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The National Association of Home Builders’ “Eye On Housing” highlights a recent study that demonstrates a link between home price gains – and homeownership in general – and the educational attainment and future earnings of children.
The results of the study, recently published by economists at the Federal Reserve Bank of Boston, indicates that homeowning parents are better able to invest in the education of their children. When the homeowners’ children are 17 years-old, a 1 percentage point increase of their parents’ area home prices yields approximately 0.9% higher average annual earnings later in life and 1.5% lower average annual income for renters’ children.
The research also indicates that home price growth when children are aged 17 increases higher education enrollment rates at age 19.
A new article from The Atlantic takes a look at homeownership as a means for building wealth, highlighting one couple who, after years of renting, are looking forward to the privacy and stability that homeownership offers.
The ideal of American homeownership may have been tarnished during the recession, as the values of so many homes plummeted and the number of foreclosures across the country soared. But for many Americans, the emotional rush of buying a home still represents a significant marker of stability and financial success. Buying often gives families access to safer neighborhoods, better schools, and more services than renting. And, like it or not, homeownership still offers the best way to save money for the majority of Americans by building up equity, especially in this era of dwindling pensions and stagnant wages.
“It is a forced saving mechanism, and if you don’t have to think about saving, it goes better,” says Brett Theodos, a senior research associate at the Urban Institute.
Here at Lennar, we’re fortunate to be able to share the experience with our customers as they celebrate the moment when they become homeowners for the first time. And we also know that although the path to first time homeownership can be an exciting one, it can also be a nerve-wracking experience at the same time. Especially when you don’t know exactly what to expect.
This new article from Bankrate highlights five steps that first-time homebuyers can take to help make the process go more smoothly. The learning curve can be steep, but most of the issues can be resolved by doing a little financial homework at the outset.
The homebuyer’s credit score is among the most important factors when it comes to qualifying for a loan these days. To get a sense of where your credit stands, get your free credit report and scour it for mistakes, unpaid accounts or collection accounts.
Ideally, first-time homebuyers would know how much they can afford to spend before the mortgage lender tells them how much they qualify for. By calculating their debt-to-income ratio and factoring in a down payment, buyers should have a good idea of what they can afford, both upfront and monthly, when it comes to their home.
According to a new article from Bankrate, the key to increasing your credit score is good payment behavior along with time and a healthy mix of credit types. But a quick fix? Despite what some commercials or online credit repair ads might proclaim, there are no real quick fixes when it comes to your credit. Smart financial moves such as closing accounts or paying off loans early may not be the credit boosters you think they are.
To help you sort the fact from the fiction, Bankrate tackles some long-held, but bogus beliefs that won’t help you build better credit.
For example, many consumers assume if they opt out of credit card offers, there will be fewer credit inquiries on their credit reports, says John Ulzheimer, president of consumer education at CreditSesame. However, those inquiries are considered “soft” inquiries and don’t affect your credit score, Ulzheimer says. You can keep the offers coming if you’d like, but doing so won’t help you build better credit.
Another myth is that closing old accounts will boost your score. But closing accounts typically won’t help your score and could possibly dent it, says Trey Loughran, president of personal information solutions at Equifax. The results can shorten your credit history eventually and leave you with a smaller amount of available credit, both of which can harm your efforts to build better credit. The length of credit history shows how seasoned of a borrower you are, so the more positive experience you have, the better.
As this article is being posted to our Lennar Open Door blog, temperatures in New York City are at 18 degrees, Chicago a breezy 20 degrees, and it’s 12 degrees in Boston (with a wind chill that’s making it feel like two degrees). It’s a perfect time for an article about moving to a place with a much warmer climate, especially for those looking to retire.
But it may not be as simple as tossing out your hat and gloves, according to this article from U.S. News & World Report, which offers some tips for a successful move to the Sunbelt.
For example, the best way to get a feel for a retirement spot is to try it out. Consider renting for the first six months or a year to get a feel for the area without making a big financial commitment. If the first place you try doesn’t fit your needs, then it’s relatively easy to move on to someplace new.
Housing costs are often significantly lower in the Sunbelt, which offers opportunities to improve your retirement finances and boost your standard of living. Tax rates vary considerably by state, and moving in retirement can provide opportunities to significantly reduce your tax bill.
Building on housing data compiled by NerdWallet identifying the top 10 small, mid-sized, and big cities for homeowners, Builder released its own revised list of the top 10 big cities for new homeownership.
Among the top 10 markets on the list: San Antonio, Raleigh, Denver, Charlotte, Nashville and Jacksonville.
Builder used Metrostudy data to compare the median price for existing versus new homes, calculating how much more home buyers in each market would pay for a new home based on last year’s median closing price. The percent increase represents the additional cost based on the existing home median closing price and shows the difference in median price.
Median closing prices for new homes in all ten cities held under $300,000 last year. New home buyers in the top big cities for homeownership can also expect to find new homes for less than $200,000 more than existing, which based on higher average household incomes than smaller, neighboring cities bodes well for families who want to spring for new.
A new article from U.S. News highlights multigenerational homes as one example of how Americans can find creative ways to become homeowners.
The recession caused many Americans to rethink whether homeownership truly is the American dream, yet a fair number of them still prefer owning to renting. In fact, a 2013 survey commissioned by the MacArthur Foundation found that more than 7 in 10 renters hope to own some day. But with stagnant wages for the past several years, Americans wishing to buy a home sometimes have to get creative.
For example, multigenerational homes are becoming more mainstream. In fact, a Pew Research report found that 57 million Americans (about 18 percent of the population) lived in multigenerational households in 2012, compared to 28 million in 1980.
Interestingly, though, it’s not just parents and adult children who join forces to buy a home. Friends or siblings might enter into a co-buying arrangement.
A new article from Business Insider collects some of the most recent housing data, based on analysis by Deutsche Bank, that highlights some interesting and promising signs for the housing market.
America’s demographics and the aftermath of the Great Recession have led to a large reservoir of potential housing demand. There are a huge number of younger millennials who are about to hit the prime years for going out and starting households.
In the wake of the Great Recession, lots of those millennials have been stuck either staying at home, or moving back in with their parents. As economic conditions improve, they will become more likely to strike out on their own:
That process of venturing out and forming new households may have already begun. There has been a spike recently in the rate of household formation. This trend could lead to a rapid increase in the demand for housing in the near future.
Meanwhile, consumers are feeling more optimistic and confident about the future of the housing market than they have in years.
A new article from Bankrate explains why this winter is an ideal time to buy and sell a home, highlighting five housing trends that home buyers and sellers should expect to see this season.
Mortgage rates have stayed low for much longer than most mortgage experts had expected. This winter may be the last chance for buyers and refinancers to grab rates at the bottom. The Mortgage Bankers Association predicts the 30-year fixed rate will reach 4.4 percent by the end of the first quarter. That’s slightly higher than where rates are now, but it’s still attractive.
If you have sat on the sidelines, waiting to refinance or buy, you may be in for a surprise if you wait too long. The Federal Reserve is likely to raise the federal funds rate in 2015, and when that happens, mortgage rates will jump, says Brett Sinnott, director of secondary marketing at CMG Mortgage Group in San Ramon, California.
“The clock is ticking,” Sinnott says. “Act now. The first quarter is going to be crucial in getting a loan completed.”
