florida especially hard. The Sunshine State led the nation during the housing boom, and it was first in foreclosures when the bubble burst.

Highlands County was right there among them. Clerk of Courts Bob Germaine recorded more than 7,000 foreclosures from 2007 through 2014.

But eight years after the downturn started, buyers damaged by excessive medical bills, balloon mortgages, an upside-down housing market, or a screwball economy are finding their way back into the real estate market.

“Absolutely,” said Chip Boring, a broker with RE/Max Realty Plus in Sebring. “Now that time lapse has taken place.” Real estate agents, banks and mortgage brokers are working with buyers now, Boring said. “They are counseling them – at no cost – on how to make repairs, getting their credit back up to speed.

“The message is: ‘You can buy another house, if you do the right things and seek counsel. There are mortgage brokers out there. There are lenders are out there,” Boring said.

Boomerangs are just a small percentage of today’s buyers, Boring said. “Maybe they are a little bit gun shy. Many have not have repaired their credit yet. Maybe they’re a year down the road from that.”

Pam Marron is one of those next-generation loan originators in Pasco County, north of Tampa.

“I have been working with folks who had a past foreclosure or short sale for the last five years,” said Marron, who has been in the business for 30 years. She has collected binders of profiles and stories of those affected across the U.S., many in Florida.

“Each of them has a story of real hardship that they almost never shared with their Realtor or loan originator,” Marron said. “Many were short sellers where their credit ended up being coded as a foreclosure, which resulted in a seven-year wait to get back into the housing market.”

Some went delinquent on their mortgage because it was the only option their own lender gave them in order to approve a short sale or foreclosure, said Marron, whose own business was drying up because of the housing crash.

“They were told they had to be delinquent in order to get help,” Marron said. More than 7 million homeowners are still underwater. “They’re ashamed, they’re humiliated, they’re wondering why they didn’t see this coming.”

“With no refinance options available for them,” Marron said. “Now, they’re going into short sale or foreclosure. Florida still has the highest number of homeowners in distress.”

Typically, a short seller’s credit is damaged for two years, Marron said. It takes seven years for a foreclosure to drop off a credit report.

“Many have not been given the opportunity to state that they did not go into a short sale or a foreclosure (willingly). Instead, most were labeled as ‘strategic defaulters,” Marron said. “And it has been incredibly hard for them to come forward. There is a website called HousingCrisisStories.com, where these stories are starting to be housed.”

Marron has invited people to attend a seminar from 3 p.m. to 4:30 p.m. Nov. 10 in Clearwater. RealtyTrac Vice President Daren Blomquist will be the guest speaker. Buyers will be told of programs, timeframes for waiting, how to spot credit report errors, how to buy damaged homes in need of renovation, and how to get downpayment assistance. Fannie Mae has changed its lending criteria.

“They’ll also learn how not to dispute their credit,” Marron said. “When you dispute something, the dispute goes back in, then the bad credit shows up again. You have to work with the credit reporting agencies and have them take off the error.”

Copyright © 2015 the Highlands Today (Sebring, Fla.), Gary Pinnell. Distributed by Tribune Content Agency, LLC.

The Real Reasons American Buy Homes

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We often talk about the financial reasons why buying a home makes sense. But often, the emotional reasons are the more powerful, or compelling reasons. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership. The top 4 reasons to own a home cited by respondents 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 purchasing their home, 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 all that means in comfort and security is the #2 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? 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?
Bottom Line
Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.