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Monthly Archives: April 2015

Studies find baby boomers prefer to 'upsize' for retirement

Conventional wisdom has long held that when people retire, they usually want to downsize their homes due to children moving out and the desire to save money on energy bills. However, two recent surveys suggest that baby boomers are bucking this trend, preferring to stay in a similarly sized home or even upsize to a larger one.

In a recent survey conducted by Trulia, 26 percent of baby boomers (defined as people older than 55) said that they would prefer to move into a larger home, and 53 percent said that their current home was the ideal size for them. Only 21 percent said that their ideal home is smaller than the one they currently live in. For baby boomers with children, the urge to upsize was stronger, with 39 percent saying they would prefer a larger home. This may be due to the increasing number of young people moving back in with their parents due to financial constraints.

Americans' confidence in housing market rising

According to a new report from Zillow, Americans' confidence in the country's housing market is on the rise, and more renters are planning to buy homes in the coming year than at any time in recent history.

The roughly 12 percent of current renters who say they plan to buy a home in 2015 represents a population of 5.2 million people. This is nearly 25 percent more than the 4.2 million renters who said they planned to buy a home within the next 12 months at the beginning of 2014. They may be motivated by the rising cost of rent and the comparative affordability of mortgage payments: Homebuyers now spend about 15 percent of their monthly income on their mortgage on average, while renters spend an average of 30 percent of their income on rent.

First-time homeowners back on the market

Lack of access to credit and low employment rates have kept many young people out of the housing market since the recession. However, there are a few key signs that show that this is rapidly changing. With credit more available than it has been in years and unemployment in the younger demographic finally falling, the housing market is finally welcoming first-time buyers back.

One indicator that first-time homebuyers are back on the market is the decreasing size of new single-family homes. New single family home sizes fell at the end of 2014 after rising ever since the recession. After the housing bubble burst, the only people who were confident in their ability to buy homes were those in the market for higher-end real estate, causing builders to focus on that end of the market. Now that homes are getting smaller, it indicates that first-time buyers are confident again.

Five types of closing costs buyers should know

The last thing you want to do as a homebuyer is forget to budget for closing costs. Usually, your lender will give you a GFE (good faith estimate) of what these costs will be soon after you apply for a mortgage loan.

It can be helpful to know the different types of costs you will have to pay at closing in order to keep track of what the final amount is made up of. Here are some of the common closing costs you might pay, although your loan officer should review all the costs carefully with you:

Millennials bought the largest share of homes in 2014

According to the 2015 National Association of Realtors (NAR) Home Buyer and Seller Generational Trends study, the stereotype of millennials as eternal parents'-basement-dwellers is less true now than ever before. Millennials composed the single largest home-buying demographic in 2014, purchasing 32 percent of all homes sold last year. In fact, they bought more than double the amount of homes purchased by baby boomers over the same period.

Millennials were driven to buy homes by their increasing rate of household formation and the need for more space to raise a family, but they also seemed to value homeownership itself at higher rates than other demographics. The desire to own a home of their own was the leading reason for purchasing a home among millennials, with 39 percent of millennial survey respondents listing this as their primary motivation.

Getting a home loan is becoming easier

If you applied for a home loan last year and were turned down, now might be the time to try again. According to the Zillow Mortgage Access Index (ZMAI), mortgage credit is far easier to obtain today than it has been in recent years. Borrowers whose only option would have been an FHA loan a year ago can now access private mortgage loans with better rates, according to the index.

To measure access to credit, the index takes into account a number of factors. These include the lowest credit scores being successfully used to obtain mortgage loans, the highest debt-to-income ratios of successful applicants, the prevalence of private mortgage insurance as opposed to government-funded programs, and the number of quotes given to buyers with credit scores lower than the traditional 700 and up required for a mortgage.

Existing home sales up in February

According to the National Association of Realtors (NAR), if you're planning on selling your home soon, there's no time like the present. Sales of existing homes, as opposed to new construction, rose by 1.2 percent in February. The seasonally adjusted annual rate rose from 4.82 million homes in January to 4.88 million in February.

This February was the fifth month in a row that existing home sales have risen on a year-over-year basis. The past month saw 4.7 percent more homes sold than February 2014. To calculate this figure, the NAR took into account all completed transactions involving existing single-family homes, townhomes, condominiums and co-ops.

4 signs that a home is in a good neighborhood

Before you make a commitment to buy a home, you'll want to make sure that the neighborhood is one in which you can see yourself living for a long time. Too many homeowners focus only on the house they're considering and fail to thoroughly evaluate the surrounding area. Here are a few signs to look out for that could indicate the home you're looking at is in a good neighborhood:

Tips on how to sell your home as quickly as possible

If you're one of the many homeowners who are selling their homes and getting back in the market for new ones this spring, you probably want to get the old home off your hands as soon as possible. There are a few pitfalls that people trying to sell homes fall into that can end up seriously delaying the sale. Here are a few ideas that will help you be as efficient as possible when selling your home:

Low-down-payment mortgages making a comeback

If you have good credit and a steady income but not much in your savings account, you may want to look into the low-down-payment mortgage options that recently became available. After the 2008 mortgage crisis, down payments rose as lenders became more cautious about who they offered credit to, but now that the economy seems to be making a recovery, the prevalence of low-down-payment loan options is doing the same.

Fannie Mae and Freddie Mac have both recently introduced programs allowing first-time and low-income homebuyers, along with those refinancing their homes, to access loans with down payments of only three percent (3%). Previously, the lowest down payment these lenders offered was five percent (5%). The Fannie Mae program has already been in effect since December, and the Freddie Mac Program, which is targeted at low-income homebuyers in particular, will go into effect in March.