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      Blog :: 02-2018

      Is Now a Good Time to Rent?

      Is Now a Good Time to Rent? | MyKCM

      People often ask if now is a good time to buy a home, but nobody ever asks when it’s a good time to rent. Regardless, we want to make certain that everyone understands that today is NOT a good time to rent.

      The Census Bureau recently released their 2017 fourth quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:

      Is Now a Good Time to Rent? | MyKCM

      As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether or not you should renew your lease, you might be pleasantly surprised at your ability to buy a home of your own instead.

      Bottom Line

      One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, let’s meet to determine if you are able to today!

       

      80% of Renters Believe Homeownership is a Part of Their American Dream

      According to the latest Aspiring Home Buyers Profile by the National Association of Realtors (NAR), 82% of surveyed renters desire to own a home in the future, with 80% believing homeownership is a big part of achieving their American Dream.

      The profile went on to state that 50% of millennials believe that their rent will increase, with 20% believing that an increase in rent will be the catalyst that pushes them to consider buying a home vs. renewing their lease.

      So, what is holding renters back?

      80% of Renters Believe Homeownership is a Part of Their American Dream | MyKCM

      What would make renters take the plunge?

      80% of Renters Believe Homeownership is a Part of Their American Dream | MyKCM

      NAR’s Chief Economist, Lawrence Yun believes that,

      “Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher.”

      Yun goes on to warn that,

      “However, with prices and mortgage rates also expected to increase, affordability pressures will persist. That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”

      Bottom Line

      If you are one of the many homeowners whose houses no longer fit their needs and are looking to move up to your dream home, now is a great time to list your starter home! First-time buyers are out in force looking to achieve their American Dream.

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        Calm Down! The Real Estate Market is NOT Falling Apart

         

        Calm Down! The Real Estate Market is NOT Falling Apart | MyKCM

        There has been tremendous volatility in certain markets over the last few weeks (for example, the stock and currency markets). When this happens, some tend to lump all of their investments together and create an almost ‘Armageddon’ scenario where everything loses value quickly and dramatically. Real estate is an investment that can get caught up in this hysteria. Does the concern about the current housing market have merit?

        Financial advisors have been warning us for months that the stock market was ripe for a “correction.”

        Experts have been questioning the value of alternative currencies for over a year.

        In contrast, here are the opinions of three major players in the residential housing market:

        Ralph DeFranco, Chief Economist, Arch Capital Services Inc.

        “It’s premature to worry about a housing bubble. The typical warning signs – excessive debt levels, poor quality loans, exponentially increasing home prices, rising vacancy rates and/or poor affordability compared to the past, and a high number of internet searches on house flipping – are not present.”

        Liu-Down, Genworth Chief Economist

        “My thoughts on many recent discussions of ‘housing bubble’ – the bar for a housing bubble is higher than just prices being above some fundamental value. There must be widespread behavior change as well such as higher levels of fraud and speculation.”

        Fitch Report

        “US home prices are on track for a 5% nominal gain for the 4th consecutive year, returning national prices to their highest level since 2007. The growth has been driven by historically low mortgage rates and unemployment plus solid population and personal income growth rates…a meaningful correction should only be triggered by an unexpected economic shock.”

        Bottom Line

        Speculation has driven certain markets over the last year. However, it has not been speculation, but instead people’s desire for homeownership, that has driven the real estate market.

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        Which Comes First? Marriage or Mortgage?

         

        Which Comes First... Marriage or Mortgage? | MyKCM

        According to the National Association of REALTORS most recent Profile of Home Buyers & Sellers, married couples once again dominated the first-time homebuyer statistics in 2017 at 57% of all buyers. It is no surprise that having two incomes to save for down payments and contribute to monthly housing costs makes buying a home more attainable.

        But, many couples are also deciding to buy a home before spending what would be a down payment on a wedding, as unmarried couples made up 16% of all first-time buyers last year.

        If you’re single, don’t fret! Single women made up 18% of first-time buyers in 2017, while single men accounted for 7% of buyers. A recent report pointed to a sense of responsibility and commitment that drives many single women to want to own their own homes rather than rent someone else’s.

        Here is the breakdown of all first-time homebuyers in 2017 by percentage of all buyers, income, and age:

        Which Comes First... Marriage or Mortgage? | MyKCM

        Bottom Line

        You may not be that much different than those who have already purchased their first homes. Let’s get together to determine if your dream home is already within your grasp!

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        Where Are Mortgage Interest Rates Headed in 2018?

        Where Are Mortgage Interest Rates Headed in 2018? | MyKCM

        The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

        Below is a chart created using  Freddie Mac’s U.S. Economic & Housing Marketing Outlook.  As you can see, interest rates are projected to increase steadily over the course of the next 12 months.

        Where Are Interest Rates Headed? | MyKCM

        How Will This Impact Your Mortgage Payment?

        Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

        According to CoreLogic’s latest Home Price Index, national home prices have appreciated 7.0% from this time last year and are predicted to be 4.2% higher next year.

        If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.

        Bottom Line 

        Even a small increase in interest rate can impact your family’s wealth. Let’s get together to evaluate your ability to purchase your dream home

        Homeownership: ?The Reports of My Death Have Been Greatly Exaggerated?

        The famous quote by Mark Twain in the title of this article can be used to describe homeownership in America today. Last week, the Census revealed that the percentage of homeowners in the country increased for the first time in thirteen year

        story in the Wall Street Journal gave these new homeownership numbers some context:

        “The annual increase marks a crucial turning point because it comes after the federal government reined in bubble-era policies that encouraged banks to ease lending standards to boost homeownership. This time, what’s driving the market is a shift in favor of owning rather than renting.

        ‘This is market, market and market…There’s no government incentive program in sight that is having this effect,’ said Susan Wachter, a professor of real estate and finance at the Wharton School at the University of Pennsylvania, ‘This is back to basics.’”

        In a separate report comparing the rental population in America to the homeowner population, RentCafé also concluded that the gap is now shrinking.

        “Undoubtedly, the recession had a great impact on homeownership…However, it looks like it takes more to discourage Americans from buying a house than that.

        As the years go by, it seems more and more certain that the fact that renting has seen a sudden gain in popularity is more a reaction to the economic crisis than a paradigm shift in the Americans’ attitude toward housing.”

        America’s belief in homeownership was also evidenced in a recent survey by Pew Research. They asked consumers “How important is homeownership to achieving the American Dream?”

        The results:

        • 43% said homeownership was essential to the American Dream
        • 48% said homeownership was important to the American Dream
        • Only 9% said it was not important

        Bottom Line

        Homeownership has been, is and will always be a crucial element of the American Dream.

        *Pictured Above – Mark Twain’s home in Hartford, Connecticut.
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