12 Jan

Aging in Place Begins Early

Aging in Place Begins Early. Homeowners are getting older, and to continue on in their current house, improvements are necessary.

“Aging in place,” however, is not just about adding railings and ramps—in fact, 46 percent of homeowners aged 75-plus began improvements early with the expectation that they would grow older, but stay put, according to a HomeAdvisor report. The most common remodels, the report shows:

Add Lever-Style Doorknobs
Add Pull-Out Shelves
Add a Smart Fire Detection System
Add a Smart Security System
Replace Stone/Tile With Carpet/Wood

Homeowners at an earlier stage, aged 55-75, are also making modifications, but not necessarily due to aging concerns (though they are, fortuitously, ideal for just that). These include adding automated features like a programmable thermostat or voice activation, and, in bathrooms, grab bars and higher toilets.

holistic” movement is occurring

According to HomeAdvisor, a “holistic” movement is occurring—a comprehensive, and, at times, preventative, approach to living over the years. Early on, that could mean addressing issues that could be unsafe, like a cracked walkway. Later, that could mean cutting clutter and organizing (accessible storage, for example), or eliminating labor-intensive chores, such as adding gutters that clean themselves. The outcome is a lifestyle that is not only beneficial currently, but also crucial down the line, when age can impede the ability to carry out chores and upkeep.

Other key improvements to consider, the report shows:

Lighting
Modifications in Shower (Bench, threshold)
Moving Master Bedroom to First Floor
Ramps
Wider Doorways

Source: HomeAdvisor

Seniors may consider a reverse mortgage:

A Reverse Mortgage is a mortgage offered to men and women over the age of 62; It makes it possible for Seniors to convert a part of the of their home into cash.

‘Aging in Place’ Begins Early: Report

Was provided by Art Di Segna, a recognized leader in his field. Art can be contacted via email at Art@FineHomesOfTexas.com by phone at (281) 415-5888 or Contact Me. Art has helped hundreds of people move in and around many Houston towns for the last 14 years.

Thinking of Selling or Buying A Home? I have a passion for Real Estate and love to share my marketing expertise! What is my home worth….

I specialize in working with buyers in the following areas: Houston, Spring, Cypress, Tomball, Magnolia, Conroe, Huntsville, Point Blank, Lake Livingston area, Onalaska, Cape Royale, Cold Spring, Blanchard, Trinity, Woodville Texas.

Original article by Suzanne De Vita is RISMedia’s online news editor

10 Jan

Silent Generation & Millennials Are Also In Search Of Walkability

By A DiSegna

Silent Generation & Millennials Are Also In Search Of Walkability, choosing distance to dining establishments and retail. Americans born between the mid-1920’s up till 1945 the “Silent Generation” are also in search of walkability. Fifty-five percent of members of the Silent Generation lately evaluated by the National Association of REALTORS ® prefer neighborhoods shut for commuting and or walkability, stone’s throw off from the 62 percent of millennials evaluated who prefer the same. Both generations would certainly stay in a house or townhouse if it implied a better commute and or walkability, in accordance to the study. Fifty-one percent of every one of the adults checked, despite generation, believe quality of life is impacted by walkability.

The generations in between millennials and the Silent Generation, however baby boomers and Generation X prefer the residential areas. Fifty-five percent of both boomers and Gen Xers are all right with the trade-off: driving to establishments, entertainment as well as work for a single-family house.

There are age and also gender-based passions, too. When purchasing a home, more youthful females look for public transit and walkability compared to younger guys, but both younger males as well as younger females seek short commute times, according to the survey.

All told, 60 percent of all the grownups surveyed prefer to live in a single-family house. One more 60 percent, though, would invest even more to live in location with better walkability. The majority of adults with children (one more 60 percent, still) are interested in the larger property as well as square video footage of the residential areas.

Eighty-six percent of every one of the grownups surveyed view sidewalks favorably, as well as 73 percent think road repair and maintenance is very important.

“REALTORS® understand that when people buy a house, they are not just looking at your house; they are checking out the community and the area,” states NAR President Elizabeth Mendenhall. “While the concept of the ‘ideal neighborhood’ is different for every home owner, a lot more Americans are expressing a need to stay in neighborhoods with accessibility to public transportation, much shorter commutes and also greater walkability.”

Silent Generation & Millennials Are Also In Search Of Walkability

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8 Jan

61 Percent of First-Time Buyers Made a Low Downpayment in November 2017

By A DiSegna

61 Percent of First-time Buyers Made a Low Downpayment in November 2017. Among first-time buyers who purchased a property through a mortgage in December 2016–November 2017, 61 percent, on average, made a zero to six percent downpayment, according to the November 2017 REALTORS® Confidence Index Survey. The share of first-time buyers who made a zero to six percent downpayment decreased from an average of 70 percent in the 12 months ended June 2010, to a low of 60 percent in mid-2014, then rose in 2014‒2015 to 63 percent, but the share appears to have slightly edged down in 2016 and 2017.[1]

In December 2015, Fannie Mae and Freddie Mac started accepting mortgage applications with as little as three percent downpayment to ease the access to credit for first-time buyers. So why has the share of first-time buyers who obtained low downpayment mortgages not budged up significantly even with these low downpayment conventional financing programs? One reason may be related to the trade-off between a lower downpayment and monthly outlays: a lower downpayment means lower upfront cash outlay, but this also means making higher monthly payments because of the higher interest payments and mortgage insurance premiums.[2]

The author’s calculations show that a 25-34-year-old headed household with median household income of $60,932 in 2016 who intends to purchase a $187,040 property[3] with a 3.5 percent or 5 percent downpayment will pay about $1,500 for principal, interests, taxes, mortgage insurance, and maintenance (PITIM) or nearly 30 percent of income on housing cost, a threshold for cost-burdened households. With a 20 percent downpayment, the monthly PITIM declines to $1,138, or 23 percent of income, because of lower interest payments and zero payments for mortgage insurance, making the mortgage more affordable.

On the other hand, the downpayment sharply increases from $6,546 to $37,408. The 20 percent downpayment will be hard to meet, given that the average savings of non-homeowners was only $5,200 in 2016, according to the Federal Reserve Board’s 2016 Survey of Consumer Finances.

Thus, making a home purchase more affordable will require either a deceleration in price growth, an acceleration in income growth, or expanding downpayment assistance programs so to help buyers make a higher downpayment and lower monthly costs.

Household income has grown at a modest pace, rising by about 20 percent since 2012, while home prices have increased by roughly 60 percent. A deceleration in home price appreciation will largely come if supply increases to meet household formation and replacement for housing demolitions or destroyed housing, which NAR Chief Economist Lawrence Yun estimates to be at 1.5 million units. Housing starts have more than doubled to an annual pace of 1.29 million units as of October 2017 (from a low of 490 thousand in January 2009), but the pace has not been adequate to meet housing demand, as evidenced by the steep price growth.

Downpayment assistance programs are another way to make a home purchase more affordable. One mechanism is through state-funded downpayment savings accounts, with states allowing contributions to and/or the interest earned on these accounts to be income tax deductible[4]. Currently, Iowa, Minnesota and Mississippi, Colorado, Montana and Virginia provide implement these programs. Alabama, Louisiana, Michigan, Missouri, and Pennsylvania are also considering setting up these accounts. According to Adriann Murawski, NAR’s state and local government affairs representative, NAR and its state counterparts have been actively promoting efforts to have more states provide funding for these accounts.[5]

More relaxed gifting standards within reasonable underwriting guidelines can also make a home purchase for First Time Home Buyers more affordable. For example, Fannie Mae allows all the downpayment for one-unit principal residence property mortgages with loan-to-value of greater than 80 percent (or downpayment of 19 percent or less) to come from eligible givers (persons related by blood or marriage, fiancé, fiancée, or domestic partner.[6] Freddie Mac allows gifts/grants after the borrower puts in a three percent downpayment.[7] The Federal Housing Administration allows the 3.5 percent downpayment to come from acceptable donors (relatives, employer, friend, charitable organization, government agency) for borrowers with credit score of at least 620. However, if credit score is between 580 and 619, the downpayment must be the borrower’s own money (required minimum investment). The builder, seller, or an associated entity to the transaction may not provide gifts.[8]

[1]NAR’s 2017 Home Buyers and Sellers Report reported a median downpayment among first-time buyers of five percent in 2017, slightly down from six percent in 2014-2016.

[2] For FHA-insured loans, the upfront mortgage insurance premium (UFMIP), which can be financed as part of the mortgage, is 1.75 percent, and the annual mortgage insurance premium (MIP) is 0.85 percent on 3.5 percent downpayment loans.

[3] This is equivalent to 20 percent of the median home price of $233,800 in 2016. Based on NAR’s 2017 Home Buyers and Sellers Report, the median price of first-time buyers is 80 percent of the median price of all buyers.

[4] Given current low rates on savings, income tax deductibility on interest earned on these accounts is a blunter incentive compared to income tax deductibility based on the contribution (similar to IRA accounts).

[6] Fannie Mae. See https://www.fanniemae.com/content/guide/selling/b3/4.3/04.html

[7] Freddie Mac. See http://www.freddiemac.com/homepossible/home_possible_faq.html

[8] FHA. See https://www.fha.com/fha_article?id=441

61 Percent of First-Time Buyers Made a Low Downpayment in November 2017

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2 Jan

Topmost Reasons We Buy a Home Today

By Art Di Segna

Topmost Reasons We Buy a Home today. We often talk about the financial reasons why buying a home makes sense. But, more often than not, the emotional reasons are the more powerful or compelling reasons.

No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it’s a certain scent or a favorite chair, the emotional reasons why we choose to buy our own homes are typically more important to us than the financial ones.

1. Owning your home offers stability to start and raise a family

From the best neighborhoods to the best school districts, even those without children at the time of purchase may have this in the back of their minds as a major reason for choosing the location of the home that they purchase.

2. There’s no place like home

Owning vs Buying your own home offers you not only safety and security, but also a comfortable place that allows you to relax after a long day!

3. You have more space for you and your family

Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take this all into consideration when buying your dream home!

4. You have control over renovations, updates, and style

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

Bottom Line

Whether you are a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.

Topmost Reasons We Buy a Home Today

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30 Dec

Changing Demand for Rentals Strains Supply

By A DiSegna

Changing Demand for Rentals Strains Supply

Demand for rentals is still strong—but what does it look like today, a decade after the recession?

According to America’s Rental Housing Report, recently released by the Joint Center for Housing Studies at Harvard University, demand is evolving. In the aftermath of the crash, demand exploded, and a large portion of rentals were single-family homes. Now demand, though largely out of necessity, is becoming motivated more by preference.

Americans who can afford to buy a home, for example, are opting to rent. In 2016, 6.1 million (or 18 percent of) renter households brought in more than $100,000 a year, the report shows; in 2006, only 3.3 million (or 12 percent of) renter households earned $100,000-plus.

Renters

Additionally, the makeup of renters is shifting. The majority of renters are single, but there are now more renter households that contain families with children than there are owner households that contain families with children (33 percent versus 30 percent). Moreover, the median age of renters has gone up to 40 years old, and one-third are 50 years old or older. Their backgrounds are diverse, as well: 20 percent of renter households are foreign-born, and 47 percent are minorities—a distinction from owner households, which are predominantly white.

This changing demand has been met with higher-end (and higher-priced) units; in fact, 40 percent of all additions to the market in 2016 rented for $1,500 or more, up from 15 percent in 2001, while 18 percent in 2016 rented for less than $850, down from 42 percent in 2001.

Lower-income renters, however, still, represent a significant share, and the discrepancy is extending them beyond their means, foiling any goal of owning. More income is needed to buy a home than rent one in the majority of markets: 29.8 percent of a household’s income monthly, versus 25.4 percent, according to data from realtor.com®.

Affordability

Affordability—the lack thereof—has other implications for ownership. Homebuyers facing limited options have investors to thank, at least partly, for the shortage of supply.

“For the past 10 years, the number of single-family homes that are rented has grown steadily and remains near the highest levels ever recorded,” says Aaron Terrazas, senior economist at Zillow. “The combination of foreclosures and growing rental demand following the housing crash was an attractive opportunity for investors large and small who were able to buy foreclosed homes and use them to meet the rental demand.

“At the same time, many long-time owners have opted to hold onto their homes as rentals even after they decide to move somewhere else,” Terrazas says. “With such a large portion of single-family homes being rented out, and with new homes being built more slowly than the market needs, home values will continue to rise, particularly among the most affordable homes with the highest demand.”

Annual Home Sales

Annual home sales, markedly, were cut by 270,000 due to the single-family rental surge, according to an analysis by Zillow.

With demand morphing and inventory strained, questions remain. To address the lack of lower-cost options, the Joint Center for Housing Studies calls for collaboration, including subsidies.

“This year’s report paints a complicated picture of the rental market,” said Christopher Herbert, managing director of the Joint Center for Housing Studies, in a statement. “We’re finally seeing the record growth in renters slow down, but while the market has responded to rental housing needs for higher-income households, there are alarming trends that suggest a growing inability to supply housing that is affordable for middle- and working-class renters, let alone those with very low incomes. Addressing these challenges will require bold leadership and hard choices from both the public and private sector.”

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

Changing Demand for Rentals Strains Supply

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27 Dec

Americans ‘Concerned’ About Homeownership in Light of Tax Bill

By A DiSegna

Americans ‘Concerned’ About Homeownership in Light of Tax Bill

Americans are concerned about homeownership in response to the Tax Cuts and Jobs Act, according to new realtor.com® research. The legislation, awaiting President Trump’s signature (at press time), passed on Wednesday this week.

More than one-third (36.2 percent) of respondents to a realtor.com survey, conducted Dec. 18-19 prior to the passage, were “concerned” about being a homeowner; 17.2 percent were “very concerned.” Just one-quarter of respondents, roughly, felt “positive” or “very positive” about the doubled standard deduction, and only about half that (12.4 percent) felt “very positive” about the elimination of the second-home mortgage interest deduction (MID). The bill doubles the standard deduction, from $13,000 to $24,000 for married taxpayers and from $6,500 to $12,000 for single taxpayers, and removes the MID on second homes.

Additionally, the bill is motivating some to move quicker—or not at all. Almost 14 percent of respondents to the survey said they will list their home sooner, while 7.6 percent said they will hold off on their plans to sell. Close to 30 percent of respondents, meanwhile, said they will buy faster; 14.2 percent will buy a cheaper home; 12 percent will delay their plans to purchase; and 2.3 percent will house-hunt in another location.

Notably, 57.1 percent of respondents to the survey believed the legislation will not impact their plans to sell, and 22.9 percent believed it will not impact their plans to purchase.

The bill caps the MID on new loans for primary residences at $750,000—a cut from the existing $1 million, but higher than the $500,000 originally proposed by House Republicans. The bill also:

Eliminates the MID for home equity loans, unless the funds go to home improvements;
Limits the state and local income, property and sales tax deduction to $10,000
Preserves the exclusion on capital gains on home sales

“The bill will have a significant impact on the housing market and overall economy, so it makes sense that people are wondering what it means to them,” says Joseph Kirchner, senior economist at realtor.com. “Some house hunters—particularly wealthy buyers—will see an increase in after-tax income, making an already tough housing market even more competitive. This increased demand could drive prices up even higher than they are already. And changes in the deductibility of mortgage interest and state and local taxes could cause challenges for many homeowners.”

Earlier this month, realtor.com Chief Economist Danielle Hale estimated homeowners in California, Maryland, New Jersey and New York would bear the brunt of the changes. California, especially—with its high prices—would be hard-hit.

“High housing costs in California [make] it the state with the third-highest average mortgage interest deduction, behind Hawaii and the District of Columbia,” said Hale. “…Lower-priced housing markets will also eventually be impacted.”

“While the impact of this bill may not be as harmful in many parts of the country, here in California, where the typical home costs two-and-a-half times the national home price, homeowners and would-be buyers will be hit especially hard,” said California Association of REALTORS® (C.A.R.) President Steve White following the passage.

The National Association of REALTORS® (NAR) acknowledged the positives in its own statement.

“The final tax reform bill is far from perfect, but it’s been greatly improved for homeowners over previous versions,” said NAR President Elizabeth Mendenhall in a statement. “REALTORS® should be proud of the good work they did to help get us here. We generated over 300,000 emails to members of Congress through two calls for action and held countless in-person meetings with legislators, all of which helped shape the final product.

“The results are mixed,” Mendenhall said. “We saved the exclusion for capital gains on the sale of a home and preserved the like-kind exchange for real property. Many agents and brokers who earn income as independent contractors or from pass-through businesses will also see a significant deduction on that business income. Despite these successes, we still have some hard work ahead of us. Significant legislative initiatives often require fixes to address unintended consequences, and this bill is no exception.

“The new tax regime will fundamentally alter the benefits of homeownership by nullifying incentives for individuals and families while keeping those incentives in place for large institutional investors,” Mendenhall said. “That should concern any middle-class family looking to claim their piece of the American Dream.”

More than 2,300 participated in the realtor.com survey.

For the latest real estate news and trends,

Americans ‘Concerned’ About Homeownership in Light of Tax Bill

Thinking of Selling or Buying A Home? I have a passion for Real Estate and love to share my marketing expertise! What is my home worth….