Homeownership is the Top Contributor to Your Net Worth

Recently two U.S. Census Bureau researchers released their findings on the biggest determinants of household wealth. What they found may help shape your view on building your family’s net worth.

Many people plan to build their net worth by buying CDs or stocks, or just having a savings account. Recently, however, Economist Jonathan Eggleston and Survey Statistician Donald Hays, both of the U.S. Census Bureau, shared the biggest determinants of wealth,

“The biggest determinants of household wealth [are] owning a home and having a retirement account.” (Shown in the graph below):

This does not come as a surprise, as we often mention that homeownership can help you to increase your family’s wealth. This study reinforces that idea,

 “Net worth is an important indicator of economic well-being and provides insights into a household’s economic health.”

Having equity in your home can help your family move in that direction, building toward substantial financial growth. According to the report noted above, people are not only creating net worth in the homes they live in, but many are also earning equity in rental property investments too. (See below):

John Paulson said it well,

If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

Bottom Line

There are financial and non-financial benefits to owning a home. If you would like to increase your net worth, let’s get together so you can learn all the benefits of becoming a homeowner.

Are you thinking of selling or buying real estate this year?  Contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

Posted on October 12, 2019 at 7:00 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips

3 Signs the Housing Market Is on the Rebound

The residential real estate market has been plodding along for most of the year. However, three recent reports show the market may be on the verge of a rebound.

1. Existing Home Sales (closed sales) are up, marking two consecutive months of growth.

2. Pending Home Sales (contracts signed) are up with each of the four major regions reporting both month-over-month growth and year-over-year gains in contract activity.
Here is the month-over-month growth:

  • The Northeast rose 0.7%
  • The Midwest increased 0.6%
  • The South increased 1.4%
  • The West grew 3.1%

3. Buyer Traffic (the number of people shopping for a home) is up compared to the same time last year, and for the first time in 13 months.

  • The Northeast is up 5.9%
  • The Midwest increased 1.3%
  • The South is up 2.7%
  • The West grew 2.2%

In their most recent report, ShowingTime Chief Analytics Officer, Daniil Cherkasskiy explained:

“The trend we saw in year-over-year buyer traffic in previous months continued across the United States. For all four regions there were more showings per listing this year compared to last year, making it the most competitive August in the last five years.”

Lawrence Yun, Chief Economist with the National Association of Realtors, believes the uptick in activity will continue into the future:

“It is very encouraging that buyers are responding to exceptionally low interest rates…With interest rates expected to remain low, home sales are forecasted to rise in the coming months and into 2020.”

Bottom Line

If you are thinking about selling your house, there are purchasers out there who are ready, willing, and able to buy.

Are you thinking of selling or buying real estate this year?  Contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

Posted on October 10, 2019 at 7:00 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips

One of the Top Reasons to Own a Home

One of the benefits of homeownership is that it is a “forced savings plan.” Here’s how it works: You make a mortgage payment each month. Part of that payment is applied to the principal balance of your mortgage. Each month you owe less on the home. The difference between the value of the home and what you owe is called equity.

If your home has appreciated since the time you purchased it, that increase in value also raises your equity. Over time, the equity in your home could be substantial. Recently, CoreLogic revealed that the average homeowner gained more than $65,000 in equity over the last 5 years.

Unlike last decade, homeowners are no longer foolishly tapping into that equity. In 2006-2008, many owners used their homes like an ATM by pulling equity out to purchase new cars, jet skis, or lavish vacations. They were pulling out cash (equity) from an appreciating asset, and then spending it on rapidly depreciating items. That is not happening anymore.

Over 50% of Homes Have at Least 50% Equity

The number of homeowners that currently have at least 50% equity in their home is astonishing. According to the Urban Institute, 37.1% of all homes in the country are mortgage-free. In a home equity study, ATTOM Data Solutions revealed that of the 62.9% of homes with a mortgage, 25.6% have at least 50% equity. That number has been increasing over the last five years:

By doing a little math, we can see that 53.2% of all homes in this country have at least 50% equity right now. Of all homes, 37.1% are mortgage-free and an additional 16.1% with a mortgage have at least 50% equity.

Bottom Line

Homeownership is different than renting. When you own, your housing expense (the mortgage payment) comes back to you in the form of equity in your home. That doesn’t happen with your rent payment. Your rent helps build your landlord’s equity instead.

 

Are you thinking of selling or buying real estate this year?  Contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

 

Posted on September 30, 2019 at 7:00 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips

Homeowners Are Happy! Renters? Not So Much.

When people talk about homeownership and the American Dream, much of the conversation revolves around the financial benefits of owning a home. However, two recent studies show that the non-financial benefits might be even more valuable. Continue reading

Posted on September 27, 2019 at 7:00 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers

Is Your House “Priced to Sell Immediately”?

In today’s real estate market, more houses are coming to market every day. Eager buyers are searching for their dream homes, so setting the right price for your house is one of the most important things you can do. Continue reading

Posted on September 25, 2019 at 7:00 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips

Should You Fix Your House Up or Sell Now?

If you’re thinking about remodeling your house before you list it, take a look at these three tips to help you decide if you really need to fix it up before you sell. The answer may surprise you. Continue reading

Posted on September 24, 2019 at 10:54 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips

4 Reasons to Sell This Fall [INFOGRAPHIC]

Continue reading

Posted on September 21, 2019 at 7:00 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Infographics, Move-up Buyers, Seller Tips

Home Prices Increase in Every Price Range

Price appreciation can differ depending on your price range. CoreLogic analyzed four individual home prices tiers and shares the increase in each one. Continue reading

Posted on September 17, 2019 at 10:05 am
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips

Home Sales Expected to Continue Increasing In 2020

Freddie MacFannie Maeand the Mortgage Bankers Association are all projecting home sales will increase nicely in 2020.

Below is a chart depicting the projections of each entity for 2019, as well as for 2020.

Continue reading

Posted on September 12, 2019 at 1:00 pm
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips

Millennial Buying Power Poised to Boost Homeownership

In a recent article by Realtor Magazine, Mark Fleming, Chief Economist of First American Financial Corporation, notes,

“The largest group of millennials by birth year will turn 30 in 2020, which puts them entering their prime homebuying years”.

Continue reading

Posted on September 11, 2019 at 1:00 pm
Jennifer Angel | Category: Buyer Tips, First-time Homebuyers, Housing Market Updates, Move-up Buyers, Seller Tips