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| Provided to you Exclusively by Kevin A. Jones |
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For the Month of May 2024 --- Vol. 18, Issue 5
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| In This Issue |
"The future belongs to those who believe in the beauty of their dreams." - Eleanor Roosevelt The decision to purchase a home is a significant milestone for first-time and long-time homeowners. The choice between buying and renting a home can be a tough one. This issue will cover the following topics: What to Watch - Housing demand has improved from last year despite higher rates and low housing supplies. Housing - The Pros and Cons of Renting vs. Buying a Home Home Improvement - DIY Home Improvement Projects That Add Value to Your Home Q&A - How Much Money Do I Need for a Down Payment on a House? Please feel free to forward this newsletter to friends, family or co-workers who may find it helpful. |
| What to Watch |
The 2023 spring home buying season was sluggish, as large numbers of homebuyers rummaged through tight housing markets within a high-rate, low-inventory environment. Fast forward to this year's season and the environment has changed a bit. Overall, housing demand is making a healthy recovery this season compared to last year with purchase applications for 30-year fixed-rate purchase mortgages up from the same period last year, even as the median mortgage rate and median sales price have increased, reports Freddie Mac. First-time homebuyers continue to lead the pack this season, as they make up almost 6 out of 10 purchase applications. Freddie Mac went on to say that this year's spring homebuying season has started strong. Demand has improved from last year despite higher rates and low housing supplies. However, there is still much uncertainty related to broader affordability problems and how that will impact mortgage application volume. Demand for homes seems unabated so far in the first three months of 2024. And that momentum may very well continue throughout the spring homebuying season. Looking ahead, after some interest rate-friendly rhetoric from the Federal Reserve in early May, and seeing some weaker-than-expected economic data streaming in, borrowing costs could begin to push lower from their current levels. If interest rates can fall low enough for sellers looking to make a move, the supply problem could ease somewhat. Also, builders have been constructing smaller homes with incentives, and supply in that arena is above average for consumers to consider. Bottom line: Whether you need to relocate, downsize, or upsize or get out from under-paying rent and want a little space you can call your own, there will always be the right place for those in the hunt to purchase the American Dream of homeownership. Source: Mortgage Market Guide |
| Housing News |
Deciding whether to rent or purchase a home is a significant financial and lifestyle decision. Both paths have distinct advantages and drawbacks that need to be carefully weighed. A key benefit of renting is flexibility. If you're pursuing new job opportunities in different cities, renting is easier to move quickly without waiting to sell your current home. Renting also requires less upfront capital and makes budgeting for future home-buying costs easier. Renters seldom have property maintenance and repair expenses as they are often included in the rental price. A downside is that, as a tenant, you don't accrue any equity or investment toward future ownership. This means that every rent payment you make goes to someone else's investment rather than helping to build your net worth. Homeownership, meanwhile, is like an automatic investment in your financial future. Each mortgage payment increases your equity in an asset that appreciates over time. You can also benefit from tax deductions and settle down in a community. Purchasing does require large upfront costs, such as a down payment and closing fees. Regular home maintenance, repairs, taxes, and insurance need to be considered in your housing budget. There's also less flexibility should you want to relocate quickly. Overall, the right path for you depends on your finances, anticipated mobility, and short- versus long-term goals. Renting provides flexibility, simplicity, and open options for future home purchasing. Buying is an investment in attaining equity and stability. Carefully assess your situation to make the best decision based on your lifestyle and future goals. Sources: Investopedia.com, Moneygeek.com |
| Home Improvement |
Home improvement projects can enhance the aesthetic appeal of your property and potentially increase the overall value. With a little creativity and some sweat equity, you can take on DIY projects that add to your home's value and elevate the look and functionality of your living space. Update fixtures throughout the home. Replacing outdated faucets, lighting, and cabinetry in the kitchen and bathrooms can instantly modernize the space and add a fresh, contemporary vibe. Similarly, a fresh coat of paint in trendy hues such as sage green, warm terracotta, and moody blues can breathe new life into living rooms, bedrooms, and other parts of your home. Enhance your curb appeal. Thoughtful landscaping, colorful plants and manicured lawns help create an inviting first impression. Improving the exterior by adding a fresh coat of paint or updating fixtures can further boost your home's street presence and perceived value. Install innovative tech features. Smart home technology, voice control systems, and other high-tech features can add both convenience and appeal. These modern amenities simplify daily living and cater to the growing demand for tech-savvy homes among buyers. By tackling DIY projects with care and attention to detail, you can create a more enjoyable living environment and increase the market value of your home. Sources: Investopedia.com, Marketwatch.com |
| Q&A |
| How Much Do You Need For a Down Payment?
Q: How much money do I need for a down payment on a house? One of the biggest upfront costs of purchasing a home is the down payment. Lenders look closely at the amount of money you put down because it represents your initial investment and goes toward the total cost of the property. But just how much should you budget for this crucial component of your homebuying costs? Many homeowners arrange for 20% down to avoid paying private mortgage insurance. This means that to purchase a $300,000 home, for example, you would need $60,000 for a 20% down payment. However, 20% down is just a rule of thumb. Depending on your credit profile, income, and mortgage terms, you may be able to put down less. For borrowers with excellent credit scores, many conventional loan programs allow for down payments as low as 3%. So, on that same $300,000 home, you'd only need $9,000 down. Federal Housing Administration loans have down payment minimums at 3.5% of the purchase price. First-time homebuyers and low-to-moderate-income borrowers may also qualify for 100% U.S. Department of Agriculture or Veterans Affairs financing, both of which require zero down payment. But don't just look at the down payment. You also need enough cash reserves for closing costs, such as lender fees, title insurance, prepaid taxes, and home insurance. Closing costs typically run between 2% and 5% of the loan amount. So, for a $300,000 home, you may need another $6,000 to $15,000 on top of the down payment to cover these costs. Your down payment depends heavily on factors such as your credit and financing path. However, in general, having at least a 3% to 5% down payment plus enough for closing costs and prepaid costs is advisable to avoid high mortgage insurance charges. Plus, the higher your down payment, the lower your overall monthly costs will be. Source: Nerdwallet.com |
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