This year's survey provides additional information to why there are fewer first time buyers entering the market. First time buyers reported that debt (student loans) delayed saving for a down payment for an average of three years, and among the 25 percent who said saving was the most difficult task, a majority (58 percent) said student loans delayed saving.
With a median amount of student loan debt for all buyers at $25,000, it's likely some younger households with even higher levels of debt can't save for an adequate down payment or have decided to delay buying until their debt is at a more comfortable level. The data comes from a survey of people who bought a home between July 2014-June 2015.
Source: 2015 Profile of Home Buyers and Sellers, http://www.realtor.org
If you have been wondering what makes up the closing costs on your home purchase, here is a great chart to explain the fees. If you have questions about buying or selling a home in Herndon, please contact me at LeAnne@LeAnneandCo.com or 571-306-2508.
Most homeowners know it’s important to ‘winterize’ the outside faucets to prevent them from freezing, because freeze damage can destroy the faucet or lead to a burst pipe. The problem is that many people don’t get it right; winterizing the outside faucets in the fall seems like a simple task that should be straightforward and easy, but there are a few tricks you need to know to really get it right.
Check out this video by Excel Home Inspections as they walk you through the steps to winterizing your hose bibs. Do yourself a favor and save thousands of dollars in damage!
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 LineHome 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. Let's get together to explore your options.
Article written by: Keeping Current Matters
There has been much written about how dramatically home values have increased over the last several years. With the increase in values, comes an increase in the equity each home owning family now has. The Joint Center of Housing Studies at Harvard Universityrecently reported that, after taking inflation into account, aggregate home equity has increased 60% since 2010. Home equity is the major component of most family’s overall wealth.
Why is this so important? Throughout history, families have tapped into their homes for many important reasons. Perhaps it was to get seed capital to start a new business; perhaps to help finance their children’s college education; perhaps to get needed medical attention not covered by insurance.
Up to ten years ago, families were able to use the equity in their homes to better the living situation for themselves and their family. More small businesses were created. College students weren’t forced to take on massive student debt. People could get needed medical care.
This hasn’t been the case over the last ten years as families found themselves in a position of having zero equity or, even worse, negative equity post the housing collapse. However, that is about to change.
Using your home as an ATM is not a good idea. We realize that there are inherent risks to tapping into the equity in your home especially if you do it for the wrong reasons. Back in 2005-2007, homeowners were using their homes as their own personal ATM machine to buy depreciating assets like cars, boats and jet skis. This reckless behavior should never be repeated.
However, using your equity (aka family wealth) to invest in yourself, your children or other family members that could use help still makes sense. And the good news is that more and more families can do this as home values continue to increase.
Bottom Line. Home equity gives families an additional financial option when money is needed. The proper use of this family wealth can be used to grow generational wealth.
As Julián Castro, U.S. Secretary of HUD, recently explained:
“Generation after generation, the primary vehicle to create wealth in our country has been through homeownership. In the U.S., homeownership has provided an opportunity for one generation to hand over to the next that opportunity and that wealth.”
Article written by: Keeping Current Matters
Week 2 is well underway in our kitchen remodel of our Herndon home. Things are going really well but not fast enough for my taste. I am getting pretty tired of TV dinners and pop tarts for breakfast! :)
The hardwood floors are going in now after they had to install a soft, new plywood over our existing old plywood. They are birch, engineered hardwoods. 5 inch, coffee colored. Cabinets and stainless steel Farm Sink are on order.
The electrical has been run and new sub panel is ready to install in the lower level office. Since we are installing 2 ovens, we had to have an additional panel installed for the extra electricity needed to run the ovens.
We were able to find 2 matching ovens, which is a miracle in itself. Electric, convection, single ovens that aren't $2k+ are hard to come by. We were able to find 2 KitchenAid, convection ovens. One was a floor model at HHGregg and the other we found on Craigslist from a seller who sold appliances from stores that closed. So basically floor models that didn't sell when the store closed. We found a pair in our budget! We also found an Electrolux electric cooktop with soft touch and 5 burners on sale as a floor model at HHGregg. We got all of the appliances at below budget. I still want to get a new refrigerator, but the old one will have to do for now as we spent more on the electrical than we thought.
We are learning the in's and out's through this experience. The good, bad and the ugly. Seems there is always something new that needs to be purchased from Home Depot!
Till next time...
If you are considering buying a home in Herndon or selling your home in Herndon, please contact me! I have contractors and stagers at your service! www.LeAnneandCo.com
Mom. Mother-in-law. Chef's Wife. Navy Chief's Wife. Realtor. Christian. Connector. Empty Nester. Business Woman. Foodie.