Owning a home has always been considered to be a big part of "living the American Dream"...

According to a recent survey by the National Association of Realtors, Americans still believe in home ownership.  

 

  The National Association of Realtors (NAR) just released the first edition of their Housing Opportunities and Market Experience Survey (H.O.M.E.). NAR explained that the report covers:

“…core topics that will be tracked on a monthly basis such as views on housing as a good financial investment, whether homeownership is part of the American Dream…”

The current survey confirmed two long standing beliefs regarding homeownership:

1. Americans at every income level believe homeownership is part of the American Dream

2.)  Americans at every age believe that homeownership is a good financial decision

Bottom Line

Americans in all age groups and income levels believe in homeownership as a piece of their American Dream. If you are ready and willing to buy your dream home, meet with a local real estate professional who can help you determine if you are able to.

For most of our area school's, winter break begins at the final bell on Friday.

At our house, that means no alarm at 6:15 am for the following 2 weeks :) It also means travel for a lot of families. Are you going somewhere for the holidays? If so, make sure that you take the necessary stapes to ensure that your home is prepared for your absence.  A few keys actions to take, as outlined by @ properties:

1)  Securely lock your home.  Doors, windows, garage access.

2)  Stop your mail, or make arrangements for a neighbor to empty your box frequently.

3)  Set up deterrents - lights on alternate timers, ask a friend to stop by for an evening, have neighbors park in your driveway.

4)  Prepare for the weather.  If it is really cold, shut off your water so pipes can't freeze.  Schedule snow removal services so that snow doesn't pile up outside and call attention to the fact that you are not home.

5)  Pamper your pups.  Don't foget to make arrangments for the care of your furry family members.  Boarding sites fill up quickly at the holidays, and pet sitters may be booked to the brim as well.  Plan ahead so Fido has the care he needs.

6)  Tidy up your home.  There is no place like home, except for a clean one!  Spending the extra minutes to leave your home clean and smelling fresh will be well worth it when you arrive home after traveling, and exhausted.  

Take a few minutes to read through these tips in the full article 6 ways to prep your home for a holiday vacation

Renting to avoid a mortgage payment?

Some people rent in order to avoid the commitment of a mortgage payment. A renter is still paying a mortgage - it just happens to be for someone else. 




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.

Not quite sure how equity works? Here's a quick explanation...

There are many reasons, both financial and non-financial, that homeownership remains an important part of the American Dream. One of the biggest reasons is the fact that it helps build family wealth. Recently, Freddie Mac wrote about the power of home equity. They explained:

“In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home's appreciation. In a nutshell, your money is working for you and contributing toward your financial future.”

They went on to show an example where a person bought a home for $150,000 with a down payment of 10% ($15K), resulting in a loan amount of $135,000. The buyer secured a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance).
The chart below demonstrates the home equity built after 7 years of making mortgage payments and assuming the historic national average of 3% per year home appreciation:

And that number continues to build as you continue to own the home.

Merrill Lynch published a report earlier this year that showed the average equity homeowners have acquired by certain ages.

Bottom Line

Home equity is important to building wealth as a family. Referring to the first scenario above, Freddie Mac explained:

“Now, if you continued to rent, and made the same payment of $684.03 per month, you'd have zero equity and no means to build it. Building equity is a critical part of homeownership and can help you create financial stability.”

Put your housing cost to work for you and your family. Meet with a real estate professional today to explore your options.

Have you ever wondered...

...what the impact of owning a home has on financial stability in your retirement years?


There has been much talk about homeownership and whether it is a true vehicle for building wealth. A new report looks at the impact owning a home has on the financial wellbeing of people closing in on their retirement years (ages 55-64).
In recently released study by the Hamilton Project, Ten Economic Facts about Financial Well-Being in Retirement, it was revealed that:
1. Middle-class households near retirement age have about as much wealth in their homes as they do in their retirement accounts.

“Over the past quarter century the largest single source of wealth for all but the richest households nearing retirement age has been their homes, which accounted for about two-fifths of net worth in the early 1990s and accounts for about one-third today.”

2. Home equity is a very important source of net worth to all but the wealthiest households near retirement age.

“Home equity is an important source of wealth for middle income households, accounting for more than one-third of total net worth for the second, third, and fourth quintiles of the net worth distribution… The fifth quintile has a much larger share in business equity—almost a quarter—than any other quintile. (The figure leaves out the bottom quintile of households because they have negative net worth. It is likely that these households will rely almost exclusively on Social Security in retirement.)”

Here is an asset breakdown for the middle 20% of Americans determined by median net worth ($165, 720):

Obviously, the data again proves that homeownership has a big role in building wealth for American families.