Source: Market Watch
The recession is continuing affect one aspect of Generation X’s financial health — and it could be putting their retirements at risk.
Generation X home owners with mortgage between the ages of 35 and 50 on average have a loan-to-value ratio (LTV) of 70 percent, according to a report released this week by real-estate website Zillow. Comparatively, the average LTV among all home owners is 62 percent. The loan-to-value ratio measures how much a borrower still owes relative to the value of the property.
Having a lower LTV means that a home owner has a lower amount left to pay on the mortgage — comparatively, home owners with high LTVs are at a greater risk defaulting on their loans. Making mortgage payments or providing a larger down payment will lower the LTV for a homeowner, and home owners with lower LTVs can qualify for a lower mortgage rate.
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Thursday, May 3, 2018
Tuesday, May 1, 2018
Wednesday, April 25, 2018
Wednesday, April 11, 2018
Why taking the highest offer isn’t always prudent
Source: CNBC
Sales and prices are moving so quickly that appraisals are not keeping up. If the appraisal doesn't match the contract price, the buyer doesn't get the mortgage, and the deal dies. The national median price of a home sold in June hit $263,800, a record, according to the National Association of Realtors. In addition, the average number of days a listing took to go under contract fell to just 28, down from 34 a year ago. "Anytime prices move up fast, the actual appraisal process, because they're looking back in history, not forward into the future, they are lagging behind," said Lawrence Yun, chief economist at the Realtors group. "From the buyer's perspective, it's a tough situation where they want to rely on the value of the home, on the appraisal, yet they know that if they decide to back away there are other buyers waiting to pounce." Lenders are now far more careful with appraisals than they were during the last housing boom. In turn, appraisers are being very cautious with the current price run-up. That history gives today's cash buyers, many of whom are investors flipping homes for a quick profit, a major advantage over mortgage-dependent buyers. Once again, they're pushing prices higher artificially, but this time they are doing it without the banks.
Read the full story
Sales and prices are moving so quickly that appraisals are not keeping up. If the appraisal doesn't match the contract price, the buyer doesn't get the mortgage, and the deal dies. The national median price of a home sold in June hit $263,800, a record, according to the National Association of Realtors. In addition, the average number of days a listing took to go under contract fell to just 28, down from 34 a year ago. "Anytime prices move up fast, the actual appraisal process, because they're looking back in history, not forward into the future, they are lagging behind," said Lawrence Yun, chief economist at the Realtors group. "From the buyer's perspective, it's a tough situation where they want to rely on the value of the home, on the appraisal, yet they know that if they decide to back away there are other buyers waiting to pounce." Lenders are now far more careful with appraisals than they were during the last housing boom. In turn, appraisers are being very cautious with the current price run-up. That history gives today's cash buyers, many of whom are investors flipping homes for a quick profit, a major advantage over mortgage-dependent buyers. Once again, they're pushing prices higher artificially, but this time they are doing it without the banks.
Read the full story
Wednesday, April 4, 2018
Opinion: A better way to solve the housing crisis
Source: Los Angeles Times
To address Los Angeles’ housing crisis, Mayor Eric Garcetti has proposed a “linkage fee” on new development. The city would charge new residential developments of more than five units $12 a square foot, and new commercial developments $5 a square foot, to finance subsidized affordable housing. This proposal is well-intentioned. Given our politics, and the realities of Proposition 13, it might be the best L.A. can do. But it won’t raise much money or build much housing, and it dodges rather than solves the fundamental problem in our housing policy. We should try for better. Linkage fees essentially tax new development, but housing in Los Angeles is expensive because L.A. doesn’t have much development. With little to tax, revenue would stay low, and so would affordable housing production. City Hall predicts that the fee will raise $100 million a year. Affordable housing costs, on average, almost $450,000 per unit to build., That works out to about 225 units annually. Those units would unquestionably change the lives of the people who got them, but the city needs hundreds of thousands, not hundreds, of affordable units.
Read the full story
To address Los Angeles’ housing crisis, Mayor Eric Garcetti has proposed a “linkage fee” on new development. The city would charge new residential developments of more than five units $12 a square foot, and new commercial developments $5 a square foot, to finance subsidized affordable housing. This proposal is well-intentioned. Given our politics, and the realities of Proposition 13, it might be the best L.A. can do. But it won’t raise much money or build much housing, and it dodges rather than solves the fundamental problem in our housing policy. We should try for better. Linkage fees essentially tax new development, but housing in Los Angeles is expensive because L.A. doesn’t have much development. With little to tax, revenue would stay low, and so would affordable housing production. City Hall predicts that the fee will raise $100 million a year. Affordable housing costs, on average, almost $450,000 per unit to build., That works out to about 225 units annually. Those units would unquestionably change the lives of the people who got them, but the city needs hundreds of thousands, not hundreds, of affordable units.
Read the full story
Thursday, March 29, 2018
99% Of Experts Agree: Home Prices Will Increase
Some believe that the combined effects of the new tax code and rising mortgage rates will have an adverse impact on residential real estate prices in 2018. However, the clear majority of recently surveyed housing experts believe that home values will continue to rise this year.
What is the Home Price Expectation Survey?
Each quarter, Pulsenomics surveys a nationwide panel of economists, real estate experts and investment & market strategists. Those surveyed include experts such as:
Daniel Bachman, Senior Manager, U.S. Economics at Deloitte Services, LP
Kathy Bostjancic, Head of U.S. Macro Investors Service at Oxford Economics
David Downs, Real Estate Finance Professor at VCU
Edward Pinto, Resident Fellow at American Enterprise Institute
Albert Saiz, Director at MIT Center for Real Estate
Where do these experts see home values headed in 2018?
Here is a breakdown of where they see home values twelve months from now:
21.6% believe prices will appreciate by 6% or more
71.6% believe prices will appreciate between 3 and 5.99%
5.7% believe prices will appreciate between 0 and 2.99%
Only 1.1% believe prices will depreciate
Bottom Line
Almost ninety-nine percent of the top experts studying residential real estate believe that prices will appreciate this year, and over 93% believe home values will appreciate by at least 3%.
What is the Home Price Expectation Survey?
Each quarter, Pulsenomics surveys a nationwide panel of economists, real estate experts and investment & market strategists. Those surveyed include experts such as:
Daniel Bachman, Senior Manager, U.S. Economics at Deloitte Services, LP
Kathy Bostjancic, Head of U.S. Macro Investors Service at Oxford Economics
David Downs, Real Estate Finance Professor at VCU
Edward Pinto, Resident Fellow at American Enterprise Institute
Albert Saiz, Director at MIT Center for Real Estate
Where do these experts see home values headed in 2018?
Here is a breakdown of where they see home values twelve months from now:
21.6% believe prices will appreciate by 6% or more
71.6% believe prices will appreciate between 3 and 5.99%
5.7% believe prices will appreciate between 0 and 2.99%
Only 1.1% believe prices will depreciate
Bottom Line
Almost ninety-nine percent of the top experts studying residential real estate believe that prices will appreciate this year, and over 93% believe home values will appreciate by at least 3%.
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