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The Top Reasons to Own Your Home

by Lisa Barall-Matt

The Top Reasons to Own Your Home [INFOGRAPHIC]

The Top Reasons to Own Your Home [INFOGRAPHIC] | MyKCM

Some Highlights:

  • June is National Homeownership Month!
  • Now is a great time to reflect on the many benefits of homeownership that go way beyond the financial.
  • What reasons do you have to own your own home?

 


The Ultimate Truth about Housing Affordability

by Lisa Barall-Matt

The Ultimate Truth about Housing Affordability

The Ultimate Truth about Housing Affordability | MyKCM

There have been many headlines decrying an “affordability crisis” in the residential real estate market. While it is true that buying a home is less affordable than it had been over the last ten years, we need to understand why and what that means.

On a monthly basis, the National Association of Realtors (NAR), produces a Housing Affordability Index. According to NAR, the index…

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase a home. Here is a graph of the index going back to 1990:

The Ultimate Truth about Housing Affordability | MyKCM

It is true that the index is lower today than any year from 2009 to 2017. However, we must realize the main reason homes were more affordable. That period of time immediately followed a housing crash and there were large numbers of distressed properties (foreclosures and short sales). Those properties were sold at large discounts.

Today, the index is higher than any year from 1990 to 2008. Based on historic home affordability data, that means homes are more affordable right now than any other time besides the time following the housing crisis.

With mortgage rates remaining low and wages finally increasing, we can see that it is MORE AFFORDABLE to purchase a home today than it was last year!

Bottom Line

With wages increasing, price appreciation moderating, and mortgage rates remaining near all-time lows, purchasing a home is a great move based on historic affordability numbers.

 

 


4 Reasons to Buy A Home This Summer

by Lisa Barall-Matt

4 Reasons to Buy A Home This Summer

4 Reasons to Buy A Home This Summer | MyKCM

Here are four reasons to consider buying today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest U.S. Home Price Insights reports that home prices have appreciated by 3.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.8% over the next year.

Home values will continue to appreciate. Waiting may no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year fixed rate mortgage have started to level off around 4.3%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

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

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

Are you ready to put your housing cost to work for you?

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?

Examine the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, greater safety for your family, or you just want to have control over renovations, now could be the 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.

 

 


How Homeownership Delivers Unsurpassed Family Wealth

by Lisa Barall-Matt

How Homeownership Delivers Unsurpassed Family Wealth

How Homeownership Delivers Unsurpassed Family Wealth | MyKCM

There are many financial benefits to homeownership, but probably none more important than its ability to create family wealth.

How Housing Matters is a joint project of the Urban Land Institute and the MacArthur Foundation. It is an online resource for research and information on how homeownership contributes to individual and community success.

Their article, The First Rung on the Ladder to Economic Opportunity Is Housing, explains the importance of homeownership to a family’s financial health. In that article, they simply stated:

“The ladder to economic success can stretch only so high without the asset-building power of homeownership.”

To this point, National Association of Realtors’ (NAR) Economists’ Outlook Blog revealed in a recent post:

“Housing wealth contributes positively to the homeowner’s and children’s economic condition, because home equity can be tapped for expenditures such as investing in another property (which can generate rental income), home renovation (which further increases the home value), a child’s college education, emergency or major life events, or expenses in retirement…

Housing wealth (or net worth or equity) is built up over time via the home price appreciation and the principal payments that the homeowner makes on the loan.”

Here is a graph showing the build-up of wealth over time:How Homeownership Delivers Unsurpassed Family Wealth | MyKCMJust last month, NAR’s Chief Economist, Lawrence Yun, explained that even though home appreciation has slowed, homeowners are still building wealth:

“Homeowners in the majority of markets are continuing to enjoy price gains, albeit at a slower rate of growth. A typical homeowner accumulated $9,500 in wealth over the past year.”

Later in life, this wealth is crucial…

This wealth is important to a family’s retirement plans. In a recent report from the Joint Center for Housing Studies at Harvard University titled, Housing America’s Older Adults 2018, they revealed that a renter 65 years old or older has a net worth of $6,710. Meanwhile, a homeowner 65+ years old has a net worth of $319,200. That huge difference will allow for a dramatic upgrade in one’s lifestyle during your retirement years.

Bottom Line

Homeownership builds wealth. This, in turn, allows families to have more and better options when it comes to their children and their life in retirement.

 

 


4 Most Popular Bottom Line Investments in America

by Lisa Barall-Matt

4 Most Popular Bottom Line Investments in America

4 Most Popular Bottom Line Investments in America | MyKCM

Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks, gold, and savings accounts.

For the sixth year in a row, real estate has come out on top as the best long-term investment! That has not always been the case. Gallup explains:

“Between 2008 and 2010, covering most of the Great Recession period that saw plummeting home and stock values, Americans were as likely to name savings accounts or CDs as the best long-term investment as they were to name stocks or real estate.”

This year’s results showed that 35% of Americans chose real estate, followed by stocks at 27%. The full results are shown in the chart below.

4 Most Popular Bottom Line Investments in America | MyKCM

Bottom Line

Now that the real estate market has recovered, so has the belief of the American people in the stability of housing as a long-term investment.

 

 


Are Older Generations Really Not Selling Their Homes?

by Lisa Barall-Matt

Are Older Generations Really Not Selling Their Homes?

Are Older Generations Really Not Selling their Homes? | MyKCM

Many studies suggest one of the main reasons for the inventory shortage in today’s market of homes for sale is that older generations have chosen to “age in place” over moving.

The 2019 Home Buyers & Sellers Generational Trend Report by NAR clarifies this point!

NAR’s findings show that Baby Boomers (43%) and the Silent Generation (12%) made up 56% of sellers in 2018! This means the majority of sellers last year were over the age of 54. This also shows these generations ARE moving!

The report also shared the reasons why they chose to move. According to the research, the top reason was a desire to be closer to friends and family. Below is a full breakdown:

Are Older Generations Really Not Selling their Homes? | MyKCM

As we can see, they have plenty of reasons to sell their current home! But what type of homes are they trading in?Are Older Generations Really Not Selling their Homes? | MyKCM

Once again, the report demonstrated that older generations are not keeping that 3-bedroom, 2-bath colonial home. Instead, they are putting it on the market and moving on with their lives!

Bottom Line

If you are living in a house that no longer fits your needs, let’s get together to help you find a home that will!

 

 


The Feeling You Get from Owning Your Home

by Lisa Barall-Matt

The Feeling You Get from Owning Your Home

The Feeling You Get from Owning Your Home | MyKCM

We often talk about the financial reasons why buying a home makes sense. But, more often than not, the emotional reasons are the more powerful and compelling ones.

No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it’s a certain scent or a favorite chair, that feeling of safety and security you gain from owning your own home is simultaneously one of the greatest and most difficult to describe.

Frederick Peters, a contributor for Forbesrecently wrote about that feeling, and the pride that comes from owning your own home.

“As homeowners discover, living in an owned home feels different from living in a rented home. It’s not just that an owner can personalize the space; it touches a chord even more fundamental than that.

Homeownership enhances the longing for self-determination at the heart of the American Dream. First-time homeowners, young or old, radiate not only pride but also a sense of arrival, a sense of being where they belong. It cannot be duplicated by owning a 99-year lease.”

Bottom Line

Owning a home brings a sense of accomplishment and confidence that cannot be achieved through renting. If you are debating renewing your lease, let’s get together before you do to answer any questions you may have about what your next steps should be, and what is required in today’s market!

 

 


What Would Make You Sell Your House?

by Lisa Barall-Matt

What Would Make You Sell Your House?

What Would Make You Sell Your House? | MyKCM

There are many reasons why a homeowner decides to sell their house and move. The latest Generational Trends Report from the National Association of Realtors asked recent home sellers to share their reason for moving.

The younger the respondents, the more likely their top response centered around needing a larger home (ages 29 to 53). Relocating for a job was the top reason for those ages 54 to 63 and the second most popular response for those under 53. The chart below shows the breakdown for these two reasons.

What Would Make You Sell Your House? | MyKCM

For homeowners over the age of 64, wanting to be closer to friends and family served as the top motivator to move. Downsizing to a smaller home or moving due to retirement came in as a close second and third.

What Would Make You Sell Your House? | MyKCM

Have you outgrown your current house? Are you a homeowner who can relate to wanting to be closer to family and friends? Is your house becoming a burden to clean now that the kids have moved out?

Bottom Line

Let’s get together to set you on the path to selling your current house and finding the home that fits your needs, today!

 

 


Existing Home Sales Slow to Start Spring

by Lisa Barall-Matt

Existing Home Sales Slow to Start Spring [INFOGRAPHIC]

Existing Home Sales Slow to Start Spring [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Existing Home Sales slowed to an annual pace of 5.21 million home sales in March.
  • Low inventory levels are still impacting home sales! The current month’s supply of homes for sale is 3.9-months.
  • Median home prices were up 3.8% over last March at $259,400. This marked the 85th consecutive month with year-over-year price gains.

 

 


2 Trends Helping Keep Housing Affordable

by Lisa Barall-Matt

2 Trends Helping Keep Housing Affordable

2 Trends Helping Keep Housing Affordable | MyKCM

Two positive trends have started to emerge that impact the 2019 Spring Housing Market. Mortgage interest rates for a 30-year fixed rate loan have dropped to new lows, right as reports show that wages have increased at their highest rate in decades!

These two factors have helped keep housing affordable despite low supply of houses for sale driving up prices. First American’s Chief Economist, Mark Fleming, explains the impact,

“Ongoing supply shortages remain the main driver of the performance gap as the housing market continues to face an inventory impasse – you can’t buy what’s not for sale.

 However, an unexpected affordability surge, driven primarily by lower-than-anticipated mortgage rates, rising wages and favorable demographics, has boosted housing demand.”

Mortgage interest rates had been on the rise for most of 2018 before reaching their peak in November at 4.94%. According to Freddie Mac’s Primary Mortgage Market Survey, interest rates last week came in at 4.20%.

Average hourly earnings grew at an annual rate of 3.2% in March, up substantially from the 2.3% average pace seen over the last 10 years.

These two factors contributed nearly $6,000 worth of additional house-buying power for median households from February to March 2019, according to First American’sresearch. Fleming is positive about the prolonged impact of lower rates and higher wages.

“We expect rising wages and lower mortgage rates to continue through the spring, boosting housing demand and spurring home sales.”

Bottom Line

Low mortgage interest rates have kept housing affordable throughout the country. If you plan on purchasing a home this year, act now while rates are still low!

 

 


Displaying blog entries 1-10 of 214

Contact Information

Photo of Lisa Barall-Matt Real Estate
Lisa Barall-Matt
Coldwell Banker Residential Brokerage
992 Farmington Ave
West Hartford CT 06107
860-614-9650

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