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Still a Great Time to Buy a Home…but HURRY!

by The Domis Team

             Still a Great Time to Buy a Home…but HURRY

Kevin Kelly, Chairman of the National Association of Home Builders (NAHB), recently explained that:

“With interest rates near historically low levels and strengthening job growth, now continues to be a great opportunity to buy a home.”


We couldn’t agree more. However, we must realize that, with prices and interest rates both projected to increase, waiting could cost us. 

There are two organizations that look at the affordability of purchasing and actually measure it over time. The National Association of Home Builders has their Housing Opportunity Index (HOI) and the National Association of Realtors’ has the Housing Affordability Index 

Both indexes are reporting the same thing. The cost of buying a home is beginning to increase leading the affordability indexes to dip. 
 

Both indexes say we passed the bottom of the housing market


According to NAHB’s HOI housing affordability dipped slightly in the second quarter of 2014. NAHB’s Chief Economist David Crowe explains:

“The second quarter HOI reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom.”


According to NAR in a recent Economists’ Outlook post, home affordability is down from both one month ago and one year ago in all regions. 

Michael Hyman, Research Assistant at NAR said:

“At the national level, housing affordability is down for the month of June due to higher prices and qualifying income levels despite the lowest mortgage rates of the year.”


In a recent article, the Wall Street Journal also revealed that the cost of home ownership is higher than any time in over five years:

“Housing affordability hit its lowest level in nearly six years in June as home prices continued to climb."

 

Bottom Line

If you were waiting for the bottom of the market, you missed it. Yet, with prices below values of seven years ago in most parts of the country and interest rates near historic lows, it is still a great time to buy a home…but hurry

 

Reprinted from Keeping Current Matters

With Interest Rates and Home Prices on the rise, do you know the true Cost of Waiting?

 

At Keeping Current Matters, we have often broken down the opportunity that exists now for Millennials who are willing and able to purchase a home NOW... Here are a couple other ways to look at the cost of waiting.

Let’s say you’re 30 and your dream house costs $250,000 today, at 4.12% your monthly Mortgage Payment with Interest would be $1,210.90.

But you’re busy, you like your apartment, moving is such a hassle...You decide to wait till the end of next year to buy and all of a sudden, you’re 31, that same house is$270,000, at 5.3%. Your new payment per month is $1,499.32.

The difference in payment is $288.42 PER MONTH!

That’s basically like taking a $10 bill and tossing it out the window EVERY DAY!

Or you could look at it this way:

  • That’s your morning coffee everyday on the way to work (average $2) with $11 left for lunch!
  • There goes Friday Sushi Night! ($72 x 4)
  • Stressed Out? How about 3 deep tissue massages with tip!
  • Need a new car? You could get a brand new $20,000 car for $288.00 per month.

Let’s look at that number annually! Over the course of your new mortgage at 5.3%, your annual additional cost would be $3,461.04!

Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining.  We could come up with 100’s of ways to spend $3,461, and we’re sure you could too!

Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $103,831, all because when you were 30 you thought moving in 2014 was such a hassle or loved your apartment too much to leave yet.

Or maybe there wasn’t an agent out there who educated you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready, but if they showed you that you could save $103,831, you’d at least listen to what they had to say.

They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now…

 

Reposted from Keeping Current Matters

Good Renters Deserve Better Credit Scores

by The Domis Team

Good Renters Deserve Better Credit Scores

For many consumers, a confusing part of trying to get a loan is the way that credit begets credit. Banks want to lend to people who’ve proven to be a good risk. Without a track record, getting a loan can be hard or expensive. A new report from the credit bureau Experian shows that many borrowers could benefit if lenders took rental payments into account.

As lenders bounce back from the Great Recession, they’ve been looking at a broader range of non-traditional data to identify more potential-borrowers who could be a good risk. The idea is some people who don’t have regular credit histories but pay their rent, utilities, and other recurring expenses on-time could a good credit risk. In 2010, Experian bought RentBureau, which tracks apartment rents from large property managers. Using that new data, Experian published an analysis [PDF] that focuses on almost 20,000 people in government-subsidized housing who pay their monthly rent on-time. (Renters who missed payments were already reported to credit bureaus through collections agencies.)

Before adding in rental history, 11 percent of the sample had no credit file at all, which makes it extremely hard to get loans. Once the rental history was added in, 59 percent of that group had prime credit scores, and another 38 percent had “nonprime” scores. Just 3 percent were considered “subprime.”

For the rest of the sample, those who already had a credit score, about two-thirds were considered subprime borrowers to start. When taking rental history into account, 21 percent didn’t see their scores change, and 5 percent saw their scores decrease. The largest group of people—about 74 percent—saw their scores increase. Overall, the credit scores went up an average of 29 points. (Like a FICO score, Experian’s VantageScore is on a scale from 300 to 850.) The report estimates that the credit card interest rates for a borrower who jumped from the “subprime” to “nonprime” would be 4.2 percentage points lower.

While adding new types of data like rent to credit scores means consumers must be vigilant in ensuring a growing number of companies are reporting the data accurately, the Experian’s study makes a compelling case that adding rental history could help people who most need a leg-up.

 

Source Businessweek.com

The Importance of Using an Agent When Selling Your Home

by The Domis Team

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s’ behavior during the home buying process. Today, 92% of all buyers use the internet in their home search according to the National Association of Realtors’ 2013 Profile of Home Buyers & Sellers.

However, the report also revealed that 96% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know. Buyers search for a home online but then depend on the agent to find the actual home they will buy (52%) or to help them handle the paperwork (24%) or understand the process (24%).

It is true that the percentage of buyers that are using the internet to search for homes and information on the home buying process has increased dramatically over the last decade. But the plethora of information now available has also resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

BOTTOM LINE

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

via Keeping Current Matters

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