A new survey by Coldwell Banker finds that 87 percent of first-time homebuyers who purchased their home within the past year preferred a move-in ready home to one that would require some work.
A home’s location to area amenities was also important to first-time buyers. Nearly four out of five buyers (78 percent) say it was important to find a home close to retail shops and services while three-fourths wanted to be close to their jobs and nearly two-thirds wanted to be near highly-rated schools.
Many buyers were surprised by the immediate benefits they received once they purchased their first home. For example, 67 percent said the market conditions provided them the opportunity to buy a home sooner than they expected, half said they found a home in a more desirable location than they expected, and 61 percent got a home for a better price than expected.
Showing posts with label fort worth. Show all posts
Showing posts with label fort worth. Show all posts
Monday, February 28, 2011
Tuesday, February 22, 2011
Housing Starts Jump 14.6% in January
Housing starts in January reached their highest rate in four months, increasing more than analysts expected, the Commerce Department reports. Housing starts jumped 14.6 percent to a seasonally adjusted annual rate of 596,000 units.
Housing starts in January were helped by a 77.7 percent jump in multi-family homes. Single-family home construction, on the other hand, fell 1 percent.
Meanwhile, new home completions dropped to a record low of 512,000 units in January, falling 9.5 percent from the previous month.
And after housing permits surged in December by 15.3 percent, housing permits for future housing projects sank in January. New building permits dropped 10.4 percent to a 562,000-unit pace in January--mostly pulled down by a drop in multi-family and single-family unit permits.
Housing starts in January were helped by a 77.7 percent jump in multi-family homes. Single-family home construction, on the other hand, fell 1 percent.
Meanwhile, new home completions dropped to a record low of 512,000 units in January, falling 9.5 percent from the previous month.
And after housing permits surged in December by 15.3 percent, housing permits for future housing projects sank in January. New building permits dropped 10.4 percent to a 562,000-unit pace in January--mostly pulled down by a drop in multi-family and single-family unit permits.
Saturday, February 12, 2011
Tarrant County foreclosure postings down 7 percent
Residential foreclosure postings dropped 7 percent in Tarrant County for the March 1 auction, while the Dallas-Fort Worth area saw a 9 percent decline, the Foreclosure Listing Service said Thursday.
In Tarrant County, 1,697 foreclosures were posted, compared with 1,834 a year earlier. March postings were also down 10 percent from February.
For the region, which includes Tarrant, Dallas, Denton and Collin counties, 5,071 foreclosures were posted, down from 5,548 a year earlier. The Addison-based real estate research firm said postings in the four counties have topped 4,000 for 30 consecutive months.
"Residential posting activity has been on the high end of the scale for some time now," said George Roddy Sr., the firm's president. "Posting activity tends to fluctuate at least some each month.
"The fact that postings filed for the upcoming auctions in March were about 9 percent lower than both this time last year and compared to last month does not elicit much excitement."
In the year's first quarter, Tarrant County postings increased 4 percent, to 5,439 from 5,234 a year earlier. It was the second-highest quarter, trailing only the fourth quarter of 2009, when 5,535 postings were filed, Roddy said.
Quarterly postings for the region were flat. From January to March, 16,194 postings were filed, a slight increase from 16,137 postings a year earlier. Collin County saw a 4 percent decline in the quarter, and Dallas County a 1 percent drop.
The auctions are held on the steps of the Tarrant County Courthouse. Postings must be filed with the county at least 21 days before the auction.
Generally, 25 percent to 40 percent of postings result in an actual foreclosure. In many of the other cases, homeowners are able to make up the arrears.
In Tarrant County, 1,697 foreclosures were posted, compared with 1,834 a year earlier. March postings were also down 10 percent from February.
For the region, which includes Tarrant, Dallas, Denton and Collin counties, 5,071 foreclosures were posted, down from 5,548 a year earlier. The Addison-based real estate research firm said postings in the four counties have topped 4,000 for 30 consecutive months.
"Residential posting activity has been on the high end of the scale for some time now," said George Roddy Sr., the firm's president. "Posting activity tends to fluctuate at least some each month.
"The fact that postings filed for the upcoming auctions in March were about 9 percent lower than both this time last year and compared to last month does not elicit much excitement."
In the year's first quarter, Tarrant County postings increased 4 percent, to 5,439 from 5,234 a year earlier. It was the second-highest quarter, trailing only the fourth quarter of 2009, when 5,535 postings were filed, Roddy said.
Quarterly postings for the region were flat. From January to March, 16,194 postings were filed, a slight increase from 16,137 postings a year earlier. Collin County saw a 4 percent decline in the quarter, and Dallas County a 1 percent drop.
The auctions are held on the steps of the Tarrant County Courthouse. Postings must be filed with the county at least 21 days before the auction.
Generally, 25 percent to 40 percent of postings result in an actual foreclosure. In many of the other cases, homeowners are able to make up the arrears.
Friday, February 4, 2011
Mortgage Rates Hold Mostly Steady This Week
Mortgage rates mostly remained steady for the week, according to Freddie Mac’s weekly report on average mortgage rates.
The average 30-year fixed mortgage rate increased just slightly this week to 4.81 percent from 4.80 percent the week prior. Mortgage rates have been steadily inching upward since reaching a 40-year low in November of 4.17 percent. Meanwhile, 15-year rates dropped to 4.08 percent this week from 4.09 percent last week.
Five-year adjustable-rate mortgages also fell slightly to 3.69 percent from 3.7 percent last week.
"Mortgage rates held relatively stable this week on news that the economy improved and inflation remained in check at the end of 2010,” says Frank Nothaft, chief economist at Freddie Mac.
Source: “Mortgage Rates Show Mixed Results This Week,” Freddie Mac (Feb. 3, 2011)
The average 30-year fixed mortgage rate increased just slightly this week to 4.81 percent from 4.80 percent the week prior. Mortgage rates have been steadily inching upward since reaching a 40-year low in November of 4.17 percent. Meanwhile, 15-year rates dropped to 4.08 percent this week from 4.09 percent last week.
Five-year adjustable-rate mortgages also fell slightly to 3.69 percent from 3.7 percent last week.
"Mortgage rates held relatively stable this week on news that the economy improved and inflation remained in check at the end of 2010,” says Frank Nothaft, chief economist at Freddie Mac.
Source: “Mortgage Rates Show Mixed Results This Week,” Freddie Mac (Feb. 3, 2011)
Wednesday, February 2, 2011
Mortgage Applications Bounce Back
U.S. mortgages were back on the rise last week after a holiday-related slowdown in mid-January, the Mortgage Bankers Association reported.
Mortgage applications gained 11.3 percent in the week ended Jan. 28, according to MBA’s seasonally adjusted index. In the week prior, applications had fallen nearly 13 percent.
Meanwhile, refinancing applications rose 11.7 percent. Loan requests for home purchases also increased 9.5 percent.
Source: “U.S. Mortgage Applications Rose Last Week,” Reuters News (Feb. 2, 2011)
Mortgage applications gained 11.3 percent in the week ended Jan. 28, according to MBA’s seasonally adjusted index. In the week prior, applications had fallen nearly 13 percent.
Meanwhile, refinancing applications rose 11.7 percent. Loan requests for home purchases also increased 9.5 percent.
Source: “U.S. Mortgage Applications Rose Last Week,” Reuters News (Feb. 2, 2011)
Tuesday, February 1, 2011
Mortgage Rates Continue to Climb
Mortgage rates are continuing their gradual climb upwards after reaching record lows. The 30-year fixed mortgage rate rose to 4.8 percent from 4.74 percent the previous week, Freddie Mac reports. The average on 15-year mortgage rates also rose slightly from 4.05 percent to 4.09 percent for the week.
In November, 30-year loans had reached a 40-year low at 4.17 percent and the 15-year mortgage rate was at 3.57 percent.
The average on the five-year adjustable-rate mortgages this week increased to 3.7 percent from 3.69 percent the previous week.
Meanwhile, the Mortgage Bankers Association says it expects mortgage lending to drop considerably in 2011, due to high unemployment, borrowers’ diminished credit coming out of the recession, and more lenders not willing to take on a high risk.
MBA says it expects new loans this year to decrease by 36 percent to its lowest level in more than a decade, falling to $966 billion in 2011 from $1.5 trillion this year.
Earlier in the week, MBA reported a drop in mortgage applications to the slowest refinancing activity in more than a year. Mortgage applications dropped 12.9 percent in the week ended Jan. 21, according to MBA’s seasonally adjusted index.
The index dropped 15.3 percent, which is the lowest level since January 2010. Refinancing activity has continued to decline since October from rising interest rates and tighter underwriting standards.
In November, 30-year loans had reached a 40-year low at 4.17 percent and the 15-year mortgage rate was at 3.57 percent.
The average on the five-year adjustable-rate mortgages this week increased to 3.7 percent from 3.69 percent the previous week.
Meanwhile, the Mortgage Bankers Association says it expects mortgage lending to drop considerably in 2011, due to high unemployment, borrowers’ diminished credit coming out of the recession, and more lenders not willing to take on a high risk.
MBA says it expects new loans this year to decrease by 36 percent to its lowest level in more than a decade, falling to $966 billion in 2011 from $1.5 trillion this year.
Earlier in the week, MBA reported a drop in mortgage applications to the slowest refinancing activity in more than a year. Mortgage applications dropped 12.9 percent in the week ended Jan. 21, according to MBA’s seasonally adjusted index.
The index dropped 15.3 percent, which is the lowest level since January 2010. Refinancing activity has continued to decline since October from rising interest rates and tighter underwriting standards.
Monday, January 24, 2011
The Top Ten Packing Tips for your Next Move
Packing is not an activity that many people enjoy or gladly anticipate. In fact, packing can be downright laborious and stressful. However, with the right amount of planning and forethought, this dreaded activity can actually be completed without too many headaches.
Here is your game plan for easing up your packing stress:
1. Start early – The absolute best thing to do is start packing early. Even if the move is several months away, there are a number of tasks you can begin taking on regarding packing so that you don’t find yourself short on time and in over your head packing at the last minute.
2. Take it slow – Starting early gives you the opportunity to take the packing process slowly. Tackling one room each week, for example, is a sensible goal, as you can really take the time to sort through your belongings and decide what stays and what goes.
3. Hold a garage sale – Speaking of things that go, consider holding a garage sale to get rid of unwanted belongings and housewares. A garage sale is also a great idea for earning extra cash to cover your moving costs and expenses!
4. Consider what you can’t take with you – One of things that every seller should consider is where they are moving and what they can and cannot take with them. For example, it may make sense to take measurements of the rooms in your new home to get a better idea of how your furniture will fit into the space. If you can’t accommodate all your furniture, it makes more sense to get rid of it now and avoid taking it with you.
5. Donate or gift – If you can’t bring all your belongings with you, consider gifting or donating them.
6. Use a dot system – Head to your local office supply store and pick up different colored dot stickers. Allocate a color for each room and stick it on the appropriate box. The stickers will be easily seen so you can be sure you are directing the packed boxes to the appropriate area of your new home.
7. Hit your local liquor store – Liquor stores have loads of boxes and, because they are constructed to hold heavy liquor bottles, you can be sure they are strong enough for your packing needs.
8. Keep your valuables safe – Instead of packing up your belongings and leaving them for the movers, ask a close friend or family member to hold onto your valuables until you move.
9. Avoid overpacking – If you can’t pick up a box once it is packed, it is overpacked!
10. Consider what to not pack – Don’t forget that you and your family will need a certain number of personal effects during the move, so make sure you don’t accidentally pack them.
Here is your game plan for easing up your packing stress:
1. Start early – The absolute best thing to do is start packing early. Even if the move is several months away, there are a number of tasks you can begin taking on regarding packing so that you don’t find yourself short on time and in over your head packing at the last minute.
2. Take it slow – Starting early gives you the opportunity to take the packing process slowly. Tackling one room each week, for example, is a sensible goal, as you can really take the time to sort through your belongings and decide what stays and what goes.
3. Hold a garage sale – Speaking of things that go, consider holding a garage sale to get rid of unwanted belongings and housewares. A garage sale is also a great idea for earning extra cash to cover your moving costs and expenses!
4. Consider what you can’t take with you – One of things that every seller should consider is where they are moving and what they can and cannot take with them. For example, it may make sense to take measurements of the rooms in your new home to get a better idea of how your furniture will fit into the space. If you can’t accommodate all your furniture, it makes more sense to get rid of it now and avoid taking it with you.
5. Donate or gift – If you can’t bring all your belongings with you, consider gifting or donating them.
6. Use a dot system – Head to your local office supply store and pick up different colored dot stickers. Allocate a color for each room and stick it on the appropriate box. The stickers will be easily seen so you can be sure you are directing the packed boxes to the appropriate area of your new home.
7. Hit your local liquor store – Liquor stores have loads of boxes and, because they are constructed to hold heavy liquor bottles, you can be sure they are strong enough for your packing needs.
8. Keep your valuables safe – Instead of packing up your belongings and leaving them for the movers, ask a close friend or family member to hold onto your valuables until you move.
9. Avoid overpacking – If you can’t pick up a box once it is packed, it is overpacked!
10. Consider what to not pack – Don’t forget that you and your family will need a certain number of personal effects during the move, so make sure you don’t accidentally pack them.
Thursday, January 20, 2011
December Existing-Home Sales Jump
Existing-home sales rose sharply in December, when sales increased for the fifth time in the past six months, according to the National Association of REALTORS®.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 12.3 percent to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November, but remain 2.9 percent below the 5.44 million pace in December 2009.
Lawrence Yun, NAR chief economist, said sales are on an uptrend. “December was a good finish to 2010, when sales fluctuate more than normal. The pattern over the past six months is clearly showing a recovery,” he said. “The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”
The national median existing-home price for all housing types was $168,800 in December, which is 1.0 percent below December 2009. Distressed homes rose to a 36 percent market share in December from 33 percent in November, and 32 percent in December 2009.
“The modest rise in distressed sales, which typically are discounted 10 to 15 percent relative to traditional homes, dampened the median price in December, but the flat price trend continues,” Yun explained.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 12.3 percent to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November, but remain 2.9 percent below the 5.44 million pace in December 2009.
Lawrence Yun, NAR chief economist, said sales are on an uptrend. “December was a good finish to 2010, when sales fluctuate more than normal. The pattern over the past six months is clearly showing a recovery,” he said. “The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”
The national median existing-home price for all housing types was $168,800 in December, which is 1.0 percent below December 2009. Distressed homes rose to a 36 percent market share in December from 33 percent in November, and 32 percent in December 2009.
“The modest rise in distressed sales, which typically are discounted 10 to 15 percent relative to traditional homes, dampened the median price in December, but the flat price trend continues,” Yun explained.
Tuesday, January 18, 2011
2011 Mortgage Trends: Jumbo Loans, Cash Buys
The number of mortgage applications for home purchases is expected to become a bigger part of the mortgage market in 2011 as home prices stabilize, predicts the Mortgage Bankers Association. Refinancing has mostly dominated in recent months as home owners looked to lock-in low interest rates, but experts predict refinancing to slow as new mortgage shoppers dominate.
Real estate analysts predict the other following trends in the mortgage market for 2011:
Rates on the rise. The Mortgage Bankers Association predicts mortgage rates to rise slightly in 2011 and hover around 5 percent. They expect rates to increase to about 6 percent in 2012.
Jumbo loans become more attractive. Jumbo loans (loans over $417,000 in most housing markets and above $729,750 in high-cost housing markets) are expected to pick up pace in the next few months. Jumbo loans often have higher mortgage rates than conforming loans. However, with mortgage rates on jumbo loans dropping, experts predict a hike in refinancing and purchase applications for high-end housing.
All-cash purchases. All-cash purchases represented about a quarter of all existing home purchases in the last four months of 2010, according to Lawrence Yun, chief economist of the National Association of REALTORS®. He expects all-cash purchases to continue to represent a big part of the real estate landscape in 2011.
Slow and complex mortgage loan process. The time between application and closing can take as much as 60 days and that’s not expected to get any faster, experts say. Lenders often recommend borrowers lock in a loan 60, 75, or 90 days to help ensure the loan process will be completed within that lock-in period. The industry's new levels of documentation and verification that is now required is causing lengthy delays in the loan process, experts say.
Real estate analysts predict the other following trends in the mortgage market for 2011:
Rates on the rise. The Mortgage Bankers Association predicts mortgage rates to rise slightly in 2011 and hover around 5 percent. They expect rates to increase to about 6 percent in 2012.
Jumbo loans become more attractive. Jumbo loans (loans over $417,000 in most housing markets and above $729,750 in high-cost housing markets) are expected to pick up pace in the next few months. Jumbo loans often have higher mortgage rates than conforming loans. However, with mortgage rates on jumbo loans dropping, experts predict a hike in refinancing and purchase applications for high-end housing.
All-cash purchases. All-cash purchases represented about a quarter of all existing home purchases in the last four months of 2010, according to Lawrence Yun, chief economist of the National Association of REALTORS®. He expects all-cash purchases to continue to represent a big part of the real estate landscape in 2011.
Slow and complex mortgage loan process. The time between application and closing can take as much as 60 days and that’s not expected to get any faster, experts say. Lenders often recommend borrowers lock in a loan 60, 75, or 90 days to help ensure the loan process will be completed within that lock-in period. The industry's new levels of documentation and verification that is now required is causing lengthy delays in the loan process, experts say.
Friday, January 14, 2011
Mortgage Rates Drop Slightly
Mortgage rates didn’t fluctuate too much this week, dropping only slightly in some cases while the conforming 30-year fixed mortgage rate held unchanged at 4.94 percent for the week, Bankrate.com reports.
Bankrate.com reports the following average rates:
• 15-year fixed mortgages fell to 4.29 percent.
• Large jumbo 30-year fixed rates dropped slightly to 5.57 percent.
• 5-year adjustable rate mortgages fell to 3.88 percent.
“The average 30-year fixed mortgage rate has been particularly docile, with the average rate fluctuating less than one-tenth of a percentage point over the past month,” according to Bankrate.com. “A heavy dose of economic data and ongoing debt issuance by the U.S. Treasury have the potential to introduce some volatility to mortgage rates over the next week.”
Mortgage rates have remained at historic lows for several years. The last time mortgage rates were above 6 percent was November 2008.
Source: “Bankrate: Mortgage Rates Mostly Lower,” Bankrate.com (Jan. 13, 2011)
Bankrate.com reports the following average rates:
• 15-year fixed mortgages fell to 4.29 percent.
• Large jumbo 30-year fixed rates dropped slightly to 5.57 percent.
• 5-year adjustable rate mortgages fell to 3.88 percent.
“The average 30-year fixed mortgage rate has been particularly docile, with the average rate fluctuating less than one-tenth of a percentage point over the past month,” according to Bankrate.com. “A heavy dose of economic data and ongoing debt issuance by the U.S. Treasury have the potential to introduce some volatility to mortgage rates over the next week.”
Mortgage rates have remained at historic lows for several years. The last time mortgage rates were above 6 percent was November 2008.
Source: “Bankrate: Mortgage Rates Mostly Lower,” Bankrate.com (Jan. 13, 2011)
Monday, January 10, 2011
Mortgage Rates Drop Slightly for the Week
Interest rates took a slight dip this week as economic uncertainty continued to plague the market, according to Bankrate.com’s national survey of large lenders.
The average 30-year fixed rate mortgages dropped slightly to 4.94 percent for the week. Meanwhile,15-year fixed rate mortgages were 4.32 percent for the week, while 5-year adjustable-rate mortgages held nearly steady at 3.99 percent.
The drop in rates suggests the financial market may have overreacted to the inflation fears that had originally pushed rates higher in late December, according to Bankrate.com.
"Unemployment is starting to stabilize. Housing is stabilizing, although there are still soft pockets. Stocks are up, and there are inflationary fears with energy prices going up, so directionally and logically, we're in for potentially higher interest rates," predicts Anthony Hsieh, chief executive of loanDepot.com, a direct mortgage lender in Irvine, Calif.
The average 30-year fixed rate mortgages dropped slightly to 4.94 percent for the week. Meanwhile,15-year fixed rate mortgages were 4.32 percent for the week, while 5-year adjustable-rate mortgages held nearly steady at 3.99 percent.
The drop in rates suggests the financial market may have overreacted to the inflation fears that had originally pushed rates higher in late December, according to Bankrate.com.
"Unemployment is starting to stabilize. Housing is stabilizing, although there are still soft pockets. Stocks are up, and there are inflationary fears with energy prices going up, so directionally and logically, we're in for potentially higher interest rates," predicts Anthony Hsieh, chief executive of loanDepot.com, a direct mortgage lender in Irvine, Calif.
Sunday, January 9, 2011
Resolving to buy a home in 2011? Resolve now to do it right
Many people start the new year with resolutions about losing weight, starting a new physical fitness routine, or getting their financial house in order. How many of you are making resolutions about buying a home?
All resolutions are only achievable if you start with realistic expectations. The resolution's goal may be very short-term (think … I will finish mailing my Christmas cards by January 15) or longer-term (think … I will fit into my old high school dress in time for the reunion). The experts agree there are two keys to success in achieving your goals. First, commit the goal to paper. Second, tell a friend who will hold you accountable for progress toward the goal. The same keys are critical to achieving success when resolving to purchase a new home.
Buying a new home doesn't just happen. Most homebuyers spend considerable time, effort, and thought when searching for their next house to call "home." Buying your next house is not as simple as going to the store and buying a loaf of bread. You can't see through the wrapper, you don't know how the house is going to fit your lifestyle or budget and, until you talk to a lender, you don't even know what kind, style, or size of home you can afford. Like all resolutions, buying a house requires commitment and effort.
For 2011, it's more important than ever to have a homebuying plan. In the last month or so, interest rates on home loans have gone up about one-half point. That means that the $150,000, 4% fixed-rate, 30-year home loan you might have secured in November will cost about $50 more per month in January just to pay the extra one-half percent interest on the loan. You'll have to pay an extra $600 a year to live in the exact same house. And, you will need about $1,500 additional income each year just to qualify for the home loan. Most financial gurus are predicting mortgage interest rates will rise in the foreseeable future. Even if the price of your dream home does not go up, the monthly payment could rise dramatically if the gurus are right and interest rates continue to rise.
Without a strong commitment to your house-buying resolution, you could miss out on the home of your dreams or the "buy of the year." It's about as easy to begin a diet tomorrow, as it is to begin your home search tomorrow. There's always an excuse to put off starting something important; that piece of pie looks tasty and the diet will just have to wait. The same is true with a house purchase. You buy the new shoes, get the new car, or spend extra money on a nice dinner out. The next thing you know, the month is gone, the year is gone, the money is gone, and you are no closer to homeownership.
So, how do you make a commitment to buying a home? First, follow the expert advice and commit your plans to paper. Don't just make a mental note about buying a house, actually write down your goal: "I will buy a house in 2011." Once you write your goal, take the time to write down exactly what items are important to you about your next home. Do you want three bedrooms or four? It's important to have a yard (big or small), or perhaps you want "country property" on one or more acres? What is more important, a gourmet kitchen or a large family room for entertaining? How far are you willing to commute to work? If you have children, is it important that the home be located in a specific school district? As you begin thinking about your next home, many more "wants" for your next house will come to mind.
The next step in the resolution process is to tell a friend. I recommend when committing to purchasing a house that you don't tell just any friend but rather, tell a knowledgeable friend. Tell someone who knows the "ins & outs" of the homebuying process. Tell someone who has first-hand experience with the entire process – what houses are for sale, how home financing works, what to expect from a home inspector, the meaning of title insurance, what did other houses in the neighborhood sell for? I strongly recommend the friend you select to help you keep your resolution and achieve your goal of homebuying be a Texas REALTOR®.
A Texas REALTOR®, under state law and the National Association of REALTORS® Code of Ethics, is obligated to look out for your best interests. The term REALTOR® has come to connote competency, fairness, and high integrity, resulting from adherence to a lofty ideal of moral conduct in business relations. When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.
As a Texas REALTOR®, I would be glad to help you keep your resolution to purchase a house in 2011.
All resolutions are only achievable if you start with realistic expectations. The resolution's goal may be very short-term (think … I will finish mailing my Christmas cards by January 15) or longer-term (think … I will fit into my old high school dress in time for the reunion). The experts agree there are two keys to success in achieving your goals. First, commit the goal to paper. Second, tell a friend who will hold you accountable for progress toward the goal. The same keys are critical to achieving success when resolving to purchase a new home.
Buying a new home doesn't just happen. Most homebuyers spend considerable time, effort, and thought when searching for their next house to call "home." Buying your next house is not as simple as going to the store and buying a loaf of bread. You can't see through the wrapper, you don't know how the house is going to fit your lifestyle or budget and, until you talk to a lender, you don't even know what kind, style, or size of home you can afford. Like all resolutions, buying a house requires commitment and effort.
For 2011, it's more important than ever to have a homebuying plan. In the last month or so, interest rates on home loans have gone up about one-half point. That means that the $150,000, 4% fixed-rate, 30-year home loan you might have secured in November will cost about $50 more per month in January just to pay the extra one-half percent interest on the loan. You'll have to pay an extra $600 a year to live in the exact same house. And, you will need about $1,500 additional income each year just to qualify for the home loan. Most financial gurus are predicting mortgage interest rates will rise in the foreseeable future. Even if the price of your dream home does not go up, the monthly payment could rise dramatically if the gurus are right and interest rates continue to rise.
Without a strong commitment to your house-buying resolution, you could miss out on the home of your dreams or the "buy of the year." It's about as easy to begin a diet tomorrow, as it is to begin your home search tomorrow. There's always an excuse to put off starting something important; that piece of pie looks tasty and the diet will just have to wait. The same is true with a house purchase. You buy the new shoes, get the new car, or spend extra money on a nice dinner out. The next thing you know, the month is gone, the year is gone, the money is gone, and you are no closer to homeownership.
So, how do you make a commitment to buying a home? First, follow the expert advice and commit your plans to paper. Don't just make a mental note about buying a house, actually write down your goal: "I will buy a house in 2011." Once you write your goal, take the time to write down exactly what items are important to you about your next home. Do you want three bedrooms or four? It's important to have a yard (big or small), or perhaps you want "country property" on one or more acres? What is more important, a gourmet kitchen or a large family room for entertaining? How far are you willing to commute to work? If you have children, is it important that the home be located in a specific school district? As you begin thinking about your next home, many more "wants" for your next house will come to mind.
The next step in the resolution process is to tell a friend. I recommend when committing to purchasing a house that you don't tell just any friend but rather, tell a knowledgeable friend. Tell someone who knows the "ins & outs" of the homebuying process. Tell someone who has first-hand experience with the entire process – what houses are for sale, how home financing works, what to expect from a home inspector, the meaning of title insurance, what did other houses in the neighborhood sell for? I strongly recommend the friend you select to help you keep your resolution and achieve your goal of homebuying be a Texas REALTOR®.
A Texas REALTOR®, under state law and the National Association of REALTORS® Code of Ethics, is obligated to look out for your best interests. The term REALTOR® has come to connote competency, fairness, and high integrity, resulting from adherence to a lofty ideal of moral conduct in business relations. When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.
As a Texas REALTOR®, I would be glad to help you keep your resolution to purchase a house in 2011.
Wednesday, January 5, 2011
Sellers … let go (while taking control)
As a seller, you have no control over some things that homebuyers factor into their purchase decisions. Location comes to mind. You can't do much about the quality of schools in your area or the nearby shopping options. My first house had no attic.
On the other hand, there are many things you can do to make your property more attractive to buyers. You could take care of long-needed repairs. You could tackle a remodeling project or spruce up your landscaping. You could "stage" your home to increase its appeal. And then there's the biggie … you have control over the
asking price.
These decisions and others will affect how long your home is on the market and how much you sell for. The key is to figure out which changes will be most successful in helping you meet your goals.
As a Texas REALTOR®, I can help you understand what actions will make the biggest difference to buyers. Once you know more about these factors, you can make good decisions about how to proceed with the sale of your house.
Marty Kramer | Consumer columnist
On the other hand, there are many things you can do to make your property more attractive to buyers. You could take care of long-needed repairs. You could tackle a remodeling project or spruce up your landscaping. You could "stage" your home to increase its appeal. And then there's the biggie … you have control over the
asking price.
These decisions and others will affect how long your home is on the market and how much you sell for. The key is to figure out which changes will be most successful in helping you meet your goals.
As a Texas REALTOR®, I can help you understand what actions will make the biggest difference to buyers. Once you know more about these factors, you can make good decisions about how to proceed with the sale of your house.
Marty Kramer | Consumer columnist
Monday, January 3, 2011
10 Real Estate Predictions for the New Year
The start of a new year is often a time of reflection, as well as a time of anticipation for the future. It’s no different for real estate professionals, many of whom have weathered the recession and are now optimistic about 2011. From the return of new construction to the creation of healthier homes, the following are 10 residential real estate trends they see for the coming year:
1.) Building is back: After three years of little to no new development, John Wozniak of Wheaton, Illinois-based J. Lawrence Homes said the builder is excited about 2011. “After a couple of very challenging years, the market for new-construction housing is showing signs of life. Slowly but surely, homes are selling and new properties are breaking ground, such as the two communities we opened this year in Lynwood and North Aurora,” he said. “We’ve had encouraging sales and I believe they point to an uptick for 2011.”
2.) Apartments continue to thrive: If there has been one bright spot over the past few years in the real estate industry, it has been the rental market.
“People have realized the many benefits of renting, from having more flexibility with your housing commitments to a higher level of finishes and amenities. And, this demand will continue to outpace supply,” said Steve Fifield, president of Fifield Cos. “Appraisal Research reports that Chicago’s Class A downtown apartments are at a nearly 95 percent occupancy rate, and those numbers will continue to stay very strong for 2011.”
3.) Opting for established: The mega-communities in the exurbs are a thing of the past, said Brian Brunhofer of Meritus Homes. Instead, 2011 will see builders move toward smaller neighborhoods or pockets of homes in established communities. “Close-knit communities with respected homeowner associations, mature landscaping and neighbors waiting to greet you – that attractive quality of life is going to appeal to buyers much more in 2011.”
Seconding the movement toward established communities is Jeff Benach of Lexington Homes. “Buyers are looking for a safer investment for their home purchase,” he said. “We won’t see them roll the dice like in the past on a fast-growing town in a far-out suburb. They want a proven area with access to retail development and employment corridors. They don’t want to wait for the surrounding area to be built. They want everything already in place,” he said.
4.) Make it modern: Chalk it up to “Mad Men” or simply a pendulum swing in taste, but either way transitional and warm-modern design will be prevalent in 2011, said Brian Goldberg, a partner in LG Development Group. “Our clients are looking for a cleaner approach to the style of their homes – more mid-century and less traditional with a warm and tailored aesthetic,” he said.
Ray Hartshorne, principal of Hartshorne Plunkard Architecture, agrees. “From the single-family side, our clients are gravitating toward modern design instead of strictly traditional, that is simple, clean line exteriors and open floor plans that are comfortable for the family and versatile for entertaining,” he said. “In the multi-family sector, now more than ever, we are seeing an interest in contemporary-themed and luxurious interior design for lobbies and common areas.”
5.) Buying for the long term: The Census shows the average person moves about 11 times, but Jim Chittaro, president of Smykal Homes, predicts that number will slowly decrease. “Thankfully, the idea of a home as a short-term moneymaker is essentially gone, so when people do buy, they’ll do it with the intention of staying put for closer to 10 years rather than two to three,” he said
This means people will be studying floor plans more closely, to ensure the home will grow with them, Chittaro continued. “Buyers want to be sure the home will suit their needs not only now, but down the road, whether they plan to expand their family or prepare for kids to leave the nest,” he said. “Floor plans that can adapt to lifestyle changes with flexible features like second family rooms should do well in 2011.”
Brunhofer agrees that more buyers will be looking for a home for the long haul. “It’s not just floor plans that buyers are going over with a fine-tooth comb,” Brunhofer said. “Our buyers are very careful about school districts. They want to know they can send all of their children to a school with a proven track record and not have to relocate a few years down the road to ensure a good education.”
The shift to long-term buyers will also put long-term builders in the spotlight. “People are hesitant to buy a home from a builder or secure a mortgage from a lender they don't perceive to be well-established,” said Benach. “Buyers want to know their builder is committed to them and the community, and that it’s not about making a quick buck or boosting a shareholder’s financial interest. That personal connection is really important.”
6.) Upping the ante on amenities: In 2011, developers will continue to create new and exciting amenities to differentiate their properties and keep them relevant in the marketplace, said Tony Rossi, president of RMK Management Corp. “Renters are looking for something special, like an outdoor grilling area or special events like dance lessons,” he said.
But it’s not just enhanced outdoor spaces in apartments that will matter in 2011. Benach thinks condo and townhome buyers will also place a higher importance on outdoor space in the coming year, especially those who live in an urban setting.
“People may realize they don’t need to live with as much square footage inside their home, so to compensate they’ll want a place to call their own outside their home,” said Benach.
7.) High-tech takes over: Running your home entertainment system, appliances and lighting from a centralized control panel is old news. Going forward, we’ll see more homeowners want a smart phone app that can control their residence remotely, noted Goldberg.
“Each year, the demand increases for home technology that makes homeowners’ lives easier,” he said. “We’ll get to a point, and some of our clients are almost there, where homeowners can leave work and by activating an app on their phone have all of their home electronics queued up when they walk in the door – the oven is preheated, lights come on and a TV show turns on when motion sensors recognize they’ve walked into the room. It may sound like a movie, but some of this technology we can build into homes now.”
8.) Smaller homes stay the course: The average size of a new home decreased for the first time in decades from 2008 to 2009, and that trend will continue into 2011, said Benach.
“This trend is fueled by first-time buyers with smaller budgets, requiring smaller homes,” he said. “New buyers will have to be more conservative with their mortgages and will need to pay a higher percentage for a down payment, which means they’ll need a home with a smaller price,” he said. “People won’t be buying more than they need. So to meet their needs, we’ll see builders continue to trim the size of their homes and look for new ways to make square footage work harder.”
9.) Green and gorgeous: As the green movement continues to grow, high-end builders and developers have found ways to make homes both green and gorgeous. “The old mind set was that a green home couldn’t also be stylish and sophisticated. It was as if the two concepts were mutually exclusive,” said Hartshorne. “But new products and forward-thinking design have proved that today’s homeowners can have both. Also, building a green home doesn’t have to break the bank. We are constantly being introduced to attractive, sustainable building materials that are more cost effective than in the past.”
10.) Healthy homes: When you consider a study by the National Institutes of Health that found the number of people with allergies is as much as five times higher than 30 years ago, the trend toward building homes with a healthier environment will also gain ground in 2011, said Goldberg.
“Indoor air quality, low VOC paints and adhesives, and all-around healthier materials are becoming more and more of a concern for people building homes – especially for those with children,” he said.
Rick Croce, from Wheaton-based Smykal Renovations, said this trend applies to existing homes, too. “Due to the economy, many people have decided to stay put in their existing home, which means they’ll be investing in changes to make it look better and live healthier,” he said. “We expect to be pricing out more jobs that include installing HVAC systems with better filtration, using low-VOC materials and even replacing old doors and windows to safeguard against exterior pollutants.”
1.) Building is back: After three years of little to no new development, John Wozniak of Wheaton, Illinois-based J. Lawrence Homes said the builder is excited about 2011. “After a couple of very challenging years, the market for new-construction housing is showing signs of life. Slowly but surely, homes are selling and new properties are breaking ground, such as the two communities we opened this year in Lynwood and North Aurora,” he said. “We’ve had encouraging sales and I believe they point to an uptick for 2011.”
2.) Apartments continue to thrive: If there has been one bright spot over the past few years in the real estate industry, it has been the rental market.
“People have realized the many benefits of renting, from having more flexibility with your housing commitments to a higher level of finishes and amenities. And, this demand will continue to outpace supply,” said Steve Fifield, president of Fifield Cos. “Appraisal Research reports that Chicago’s Class A downtown apartments are at a nearly 95 percent occupancy rate, and those numbers will continue to stay very strong for 2011.”
3.) Opting for established: The mega-communities in the exurbs are a thing of the past, said Brian Brunhofer of Meritus Homes. Instead, 2011 will see builders move toward smaller neighborhoods or pockets of homes in established communities. “Close-knit communities with respected homeowner associations, mature landscaping and neighbors waiting to greet you – that attractive quality of life is going to appeal to buyers much more in 2011.”
Seconding the movement toward established communities is Jeff Benach of Lexington Homes. “Buyers are looking for a safer investment for their home purchase,” he said. “We won’t see them roll the dice like in the past on a fast-growing town in a far-out suburb. They want a proven area with access to retail development and employment corridors. They don’t want to wait for the surrounding area to be built. They want everything already in place,” he said.
4.) Make it modern: Chalk it up to “Mad Men” or simply a pendulum swing in taste, but either way transitional and warm-modern design will be prevalent in 2011, said Brian Goldberg, a partner in LG Development Group. “Our clients are looking for a cleaner approach to the style of their homes – more mid-century and less traditional with a warm and tailored aesthetic,” he said.
Ray Hartshorne, principal of Hartshorne Plunkard Architecture, agrees. “From the single-family side, our clients are gravitating toward modern design instead of strictly traditional, that is simple, clean line exteriors and open floor plans that are comfortable for the family and versatile for entertaining,” he said. “In the multi-family sector, now more than ever, we are seeing an interest in contemporary-themed and luxurious interior design for lobbies and common areas.”
5.) Buying for the long term: The Census shows the average person moves about 11 times, but Jim Chittaro, president of Smykal Homes, predicts that number will slowly decrease. “Thankfully, the idea of a home as a short-term moneymaker is essentially gone, so when people do buy, they’ll do it with the intention of staying put for closer to 10 years rather than two to three,” he said
This means people will be studying floor plans more closely, to ensure the home will grow with them, Chittaro continued. “Buyers want to be sure the home will suit their needs not only now, but down the road, whether they plan to expand their family or prepare for kids to leave the nest,” he said. “Floor plans that can adapt to lifestyle changes with flexible features like second family rooms should do well in 2011.”
Brunhofer agrees that more buyers will be looking for a home for the long haul. “It’s not just floor plans that buyers are going over with a fine-tooth comb,” Brunhofer said. “Our buyers are very careful about school districts. They want to know they can send all of their children to a school with a proven track record and not have to relocate a few years down the road to ensure a good education.”
The shift to long-term buyers will also put long-term builders in the spotlight. “People are hesitant to buy a home from a builder or secure a mortgage from a lender they don't perceive to be well-established,” said Benach. “Buyers want to know their builder is committed to them and the community, and that it’s not about making a quick buck or boosting a shareholder’s financial interest. That personal connection is really important.”
6.) Upping the ante on amenities: In 2011, developers will continue to create new and exciting amenities to differentiate their properties and keep them relevant in the marketplace, said Tony Rossi, president of RMK Management Corp. “Renters are looking for something special, like an outdoor grilling area or special events like dance lessons,” he said.
But it’s not just enhanced outdoor spaces in apartments that will matter in 2011. Benach thinks condo and townhome buyers will also place a higher importance on outdoor space in the coming year, especially those who live in an urban setting.
“People may realize they don’t need to live with as much square footage inside their home, so to compensate they’ll want a place to call their own outside their home,” said Benach.
7.) High-tech takes over: Running your home entertainment system, appliances and lighting from a centralized control panel is old news. Going forward, we’ll see more homeowners want a smart phone app that can control their residence remotely, noted Goldberg.
“Each year, the demand increases for home technology that makes homeowners’ lives easier,” he said. “We’ll get to a point, and some of our clients are almost there, where homeowners can leave work and by activating an app on their phone have all of their home electronics queued up when they walk in the door – the oven is preheated, lights come on and a TV show turns on when motion sensors recognize they’ve walked into the room. It may sound like a movie, but some of this technology we can build into homes now.”
8.) Smaller homes stay the course: The average size of a new home decreased for the first time in decades from 2008 to 2009, and that trend will continue into 2011, said Benach.
“This trend is fueled by first-time buyers with smaller budgets, requiring smaller homes,” he said. “New buyers will have to be more conservative with their mortgages and will need to pay a higher percentage for a down payment, which means they’ll need a home with a smaller price,” he said. “People won’t be buying more than they need. So to meet their needs, we’ll see builders continue to trim the size of their homes and look for new ways to make square footage work harder.”
9.) Green and gorgeous: As the green movement continues to grow, high-end builders and developers have found ways to make homes both green and gorgeous. “The old mind set was that a green home couldn’t also be stylish and sophisticated. It was as if the two concepts were mutually exclusive,” said Hartshorne. “But new products and forward-thinking design have proved that today’s homeowners can have both. Also, building a green home doesn’t have to break the bank. We are constantly being introduced to attractive, sustainable building materials that are more cost effective than in the past.”
10.) Healthy homes: When you consider a study by the National Institutes of Health that found the number of people with allergies is as much as five times higher than 30 years ago, the trend toward building homes with a healthier environment will also gain ground in 2011, said Goldberg.
“Indoor air quality, low VOC paints and adhesives, and all-around healthier materials are becoming more and more of a concern for people building homes – especially for those with children,” he said.
Rick Croce, from Wheaton-based Smykal Renovations, said this trend applies to existing homes, too. “Due to the economy, many people have decided to stay put in their existing home, which means they’ll be investing in changes to make it look better and live healthier,” he said. “We expect to be pricing out more jobs that include installing HVAC systems with better filtration, using low-VOC materials and even replacing old doors and windows to safeguard against exterior pollutants.”
Sunday, January 2, 2011
Housing Starts Predicted to Hit 3-Year High
Housing starts will probably reach a three-year high of 739,000 in 2001, creating about 500,000 jobs and helping trim the unemployment rate to 9.1 percent, said David Crowe, chief economist for the National Association of Home Builders, in an interview with Bloomberg.
“This is an ugly economic cycle,” he said. “We need job creation to get people comfortable with buying a home. If they do that, we’ll create jobs that will reinforce that home buying and fuel additional job growth.”
Job growth in other sectors, as well as population growth, will also likely have an effect. The number of U.S. households will rise 0.7 percent to 118.7 million in 2011, the largest annual gain since the beginning of the housing crisis in 2007. Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, N.J., expects jobs to rise by an average of 200,000 per month in 2011.
The CEO of luxury home builder Toll Brothers is optimistic. “The recovery is here to stay,” said Douglas Yearley. “I think 2011 will be an improving year, but I think 2012 will be a big year for us.”
Source: Bloomberg, Joshua Zumbrun and Kathleen M. Howley (12/28/2010)
“This is an ugly economic cycle,” he said. “We need job creation to get people comfortable with buying a home. If they do that, we’ll create jobs that will reinforce that home buying and fuel additional job growth.”
Job growth in other sectors, as well as population growth, will also likely have an effect. The number of U.S. households will rise 0.7 percent to 118.7 million in 2011, the largest annual gain since the beginning of the housing crisis in 2007. Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, N.J., expects jobs to rise by an average of 200,000 per month in 2011.
The CEO of luxury home builder Toll Brothers is optimistic. “The recovery is here to stay,” said Douglas Yearley. “I think 2011 will be an improving year, but I think 2012 will be a big year for us.”
Source: Bloomberg, Joshua Zumbrun and Kathleen M. Howley (12/28/2010)
Wednesday, December 29, 2010
2011: The Year a House Again Becomes a Home
by THE KCM CREW on DECEMBER 29, 2010
For almost a decade now, every time we talked about real estate we immediately discussed money. We didn’t talk about the value of a home but instead about the price of the house. We didn’t worry about a roof over our heads but instead the ceiling on our interest rate. We didn’t care as much about where we raised our family as we cared about how much we increased our family’s net worth.
That will change in 2011. The KCM Crew believes very strongly that real estate will return to what it has been for the 200+ year history of this country: a place for us and our families to live comfortably. It will also prove to be a great long term investment as it always has been.
Our parents and our grandparents didn’t buy their homes as a short term financial investment. They bought it so they had a place of their own to come home to at the end of the day; a place to raise their family; a place they could feel safe.
Sure they dreamed of a ‘mortgage-burning’ party. They realized it was a form of forced savings. They were taught that, if they paid their mortgage every month, they would wind up with a little retirement account decades later.
And, they realized that wouldn’t happen if they rented.
However, in the last decade, we somehow forgot that the financial aspect was the serendipity not the major reason to buy. We believe that 2011 will be the year that people return to the historic reasons families purchased a home. This is the year when we again remember that homeownership is a major part of the American Dream.
What about the challenges to a housing recovery? Let’s look at them.
The Economy
Most reports are showing that the economy is doing better than expected. This shopping season provided additional proof of this point. As the economy recovers, so will consumer confidence. This will be great news for housing.
Unemployment
There is much talk about a ‘jobless recovery’. We agree that unemployment will continue to be a challenge. However, when you talk about housing, it is not the unemployment rate that is all telling. Instead, it is the change in the rate. As unemployment skyrocketed, people started to worry about their own job. Any change creates concern. Unabated concern turns to fear. Fear causes paralysis. The spike in unemployment has plateaued. People no longer have the felling that ‘they are next’. The fear will diminish and people will start moving on with their lives. This too will be great news for housing.
Interest Rates
It seems the bottomless pit in which rates have been falling does have a floor after all. And it seems we have found it. Those purchasers who had been waiting for the best interest rate may have already missed it.
Prices
Economists are projecting that prices will not see any appreciation in 2011. Sellers who had been waiting for 2006 to return will come to the realization that waiting any longer makes little sense. They will instead decide to get on with their lives and sell this year.
Prices probably will soften further. However, the possible savings to potential buyers will be minimized by a rise in interest rates.
Bottom Line
This is the year that normalcy returns to real estate. People will buy and sell based on the desire for a better life for themselves and their families. They will realize that is the true value of homeownership and they will be willing to pay for that value.
For almost a decade now, every time we talked about real estate we immediately discussed money. We didn’t talk about the value of a home but instead about the price of the house. We didn’t worry about a roof over our heads but instead the ceiling on our interest rate. We didn’t care as much about where we raised our family as we cared about how much we increased our family’s net worth.
That will change in 2011. The KCM Crew believes very strongly that real estate will return to what it has been for the 200+ year history of this country: a place for us and our families to live comfortably. It will also prove to be a great long term investment as it always has been.
Our parents and our grandparents didn’t buy their homes as a short term financial investment. They bought it so they had a place of their own to come home to at the end of the day; a place to raise their family; a place they could feel safe.
Sure they dreamed of a ‘mortgage-burning’ party. They realized it was a form of forced savings. They were taught that, if they paid their mortgage every month, they would wind up with a little retirement account decades later.
And, they realized that wouldn’t happen if they rented.
However, in the last decade, we somehow forgot that the financial aspect was the serendipity not the major reason to buy. We believe that 2011 will be the year that people return to the historic reasons families purchased a home. This is the year when we again remember that homeownership is a major part of the American Dream.
What about the challenges to a housing recovery? Let’s look at them.
The Economy
Most reports are showing that the economy is doing better than expected. This shopping season provided additional proof of this point. As the economy recovers, so will consumer confidence. This will be great news for housing.
Unemployment
There is much talk about a ‘jobless recovery’. We agree that unemployment will continue to be a challenge. However, when you talk about housing, it is not the unemployment rate that is all telling. Instead, it is the change in the rate. As unemployment skyrocketed, people started to worry about their own job. Any change creates concern. Unabated concern turns to fear. Fear causes paralysis. The spike in unemployment has plateaued. People no longer have the felling that ‘they are next’. The fear will diminish and people will start moving on with their lives. This too will be great news for housing.
Interest Rates
It seems the bottomless pit in which rates have been falling does have a floor after all. And it seems we have found it. Those purchasers who had been waiting for the best interest rate may have already missed it.
Prices
Economists are projecting that prices will not see any appreciation in 2011. Sellers who had been waiting for 2006 to return will come to the realization that waiting any longer makes little sense. They will instead decide to get on with their lives and sell this year.
Prices probably will soften further. However, the possible savings to potential buyers will be minimized by a rise in interest rates.
Bottom Line
This is the year that normalcy returns to real estate. People will buy and sell based on the desire for a better life for themselves and their families. They will realize that is the true value of homeownership and they will be willing to pay for that value.
Friday, December 24, 2010
Tax Deal Has Home Owner Benefits
Home owners were among those who benefited from the tax compromise that President Obama signed last week. Among the most home owner-friendly provisions are:
Deductions for private mortgage insurance: The agreement extends through 2011 a provision allowing home owners to deduct mortgage insurance premiums. To qualify for the full deduction, homeowners must have an adjusted gross income of $100,000 or less. Taxpayers with AGI of $100,000 to $109,000 can claim a partial deduction. Borrowers can’t deduct mortgage premiums on home loans that closed before 2007.
Tax credits for energy-efficient home improvements. Home owners who install insulation, new windows or other energy-saving improvement in 2010 are eligible for a tax credit worth 30 percent of the cost up to a lifetime maximum of $1,500. Improvements must be bought and installed by Dec. 31. Those who delay improvements to 2011 still get a tax credit, but it is capped at $500.
Source: USA Today, Sandra Block (12/21/2010)
Deductions for private mortgage insurance: The agreement extends through 2011 a provision allowing home owners to deduct mortgage insurance premiums. To qualify for the full deduction, homeowners must have an adjusted gross income of $100,000 or less. Taxpayers with AGI of $100,000 to $109,000 can claim a partial deduction. Borrowers can’t deduct mortgage premiums on home loans that closed before 2007.
Tax credits for energy-efficient home improvements. Home owners who install insulation, new windows or other energy-saving improvement in 2010 are eligible for a tax credit worth 30 percent of the cost up to a lifetime maximum of $1,500. Improvements must be bought and installed by Dec. 31. Those who delay improvements to 2011 still get a tax credit, but it is capped at $500.
Source: USA Today, Sandra Block (12/21/2010)
Wednesday, December 22, 2010
Four Steps to Sustainable Homeownership
Purchasing a home is an exciting step in anyone’s life, but there is more to the process than just getting approved for a loan. In fact, it is even more important to make certain you are ready to keep your home for the long term. To that end, here is a look at 4 things you can do to make your homeownership sustainable.
Step #1: Increase Your Knowledge
The first step you need to take is to learn as much about your mortgage loan options as possible. This way, you can be certain to apply for the best type of loan to meet your personal needs. In addition to learning about the pros and cons of various loan options, you need to learn more about how credit scores, discount points and other factors affect the overall cost of a loan. As part of this process, you should contact your local HUD housing counselors to learn more about special buyer programs that might be available in your area.
Step #2: Get Your Finances Under Control
Before you can purchase a home, you need to be certain you will qualify to buy it. If your credit score is below 620, you will be better off taking some time to bring up your score before you make a purchase. This way, you can keep your interest rates down, which will help keep your mortgage payments down and will make it easier for you to keep up with your monthly payments. Of course, by getting your finances under control before you buy, you will also be more likely to be able to stay on top of your bills after you make a purchase.
Step #3: Create a Budget
In order to remain safely within your means, your mortgage payments should never be more than 28 to 33 percent of your total monthly gross income. If you have other debts, such as car payments, student loans, credit cards or child support payments, the total cost of these debts and your mortgage payment should not exceed 36 to 40 percent of your monthly gross income. Therefore, before you make a purchase, carefully analyze your debts and create a budget that will ensure your monthly payments remain below this figure while also leaving enough money available to put toward a savings plan.
Step #4: Get to Saving
Before you start looking for a home, you should have plenty of money saved up to apply toward the purchase of your home. In most cases, Earnest money, which is a deposit provided to the seller, will be required when making an offer. Earnest money requirements can range anywhere from $500 to two percent of the purchase price. In addition, depending upon the type of loan you get, you might need to make a substantial down payment or closing costs. In addition, by establishing good saving habits now, you will be better prepared to handle your finances effectively in the future.
Step #1: Increase Your Knowledge
The first step you need to take is to learn as much about your mortgage loan options as possible. This way, you can be certain to apply for the best type of loan to meet your personal needs. In addition to learning about the pros and cons of various loan options, you need to learn more about how credit scores, discount points and other factors affect the overall cost of a loan. As part of this process, you should contact your local HUD housing counselors to learn more about special buyer programs that might be available in your area.
Step #2: Get Your Finances Under Control
Before you can purchase a home, you need to be certain you will qualify to buy it. If your credit score is below 620, you will be better off taking some time to bring up your score before you make a purchase. This way, you can keep your interest rates down, which will help keep your mortgage payments down and will make it easier for you to keep up with your monthly payments. Of course, by getting your finances under control before you buy, you will also be more likely to be able to stay on top of your bills after you make a purchase.
Step #3: Create a Budget
In order to remain safely within your means, your mortgage payments should never be more than 28 to 33 percent of your total monthly gross income. If you have other debts, such as car payments, student loans, credit cards or child support payments, the total cost of these debts and your mortgage payment should not exceed 36 to 40 percent of your monthly gross income. Therefore, before you make a purchase, carefully analyze your debts and create a budget that will ensure your monthly payments remain below this figure while also leaving enough money available to put toward a savings plan.
Step #4: Get to Saving
Before you start looking for a home, you should have plenty of money saved up to apply toward the purchase of your home. In most cases, Earnest money, which is a deposit provided to the seller, will be required when making an offer. Earnest money requirements can range anywhere from $500 to two percent of the purchase price. In addition, depending upon the type of loan you get, you might need to make a substantial down payment or closing costs. In addition, by establishing good saving habits now, you will be better prepared to handle your finances effectively in the future.
Tuesday, December 21, 2010
Growing Economy Big Factor for Buyers
Economists are surprisingly positive about the impact of rising interest rates on home sales.
The consensus is that while rates are up from where they were, they are still at historically low levels and rock bottom rates are only a part of what encourages people to buy homes. More important factors could be jobs and other financial issues, which appear to be improving.
“Since the recent rate increases have essentially just undone the declines from earlier months, it is hard to see why sales should drop significantly further from current levels,” wrote Goldman Sachs economist Ed McKelvey in a research note published Thursday evening.
Source: The Wall Street Journal, Nick Timiraos (12/17/2010)
The consensus is that while rates are up from where they were, they are still at historically low levels and rock bottom rates are only a part of what encourages people to buy homes. More important factors could be jobs and other financial issues, which appear to be improving.
“Since the recent rate increases have essentially just undone the declines from earlier months, it is hard to see why sales should drop significantly further from current levels,” wrote Goldman Sachs economist Ed McKelvey in a research note published Thursday evening.
Source: The Wall Street Journal, Nick Timiraos (12/17/2010)
Monday, December 20, 2010
Home Building Edged Up in November
Housing starts increased 3.9 percent last month from October, the U.S. Department of Commerce reports.
Despite the gain, activity remains 45 percent below the threshold — 1 million units annually — that is considered healthy. And permits, which gauge future demand, slid 4 percent to the lowest level since April 2009.
In November, builders broke ground on 555,000 units, fueled by a 6.9 percent jump in construction of single-family homes; multifamily projects, conversely, declined 9.1 percent.
Source: Boston Globe (12/17/10)
Despite the gain, activity remains 45 percent below the threshold — 1 million units annually — that is considered healthy. And permits, which gauge future demand, slid 4 percent to the lowest level since April 2009.
In November, builders broke ground on 555,000 units, fueled by a 6.9 percent jump in construction of single-family homes; multifamily projects, conversely, declined 9.1 percent.
Source: Boston Globe (12/17/10)
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