The Truth about Home Affordability!

Home: 326 Cambridge Dr. Four Seasons, MO. 65049

MLS# 3126694

There has been a lot of talk about the current state of housing affordability for both first-time buyers and those who are looking to upgrade (or down-grade) and much of the talk is negative. The truth is, home affordability is better today than almost any time in the history of home buying!

There is some truth to the negative talk in the fact that affordability today is not as good as it has been over the past several years. However, most are not considering the housing crash and how the prices dropped due to distressed properties, i.e. foreclosures and short sales, kept home values depressed for years. When comparing the affordability of homes prior to the crash, we come to a different conclusion on housing affordability!

Below is a graph of the National Association of Realtors’ Housing Affordability Index. The higher the graph, the more affordable homes are.

Viewing the chart above, we can see that housing affordability is better today than in the decade prior to the housing boom and crash.

CoreLogic published a report showing the National Homebuyers’ “Typical Mortgage Payment.” Below is the graph depicting their findings:

The graph reveals that due to the distressed property prices a “typical” housing payment was less expensive than in 2012. Currently, housing prices today are less than the average in 2000, and prices are projected to be lower in 2018 than they were in 2000.

Bottom Line

Mark Fleming, Chief Economist at First American, explained it best:

“While borrowing power for the potential home buyer has fallen relative to the low point of 2012, it remains high today and will remain high next year, relative to the long run average. If you don’t want to rent anymore and are considering becoming a homeowner, even if mortgage rates rise next year, your borrowing power will remain strong by historic standards.”

So when you are out looking to buy a home, keep in mind that home prices are actually lower than home prices prior to the crash!

REAL ESTATE AT THE LAKE WITH VALERIE LITTRELL

BROKER/OWNER– 573-216-4991 – ABR, GR

The Cost of NOT Owning Your Home!

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

Zillow recently reported that:

“In reality, buying or renting a home is an intensely personal decision, with emotional and even financial considerations that go beyond whether to invest in this one (admittedly large) asset. Looking strictly at housing market numbers, there is a concrete point at which buying a home makes more financial sense than renting it.”

What proof exists that owning is financially better than renting?

1. We recently highlighted the top 5 financial benefits of home-ownership:

• Home-ownership is a form of forced savings.
• Home-ownership provides tax savings.
• Home-ownership allows you to lock in your monthly housing cost.
• Buying a home is cheaper than renting.
• No other investment lets you live inside of it.

2. Studies have shown that a home-owner’s net worth is 44x greater than that of a renter.

3. Just a few months ago, we explained that a family that purchased an average-priced home at the beginning of 2017 could build more than $48,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment– along with a profit margin!!

Bottom Line

Owning a home has always been, and will always be, better from a financial standpoint than renting.

REAL ESTATE AT THE LAKE WITH VALERIE LITTRELL

BROKER/OWNER– 573-216-4991 – ABR, GR

4 Reasons to Buy a Home This Fall!

Here are four great reasons to consider buying a home today, instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.0% over the next year.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are 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 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.

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

4. It’s Time to Move on With Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

If purchasing a home for you and your family is the right thing for you to do this year, buying sooner rather than later could lead to substantial savings.

REAL ESTATE AT THE LAKE WITH VALERIE LITTRELL

BROKER/OWNER– 573-216-4991 – ABR, GR

Lakefront Home with 104ft of shoreline UNDER $150K? You bet!!

165 Ulmus Road Lake Ozark, MO. 65049

MLS# 3125465

This A-Frame home can be cleaned up and lived in while you build your dream home on this large, lakefront lot with 104ft of shoreline or you can remove it and start fresh! The possibilities here are endless!

Stunning views of the wide cove at the 4MM! Home is located on a peaceful and quiet street with room for a nice size dock! Great possibilities can happen here, do you have the imagination to see it?

View the Virtual Tour HERE!

REAL ESTATE AT THE LAKE WITH VALERIE LITTRELL

BROKER/OWNER– 573-216-4991 – ABR, GR