Wednesday, July 8, 2020 / by Amy McLeod
Everyone is ready to buy a home at different times in their lives, and despite the health crisis, today is no exception. Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.
There are three main factors that go into determining how affordable homes are for buyers:
Mortgage Payments as a Percentage of Income
The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. 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 thw ...
Wednesday, January 22, 2020 / by Amy McLeod
Home values have been increasing for 93 consecutive months, according to the National Association of Realtors. If you’re a homeowner, particularly one looking to downsize your living space, that’s great news, as you’ve likely built significant equity in your home.
Here’s some more good news: mortgage rates are expected to remain low throughout 2020 at an average of 3.8% for a 30-year fixed-rate loan.
The combination of leveraging your growing equity and capitalizing on low rates could make a big difference in your housing plans this year.
How to Use Your Home Equity
For move-up buyers, the typical pattern for building financial stability and wealth through homeownership works this way: you buy a house and gain equity over several years of mortgage payments and price appreciation. You then take that equity from the sale of your house to make a down payment on your next home and repeat the process.
For homeowners ready to w ...
Monday, March 25, 2019 / by Amy McLeod
According to data released by the Internal Revenue Service (IRS), Americans can expect an estimated average refund of $3,143 this year when filing their taxes. This is down slightly from the average refund of $3,436 last year.
Tax refunds are often thought of as ‘extra money’ that can be used toward larger goals. For anyone looking to buy a home in 2019, this can be a great jump start toward a down payment!
The map below shows the average tax refund Americans received last year by state.
Many first-time buyers believe that a 20% down payment is required to qualify for a mortgage. Programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae all allow for down payments as low as 3%. Veterans Affairs Loans allow many veterans to purchase a home with 0% down.
If you started your down payment savings with your tax refund check this year, how close would you be to a 3% dow ...
Wednesday, March 20, 2019 / by Amy McLeod
Welcome to the best—and worst—time to buy a home: spring! Yes, it's peak home-buying season. However, it’s no bed of roses.
Knowing what to expect is half the battle, and can help you use these highs and lows to your advantage!
So consider this an essential prep course. Ready to dive into the best of times and the worst of times for home buying?
You’ll love: All the inventory
One of the best things about buying a house during the spring is that you have a lot more options to choose from.
“New listings tend to flood the market in April and May,” says Kimberly Sands, a real estate broker in Carolina Beach, NC. Just keep in mind that with so much inventory out there, you’ll want to make sure to stick to your search and price parameters to avoid getting overwhelmed.
You’ll hate: All the competition
Busier times mean more buyers and, thus, more competition—which explains why bidding wz ...
Wednesday, January 2, 2019 / by Amy McLeod
As we kick off the new year, many families have made resolutions to enter the housing market in 2019. Whether you are thinking of finally ditching your landlord and buying your first home or selling your starter house to move into your forever home, there are two pieces of the real estate puzzle you need to watch carefully: interest rates & inventory.
Mortgage interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. Despite the recent drop, interest rates are projected to reach 5% in 2019.
The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.
Purchasing power, simply put, is the amount of home you can affordw ...