How Long Does It Take To Save A Down Payment?

In a recent study conducted by Builder.com , researchers determined that nationwide it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.

Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage a renter spends on housing in each state and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

What if you only needed to save 3%?

What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

Bottom Line

Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.

Selling Your House? 5 Reasons You Shouldn't For Sale By Owner

In today's market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five of those reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner :

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always, find some problems with the house
• The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

• 44% on the internet
• 33% from a Real Estate Agent
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Foreclosure Inventory Drops As Economy Improves

Some Highlights:

• Foreclosure Inventory has dropped year-over-year for the last 4 years (48 months).
• Only 3.4% of US homes are in serious delinquency.
• 29 states have a foreclosure inventory rate lower than the national average.
• For more information you can download the full report here

10 Seasonal Tips: Simple ways to save time and enjoy the holidays

(BPT) - It may be the most wonderful time of year, but at times, it can also feel like the most stressful. This holiday season, take a fresh approach to your "to-do's list" to save time and energy so you can be merry and bright. These 10 tips and tricks will help you relax, unwind and enjoy all the best parts of the holidays.



Wrap while shopping

It's a given that shopping early avoids the last-minute frenzy, but you can save even more time and stress by getting gifts wrapped while out and about. Many department stores offer gift wrap services, all you need to do is ask.



Streamline holiday cards

Sending cards is a holiday tradition, but it shouldn't cause unneeded stress. No need to worry about a dated address book - an easy trick is to cut return address labels from each card you receive and place in an envelope. Now it's easy to send cards to loved ones and update your address book without hassle.



Use baking hacks

Using premade foods is one of the simplest (yet yummy) ways to create holiday bakery delights. Check out www.facebook.com/entenmanns for simple, amazing recipes like Entenmann's Dreamy Chocolate Bars that feature crumbled Rich Frosted Donuts as the secret ingredient. While you're baking, double the batch to have an extra on hand for a hostess gift.



Go tech free

Smartphones ringing, emails beeping, texts buzzing - technology is time consuming. Avoid feeling overwhelmed by designating tech-free times for your family each day. Use this time (1-2 hours) to relax and focus on each other, perhaps with a hot cup of cocoa - the emails and messages will still be there later.



Schedule a salon visit

With a long holiday to-do list, it's hard to find time for you. That's why treating yourself to a haircut or manicure can do wonders for your holiday spirit. Plus, you'll look and feel fantastic when you attend all those festive get-togethers.



Opt for an open house

Having a holiday gathering adds to the season's merriment, but where will everyone fit and how will you feed them? Instead of a formal dinner, opt for an open house with hors d'oeuvres. You'll have less work and more time to spend with love ones as they come and go.



Embrace holiday breakfasts

Start every day off right by enjoying a delicious breakfast with your family. No need to spend hours in the kitchen cooking; instead include iconic breakfast classics that you and the kids love. For example, scrumptious Entenmann's Donuts are undeniable when paired with fresh fruit for a quick breakfast delight. Find more breakfast inspiration at www.facebook.com/Entenmanns.

5 perfect presents make gift-giving easy

The holidays are a special time of year to show the important people in our lives how much we appreciate them - and that means gift-giving. If picking out holiday gifts is painless for you, you're one of the lucky ones. More often than not, people have a tough time finding the perfect present for friends and family, particularly if you have someone on your list who already seems to have everything. So, if you're stumped as to what to get that impossible-to-buy-for person, consider these five gift ideas that are sure to brighten anyone's holiday:



1. Gift your services



Rather than giving a tangible item, give your services; it's the perfectly practical gift for the person on your list who may be short on space, lacking financial resources or would just appreciate a little extra help. Love kids? Offer free child care so the recipient can enjoy an evening out on the town without worrying about the little ones. Have a knack for cooking? Gift a weeknight meal that you deliver to the recipient's doorstep. Known for your organization? Offer your skills to help the recipient organize a closet, office or other cluttered space.



2. Make a miracle happen



Positively impacting others by giving a charitable gift in the recipient's name embraces the true meaning of the season. The new Give Miracles Holiday Catalog from national nonprofit Children's Miracle Network Hospitals features in-demand pediatric items and services that local children's hospitals need anything from comforting teddy bears ($30) to a case of extra-small preemie diapers smaller than the palm of your hand ($170)! For high-impact gifts like a physical therapy toy kit ($375) or a pediatric wheelchair ($970), funds can be collectively raised by numerous gift-givers. This option is ideal for extended families looking to do something more meaningful than the typical gift exchange.



And to make that 'do-good' feeling for the recipient last long after the holidays are over, Give Miracles donors receive ongoing communication from Children's Miracle Network Hospitals throughout the year about how their gift is making an impact at their local hospital. Browse the gift catalog at www.GiveMiracles.org.



3. Purchase a membership to a monthly club



Rather than wasting money on a new gadget that will quickly be forgotten, give a gift that benefits the recipient all year long. Monthly clubs provide fun deliveries to a loved one's address, an ongoing reminder of your generosity. Monthly gift clubs are available for just about anything, from wine and beer, to jams and cheese, to bacon and fruit.



4. Give a gift that grows



Potted plants are a fantastic gift idea because they represent how your love continues to grow for that special someone. Plus, plants are a wonderful addition to interior decor and help clean the air. With so many houseplants readily available, you're sure to find the perfect one for the person who has everything. Does he gravitate toward decor with vivid color? Choose a flowering plant that provides delightful blooms. Does she love Asian culture? How about gifting a bonsai tree or a bamboo plant?



5. Provide an experience



Often, it's not what's in the box, it's the memory that stays with so many people after the holidays have passed. That's why giving a special experience can make a truly meaningful gift. Think about what really interests the recipient or an activity they've had on their bucket list. Perhaps it's a hot air balloon ride or a white water rafting daytrip. If the person really loves to shop, hire a personal shopper for the day and let them see what it's like to live like a star. If the recipient loves gourmet food, purchase a spot in a class taught by your town's hottest chef.



Any one of these ideas is sure to show that hard-to-shop-for person on your list that you've put some real thought into their gift. And ultimately, isn't it the thought that counts?

What You Really Need To Qualify For A Mortgage

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 5% or less.

2. FICO Scores

The Ipsos survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower.

Bottom Line

If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able,’ sit down with someone who can help you understand your true options.

'Tis the season for holiday baking

(BPT) - The holidays are a busy season. From cooking and baking for family and friends to holiday shopping and preparing for time-honored traditions, the season will pass in a blur. Regardless, it's also the time of year when everyone has holiday cookies and extra-special meals on their minds.



While dreaming of countless delectable treats, like homemade eggnog and royal icing, there is also a risk that at-home cooks and bakers strive to avoid: salmonella. Renowned baker and author of The Cake Bible and Rose's Christmas Cookies, Rose Levy Beranbaum, uses pasteurized eggs instead of worrying about the risk of salmonella when baking her holiday treats.



Beranbaum offers tips for baking this holiday season and her favorite iced sugar cookie recipe.



* Prep the kitchen. Put away unnecessary items, clean off the counter or table top and make sure that all of the tools and ingredients are available to make for a smoother baking process.



* Measurement is key. Unlike cooking, baking requires exact measurement. One important technique is the spoon-and-sweep method for measuring flour, which can settle. Scoop the flour into the measuring cup, ensure it is full and sweep off the excess with a knife.



* Be patient. Allow the cookie sheets to cool completely before using for the next batch to avoid flat cookies.



* Think through baking times. Looking for a slightly softer, chewier cookie? Roll the dough to 1/4-inch thickness and reduce the baking time slightly



* Use high quality ingredients. Products like Safest Choice Pasteurized Eggs eliminate the risk of salmonella - and they add a little fun and excitement back into the kitchen for anyone who enjoys a quick taste of cookie batter or using eggs in raw preparations like Beranbaum's royal icing recipe.



Traditional Rolled Christmas Sugar Cookies



Makes about 4 dozen 3-inch cookies



Ingredients:

2 1/4 cups (11.25 ounces) bleached all-purposed flour

1/4 teaspoon salt

3/4 cup sugar

12 tablespoons unsalted butter

1 large Safest Choice Pasteurized Egg

1 tablespoon (finely grated) lemon zest

1 teaspoon pure vanilla extract

Royal Icing (recipe follows)



Directions:

Soften the butter. In a mixing bowl, cream together the sugar and butter until fluffy. Add the egg, lemon zest, and vanilla extract and beat until blended. In a small bowl, whisk together the remaining dry ingredients. On low speed, gradually add them to the butter mixture and mix until incorporated. Add water, a few drops at a time, only until the dough starts to come away from the sides of the bowl.



Scrape the dough onto a sheet of plastic wrap and use the wrap, not your fingers, to press the dough together to form a thick flat disc. Wrap it well and refrigerate for at least 2 hours, preferably no longer than 3. Place 2 oven racks in the upper and lower thirds of the oven. Preheat oven to 350 F. On a lightly floured surface, roll out the dough, covered with plastic wrap to prevent cracking, to a 1/8-inch thickness. Cut shapes using your favorite cookie cutters or freehand with a knife. With a small spatula, transfer the cookies to the prepared cookie sheets. Bake for 8 to 12 minutes or until the cookies begin to brown around the edges. For even baking, rotate the cookie sheets from top to bottom and front to back halfway through the baking period. Use a small spatula to transfer the cookies to wire racks to cool before decorating with Royal Icing, dragees sprinkles and glittering holiday edibles. Store in an airtight container at room temperature.



Royal Icing



Ingredients:

3 large Safest Choice pasteurized egg whites

4 cups (1 pound) powdered sugar



Directions:

In a large mixing bowl, place the egg whites and powdered sugar and beat, preferably with the whisk beater, at low speed, until the sugar is moistened. Beat at high speed until very glossy and stiff peaks form when the beater is lifted (5 to 7 minutes). The tips of the peaks should curve slightly. If necessary, more powdered sugar may be added. Keeps for 3 days in an airtight container at room temperature.

Do You Know The Difference Your Interest Rate Makes?

Some Highlights:

• Interest rates have come a long way in the last 30 years.
• The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford.
• Experts predict that rates will increase by 3/4 a percent over the next 12 months.
• Secure a low rate now to get the most house for your money.

The Residential Rental Market Heading into 2016

Below are quotes from experts as well asindustry reports & articles that cover the residential rental market in the U.S.

The experts…

Zillow Chief Economist Svenja Gudell :

"Make no mistake: Despite this recent slowdown in rental appreciation, the rental affordability crisis we've been enduring for the past few years shows no signs of easing, especially as income growth remains weak. It will take a lot more supply, and a lot more renters-turned-homeowners, to fully reverse this.”

Lawrence Yun, Chief Economist of the National Association of Realtors

“Rents and home prices are expected to exceed income growth into next year because of the insufficient creation of new home construction and the detrimental impact its inadequacy continues to have on housing costs in several markets.”

David Brickman, Executive Vice President of Freddie Mac Multifamily

"We know rents are rising faster than incomes, and now we have data to show that many renters don't have enough to pay all their debts each month, which is forcing them to make tradeoffs, such as cutting spending on other items.”

The reports and articles…

Zillow's 2016 Housing Market Predictions

“Rising rents won't let up in 2016, and will continue to set new records. The next year will bring the least affordable median rents ever.”

2015 rent.com Rental Market Report

“68% of property managers predict that rental rates will continue to rise in the next year by an average of 8%”

CNBC

“The primary reasons cited for the latest rises were increasing demand and low inventory. Vacancy rates for rental housing nationally dropped to a 20-year low of 6.8 percent in the second quarter…Rents and occupancies are currently hovering at historic highs as supply isn't keeping up with demand.”

Bottom Line

If you are one of the many renters debating a home purchase, meet with a real estate professional in your area who can show you your options, before your rent goes up!

NAR Reports Reveal Two Reasons to Sell This Winter

The most important data point revealed in the report was not sales but instead the inventory of homes on the market (supply). The report explained:

• Total housing inventory decreased 2.3%to 2.14 million homes available for sale
• That represents a 4.8-month supply at the current sales pace
• Unsold inventory is 4.5% lower than a year ago

There were two more interesting comments made by Yun in the report:

1. "New and existing-home supply has struggled to improve, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets."

In real estate, there is a guideline that often applies. When there is less than 6 months inventory available, we are in a sellers’ market and we will see appreciation. Between 6-7 months is a neutral market where prices will increase at the rate of inflation. More than 7 months inventory means we are in a buyers’ market and should expect depreciation in home values. As Yun notes, we are currently in a sellers’ market (prices still increasing).

2. "Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home.” As rents and prices increase, potential buyers will not able to save as much for a down payment and many may become priced out of the market.

Takeaway: Inventory of homes for sale is still well below the 6 months needed for a normal market. Prices will continue to rise if a ‘sizeable’ supply does not enter the market. Take advantage of the ready willing and able buyers that are still out looking for your house.

Bottom Line

If you are going to sell, now may be the time.

The Impact of Higher Interest Rates

Last week, an article in the Washington Post discussed a new ‘threat’ homebuyers will soon be facing: higher mortgage rates. The article revealed:

“The Mortgage Bankers Association expects that rates on 30-year loans could reach 4.8 percent by the end of next year, topping 5 percent in 2017. Rates haven’t been that high since the recession.”

How can this impact the housing market?

The article reported that recent analysis from Realtor.com found that -

“…as many as 7% of people who applied for a mortgage during the first half of the year would have had trouble qualifying if rates rose by half a percentage point.”

This doesn’t necessarily mean that those buyers negatively impacted by a rate increase would not purchase a home. However, it would mean that they would either need to come up with substantially more cash for a down payment or settle for a lesser priced home.

Below is a table showing how a jump in mortgage interest rates would impact the purchasing power of a prospective buyer on a $300,000 home.

Bottom Line

If you are considering a home purchase (either as a first time buyer or move-up buyer), purchasing sooner rather than later may make more sense from a pure financial outlook.

Rent vs. Buy: Either Way You're Paying A Mortgage

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains :

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

The graph below shows the widening gap in net worth between a homeowner and a renter:

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting withhome values and interest rates projected to climb.



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Distressed Property Sales Hit New Low

The National Association of Realtors (NAR) just released their Existing Home Sales Report revealing that distressed property sales accounted for 6% of sales in October. This is down from 9% in 2014 and the lowest figure since NAR began tracking distressed sales in October 2008.

Below is a graph that shows just how far the market has come since January 2012 when distressed sales accounted for 35% of all sales.

Existing Home Sales Up Year-Over-Year

Mortgage interest rates remained below 4% in October prompting existing home sales to stay at a healthy annual pace of 5.36 million. Year-over-year sales were up 3.9%.

Inventory of homes for sale remain below the 6-month supply that is necessary for a normal market, as they fell 2.3% to a 4.8-months supply. The shortage in inventory has contributed to the median home price rising an additional 5.8% to $219,600.

NAR’s Chief Economist , Lawrence Yun had this to say about the lack of inventory:

"New and existing-home supply has struggled to improve so far this Fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets."

There is good news though, as Yun went on to say:

"As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago."

Bottom Line

If you are debating putting your home on the market this year, now may be the time. Buyers are still out there looking for their dream home. Meet with a local real estate professional who can help you determine your best plan.



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