I personally love this chart. Do you think interest rates are going up? Think again, We are paying less interest than our parents and grand parents.

-source KCM-

Harvard's 5 Financial Reasons To Buy a Home

I don't know about you, but every time I heard that Harvard University came came up with a research I say to myself; "It must be good." 

Well I hope you find this helpful!

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. Last year, he released a paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially.

Where Are Home Prices Headed?

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.  

The results of their latest survey

• Home values will appreciate by 4.8% in 2014.
• The cumulative appreciation will be 23.5% by 2019.
• That means the average annual appreciation will be 3.6% over the next 5 years.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 15.1% by 2019.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

-source KCM-

Most homeowners believe that the winter is not a good time to sell. This belief is based on the fact that historically the number of buyers decreases in the winter and then increases dramatically during the spring buying market. Though this is still true, there is an interesting pattern developing over the last few months.
The number of prospective purchasers actively looking at a home (foot traffic) has remained strong going into the fall. As a matter of fact, the foot traffic far exceeds the numbers reported for the same months last year (see chart):

At the same time, the National Association of Realtors revealed that the months’ supply of housing inventory has decreased from 5.5 months to 5.3. That equates to less competition for homeowners selling today as compared to next spring when many homeowners will decide to put their home on the market.

Bottom Line

Since buying activity is still strong, this might be a great time to put your house on the market.

www.luisbmartinez.com
(818) 455 3095 Mobile
luisbmartinez80@gmail.com

-source KCM-