Where Did Americans Move in 2017? [INFOGRAPHIC]

Where Did Americans Move in 2017? [INFOGRAPHIC] | Simplifying The Market

Where Did Americans Move in 2017? [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Atlas Van Lines recently released the results of their annual Migration Patterns Survey in which they tracked their customer’s movement from state-to-state over the course of 2017.
  • Idaho held on to the top spot of ‘high inbound’ states for the 2nd year in a row followed by Washington.
  • The ‘outbound’ states seem to draw a line straight across the country from Connecticut to Wyoming.

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What Impact Will the New Tax Code Have on Home Values?

Every month, CoreLogic releases its Home Price Insights Report. In that report, they forecast where they believe residential real estate prices will be in twelve months.

Below is a map, broken down by state, reflecting how home values are forecasted to change by the end of 2018 using data from the most recent report.

What Impact Will the New Tax Code Have on Home Values? | Simplifying The Market

As we can see, CoreLogic projects an increase in home values in 49 of 50 states, and Washington, DC (there was insufficient data for HI). Nationwide, they see home prices increasing by 4.2%.

How might the new tax code impact these numbers?

Recently, the National Association of Realtors (NAR) conducted their own analysis to determine the impact the new tax code may have on home values. NAR’s analysis:

“…estimated how home prices will change in the upcoming year for each state, considering the impact of the new tax law and the momentum of jobs and housing inventory.”

Here is a map based on NAR’s analysis:

What Impact Will the New Tax Code Have on Home Values? | Simplifying The Market

Bottom Line

According to NAR, the new tax code will have an impact on home values across the country. However, the effect will be much less significant than what some originally thought.

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61% of First-Time Buyers Put Down Less than 6%

61% of First-Time Buyers Put Down Less than 6% | Simplifying The Market

According to the National Association of Realtors’ latest Realtors Confidence Index, 61% of first-time homebuyers purchased their homes with down payments below 6% from October 2016 through November 2017.

Many potential homebuyers believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying. The median down payment for all buyers in 2017 was just 10% and that percentage drops to 6% for first-time buyers.

Zillow Senior Economist Aaron Terrazas’ recent comments shed light on why buyer demand has remained strong,

“Looking into 2018, rent is expected to continue gaining. More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead.”

It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes.

Bottom Line

If you are one of the many first-time buyers who is not sure if you would qualify for a low-down payment mortgage, let’s get together and set you on your path to homeownership!

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Wondering If You Can Buy Your First Home?

There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family, others might think they are too young, and still, others might think their current income would never enable them to qualify for a mortgage.

We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first-time buyer:

Wondering If You Can Buy Your First Home? | Simplifying The Market

Bottom Line

You may not be much different than many people who have already purchased their first homes. Let’s meet to determine if your dream home is within your grasp.

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93% Believe Homeownership Is Important in Attaining the American Dream

93% Believe Homeownership Is Important in Attaining the American Dream | Simplifying The Market

Americans continue to believe that homeownership is important in achieving the American Dream. A recent survey by NeighborWorks America reported that:

“Owning a home remains a core element of the American Dream.”

When asked “How important a part of the American dream is owning a home?”

  • 18% of those surveyed said it was the most important part
  • 53% of those surveyed said it was very important
  • 22% of those surveyed said it was somewhat important

Homeownership and Financial Stability

The survey also revealed that 81% of Americans believe that owning a home leads to a family being more financially stable. This feeling was reiterated by Zillow Senior Economist Aaron Terrazas who, in a recent press release, explained:

“After about a two-year slowdown, rent growth is starting to pick back up across the nation…Looking into 2018, rent is expected to continue gaining.

More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead.” (emphasis added)

Bottom Line

Owning a home always has been, and always will be, a crucial part of attaining the American Dream.

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FICO® Scores on Approved Home Loans Drop Again

FICO® Scores on Approved Home Loans Drop Again | Simplifying The Market

According to Ellie Mae’s latest Origination Report, the average FICO® Score on all closed loans dropped to 722 which is its lowest mark since April. The average includes all approved refinance and purchase loans.

FHA and VA loans showed the most opportunity for millennials looking to enter the market with low down payments and even lower FICO® Score requirements.

Ellie Mae’s Millennial Tracker revealed that those who purchased homes in December with an FHA Loan were able to do so with an average down payment of 4% and a FICO® Score of only 684.

Joe Tyrell, EVP of Corporate Strategy at Ellie Mae commented on the opportunity this brings to buyers,

“With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market.”

Bottom Line

More and more potential buyers are able to qualify for a mortgage loan now! If you are debating a home purchase, let’s get together and evaluate your ability to buy today!

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The Benefits of Homeownership Go Beyond the Financial

The Benefits of Homeownership Go Beyond the Financial | Simplifying The Market

Homeownership is a major part of the American Dream. As evidence of that, 91% of Americans believe that owning a home is either essential (43%) or important (48%) to achieving that “dream.” In a market where some people may be unsure about the benefits and possibilities of buying a home, it is important that we remember this.

Homeownership is NOT just about the money. In fact, some of the major benefits are non-financial. Here are a few of those benefits as per the National Association of Realtors:

  • Consistent findings show that homeownership does make a significant positive impact on educational achievement.
  • Several researchers have found that homeowners tend to be more involved in their communities than renters.
  • Early studies of homeownership and health outcomes found that homeowners and children of homeowners are generally happier and healthier than non-owners, even after controlling for factors such as income and education levels that are also associated with positive health outcomes and positively correlated with homeownership.

Bottom Line

Homeownership means something more to people and their families than just the financial considerations.

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How Rising Prices Will Help You Build Family Wealth in 2018

How Rising Prices Will Help You Build Family Wealth in 2018 | Simplifying The Market

Over the next five years, home prices are expected to appreciate on average by 3.35% per year and to grow by 24.34% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

So, what does this mean for homeowners and their equity position?

As an example, let’s assume a young couple purchases and closes on a $250,000 home this month (January). If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?

How Rising Prices Will Help You Build Family Wealth in 2018 | Simplifying The Market

Since the experts predict that home prices will increase by 4.2% in 2018, the young homeowners will have gained $10,500 in equity in just one year.

Over a five-year period, their equity will increase by nearly $45,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

Bottom Line

Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!

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Buying or Selling in 2018? 5 Reasons to Resolve to Hire a Pro [INFOGRAPHIC]

Buying or Selling in 2018? 5 Reasons to Resolve to Hire a Pro [INFOGRAPHIC] | Simplifying The Market

Buying or Selling in 2018? 5 Reasons to Resolve to Hire a Pro [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • As we usher in the new year, one thing is for certain… if you plan to buy or sell a house this year, you need a real estate professional on your team!
  • There are many benefits to using a local professional!
  • Pick a professional who knows your local market and can help you achieve your dreams!

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There’s More to a Bubble Than Rising Home Prices

There's More to a Bubble Than Rising Home Prices | Simplifying The Market

What truly causes a housing bubble and the inevitable crash? For the best explanation, let’s go to a person who correctly called the last housing bubble – a year before it happened.

“A bubble requires both overvaluation based on fundamentals and speculation. It is natural to focus on an asset’s fundamental value, but the real key for detecting a bubble is speculation…Speculation tends to chase appreciating assets, and then speculation begets more speculation, until finally, for some reason that will become obvious to all in hindsight, the ‘bubble’ bursts.

I have taken to calling the housing market a ‘bubble’.”

– Bill McBride of Calculated Risk calling the bubble back in April 2005

Where do we stand today regarding speculation?

There are two measurements that are used to determine the speculation in a housing market:

  1. The number of homes purchased by an investor and
  2. The number of homes being flipped (resold within a twelve-month period)

As compared to 2005, investor purchases are down dramatically (from 23% to 13%) and so is flipping (from 8.2% to 5.7%). McBride explains:

“There is currently some flipping activity, but this is more the normal type of flipping (buy, improve and then sell). Back in 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation.”

What are the experts saying about speculation in today’s market?

DSNews recently ran an article which asked two economists to compare the speculation in today’s market to that in 2005-2007. Here is what they said:

Dr. Eddie Seiler, Chief Housing Economist at Summit Consulting:

“The speculative ‘flipping mania’ of 2006 is absent from most metro areas.”

Tian Liu, Chief Economist of Genworth Mortgage Insurance:

“The nature of housing demand is different as well, with more potential homeowners and far fewer speculators in the housing market compared to the 2005-2007 period.”

And what does McBride, who called the last housing bubble, think about today’s real estate market?

Sixty days ago, he explained:

“In 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation. And even more dangerous during the bubble was the excessive use of leverage (all those poor-quality loans). Currently lending standards are decent, and loan quality is excellent…

I wouldn’t call house prices a bubble – and I don’t expect house prices to decline nationally like during the bust.”

Bottom Line

Speculation is a major element of the housing bubble formula. Right now, there are not elevated percentages of investors and house flippers. Therefore, there is not an elevated rate of speculation.

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