New York Times: Homeownership is Best Way To Build Wealth

The housing market has made a strong recovery, not only in sales and prices, but also in the confidence of consumers and experts as an investment. In a New York Times editorial entitled, “Homeownership and Wealth Creation” they explain:

“Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.”

Many of the points that were made in the article are on track with the research that the Federal Reserve has also conducted in their Survey of Consumer Finances.

The study found that the average net worth of a homeowner ($194,500) is 36x greater than that of a renter ($5,400).

The National Association of Realtors (NAR) expanded on the Federal Reserve’s research and projected that by the end of 2015, the average homeowner will have nearly 41x the net worth of a renter. Their findings are detailed in the graph below:

One reason for this large discrepancy in net worth is the concept of ‘forced savings’ created by having a mortgage payment and was explained by the Times:

“Homeownership requires potential buyers to save for a down payment, and forces them to continue to save by paying down a portion of the mortgage principal each month.”

“Even in instances where renters have excess cash, saving a substantial amount is difficult without a near-term goal, like a down payment. It is also difficult to systematically invest each month in stocks, bonds or other assets without being compelled to do so.”  

Bottom Line

“As a means to building wealth, there is no practical substitute for homeownership.” If you are a renter who is considering making a purchase, sit with a local real estate professional who can explain the benefits of signing a contract to purchase over renewing your lease!

Contact The J Team Fort Lauderdale and schedule your Homebuyers consultation today at 954-235-3589.  Learn about the home buying process, connect with a mortgage professional to get pre-approved and create a roadmap to purchasing a home.

Curious whats on the market now?  Search Fort Lauderdale Homes for sale at http://JTeamFL.com

52% Likely to Buy a home in the Next 5 Years!! Are You?

According to the recently released BMO Harris Bank Home Buying Report, 52% of Americans say they are likely to buy a home in the next five years. Americans surveyed for the report said they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also had other interesting revelations.

Those Looking to Buy

• 74% of those looking to buy a new home will consult a real estate agent
• 59% said they will visit online real estate websites
• 37% will seek recommendations from friends and family
• 78% plan to get pre-approved before seriously searching for a home

Those Who Already Own

• 75% of current home owners set a budget before looking for a home. 16% ended up spending less while 13% went over their budget.
• 63% of American homeowners spent under six months looking for a new home before they made a purchase.
• 8% bought their home without participating in an active real estate search - or even any plan to buy at all - because a specific property caught their attention.

The last point is very interesting: Of those that purchased a home, 8% bought “without any plan to buy at all”. A property caught their attention and they acted on it.

Why are More People not Planning their Next Move?

Why are people that are considering a move not putting their home search to a plan, and instead, buying only when a property catches their attention? A recent article byFannie Mae may give us that answer, there is evidence that a large numbers of homeowners are dramatically underestimating the equity they have in their current home. The report explains:

“Homeowners may be underestimating their home equity. In particular, if homeowners believe that large down payments are now required to purchase a home, then widespread, large underestimates of their home equity could be deterring them from applying for mortgages, selling their homes, and buying different homes.”

Bottom Line

Perhaps it is time to sit with a real estate professional to determine the actual equity you have in your house and take a look at the opportunities that currently exist in the real estate market. This may be the perfect time to move-up, move-down or buy that vacation home your family has always wanted.

Thinking of buying in the next 5 years?  Contact The J Team Fort Lauderdale today at 954-235-3589 and schedule your Homebuyers Consultation.  We will help you come up with a roadmap to purchase a home with solutions for financing issues, consultation with a mortgage professional and educate on the homebuying process.  All key items to have a successful roadmap to buy a home!

Search Fort Lauderdale homes for sale now at http://JTeamFL.com

National Association of Realtors Latest Existing Home Sales Report[INFOGRAPHIC]

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.

This is still a great market to buy and sell a home thanks to low interest rates.  Did you know if the interest rates go up even 1% your buying power goes down 10%...that's big if it's a $300,000 house you can afford today it'll be only a $270,000 hours when interest rates go up.  Contact The J Team Fort Lauderdale today at 954-235-3589 and schedule your Real Estate consultation today!

Should I Wait to Put Down a Bigger Down Payment?

Some experts are advising that first time and move-up buyers wait until they save up 20% before they move forward with their decision to purchase a home. One of the main reasons they suggest waiting is that a buyer must purchase private mortgage insurance if they have less than the 20%. That increases the monthly payment the buyer will be responsible for.

In a recent article, Freddie Mac explained what this would mean for a $200,000 house:

However, we must look at other aspects of the purchase to see if it truly makes sense to wait.

Are you actually saving money by waiting?

CoreLogic has recently projected that home values will increase by 4.3% over the next 12 months. Let’s compare the extra cost of PMI against the projected appreciation:

If you decide to wait until you have saved up a 20% down payment, the money you would have saved by avoiding the PMI payment could be surpassed by the additional price you eventually pay for the home. Prices are expected to increase by more than 3% each of the next five years.

Saving will also be more difficult if you are renting, as rents are also projected to increase over the next several years. Zillow Chief Economist Dr. Svenja Gudell explained in a recent report:

"Our research found that unaffordable rents are making it hard for people to save for a down payment ... There are good reasons to rent temporarily – when you move to a new city, for example – but from an affordability perspective, rents are crazy right now. If you can possibly come up with a down payment, then it's a good time to buy a home and start putting your money toward a mortgage."

Laura Kusisto of the Wall Street Journal recently agreed with Dr. Gudell:

“For some renters there may be a way out: Buy a house. Mortgages remain very affordable.”

Mortgage rates are expected to rise…

Freddie Mac is projecting that mortgage interest rates will increase by almost a full percentage point over the next 12 months. That will also impact your mortgage payment if you wait.

Bottom Line

Sit with a real restate or mortgage professional to truly understand whether you should buy now or wait until you save the 20%.

Schedule your homebuyers consultation with The J Team Fort Lauderdale today at 954-235-3589!

Search Fort Lauderdale Homes for sale today at http://JTeamFL.com

Don’t Get Caught In The Renter’s Trap

There are many benefits to homeownership. One of 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.  Contact The J Team Fort Lauderdale at 954-235-3589 and schedule your Real Estate Consultation today! 

Search Fort Lauderdale Homes for Sale now at http://JteamFL.com

What You Do Not Need To Hear From Your Listing Agent!

You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

• Set the market value on possibly the largest asset your family owns (your home)
• Set the time schedule for the successful liquidation of that asset
• Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust. Make sure this is the case.

Be careful if the agent you are interviewing begins the interview by:

• Bragging about their success
• Bragging about their company’s success

An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.

Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home.

Not someone only interested in trying to sell you on how great they are.

You have many agents from which to choose. Pick someone who truly cares.

Contact The J Team Fort Lauderdale 954-235-3589 and schedule your real estate consultation today! 

64.2% of Millennials Put Down Less than 20% on a Home

Digital Risk recently polled Millennials about the housing market. Among their findings was the fact that nearly two-thirds of the generation who have recently purchased a home, have done so with less than 20% down; with 36% putting down less than 5%!

Here is a graph detailing the results:

This means that more and more American’s between the ages of 18 and 34 stopped paying their landlord’s mortgage and started building their own family’s wealth.

Millennials aren’t the only ones taking advantage of lower down payments.

The Federal Reserve Bank of New York found that if the down payment required to purchase a home went from 20% to 5%, a renter’s Willingness To Pay (WTP) increased by 40%.

The problem is that thirty-six percent of Americans still think a 20% down payment isalways required when buying a home. Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

Bottom Line

If you are one of the many renters now realizing that the home of your dreams is obtainable now, contact a local real estate professional who can guide you through the process.

The J Team Fort Lauderdale can help you with a homebuyers consultation!  You may qualify to buy a home now with as little as 3% down, and if you are a Veteran 0% down!  There are so many options and programs out there to help homebuyers!  Contact The J Team Fort Lauderdale at 954-235-3589 today!

Search Fort Lauderdale Homes for sale now at http://JteamFL.com

Real Estate Again Seen as Best Investment

We are almost back to ‘pre-housing crash’ home values. The inventories of distressed properties (foreclosures & short sales) are shrinking dramatically. The economy is improving. The job numbers are headed in the right direction.

The big question that still remains: Have Americans regained their confidence in real estate as a worthy investment?

According to a survey conducted by Princeton Survey Research Associates, Americans have put real estate back into first place as the best of all investments.

Here are the results of the survey:

Bottom Line

Homeownership never lost its place as a key component of the American Dream for a host of financial and non-financial reasons. It is good to see that it has regained the top spot as best overall investment.

Contact The J Team Fort Lauderdale at 954-235-3589 and schedule your homebuyers consultation today!  We will help you understand the buying process, share with you the current market conditions, help you connect with a mortgage professional for a pre-approval and guide you along the way to buying a home.

Search Fort Lauderdale Homes that are for sale now! http://JTeamFL.com

Home Values: Where Are They Headed Over The Next 5 Years?

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

• Home values will appreciate by 4.1% in 2015.
• The cumulative appreciation will be 18.1% by 2019.
• That means the average annual appreciation will be 3.4% over the next 5 years.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 10.5% by 2019.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.  Do you know what your home is currently valued at?  Contact The J Team Fort Lauderdale today 954-235-3589 and we can provide you with a local market update in Broward County Florida as well as what your home value is based on today's market!

You may fill out our online form to find out the value of your Fort Lauderdale home at http://Sell.JTeamFL.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.

Contact The J Team Fort Lauderdale today at 954-235-3589 and schedule your real estate consultation!  Whether you are buying a home or selling your current home to move up into something larger or smaller!  The J Team is committed to helping with all of your Real Estate needs.

Don’t Wait to Move Up to Your Dream Home!

Now that the housing market has stabilized, more and more homeowners are considering moving up to their dream home. With interest rates still near 4% and home values on the rise, now may be a great time to make a move.

Sellers should realize that waiting while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain budget for your monthly housing costs.

Here is a chart detailing this point:

With each quarter percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

Act now to get the most house for your hard earned money.  Contact The J Team Fort Lauderdale and schedule your Real Estate consultation!  Selling your Fort Lauderdale Home or Buying a Fort Lauderdale Home, we can help you understand the process, search the local inventory and help you come up with a roadmap to success!

Foreclosure Inventory Hits Lowest Mark in Over 7 Years

Some Highlights:

• The number of homes in the US in some stage of foreclosure is down 28.9% to 472,000.
• Only 3.5% of homes in the US are currently in serious delinquency.
• Foreclosure Inventory levels hit the lowest level since January 2008 at 1.2% of all homes with a mortgage.

There are solutions to help if you are behind on your Mortgage. Florida still has millions on grant money to get you current.  There are forgiveness programs to help not affect your credit and more!  Contact The J Team Fort Lauderdale Today 954-235-3589!  We are your Real Estate resource destination!

When is it a Good Time to Rent? Definitely NOT Now!

People often ask whether or not now is a good time to buy a home. No one ever asks when a good time to rent is. However, we want to make certain that everyone understands that today is NOT a good time to rent.

The Census Bureau just released their second quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

At the same time, a report by Axiometrics revealed:

“The national apartment market’s annual effective rent growth rate of 5.1% in June 2015 represented a 47-month high, and continued a streak of 5.0%-plus rent growth that is now the longest in at least six years, according to apartment market research. The effective rent growth in June 2014 was 3.7%, putting June 2015’s exceptional performance into perspective.

This is the highest rate since the 5.3% of July 2011. The metric has reached at least 5.0% for five straight months, the longest such streak since Axiometrics started monthly reporting of annual apartment data in April 2009.”

Where will rents be headed in the future?

Stephanie McCleskey, Axiometrics vice president of research, commented on the above report in an article by Real Estate Economy Watch:

“Rent growth is just shy of the post-recession peak, and the June metrics reflect the continued strength of the apartment market. The demand for apartments is still strong, despite the record number of new units being delivered this year. Tight occupancy is why landlords can push rents higher.”

Bottom Line

If you are ready, willing and of course able to buy, now may make sense.  Schedule a homebuyers consultation with The J Team Fort Lauderdale today at 954-235-3589!  Learn about the homebuying process and let us help you come up with a roadmap to buying a home!  We have solutions to most common problems like credit issues, student loan debt and more!

Want to see what homes are available today?  Search Fort Lauderdale Homes for sale at http://JTeamFL.com