Are more Americans positioning themselves for home purchase? Although May’s data showed that home sales were down 26.8% as the home buyer tax credit concluded, a new survey conducted by Relocation.com suggests some families are opting for renting while they research—cash in hand—for deals on a new, more desirable home in their area.
Among the key findings of the survey: Of the 60% of individuals moving into rentals, 24% were previous homeowners who are renting temporarily while they look for a new home to purchase. Underscoring this finding is the fact that for many of these families, foreclosure was not the reason for moving—in fact, the number of consumers who moved due to foreclosure dropped by 70%.
Furthermore, many of these families stayed in the area (one in three made a short distance move of 100 miles or less), opting to remain in a location where they already know their schools, shopping districts and prime neighborhoods.
“While the housing market continues to flux from month to month, we’re seeing strong, continued interest as consumers looking to move start their research with us,” said Relocation.com Chairman and Founder Sharon Asher. “These findings suggest that more Americans may be poised to re-enter the housing market this year.”
The Relocation.com survey was conducted in early June 2010 and is a continuation of consumer surveys conducted since March 2009 to gauge moving and relocation attitudes and behaviors.
Over the last two years we’ve seen a little bit of everything. Rates overall going lower and lower, the stock market up a little one day and down a lot the next which indirectly moves the rates and mortgage underwriting guidelines continuing to change. It all can be a little overwhelming for those in the market to buy a home. With all that being said it is probably one of the best times to buy a home!
Thirty year fixed rates in the mid 4′s make payments much lower than when they were in the 6′s just a few years ago – it can also give borrowers more purchasing power.
A $100,000 30-year mortgage at a fixed rate of 6.5% (where it was just a few years ago), makes a principle and interest payment $628.
A 30 year fixed rate at 4.5% makes a principle and interest payment $504 per month which is a $123 per month savings!
Another way to look at it is with a rate of 4.5% a borrower could finance $125,000 and have a principle and interest payment of $630. So, in other words, to have the same payment at 6.5% a borrower could afford a loan of $25,000 more to have roughly the same payment.
What this does is completely open up borrowers to a whole new range to look for their dream home! On top of these historically low rates, FHA financing remains a very strong program with as little at 3.5% down payment and a minimum 600 credit score needed.
While it is true underwriting has changed some over the years, the borrowers that should be buying still are able to with not much change to the underwriting process.
Even if you hate raking in the fall, I’ll bet you would agree that a home site with nice trees has greater appeal than one that appears to be a former corn field.
A recent study by the U.S. Forest Service says the presence of street trees increases home values by an average of $7,000. That’s an awfully broad generalization, but any REALTOR will tell you that they in fact raise property values.
Way back in the 70’s I had a client ask me to provide him with an estimate of the value of a large tree in his front yard that was lost in a storm (he intended to make a claim on his homeowners insurance). That was a difficult exercise, however in the Internet age there are some interesting tools out there. In case you ever wondered about the value of a particular specimen in your yard, the Arbor Day Foundation offers an interesting tool on their site. Go to www.arborday.org/calculator and enter your ZIP code, the name of the tree and its diameter to learn the annual benefits of your tree. While you’re at it, you might want to browse their tree store. It’s an inexpensive way to get your next generation of trees going!
Attention home buyers! You are probably aware that the federal government offered tax credits on home purchases with contracts accepted by the end of April, 2010. For first-time buyers that could have amounted to as much as $6,500. That was certainly an incentive to buy.
If you think you missed the boat, consider this. If you commit to a home purchase soon while mortgage interest rates are the lowest anyone in our industry can remember, you should be able to save nearly the same amount in interest as you would have received in a tax credit! How so, you ask?
Here are the numbers for a very common scenario in the Toledo real estate market, and you can substitute different numbers to fit your family’s specific circumstances. A $100,000 mortgage last September would likely have been made at an interest rate of 5.1%. Today, you are likely to get a mortgage loan at 4.5%. In our market, many people remain in their home about ten years. The difference in the interest a homeowner would pay after ten years on those two mortgage loans amortized over 30 years would be approximately $5,848. In other words, those who missed out on the tax credits can realize nearly the same benefit over time simply because of declining interest rates!
Of course the interest savings are much more significant over the life of the loan and definitely greater for higher mortgage amounts – this was simply intended as one typical example. If you would like to calculate your own mortgage payment, The Danberry Co., Realtors and First Mortgage Consultants can help! Just go to: http://www.danberry.com/mortgage_calculator/
There are at least three reasons I am hesitant to accept everything I read in newspapers as the truth, whole truth and nothing but the truth. First, meeting deadlines may mean that extensive research on topics may be impractical. Secondly, some articles may include at least a hint of the editor’s or publisher’s opinions. And most commonly, at least when we read articles about the real estate industry, many of them are based on national statistics or address a national audience, but real estate markets are local.
Last week I read an article in USA TODAYthat I’ll bet all real estate practitioners would agree with. The headline is simple and to the point: “Homes will sell if priced right; foreclosures have impact.” This is true in the Toledo real estate market just as it is in New York, Las Vegas or Washington. Sellers simply cannot wish and hope their way to the values of 2004 and 2005. That is a bitter pill for most sellers to swallow, but there is a silver lining. When most sellers sell, they become buyers, and they then benefit from the same lower values. On balance, many even come out ahead on the exchange!
We all know that our Metroparks are out there, but answer this – how many of them have you actually stepped foot in? This incredible regional asset is great for newcomers and life-long Toledoans alike. Metroparks of the Toledo Area is a regional system of premier natural, historical and cultural parklands totaling 10,500 acres! The park district’s mission is to enhance our quality of life and inspire preservation efforts. Why not visit soon, and take the kids with you! For a taste of programs and what you can do in the Metroparks this summer, go to www.metroparksprograms.com.
If you are new to the Toledo Area, please contact Joyce DeLucia, the Danberry Co.’s relocation counselor, for information. Thinking about moving? Click here for information about moving to Northwest Ohio.
…have truly become the mortgage of choice in the Toledo real estate market.
When I was a kid Realtor, we had a terrible time getting sellers to consider offers that called for FHA of VA mortgages. And I have to admit, there were valid reasons from the seller’s viewpoint. FHA appraisers would come back with lengthy lists of repairs that the seller was required to complete prior to closing, and even the ones that went smoothly seemed to take twice as long to close as conventional transactions. Even points often needed to be paid.
Fast forward to today’s market. The times, they have changed, as FHA mortgages have become the mortgage of choice. The primary attraction is the low down payment requirement (3.5%), which puts this financing within the reach of most buyers. And what makes sense for buyers has become the best action in town for most sellers.
So, how much do you know about FHA financing? Here’s a quick way to find out. Take this QUIZ from the National Association of Realtors, click the “submit” button, and you will instantly be shown the correct answers.
How can we help you? Danberry Co. professionals are ready to take your calls and answer your questions, as are the Home Mortgage Consultants from First Mortgage who can be found under the “Financing” button above. We’d love to hear from you!
Any prospective homebuyers who backed off from their Toledo, Ohio, and metropolitan area house-hunting because they feel they missed out on the tax credits should consider this. Maybe a check won’t arrive from Uncle Sam, but you might get a mortgage today at a rate considerably below the one you would have gotten during the program. The net impact could be that you will actually realize a greater savings over the time you own your home than if you had gotten the tax credit!
Many “experts” nationwide speculated that the expiration of the tax credit program would take the wind out of the sails (sales?) of a rapidly improving real estate market, but the mortgage market is definitely propping up activity.
If you made it this far reading the blog, chances are good you might be among those searching for Toledo real estate who could benefit. What are you waiting for? “Historically low rates” will not last forever! Contact The Danberry Co., Realtors or a First Mortgage Home Mortgage Consultant today!
You’ve probably heard the analogy comparing real estate markets to weather reports. Real estate markets, like weather reports, are local. What we really want to know is what’s going on in our neighborhood-with Toledo homes for sale-not half way across the country. The media constantly reports what is going on in Florida, California, New York and Las Vegas, but to make good buying and selling decisions here, you want to know about the Toledo real estate market, which brings us back to the title of this article.
We are facing a window of opportunity, but remember, open windows do close. We know that mortgage interest rates right now are at bargain levels – essentially mortgage money is “on sale”. With soaring federal debt and deficits, however, does anyone believe these historically low rates are sustainable? I don’t. Those low rates are also coupled with a high inventory of listings (great choices) and low prices. I’ll bet a year from now buyers will look back at June of 2010 and say “THAT was our window of opportunity. What were we waiting for?”
How can we help you? You can find a Danberry professional by clicking on “Agents & Offices” above. If you have mortgage questions, click on “Financing” to find a Home Mortgage Consultant at First Mortgage Consultants, an affiliate of Wells Fargo Home Mortgage.
Danberry recently sponsored a High School Community Video Contest. Entries were submitted by several Toledo area high schools, and the contest was judged on three main criteria:
