The Team Hinton Real Estate Group blog is a place for all the latest news and updates about the Real Estate market will appear. Learn all about the latest and greatest tips and tricks to buying a home or selling a home. Also, get the latest updates about Team Hinton and our ever growing team of real estate agents in Ypsilanti, Michigan.
The idea of appraisals and inspections can be overwhelming. Luckily you don’t have to do it alone! Learn the differences so you can tick another box off on the selling/buying list!
Read MoreBuyers and sellers need to stay on their toes this year with record-low housing inventory. Though projections point to a positive direction for the housing market!
Read MoreCheck out these 6 tips on Do’s and Don’ts after applying for a mortgage including: Credit, Banking advice and much more!
Read MoreOne of the best ways to build your family's financial future is through homeownership. Recent data from the Federal Reserve indicates the net worth of a homeowner is actually over 40 times greater than that of a renter. Maybe it's time to start thinking about buying a home, especially when they're so affordable in today's market.
Every three years the Survey of Consumer Finances shows the breakdown of how owning a home helps build financial security. In the graph below, we see that the average net worth of homeowners continues to grow, while the net worth of renters tends to hold fairly steady and be significantly lower than that of homeowners. The gap between owning and renting just keeps getting wider over time, making homeownership more and more desirable for those who are ready.
For many families, homeownership serves as a form of ‘forced savings.' Every time you pay your mortgage, you're contributing to your net worth by increasing the equity you have in your home (See chart below):The impact of home equity is part of why Gallup reports that Americans picked real estate as the best long-term investment for the seventh year in a row. According to this year's survey, 35% of Americans chose real estate over stocks, savings accounts, gold, and bonds.
Today, there are great opportunities available for those planning to buy a home. The housing market has made a full recovery, and all-time low interest rates are giving homebuyers a big boost in purchasing power. If you're ready, buying a home this fall can set you up to increase your net worth and create a safety net for your family's future.
Build your family net worth through home ownership.. You don’t need 20% down and in some cases through many State grants and opportunities you can find yourself owning a home with zero money down.
CALL US TODAY- We have a Realtor on Duty 10-7 Daily!-734-480-8650.
With all of the unanswered questions caused by COVID-19 and the economic slowdown we’re experiencing across the country today, many are asking if the housing market is in trouble. For those who remember 2008, it’s logical to ask that question.
Many of us experienced financial hardships, lost homes, and were out of work during the Great Recession – the recession that started with a housing and mortgage crisis. Today, we face a very different challenge: an external health crisis that has caused a pause in much of the economy and a major shutdown of many parts of the country.
Let’s look at five things we know about today’s housing market that were different in 2008.
When we look at appreciation in the visual below, there’s a big difference between the 6 years prior to the housing crash and the most recent 6-year period of time. Leading up to the crash, we had much higher appreciation in this country than we see today. In fact, the highest level of appreciation most recently is below the lowest level we saw leading up to the crash. Prices have been rising lately, but not at the rate they were climbing back when we had runaway appreciation.
The Mortgage Credit Availability Index is a monthly measure by the Mortgage Bankers Association that gauges the level of difficulty to secure a loan. The higher the index, the easier it is to get a loan; the lower the index, the harder. Today we’re nowhere near the levels seen before the housing crash when it was very easy to get approved for a mortgage. After the crash, however, lending standards tightened and have remained that way leading up to today.
One of the causes of the housing crash in 2008 was an oversupply of homes for sale. Today, as shown in the next image, we see a much different picture. We don’t have enough homes on the market for the number of people who want to buy them. Across the country, we have less than 6 months of inventory, an undersupply of homes available for interested buyers.
The chart below shows the difference in how people are accessing the equity in their homes today as compared to 2008. In 2008, consumers were harvesting equity from their homes (through cash-out refinances) and using it to finance their lifestyles. Today, consumers are treating the equity in their homes much more cautiously.
Today, 53.8% of homes across the country have at least 50% equity. In 2008, homeowners walked away when they owed more than what their homes were worth. With the equity homeowners have now, they’re much less likely to walk away from their homes.
The COVID-19 crisis is causing different challenges across the country than the ones we faced in 2008. Back then, we had a housing crisis; today, we face a health crisis. What we know now is that housing is in a much stronger position today than it was in 2008. It is no longer the center of the economic slowdown. Rather, it could be just what helps pull us out of the downturn.
Whether you’re a first-time buyer or a seasoned homeowner, shopping for a new home can feel daunting. In fact, 56% of buyers said that “finding the right property” was the most difficult step in the home buying process.1
Buying a home is a significant commitment of both time and money. And a home purchase has the power to improve both your current quality of life and your future financial security, so the stakes are high.
Follow these five steps—and complete the corresponding worksheet offered below—to assess your priorities, streamline your search, and choose your next home with confidence.
STEP 1: Set Your Goals and Priorities
The first step to finding your ideal home is determining WHY you want to move. Do you need more space? Access to better schools? Less maintenance? Or are you tired of throwing money away on rent when you could be building equity? Pinpointing the reasons why you want to move can help you assess your priorities for your home search.
Don’t forget to think about how your circumstances might change over the next few years. Do you expect to switch jobs? Have more children? Get a pet? A good rule of thumb is to choose a house that will meet your family’s needs for at least the next five to seven years.2 Be sure to set your goals accordingly.
STEP 2: Determine Your Budget
Many financial professionals recommend following the “28/36 Rule” to determine how much you can afford to spend on a home. The rule states that you should spend no more than 28% of your gross monthly income on housing expenses (e.g., mortgage, taxes, insurance) and a maximum of 36% of your gross monthly income on your total debt obligations (i.e., housing expenses PLUS any other debt obligations, like car loans, student loans, credit card debt, etc.).3
Of course, the 28/36 rule only provides a rough guideline. Getting pre- qualified or pre- approved for a mortgage BEFORE you begin shopping for homes will give you a much more accurate idea of how much you can borrow. Add your pre-approved mortgage amount to your down payment to find out your maximum purchasing potential.
STEP 3: Choose a Location
When it comes to real estate, WHERE you choose to buy is just as important as WHAT you choose to buy.
Do you prefer a rural, urban, or suburban setting? How long of a commute are you willing to make? Which neighborhoods feed into your favorite schools? These decisions will impact your day-to-day life while you live in the home.
Another important factor to consider is how the area is likely to appreciate over time. Choosing the right neighborhood can raise the profit potential of your home when it comes time to sell. Look for communities that are well maintained with high home-ownership rates, low crime rates, and access to good schools, desired retail establishments, and top employers.4
STEP 4: Decide Which Features You Need (and Want) in a Home
Start with the basics, like your ideal number of bedrooms, bathrooms, and square footage. Do you prefer a one-story or two-story layout? Do you want a swimming pool?
Keep in mind, you may not find a home with all of your “wants,” or even all of your “needs” … at least not at a price you can afford. The reality is, most of us have to make a few compromises when it comes to buying a home.
Some buyers will opt for a longer commute to get a larger, newer home in the suburbs. Others will sacrifice hardwood floors or an updated kitchen so that their kids can attend their desired school.
If you’re faced with a tough choice about how or what to compromise in your home search, return to STEP 1. What were your original goals and motivations for moving? Reminding yourself of your true priorities can often provide the clarity that you need.
STEP 5: Meet with a Hinton real estate agent
a good real estate agent can remove much of the stress and uncertainty from the home search process. From setting goals to securing a loan to selecting the best neighborhood to meet your needs, we will be there to assist you every step of the way.
And no one has more access to home listings, past sales data, or market statistics than a professional agent. We can set up a customized search that alerts you as soon as a new listing you might like goes live. Better yet, we get notified about many of the hottest homes even BEFORE they hit the market.
You might guess that the VIP service we provide is very expensive. Well, the good news is, we can represent you throughout the entire home buying process at NO COST to you. It’s true; the home seller pays a buyer agent’s fee at closing. So you can benefit from our time, experience, and expertise without paying a dime. It’s no wonder 87% of buyers choose to purchase their home with the help of an agent.1
And although we’ve listed it here as STEP 5, the reality is, it’s never too early (or too late) to contact an agent about buying a home. Whether you plan to buy today, next month, or next year, there are steps you can (and should) be taking to prepare for your purchase.
Call us today to schedule a free consultation!
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
Sources:
NAR 2019 Home Buyers & Sellers Generational Trends Report – https://www.nar.realtor/sites/default/files/documents/2019-home-buyers-and-sellers-generational-trends-report-08-16-2019.pdf
Architectural Digest – https://www.architecturaldigest.com/story/this-is-how-long-you-should-live-in-your-house-before-selling-it
Investopedia – https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp
Money Talks News – https://www.moneytalksnews.com/20-clues-youre-buying-home-the-right-neighborhood/
The Team Hinton Real Estate Group is a Buyer's Boutique that is dedicated to making your home buying or selling experience the best and mist enjoyable experience it an be!
