Five Financial Reasons to Buy a Home

Five Financial Reasons to Buy a Home

We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own differ for each buyer, with many basic similarities.

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership in his paper -The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study: 

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, contact a local professional who can help evaluate your ability to do so.

Click here for my free Home Buyer's Guide

Debbie Mignogna
BHHS Fox & Roach Realtors
267-640-1120

WWW.PA-DREAMHOMES.COM

Federal Housing Finance Agency (FHFA) Releases 2nd Quarter 2015 Home Price Index

Federal Housing Finance Agency (FHFA) Releases 2nd Quarter 2015 Home Price Index 

The FHFA released the 2nd Quarter Home Price Index for 2015. Looking at the breakdown regionally, year-over-year, prices are up across the country. We always like to give you the regional outlook so you can compare different areas of the country.

Breaking down prices by state, we can see that the entire country is experiencing higher prices than the 2nd quarter of 2014. Some states are experiencing double digit gains like Nevada & Colorado, while others like New Jersey (0.1%), Maryland (0.3%) & Vermont (0.5%) have appreciated at a slower rate.

If you have a client who is relocating to another state, it is important to show them the different rates at which home prices are appreciating to show them how waiting to buy could significantly impact the price they pay for their next home.

By: Keeping Current Matters

Debbie Mignogna
BHHS Fox & Roach Realtors
267-640-1120
WWW.PA-DREAMHOMES.COM

What Do You Really Need To Qualify For A Mortgage?

What Do You Really Need to Qualify For A Mortgage?

2. FICO Scores

The Ipsos survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower.

Here are the numbers from a recent Ellie Mae report:

Bottom Line

If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able’, sit down with ME and I will help you understand your true options.

Click here for my free Home Buyer's Guide


Debbie Mignogna
BHHS Fox & Roach Realtors
267-640-1120

WWW.PA-DREAMHOMES.COM

Homeownership Still the American Dream

Homeownership Still the American Dream

Some Highlights:

• Existing Home Sales are 9.2% higher than just one year ago.
• Home Prices are 7.9% higher than last year this time.
• The $250-500K price range leads the way with the largest improvement from last year at 17.4%.

By: Keeping Current Matters

Click here for my free Home Buyer's Guide


Debbie Mignogna

BHHS Fox & Roach Realtors

267-640-1120
WWW.PA-DREAMHOMES.COM

The REAL Reasons Americans Buy a Home

We often talk about the financial reasons why buying a home makes sense. But often, the emotional reasons are the more powerful, or compelling reasons. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.

The top 4 reasons to own a home cited by respondents were not financial.

1. It means having a good place to raise children & provide them with a good education

From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.

2. You have a physical structure where you & your family feel safe

It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.

3. It allows you to have more space for your family

Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.

4. It gives you control over what you do with your living space, like renovations and updates

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:

5. Owning a home is a good way to build up wealth that can be passed along to my family

Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?

Bottom Line

Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.

Click here for my Free Home Buyer's Guide

Debbie Mignogna
BHHS Fox & Roach Realtors
267-640-1120

PA-DREAMHOMES.COM

Existing Home Sales and Prices Are Up!!

Existing Home Sales and Prices Are Up!!

NAR’S Latest Existing Home Sales Report 

Some Highlights:

• Existing Home Sales are up 10.3% year-over-year across the country.
• Sales rose to an annual rate of 5.59 million marking the 10th month in a row of year-over-year gains
• Prices are up 5.6% year-over-year in the U.S. to a median price of $234,000
• Marked the 41st consecutive month of year-over year price gains.

For more Information call 

Debbie Mignogna at 267-640-1120

Don't Get Caught In The Renter's Trap

Don't Get Caught In The Renter's Trap

There are many benefits to homeownership. One of the top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

The National Association of Realtors (NAR) released their findings of a study in which they studied “income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years in metropolitan statistical areas throughout the US.”

Don’t Become Trapped

The study revealed that over the last five years a typical rent rose 15% while the income of renters grew by only 11%. If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment.

The average renter in the United States pays 30% of their income on housing compared to that of a homeowner who can expect to spend 15%.

In many metro areas the percentage of income spent on housing is even higher and continues to rise every year. Like in San Francisco, CA, where the average renter spends 59% of their monthly income on housing or nearly 65% in Boston, MA.

Homebuyers who purchased their home over the same five-year period locked in their housing costs and were able to grow their net worth as home values have increased and their mortgage balances have gone down.

Know Your Options

Perhaps, you have already saved enough to buy your first home. HousingWire reportedthat analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

As we have reported last week, over 60% of Millennials who recently bought a home put down less than 20%; 36% put down less than 5%. Your dream home may be more attainable than you ever imagined!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

Click here for my free Home Buyer's Guide



Debbie Mignogna
BHHS Fox & Roach Realtors
267-640-1120

WWW.PA-DREAMHOMES.COM