As someone who may have recently bought a home or (more likely) are thinking of buying a home now, you should know that most American’s consider home buying to be a solid investment. Despite the downturn that we are in right now, it appears that most people still agree that when you purchase a home you are making a good investment decision. According to a survey done by The National Association of Realtors of 3,793 home owners and renters in January 2011, both home owners and renters found the following in their “American Attitudes about Homeownership” survey…

The vast majority of both home owners and renters say that owning a home is a smart decision over the long term. Even in today’s challenging economy, 95% of owners and 72% of renters believe that over a period of several years, it makes more sense to own a home.

Home owners are much more likely to be satisfied with the quality of their family and community life than renters. While more than half of owners (56%) are “very” or “extremely” satisfied with the overall quality of their family life, only about one-third (36%) of renters report the same levels of satisfaction. Also, 43% of home owners are “very” or “extremely” satisfied with their community life, compared with 30% of renters.

An overwhelming majority of home owners are happy with their decision to own a home. A full 93% of owners surveyed would buy again.

Most renters aspire to home ownership. The majority of renters (63%) say they are at least somewhat likely to purchase a home at some point in the future. Among them, young adults (18- to 24-years-old) have the strongest aspirations for home ownership.

Source: Homefinder.com, February 2011

February 17, 2011 – Nationwide housing affordability during the fourth quarter of 2010 rose to its highest level in the 20 years since it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released today.

The HOI indicated that 73.9 percent of all new and existing homes sold in the fourth quarter of 2010 were affordable to families earning the national median income of $64,400. The record-setting index for the fourth quarter surpassed the previous high of 72.5 percent set during the first quarter of 2009 and marked the eighth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.

“Today’s report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “However, while this is good news for consumers, both home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales.”

Indianapolis-Carmel, Ind., was the most affordable major housing market in the country for the second consecutive quarter, after relinquishing for a quarter the top spot it has held for five years. In Indianapolis, 93.5 percent of all homes sold were affordable to households earning the area’s median family income of $68,700.

Also ranking near the top of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Syracuse, N.Y; Warren-Troy-Farmington Hills, Mich.; and Detroit-Livonia-Dearborn, Mich.

Among smaller housing markets, the most affordable was Elkhart-Goshen, Ind., where 97.0 percent of homes sold during the fourth quarter of 2010 were affordable to families earning a median income of $58,600. Other smaller housing markets near the top of the index included Lansing-East Lansing, Mich.; Kokomo, Ind.; Mansfield, Ohio; and Bay City, Mich.,.

Source: National Association of Home Builders

Builders applied for 3,720 new-home permits last year, a 2.6 percent increase over 2009, which was one of the weakest years for homebuilding in decades.

The homebuilding industry ended the year on a weak note, with 265 permits issued in December in the nine-county metro area. That was a slight drop from 279 in December 2009, according to Builders Association of Greater Indianapolis, which tracks building permits.

Counties showing gains in homebuilding permits last year were Madison, up 107 percent to 122; Johnson, up 59 percent to 383, Boone, up 12 percent to 304; and Morgan, up 5 percent to 88.

Hamilton County saw a 1 percent drop, to 1,354, while Marion County permits slid 6 percent, to 729. Hendricks County also registered a drop, of 10 percent, to 569 permits.

Homebuilders benefited early in 2010 from a federal tax income tax credit for homebuyers that spurred activity in the market. But the tax credit expired in the spring and permits fell for six of the last seven months of the year.

Source: Indianapolis Star

Our challenge now is in presenting the home-buying opportunity of a lifetime to consumers besieged by bad news and sensational headlines and sound bites of a consistently negative press.

As I write this commentary, mortgage rates stand at historic lows, thresholds we haven’t seen since the Truman administration. Likewise, home prices on a national basis are significantly lower than their peaks of the last decade.

Housing affordability, as measured by the National Association of Realtors, stood near record highs in September. Consider the typical American home now vs. October 2006. Four years ago, the principal and interest payment on an existing home priced at the national median—$218,900—was $1,085 after a 20% down payment and with the prevailing 30-year fixed mortgage rate of 6.31%. That same home today sells for $171,700 and, with a 20% down payment and 4% fixed mortgage for 30 years, carries a principal and interest payment of just $656.

Prospective buyers continue to focus on price, yet I submit that interest rates will be the most fluid part of the home-buying equation over the coming months and beyond. As the world economy grows, so will the demand for natural resources, including lumber and other materials used to build homes.

I like to say the only time people really think about their home price is when they buy and when they sell. However, they think about their house payment every month and those payments won’t go much lower. If you are lucky and can squeeze another $10,000 out of that national median price of $171,700, you might lower your monthly payment by around $47 at current rates. However, a 1% jump in rates to 5% would add nearly twice that amount to the monthly payment.

Of course, this does not discount why many consumers are hesitating to enter the housing market. Slow economic recovery and job growth have most Americans concerned about the future. Still other consumers face negative equity or have dealt with foreclosure—challenges that must play out over time.

Yet for others, particularly those who’ve owned their property for more than five years and the growing ranks of those considering homeownership for the first time, housing and its long-term virtues of shelter, wealth-building and personal and civic pride are available at bargain-basement prices that should not be ignored.

Americans still believe that buying a home is a sound financial decision and a key part of their American Dream. They want a home for all the right reasons—as a place to raise a family, build for the future and face life’s opportunities and challenges. They believe in the home as a long-term asset, not a siding-clad automated teller machine.

It comes down to educating buyers and sellers – helping them weigh homeownership possibilities and benefits – enabling them to capture an opportunity of a lifetime.

Written by: Earl Lee
Source: RISMedia, January 3, 2011

Please discuss any home ownership questions you may have with your trusted real estate agent. He or she is there is help you – you simply need to ask.

Other major advantages of working with a real estate agent include:

Convenience
If you’re not using a real estate agent and you want to see five properties, you’ll have to make five appointments with five agents and it might take all day – or several days. But a real estate agent can make all those calls for you and you can see multiple properties on one trip.

Objectivity
A real estate agent can be objective about homes you view and highlight faults, as well as strong points. Additionally, the agent will be familiar with sales of comparable homes in the area and can counsel you on making an offer that’s fair to you, as well as acceptable to the sellers.

You should select a real estate agent who’s familiar with the neighborhoods where you’re interested in buying.

Agents knowledgeable in a particular area can tell you which specific locations are more desirable than others, even which side of any given street is better. Most buyers can’t possibly know that themselves. If you see two homes on the same street that look similar, yet have significant differences in asking price, someone who’s representing your interests will be able to tell you why – and perhaps whether the more expensive house is worth it.

Negotiating
Buyers don’t sit across the table from sellers. You’re depending on your agent to get your points across and negotiate the best deal, and it’s important that your representative is someone you have trust in.

Obtaining a Mortgage
A real estate agent can counsel buyers on choosing an appropriate home mortgage and may be able to help obtain the best terms. Most can tell you what’s a good rate and whether it’s worth it to keep shopping around. Some even have connections to mortgage brokers. But its most important to work with a lender that YOU are comfortable with.

Making an Offer
An experienced real estate agent is invaluable! There are many clauses real estate agents can put into contracts that protect buyers’ interests.

Pushing the Deal to Closing
Once an offer is accepted, buyers can continue to rely on their agents. Your agent can help you work with home inspectors. They’re sometimes better inspectors than they are communicators. An agent can help you determine what to take seriously without over-reacting.

A real estate agent can help keep the transaction on track by making sure deadlines are met and that the loan is finalized in time for the closing.

Written by: Jeremy Pilarski
Submitted by: David Brenton