Homeowner’s Net Worth Is 45x Greater Than A Renter’s

Let’s Connect:     

Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

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In a Forbes article, the National Association of Realtors’ (NAR) Chief EconomistLawrence Yun predicts that by the end of 2016, the net worth gap will widen even further to 45 times greater.

The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

Put Your Housing Cost to Work for You

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, meet with a real estate professional in your area who can guide you through the process.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent with The J Team at 954.235.3589 and schedule a FREE Real Estate Consultation today.

Whether You Rent or Buy: Either Way You’re Paying a Mortgage

There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

<<SEARCH FORT LAUDERDALE HOMES FOR SALE>>

Are you ready to put your housing cost to work for you?

Christina Boyle, Senior Vice President and Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

Bottom Line

This holiday season, why not give yourself the gift of homeownership? Lock in your housing costs for the next 30 years and guarantee you are the one building wealth.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

Don’t Get Caught in the Rental 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.

Don’t Become Trapped

Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns that,

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

In the Joint Center for Housing Studies at Harvard University's 2015 Report on Rental Housing, they reported that 49% of rental households are cost-burdened, meaning they spend more than 30% of their income on housing. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

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It’s Cheaper to Buy Than Rent

In Smoke’s article, he went on to say,

“Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”

 “While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWire reported that 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)

Many first-time homebuyers who believe that they need a large down payment may beholding themselves back from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

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.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

Whether You Rent or Buy, You’re Paying a Mortgage

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord’s.

<<SEARCH FORT LAUDERDALE HOMES FOR SALE>>

As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were 3.43% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

You may qualify for a mortgage sooner than you think, with credit scores as low as 600s, and downpayment as little as 3-5%!  Don't wait, it doesn't hurt to talk to a mortgage professional or real estate agent today to start planning for the future!

Contact Jay Cermak Top Fort Lauderdale Real Estate Agent with Keller Williams at 954.235.3589 and schedule a FREE Real Estate consultation.

Serving all of your South Florida and Fort Lauderdale Real Estate Needs!

Rents Skyrocket at Highest Rate in almost a Decade

The Consumer Price Index (CPI) was released by the Labor Department last week. An analysis by Market Watch revealed the cost of rent was 3.8% higher than a year ago for the second straight month in June. That’s the strongest yearly price gain since 2007.

<<DOWNLOAD YOUR FREE HOME BUYING GUIDE SUMMER 2016>>

This coincides with a report released earlier this month in which AxioMetricsannounced that rents are continuing to increase in 2016. The report revealed:

• There was a 3.7% increase in effective rents in the second quarter of 2016 as compared to the same period last year.
• That the effective rent growth this quarter compared to last quarter was 2.3%.

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• Annual effective rent growth was positive in 49 of the top 50 markets, based on number of units. Only Houston was negative, at -1.4%, as the fallout from energy-industry job losses and excess construction continues.

Here is a graph to illustrate the rate of increase over the last several years:

Bottom Line

With rents continuing to rise and mortgage interest rates still at historic lows, meet with a local real estate professional who can help determine if you could turn your monthly rental cost into a home of your own.

Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation.

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 recently released their first quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

A recent Wall Street Journal article reports that rents rose “faster last year than at any time since 2007, a boon for landlords but one that has stoked concerns about housing affordability for renters.”

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The article also cited results from a recent Reis Inc. report which revealed that average effective rents rose 4.6% in 2015, the biggest gain since before the recession. Over the past 15 years, rents have risen at a rate of 2.7% annually. 

Where are rents headed?

Jonathan Smoke, Chief Economist at realtor.com recently warned that:

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”  

Bottom Line

NAR’s Chief Economist, Lawrence Yun had this to say in the latest Existing Home Sales Report:

 "With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now."

One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, meet with a local real estate professional who can help determine if you are able to today!

Call Jay Cermak Top Fort Lauderdale Real Estate Agent with The Edwards Real Estate Group At Keller Williams Realty today!  954.235.3589 and schedule a FREE Real Estate Consultation!

Renting vs. Buying: What Does it Really Cost?

We talk about this a lot.  Mostly due to the millions of people renting and their money just goes in someone else's pocket.  We're passionate about helping you get into a home, we have a lot of solutions to help you if you think its unattainable to buy a home.  We have student debt solutions, credit repair, legal help to clear anything holding you back.

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Here are the rents that keep going up year over year...at what point will they stop....or WILL they?  Imagine how much your rent will be in 5 years....however if you buy a home now you KNOW what your monthly payment will be and your money will be investing in your financial future.

Even just the past 5 years rent has gone up over $150/month in the U.S. and thats just the median!  Take advantage of low interest rates and the cost of living to buy a home now.

It's more affordable to buy a home than to rent.  Why pay someone else's mortgage and add money to their pocket when you can add money to your own and start building a better financial future.

Ready to Buy or Invest in Real Estate?  Contact Jay Cermak Top Fort Lauderdale Real Estate Agent with The Edwards Real Estate Group at Keller Williams Realty.  Call or Text 954.235.3589 and schedule a FREE Real Estate Consultation Today!

Put Your Housing Cost To Work For You!

There are many young people debating whether they should renew the lease on their apartment or sign a contract to purchase their first home. As we have said before, mortgage interest rates are still near historic lows and rents continue to rise.

Housing Cost & Net Worth

Whether you rent or buy, you have a monthly housing cost.

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As a buyer, you are contributing to YOUR net worth.

Every mortgage payment is a form of what Harvard University’s Joint Center for Housing Studies calls “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.”

The principal portion of your mortgage payment helps build your net worth through building the equity you have in your home.

As a renter, you are contributing to YOUR LANDLORD’S net worth.

Below is an example of the home equity that would be accrued over the course of the next five years if you had purchased a home in January; based on the results of the Home Price Expectation Survey.

In this example, simply by paying your mortgage, you would have increased your net worth by over $44,000!

Bottom Line

Use your monthly housing cost to your advantage! Meet with a local real estate professional who can explain the opportunities available in your market.

Contact Jay Cermak Top Fort Lauderdale Real Estate Agent with The Edwards Real Estate Group at 954.235.3589 and schedule a Homebuyer's Consultation today!  

Learn the home buying process, conduct a needs analysis to determine what you need in a home and we will connect you with a mortgage professional to help you get pre-approved to buy a home.  

That's just the consultation there are hundreds of additional steps involved and as a home buy typically the seller pays our fees...so no cost to you, isn't that great?

Rent vs. Buy: Either Way You’re Paying A Mortgage

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

The graph below shows the widening gap in net worth between a homeowner and a renter:

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.

Contact Jay Cermak, Realtor at 954-235-3589 and schedule a FREE Homebuyer's Real Estate Consultation today!  Stop paying someone else's mortgage and invest in your financial future!

Search Fort Lauderdale Homes for Sale at Http://JaySellsFortLauderdale.com

Buying a Home Remains 35% Less Expensive than Renting!

In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage throughout the 100 largest metro areas in the United States.

The updated numbers actually show that the range is from an average of 16% in Honolulu (HI), all the way to 55% in Sarasota (FL), and 35% Nationwide!

The other interesting findings in the report include:

• Interest rates have remained low and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation. “In the past year, these two trends have made homeownership even more affordable compared with renting.”
• Some markets might tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
• Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.  

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, lock in your housing cost with a mortgage payment now.

Don't get stuck in the Renter's Trap!  Contact The J Team Fort Lauderdale and let us help you come up with a plan to buy a home now!  954-235-3589, there are many solutions to problems holding you back from buying like Credit Issues and Student Loan Debt holding you back.  We have an amazing Solution Center with the Krasker Law Firm, they can help in almost every state!