Portrait of an excited woman reading good news in a letter at home
Portrait of an excited woman reading good news in a letter at home
If you’re looking to buy a home in 2020, have you thought about putting your tax refund toward a down payment? Homeownership may be one step closer than you think if you spend your dollars wisely this year.
Based on data released by the Internal Revenue Service (IRS), Americans can expect an estimated average refund of $2,962 when filing their taxes this year.
The map below shows the average tax refund Americans received last year by state:
Average Tax Return by State
According to programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, many first-time buyers can purchase a home with as little as 3% down. Truth be told, a 20% down payment is not always required to buy a home, even though that’s a common misconception about homebuying. Veterans Affairs Loans allow many veterans to purchase a home with 0% down.
How can my tax refund help?
If you’re a first-time buyer, your tax refund may cover more of a down payment than you ever thought possible.
If you take into account the median home sale price by state, the map below shows the percentage of a 3% down payment that’s covered by the average tax refund:
What Percentage of a 3% Down Payment to Buy a House is Covered by the Tax Return
The darker the blue, the closer your tax refund gets you to homeownership in one of these programs. Maybe this is the year to plan ahead and put your tax refund toward a down payment on a home.
Bottom Line
Saving for a down payment can seem like a daunting task, but the more you know about what’s required, the more prepared you’ll be to make the best decision for you and your family. This tax season, your refund could be your key to homeownership.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
The real estate market is entering the year like a lion. There’s no indication it will lose that roar, assuming inventory continues to come to market.
Residential buildings and easel with a positive growth trend chart. Market growth, attracting investment. Raising taxes and house maintenance. Real estate price increases. High demand and value
The housing market has started off much stronger this year than it did last year. Lower mortgage interest rates have been a driving factor in that change. The average 30-year rate in 2019, according to Freddie Mac, was 3.94%. Today that rate is closer to 3.5%.
The Census Bureau also just reported the highest homeownership rate since 2014 for people under 35. This is evidence that owning their own home is becoming more important to Millennials as they reach the age where marriage and children are part of their lives.
According to the latest Realtors Confidence Index Survey from the National Association of Realtors (NAR), buyer demand across the country is strong. That’s not the case, however, with seller demand, which remains weak throughout most of the nation. Here’s a breakdown by state:
Demand for housing is high, but supply is extremely low. NAR also just reported that the actual number of homes currently for sale stands at 1.42 million, which is one of the lowest totals in almost three decades. Additionally, the ratio of homes for sale to the number purchased currently stands at 3.1 months of inventory. In a normal market, that number would be nearly double that at 6.0 months of inventory.
What does this mean for buyers and sellers?
Buyers need to remain patient in the search process. At the same time, buyers must be ready to act immediately once they find the right home.
Sellers may not want to wait until spring to put their houses on the market. With demand so high and supply so low, now is the perfect time to sell your house for the greatest dollar value and the least hassle.
Bottom Line
The real estate market is entering the year like a lion. There’s no indication it will lose that roar, assuming inventory continues to come to market.
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
One thing helping homeowners right now is price appreciation, especially in the entry-level market. In the latest Home Price Insights report, CoreLogic reveals how home prices increased by 4% year-over-year and projects prices will rise 5.2% by December 2020.
Why is this good news for the homeowners?
When prices appreciate, homeowners gain equity. In addition, those planning to sell this year, especially in the entry-level market, can potentially earn a substantial profit.
Dr. Frank Nothaft, Chief Economist at CoreLogic, says:
“Moderately priced homes are in high demand and short supply, pushing up values…Homes that sold for 25% or more below the local median price experienced a 5.9% price gain in 2019, compared with a 3.7% gain for homes that sold for 25% or more above the median.”
As Dr. Nothaft indicates, the lack of inventory continues to drive home price growth. This means there’s a high demand for homes in this tier of the market, making it a great time to consider using your equity to move up to a bigger or more premium home.
When you upgrade your home, you may be able to find the amenities or features you’ve dreamed of – such as a yard to plant or garden in with your family this spring, or more outdoor space for entertaining this summer. Maybe it’s the master bath you’ve always hoped for, or a garage to finally park your car inside.
Whatever you choose, if you’re moving out of an entry-level house, you’re likely going to be in the driver’s seat as a seller.
Bottom Line
If you’d like to own a bigger home, let’s get together to discuss your situation. You may be surprised by the current value of your home and the equity you’ve gained.
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
With interest rates hovering at near historic lows, now is a great time to look back at where they’ve been, and how much they’ve changed over time.
Some Highlights:
With interest rates hovering at near historic lows, now is a great time to look back at where they’ve been, and how much they’ve changed over time.
According to Freddie Mac, mortgage interest rates are currently hovering near a five-decade low.
The impact your interest rate has on your monthly mortgage payment is significant. An increase of just $20 dollars in your monthly payment can add up to $240 per year or $7,200 over the life of your loan. Maybe it’s time to lock in now while rates are still low.
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
After over a year of moderating home prices, it appears home value appreciation is about to reaccelerate. Skylar Olsen, Director of Economic Research at Zillow, explained in a recent article:
“A year ago, a combination of a government shutdown, stock market slump and mortgage rate spike caused a long-anticipated inventory rise. That supposed boom turned out to be a short-lived mirage as buyers came back into the market and more than erased the inventory gains. As a natural reaction, the recent slowdown in home values looks like it’s set to reverse back.”
CoreLogic, in their January 2020 Market Pulse Report, agrees with Olsen, projecting home value appreciation in all fifty states this year. Here’s the breakdown:
21 states appreciating 5% or more
26 states appreciating between 3-5%
Only 3 states appreciating less than 3%
The Misconception
Many believe when real estate values are increasing, owning a home becomes less affordable. That misconception is not necessarily true.
In most cases, homes are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by almost a full percentage point since this time last year.
Another major piece of the equation is a buyer’s income. The median family income has risen by 5% over the last year, contributing to the affordability factor.
Black Knight, in their latest Mortgage Monitor, addressed this exact issue:
“Despite the average home price increasing by nearly $13,000 from just over a year ago, the monthly mortgage payment required to buy that same home has actually dropped by 10% over that same span due to falling interest rates…
Put another way, prospective homebuyers can now purchase a $48K more expensive home than a year ago while still paying the same in principal and interest, a 16% increase in buying power.”
Bottom Line
If you’re thinking about purchasing a home, realize that homes are still affordable even though prices are increasing. As the Black Knight report concluded:
“Even with home price growth accelerating, today’s low-interest-rate environment has made home affordability the best it’s been since early 2018.”
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
Superhero Real Estate Professional. Trusted Professionals make Homebuying process easier
In the spring, many excited buyers get ready to enter the housing market. Others continue dreaming about the homes they’d like to buy. The truth is, many potential buyers continue to dream longer than they need to, simply because they’re confused about the homebuying process. Thankfully, working with a trusted real estate professional can help ease those concerns and make the process to homeownership much easier to understand.
A recent survey conducted by Ipson and Freddie Mac reveals the confidence level of Gen Z and Millennial buyers regarding the homebuying process. The graph below shows the breakdown of the top results, clearly indicating there’s a significant portion of younger buyers who are not yet confident with some of the steps in the homebuying process.
Gen Z is Less Confident in the Homebuying Process
Between the homebuying process and the mortgage process, there are 230 possible steps in the transaction. With trusted professionals on your side, you certainly don’t have to know them all to have a successful experience.
There are many reasons why these steps can change as you move through each one. Depending on your personal circumstances, the term or your mortgage, and the type of loan you use, the path you take may need to vary. That’s why guidance and support from the experts is key.
In addition to the process itself, respondents in the survey definitely expressed concerns about understanding the types of loans available. Here are just a few of the basic loans to consider. Be sure to speak with your lender about the specifics of what will work best for you:
FHA: Loans guaranteed by the Federal Housing Administration for first-time buyers. They generally enable qualified borrowers to enter the housing market with a lower down payment.
Conventional: Loans that usually require a larger down payment. Repeat buyers usually use these types of loans since they have an established credit history as well as more money from the sale of their previous home (called equity) for a bigger down payment.
USDA: Loans for those living in rural and suburban areas. A qualified lender can issue a USDA home loan, and they are guaranteed by the United States Department of Agriculture (USDA).
Interest rates also popped up as a common area of confusion among Gen Z and Millennial respondents in the survey. With today’s rates hovering at near historic lows, it’s a fantastic time for buyers to get more house for their money in the current market. Why? When mortgage rates are this low and wages are increasing as they are today, overall affordability increases, enabling home buyers to stretch their mortgage dollars further. It’s just another area where a trusted professional can help simplify the process and give guidance along the way.
Bottom Line
There are many possible steps in a real estate transaction, but they don’t have to be confusing. To understand your best course of action, let’s get together today to ensure you have a trusted advisor who will help you feel confident and informed at every turn.
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
Photo of a young mixed-race family admiring a home – possibly their first home, or the home they hope to own.
There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.
1. You Won’t Always Have a Monthly Housing Payment
According to a recent article by the National Association of Realtors (NAR):
“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”
As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.
2. Homeownership Is a Tax Break
One thing people who have never owned a home don’t always think about are the tax advantages of homeownership. The same piece states:
“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”
Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.
3. Monthly Housing Costs Are Predictable
A third item noted in the article is how monthly costs become more predictable with homeownership:
“As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”
With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.
Bottom Line
If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying a home sooner rather than later is right for you.
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
Single mother having fun with young daughter on the backyard.
Rents in the United States have been skyrocketing since 2012. This has caused many renters to face a tremendous burden when juggling their housing expenses and the desire to save for a down payment at the same time. The recent stabilization of rental prices provides a great opportunity for renters to save more of their current income to put toward the purchase of a home.
Just last week the Joint Center of Housing Studies of Harvard University released the America’s Rental Housing 2020 Report. The results explain the financial challenges renters are experiencing today,
“Despite slowing demand and the continued strength of new construction, rental markets in the U.S. remain extremely tight. Vacancy rates are at decades-long lows, pushing up rents far faster than incomes. Both the number and share of cost-burdened renters are again on the rise, especially among middle-income households.”
According to the most recent Zillow Rent Index, which measures the estimated market-rate rent for all homes and apartments, the typical U.S. rent now stands at $1,600 per month. Here is a graph of how the index’s median rent values have climbed over the last eight years:
Is Good News Coming?
There seems, however, to be some good news on the horizon. Four of the major rent indices are all reporting that rents are finally beginning to stabilize in all rental categories:
1. The Zillow Rent Index, linked above, only rose 2.6% over the last year.
2. RENTCafé’s research team also analyzes rent data across the 260 largest cities in the United States. The data on average rents comes directly from competitively rented, large-scale, multi-family properties (50+ units in size). Their 2019 Year-End Rent Report shows only a 3% increase in rents from last year, the slowest annual rise over the past 17 months.
3. The CoreLogicSingle Family Rent Index reports on single-family only rental listing data in the Multiple Listing Service. Their latest index shows how overall year-over-year rent price increases have slowed since February 2016, when they peaked at 4.2%. They have stabilized around 3% since early 2019.
4. The Apartment List National Rent Report uses median rent statistics for recent movers taken from the Census Bureau American Community Survey. The 2020 report reveals that the year-over-year growth rate of 1.6% matches the rate at this time last year; it is just ahead of the 1.5% rate from January 2016. They also explain how “the past five years also saw stretches of notably faster rent growth. Year-over-year rent growth stood at 2.6% in January 2018, and in January 2016 it was 3.3%, more than double the current rate.”
It seems tenants are getting a breather from the rapid rent increases that have plagued them for almost a decade.
Bottom Line
Rental expenses are beginning to moderate, and at the same time, average wages are increasing. That power combination may allow renters who dream of buying a home of their own an opportunity to save more money to put toward a down payment. That’s sensational news!
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
Group of an architect feel stressed after working on architecture model together with shop drawing paper on table in office
Group of an architect feel stressed after working on architecture model together with shop drawing paper on table in office
A desire among many seniors is to “age in place.” According to the Senior Resource Guide, the term means,
“…that you will be remaining in your own home for the later years of your life; not moving into a smaller home, assisted living, or a retirement community etcetera.”
There is no doubt about it – there’s a comfort in staying in a home you’ve lived in for many years instead of moving to a totally new or unfamiliar environment. There is, however, new information that suggests this might not be the best option for everyone. The familiarity of your current home is the pro of aging in place, but the potential financial drawbacks to remodeling or renovating might actually be more costly than the long-term benefits.
A recent report from the Joint Center for Housing Studies of Harvard University (JCHS) titled Housing America’s Older Adults explained,
“Given their high homeownership rates, most older adults live in single-family homes. Of the 24 million homeowners age 65 and over, fully 80 percent lived in detached single-family units…The majority of these homes are now at least 40 years old and therefore may present maintenance challenges for their owners.”
If you’re in this spot, 40 years ago you may have had a growing family. For that reason, you probably purchased a 4-bedroom Colonial on a large piece of property in a child-friendly neighborhood. It was a great choice for your family, and you still love that home.
Today, your kids are likely grown and moved out, so you don’t need all of those bedrooms. Yard upkeep is probably very time consuming, too. You might be thinking about taking some equity out of your house and converting one of your bedrooms into a massive master bathroom, and maybe another room into an open-space reading nook. You might also be thinking about cutting back on lawn maintenance by installing a pool surrounded by beautiful paving stones.
It all sounds wonderful, doesn’t it? For the short term, you may really enjoy the new upgrades, but you’ll still have to climb those stairs, pay to heat and cool a home that’s larger than what you need, and continue fixing all the things that start to go wrong with a 40-year-old home.
Last month, in their Retirement Report, Kiplinger addressed the point,
“Renovations are just a part of what you need to make aging in place work for you. While it’s typically less expensive to remain in your home than to pay for assisted living, that doesn’t mean it’s a slam dunk to stay put. You’ll still have a long to-do list. Just one example: You need to plan ahead for how you will manage maintenance and care—for your home, and for yourself.”
So, at some point, the time may come when you decide to sell this house anyway. That can pose a big challenge if you’ve already taken cash value out of your home and used it to do the type of remodeling we mentioned above. Realistically, you may have inadvertently lowered the value of your home by doing things like reducing the number of bedrooms. The family moving into your neighborhood is probably similar to what your family was 40 years ago. They probably have young children, need the extra bedrooms, and may be nervous about the pool.
Bottom Line
Before you spend the money to remodel or renovate your current house so you can age in place, let’s get together to determine if it is truly your best option. Making a move to a smaller home in the neighborhood might make the most sense.
Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com
