Tag Archives: homeownership

Homeownership Doesnt Have To Be Out Of Reach

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dreaming of buying a home

It turns out, millennials aren’t the renter generation after all. The 2022 Consumer Insights Report from Mynd says there’s a portion of millennial and Gen Z buyers who are pursuing homeownership as a way to build their wealth, but it may not be exactly the way previous generations have done it. The study explains how they’re breaking into the market:
“. . . younger generations of Americans are not buying into that dream in the same way that older generations have. A growing number of Americans are choosing to make their first real estate purchase as an investment property.”

Instead of buying a home and moving into it themselves, some young buyers are purchasing a home so they can use it as a rental. This tactic may be gaining popularity, at least in part, because of the affordability challenges brought about by today’s higher mortgage rates. The report above mentions how many people in this group are considering this approach. It says:
“Almost half of Millennials and Gen Z (43%) are considering buying an investment property compared to only 9% of Baby Boomers and 27% of Gen X.”

Why Younger Buyers Are Buying a Home To Use as a Rental

This strategy allows buyers to continue living in their current location, like the bustle of a city apartment or a neighborhood that they know and love, where they couldn’t afford to buy. But instead of giving up on the idea of owning a home, they buy a home in a more affordable area with the intention of renting it out.

In a way, they’re getting the best of both worlds. They live where they want, and they still own a home where they can afford it.

Their goal is to generate passive income and diversify their assets. It works like this: in addition to having a rental stream of income, the equity they build in their house will also help grow their net worth over time.

Bottom Line

If you’re thinking about buying a home as an investment strategy to build your wealth, connect with a real estate professional to explore your options and nearby areas that may have homes that fit what you’re looking for.

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The Dream Of Homeownership

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If you’re in the market to buy a home this season, stick with it. Homebuyers face challenges in any market, and today’s is no exception. But if you persevere, your decision to purchase a home will be worth the effort in the end. In fact, a recent survey from Bankrate shows homeownership is so powerful that:
“Nearly three in four homeowners say they would still buy their current home if they had it to do [sic] all over again.”

That means the results – owning a home and the benefits that come with it – outweigh the effort needed to achieve their goal. If you’re a homebuyer, let that provide you with the confidence to know the work you’re putting in today will pay off for years to come. Here are a few reasons to stick with your search and focus on the outcome.

Homeownership Contributes Significantly to Your Financial Well-Being

The National Association of Realtors (NAR) lists several motivations to consider if you’re thinking about buying a home. One of the top financial reasons is the equity you build. As NAR says:
“Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity . . . Building equity in your home is a ready-made savings plan.”

Your equity is a powerful tool you can leverage in a number of ways. And with recent home price appreciation, homeowners are seeing record levels of equity today. That may be one reason why so many people view owning a home as a great investment and a top indicator of financial well-being. As the survey from Bankrate mentioned above shows:

“. . . Americans place a higher value on homeownership than on any other indicator of economic stability, . . .”

Owning a home ranks above other major accomplishments like retirement, having a successful career, and getting a college degree. That indicates just how impactful the financial benefits of homeownership truly are.

The Emotional Benefits of Owning a Home Are Powerful

Of course, homeownership is more than an investment. In their list of top reasons to buy a home, NAR also highlights some of the powerful, non-financial aspects of homeownership. Among them is the opportunity to customize your home to reflect your personality and needs. As they say:
“The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.”

Another benefit homeowners enjoy is the stability it provides. Homeowners typically stay put longer than renters. According to NAR, when you remain in one place longer than a few years, you can grow closer to your community. And that can enhance your sense of pride and lead to better relationships.

What Does That Mean for You?

The benefits of homeownership are powerful, as Leslie Rouda Smith, President of NAR, says:
“From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable.”

Even if you face challenges in today’s market, the payoff when you succeed and purchase a home will be worth it.

Bottom Line

If you’re planning to buy a home this year, there are incredible benefits waiting for you at the end of your journey.
Speak with a trusted real estate advisor today about everything homeownership has to offer.

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Are You Ready To Fall In Love With Homeownership

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Financial benefits are always a key aspect of homeownership, but it’s also important to understand that the nonfinancial and personal benefits are why so many people genuinely fall in love with their homes. When you own your home, you likely feel a sense of emotional attachment because of the comfort it provides, but also because it’s a space that’s truly yours.

Over the past two years, we’ve learned to love our homes even more as we’ve stayed home more than ever due to the ongoing pandemic. As a result, the personal and emotional benefits our homes provide have become even more important to us.

As the most recent State of the American Homeowner from Unison puts it:

“Despite the upheaval and uncertainty of the past year, one thing has stayed the same: the home continues to be of the utmost importance and a place of security and comfort.”

When the health crisis began, the world around us changed almost overnight, and our homes were redefined. Our needs shifted, and our shelters became a place that protected us on a whole new level. The same study from Unison notes:

91% of homeowners say they feel secure, stable, or successful owning a home
64% of American homeowners say living through a pandemic has made their home more important to them than ever
83% of homeowners say their home has kept them safe during the COVID-19 pandemic

It’s no surprise this study also reveals that homeowners now love their homes even more as our emotional attachments to them have grown:
Are You Ready To Fall In Love With Homeownership

That sense of emotional connection genuinely reaches far beyond the financial aspect of homeownership. Because they’re our shelters – ones that we can genuinely call our own. Our homes touch our hearts and can also positively impact our mental health.

As JD Esajian, President of CT Homes, LLC, says:

“Aside from the financial factors, there are several social benefits of homeownership and stable housing to consider. It has long been thought that buying a home contributes to a sense of accomplishment. Still, most individuals fail to realize that homeownership can benefit your mental health and the community around you.”

Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, take a moment to reflect on what Mark Fleming, Chief Economist at First American, notes:

“Buying a home is not just a financial decision. It’s also a lifestyle decision.”

Bottom Line

There are so many reasons to fall head over heels for homeownership.
Your home will provide a place to customize and call your own, in addition to stability and security.
If you’re ready to fall in love with homeownership, contact a real estate professional today to get started on your homebuying journey today.

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Achieving The Dream of Homeownership

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achieving the dream of homeownership

Homeownership has long been considered the American Dream, and it’s one every American should feel confident and powerful pursuing. But owning a home is also a deeply personal dream. Our home provides us with safety and security, and it’s a place where we can grow and flourish.

Today, we remember the legacy of Dr. Martin Luther King, Jr. Many of us will remember his passion and determination for the causes he championed, including his famous “I Have a Dream” speech in 1963. As we reflect on his message today, it may inspire your own dream of homeownership. And if so, know you’re not alone. With a trusted real estate advisor at your side, you can begin your journey toward homeownership by answering the questions below.

1. Where Do I Start?

The process of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, how much space you need, what kind of commute works for you, and how much you can spend.

Then, when you decide you’re ready to buy, you’ll need to apply for a mortgage. Your lender will look at several factors to determine how much you’re able to borrow, including your credit history. Lenders want to understand how well you’ve managed paying your student loans, credit cards, car loans, and other past debts.

According to Freddie Mac:

“To get a rough estimate of what you can afford, most lenders suggest that you should spend no more than 28% of your monthly gross (pre-tax) income on your mortgage payment, including principal, interest, taxes and insurance.”

2. How Do I Save Enough for a Down Payment?

Speaking of how much you can afford, you’ll want to know what to save for a down payment. While the idea of saving for a down payment can be daunting, there are many different options and resources that can help.

According to Business Insider, automatic savings can bring you one step closer to achieving your target down payment:

“If you receive your paycheck as a direct deposit, you may want to arrange for your company to send a percentage of each check directly into a savings account for the down payment. . . . The automatic-savings strategy makes it so you don’t have to constantly remember to save money.”

Before you know it, you’ll have enough for a down payment if you’re disciplined and thoughtful about your process. And the best part is, you may need to save less for your down payment than you think. Your agent and lender can help you understand your options.
3. How Can I Reach My Financial Goals?

Another way to increase your savings is by sticking to a planned budget. If you’ve never budgeted before, there are tools available. For example, MoneyFit.org provides a budgeting worksheet you can use to create your own plan and five rules to follow when you’re saving. They recommend you:

Identify Goals
Record Expenses
Record Earnings
Compare and Calculate
Fix Weak Spots

If you’re already budgeting, consider finding ways to tighten your spending a bit more to accelerate your journey to homeownership. After all, putting even a little extra into your savings each month can truly add up over time.
Bottom Line

As you set out to realize your dream of homeownership this year, know that it’s achievable with careful planning.
And, most importantly, know that you don’t have to walk alone.
A real estate professional is there to help every step of the way.

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Why Its Easy To Fall In Love With Homeownership

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why its easy to fall in love with homeownership

Some Highlights

  • Homeownership provides comfort, stability, and security, and it makes you feel more connected to your community.
  • Your home is something to be proud of and is uniquely yours, so you can customize it to your heart’s desire.
  • If you’re ready to fall in love with a home of your own, contact a local real estate professional to get you started on the path to homeownership.

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Homeowners Net Worth is 40x Greater Than A Renters Net Worth

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One of the best ways to build your family’s financial future is through homeownership. Recent data from the Federal Reserve indicates the net worth of a homeowner is actually over 40 times greater than that of a renter. Maybe it’s time to start thinking about buying a home, especially when they’re so affordable in today’s market.

Every three years the Survey of Consumer Finances shows the breakdown of how owning a home helps build financial security. In the graph below, we see that the average net worth of homeowners continues to grow, while the net worth of renters tends to hold fairly steady and be significantly lower than that of homeowners. The gap between owning and renting just keeps getting wider over time, making homeownership more and more desirable for those who are ready.Homeowners Net Worth is 40x Greater Than A Renters Net Worth

Owning a home is a great way to build family wealth.

For many families, homeownership serves as a form of ‘forced savings.’ Every time you pay your mortgage, you’re contributing to your net worth by increasing the equity you have in your home (See chart below):Homeowners Net Worth is 40x Greater Than A Renters Net WorthThe impact of home equity is part of why Gallup reports that Americans picked real estate as the best long-term investment for the seventh year in a row. According to this year’s survey, 35% of Americans chose real estate over stocks, savings accounts, gold, and bonds.

Today, there are great opportunities available for those planning to buy a home. The housing market has made a full recovery, and all-time low interest rates are giving homebuyers a big boost in purchasing power. If you’re ready, buying a home this fall can set you up to increase your net worth and create a safety net for your family’s future.

Bottom Line

To learn how you can use your monthly housing cost to build your family’s net worth, reach out to a trusted real estate professional in your area who can guide you through the homebuying process.

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The Benefits of Homeownership

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More than ever, our homes have become an integral part of our lives. Today they are much more than the houses we live in. They’re evolving into our workplaces, schools for our children, and safe havens that provide shelter, stability, and protection for our families through the evolving health crisis. Today, 65.3% of Americans are able to call their homes their own, a rate that has risen to its highest point in 8 years.

June is National Homeownership Month, and it’s a great time to reflect on the benefits of owning your own home. Below are some highlights and quotes recently shared by the National Association of Realtors (NAR). From non-financial to financial, and even including how owning a home benefits your local economy, these items may give you reason to think homeownership stretches well beyond a sound dollars and cents investment alone.

Non-Financial Benefits

Owning a home brings families a sense of happiness, satisfaction, and pride.

  • Pride of Ownership: It feels good to have a place that’s truly your own, especially since you can customize it to your liking. “The personal satisfaction and sense of accomplishment achieved through homeownership can enhance psychological health, happiness and well-being for homeowners and those around them.”
  • Property Maintenance and Improvement: Your home is your stake in the community, and a way to give back by driving value into your neighborhood.
  • Civic Participation: Homeownership creates stability, a sense of community, and increases civic engagement. It’s a way to add to the strength of your local area.

Financial Benefits

Buying a home is also an investment in your family’s financial future.

  • Net Worth: Homeownership builds your family’s net worth. “The median family net worth for all homeowners ($231,400) increased by nearly 15% since 2013, while net worth ($5,000) actually declined by approximately 9% since 2013 for renter families.”
  • Financial Security: Equity, appreciation, and predictable monthly housing expenses are huge financial benefits of homeownership. Homeownership is truly the best way to improve your long-term net worth.

Economic Benefits

Homeownership is even a local economic driver.

  • Housing-Related Spending: An economic force throughout our nation, housing-related expenses accounted for more than one-sixth of the country’s economic activity over the past three decades.
  • GDP Growth: Homeownership also helps drive GDP growth as the country aims to make an economic rebound. “Every 10% increase in total housing market wealth would translate to approximately $147 billion in additional consumer spending, or 0.8% of GDP, as well as billions of dollars in new federal tax revenue.”
  • Entrepreneurship: Homeownership is even a form of forced savings that provides entrepreneurial opportunities as well. “Owning a home enables new entrepreneurs to obtain access to credit to start or expand a business and generate new jobs by using their home as collateral for small business loans.”

Bottom Line

The benefits of homeownership are vast and go well beyond the surface level. Homeownership is truly a way to build financial freedom, find greater satisfaction and happiness, and make a substantial impact on your local economy. If owning a home is part of your dream, contact a local real estate professional to begin the homebuying process today.

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Homeowners are happy, renters not so much!

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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.

In a recent survey, Bank of America asked homeowners: “Does owning a home make you happier than renting?” 93% of the respondents answered yes, while only 7% said no. The survey also revealed:

  • More than 80% said they wouldn’t go back to renting
  • 88% agreed that buying a home is the “best decision they have ever made”
  • 79% believed owning a home has changed them for the better

Those surveyed talked about the “emotional equity” that is built through homeownership. The study says more than half of current homeowners define a home as a place to make memories, compared to 42% who view a home as a financial investment. Besides building wealth, the survey also showed that homeownership enhances quality of life:

  • 67% of current homeowners believed their relationships with family and loved ones have changed for the better since they bought a home
  • 78% are satisfied with the quality of their social life
  • 82% of homeowners said they were satisfied with the amount of time they spend on their hobbies and passions since purchasing a home
  • 75% of homeowners pursued new hobbies after buying a home

Homeowners seem to be very happy.

Renters Tell a Different Story…

According to the latest Zillow Housing Aspirations Report, 45% of renters regret renting rather than buying — more than five times the share of homeowners (8%) who regret buying instead of renting. Here are the four major reasons people regret renting, according to the report:

  • 52% regret not being able to build equity
  • 52% regret not being able to customize or improve their rentals
  • 50% regret that the rent is so high
  • 49% regret that they lack private outdoor space

These two studies prove that renting is just not the same as owning.

Bottom Line

There are both financial and non-financial benefits to homeownership. As good as the “financial equity” is, it doesn’t compare to the “emotional equity” gained through owning your own home.
Speak to a real estate professional to see what’s best for you and your goals.

 

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365 Day Difference in Homeownership

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365 Day Difference in Homeownership

Over the past year, mortgage rates have fallen more than a full percentage point. This is a great driver for homeownership, as today’s low rates provide consumers with some significant benefits. Here’s a look at three of them:

Refinance: If you already own a home, you may want to decide if you’re going to refinance. It’s one way to lock in a lower monthly payment and save substantially over time, but it also means paying upfront closing costs too. You have to answer the question: Should I refinance my home?
Move-up or Downsize: Another option is to consider moving into a new home, putting the equity you’ve likely gained in your current house toward a down payment on a new one that better meets your needs – something that’s truly a perfect fit for your family.
Become a First-Time Homebuyer: There are many financial and non-financial benefits to owning a home, and the most important thing is to first decide when the time is right for you. You have to determine that on your own, but know that now is a great time to buy if you’re considering it. Just take a look at the cost of renting vs. buying

Why 2019 Was a Great Year for Homeownership

Last year at this time, mortgage rates were 4.63% (substantially higher than they are today). If you’re one who waited for a better time to make a move, market conditions have improved significantly. Today’s low mortgage rates combined with increasing wages are making homes much more affordable than they were just one year ago, so it’s a great time to get more for your money and consider a new home.

The chart below shows how much you would save based on today’s rates, compared to what you would have paid if you purchased a house exactly one year ago, depending on how much you finance.

365 Day Difference in Homeownership

If you’ve been waiting since last year to make your move into homeownership, or to find a house that better meets your needs, today’s low mortgage rates may be just what you need to get the process going. Reach out to a local real estate professional to discuss how you can benefit from the current rates.

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The Cost of Not Owning Your Home

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Cost of Not Owning Your Home

There are great advantages to owning a home, yet many people continue to rent. The financial benefits are just some of the reasons why home ownership has been a part of the long-standing American dream.

Realtor.com reported that:

“Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option…as people get more savings in their pockets, buying becomes the better option.”

Why is owning a home financially better than renting?

Here are the top 5 financial benefits of home ownership:

  1. Home ownership is a form of forced savings.
  2. Home ownership provides tax savings.
  3. Home ownership allows you to lock in your monthly housing cost.
  4. Buying a home is less expensive than renting.
  5. No other investment lets you live inside of it.

Studies have also shown that a homeowner’s net worth is 44x greater than that of a renter.

A family that purchased a median-priced home at the start of 2019 would build more than
$37,750 in family wealth over the next five years with projected price appreciation alone.

Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment – along with a profit margin!

Bottom Line

Owning a home has many social and financial benefits that cannot be achieved by renting. Reach out to a Real Estate Professional to determine if buying a home is your best move.

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