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New Report Finds Waiting to Buy a Home Could Cost Thousands

New Report Finds Waiting to Buy a Home Could Cost Thousands

With interest rates and home prices expected to climb in the next year, the financial penalties of delaying or forgoing a home purchase in today’s market have become very steep, according to the inaugural Opportunity Cost Report released recently by®, a leading provider of online real estate services operated by News Corp subsidiary Move, Inc.

The proprietary report examines a wide range of factors, including the long-term financial impact of owning versus renting a home, the likely monetary gain renters forego in waiting to buy and the financial benefits of homeownership by market.

“Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of the projected increase in mortgage rates and continuing price appreciation,” says Jonathan Smoke, chief economist for®. “The problem is inventory is low, which has many would-be home buyers –especially first timers – standing on the sidelines and missing out on potentially material financial gains.”

Nationally, the estimated wealth an average buyer would accumulate over a 30-year period based on today’s dollars totals $217,726. Although some markets are more buyer-friendly than others, national data shows homeowners see significant financial benefits as compared to lifetime renters. In 88 percent of MSAs, buying a home produces a financial benefit of at least $100,000 over 30 years.

Ten markets offer an especially considerable upside to owning, with estimated 30-year financial gains above $500,000, and opportunity costs of waiting three years as high as $200,000. These MSAs, in California and other Western states, are relatively expensive markets with strong housing demand and limited supply. The potential long-term wealth in these areas is the greatest nationwide, and likewise, the long-term financial penalty for delaying ownership is substantial, due to price appreciation, escalating rents, and higher mortgage rates on the horizon.

“This analysis looks solely at the financial reasons to buy a home, based on assumptions about rising mortgage rates and changes in home values,” Smoke says. “It’s important to remember that a home purchase decision is deeply personal. Potential buyers need to consider factors such as upcoming life events, job security and potential relocation, in addition to financial benefits, because they too can have a significant impact on ownership.”

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on August 3rd, 2015 4:54 PMLeave a Comment

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July 31st, 2015 11:19 PM

Exciting Changes to Freddie Mac Guidelines!

Freddie Mac recently announced some exciting changes to their current policies and underwriting guidelines. These changes are considerably positive, to both industry professionals and consumers. Here are the changes that will have the biggest impact to you and your business:

Debt-to-income ratio calculation
Effective for loans closing on or after August 1, 2015, the minimum monthly payment amount that must be included in the debt-to-income ratio (“DTI”) calculation for deferred student loans will decrease from 2% to 1% of the outstanding balance.

Increase in Maximum Number of Financed Properties
Effective for loans closing on or after October 26, 2015, the maximum number of financed properties that a borrower may own or be obligated on, will increase from four (4) to six (6) when the transaction is for a second home or investment property (1-unit only). In addition, the maximum Loan-to-Value (LTV) for these purchase transactions will be 85% (mortgage insurance applies).

Rental Income
Effective for loans closing on or after October 26, 2015, Freddie Mac is removing their previous requirement that the borrower have a two-year history of managing investment properties, in order to use rental income for qualifying purposes.

Rent Loss Insurance
Effective for loans closing on or after October 26, 2015, Freddie Mac is removing their previous requirement that the borrower have at least six (6) months of rent loss insurance coverage, when using rental income from the subject investment property for qualifying purposes.

The removal of these restrictions will make a measurable difference in your homebuyers’ purchasing power, and lighten their burden of proving their creditworthiness.

USDA Upfront Guarantee Fee Increase

USDA Rural Development announced an increase to the upfront guarantee fee on Guaranteed Rural Housing (GRH) Loans from 2% to 2.75% beginning with Conditional Commitments issued on or after October 1, 2015. Fortunately, the annual fee is unchanged and will remain at .50%.

I hope this information gives you and your clients more opportunities to succeed in today’s housing market. If you have any further questions or would like to learn more, please do not hesitate to contact me!

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 31st, 2015 11:19 PMLeave a Comment

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Tips for keeping your home safe while away

Tips for keeping your home safe while away

Going away on vacation should be a tranquil experience, but worrying about the safety of your home while you’re away can defeat the reason you left in the first place. It only takes a little pre-planning to ensure your home is safe and sound when you return. If a house sitter is in your budget and you know someone responsible and trustworthy, it can be the best solution for taking care of your home while away. For many of us, this isn’t the case, so here are some measures that can help protect your home while away on vacation.

Newspapers and Mail

If you’ve got a helpful neighbor, ask if they will pick up your mail/newspaper daily. If not, contact the newspaper to stop delivery and tell the USPS to put a hold on your mail during the time you will be away. It’s a good idea to have a friend or neighbor come by and check periodically to be sure the newspapers and mail have stopped, just in case. Also, they can pick up any packages that have been delivered or materials that solicitors may have left behind.


If you have a gardener, keep them on schedule while you are away to water (or check sprinklers), mow, and keep your yard clean. Weather effects such as a broken limb in the driveway or knocked over pots, left for weeks, is a sure sign no one is home. If you live in a windy area, be sure all furniture and plants are secure.


Unplug computers and other expensive electronics that could be affected by power surges. Unplug all small appliances such as coffee makers, toasters etc. Many appliances use power even when turned off.


Install a timer switch for a few lights inside and outside your house. One or two lights on a timer will give the appearance of someone being home. Outdoor motion detector lights also work well for security. Leaving lights switched on the entire time you are gone is a waste of electricity, and having lights on all night may draw even more attention. Check out your local home improvement store or online resources for a variety of timer options.

Social Media

Be aware of your chatter on social media. Letting everyone in your social network know you are gone for the month in the tropics could get the word out beyond your circle and potentially make your home a target.


Consider turning off the water lines to the inside of the house (unless you have appliances requiring water such as an icemaker.) A burst washing machine hose, leaky faucet, or cracked toilet tank could be disastrous while away.  If you have a sprinkler system outside which you plan to keep on, have someone check on it periodically.

Water Heater

If your water heater has “vacation mode”, set it. It will run less and save energy.

Alarm System

If you have an alarm system, be sure you have a sign/sticker visible. This can act as a deterrent. Be sure to leave the code/key with someone you trust. Let the alarm company know you are away and give them the contact number of that person.

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 29th, 2015 12:24 PMLeave a Comment

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July 28th, 2015 9:43 AM
5 Reasons You Should Sell Now!

Posted: 27 Jul 2015 04:00 AM PDT

5 Reasons to Sell You House Now! | Keeping Current Matters
As the temperature continues to rise, buyers are coming out ready to purchase their dream home. Here are five reasons that you should list your house for sale now.

1. Strong Buyer Demand

Foot traffic refers to the number of people out actually physically looking at homes right now. The latest foot traffic numbers show that there are significantly more prospective purchasers currently looking at homes than at any point in the last two years! These buyers are ready, willing and able to purchase… and are in the market right now! Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

The National Association of Realtors reported last week that housing supply as slipped to a 5.0-month supply. This is still under the 6-month supply that is needed for a normal housing market. This means, in most areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future. The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.

3. Home Prices Are Skyrocketing

Daren Blomquist, President of RealtyTrac, recently shared insights into why “2015 is a Great Year to Sell” by saying:
"So far in 2015, [sellers] are realizing the biggest gains in home price appreciation since 2007. In June, sellers sold for above estimated market value on average for the first time in nearly two years."
One major factor driving prices up is the lack of inventory available for the amount of buyers in the market. Often buyers, who find a home that they would like to make an offer on, are met with the reality that they aren’t the only ones interested.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19.4% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate near 4% right now. Rates are projected to increase by a full percentage point over the next year according to Freddie Mac.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 28th, 2015 9:43 AMLeave a Comment

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July 24th, 2015 2:32 PM
Home Sales Will Remain Hot This Summer

Posted: 22 Jul 2015 04:00 AM PDT

Home Sales Will Remain Hot This Summer | Keeping Current Matters
People always talk about the “spring buying season” when they talk real estate. However, this year it appears as though the summer real estate market will be just as hot. The most recent Foot Traffic Report released by the National Association of Realtors (NAR) revealed that there are more buyers out looking at homes right now than at any other time in the last two years including the past two springs (in orange below). Foot Traffic | Keeping Current Matters The Foot Traffic Report is compiled from data on the number of properties shown by Realtors. NAR further explains:
“Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future."
We can see that the number of prospective purchasers out looking at homes has been greater each month this year compared to the same month in 2014. And, though foot traffic fell off last June as compared to May, this year it has increased nicely. Foot Traffic Comparison | Keeping Current Matters

Bottom Line

The housing market will remain strong throughout the summer and into the fall, making for one of the best years in real estate over the last decade.

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 24th, 2015 2:32 PMLeave a Comment

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5 Reasons to Hire a Real Estate Professional Today!

Posted: 20 Jul 2015 04:00 AM PDT

5 Reasons To Hire A Real Estate Professional Today | Keeping Current Matters
Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO. The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover. 1. What do you do with all this paperwork? Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality. 2. Ok, so you found your dream house, now what? According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream. 3. Are you a good negotiator? So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process. 4. What is the home you’re buying/selling really worth? It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $208,700 compared to $235,000 among agent-assisted home sales.” Get the most out of your transaction by hiring a professional. 5. Do you know what’s really going on in the market? There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer? Dave Ramsey, the financial guru advises:
“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”
Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 22nd, 2015 4:08 PMLeave a Comment

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Stop Paying Your Landlord’s Mortgage!

Posted: 21 Jul 2015 04:00 AM PDT

Stop Paying Your Landlord's Mortgage | Keeping Current Matters
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’ which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity. The graph below shows the widening gap in net worth between a homeowner and a renter: Increasing Gap in Family Wealth | Keeping Current Matters

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 since home values and interest rates are projected to climb.

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 21st, 2015 1:00 PMLeave a Comment

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July 21st, 2015 11:48 AM

The US housing market is exploding.

On Friday morning, Census Bureau data showed that housing starts surged 9.8% to an annualized pace of 1.174 million, a level not seen since July 2007.

Building permits, which indicate the pace of future construction, climbed 7.4% to an annualized pace of 1.343 million, also the highest level in about eight years.

"With a nearly 30% increase in housing starts compared to June of last year, the residential market recovery is here, and it is strong and sustainable," said Peter Ciganik, managing director of GTIS Partners, in a note Friday.

"The increase is the result of a strong job market, rising consumer confidence, and a moderate and much needed improvement in the supply of mortgage credit."

permitsPantheon MacroeconomicsBuilding permits are at multiyear highs.

And so if anyone is looking for a bright spot in this economic recovery, the housing market is where to find it. The continued strength of this corner of the economy is feeding into other crucial areas.

"Housing 'caught fire' in a positive sense this spring helping to heat up an economy that was frozen stiff in the cold winter months," PNC economists Stu Hoffman and Gus Faucher wrote in a note Friday. "This will continue to add construction jobs to more than make up for the loss of jobs in the energy economy."

On Thursday, the National Association of Homebuilders' homebuilder-sentiment index rose to the highest level in nearly ten years.

Pantheon Macroeconomics' Ian Shepherdson noted that while it's not a solid indicator of ongoing construction, the index "does add weight to the increasing pile of evidence suggesting that a real housing upswing is underway."

The Beige Book

The Federal Reserve's beige book — a collection of anecdotes on the US economy — released Wednesday showed that "several" of the 12 districts noted an uptick in real estate activity. 

As Business Insider's Shane Ferro noted, most regions showed signs of either a housing boom or an increase in residential and commercial real estate. 

One contact in Boston told the Fed that the city's office-leasing market is the strongest it has been in 50 years. Another in New York said new construction is at a level not witnessed in a decade. Some in Chicago were even worried that the commercial-real-estate market is overheating.

fredgraphconstrution spendingFRED

The signs of a boom are everywhere.

Home Prices

What's also obvious is that the cost of housing is soaring, to the point where it's again growing unaffordable.

On Friday, we got data on consumer prices, and the headline print of 0.3% came right in line with expectations.

However, the rent component jumped 0.4%, the highest since October 2006, with primary rent rates up 3.5% year-on-year, and owners' equivalent rent up 2.9%.

The value of each square foot of housing surged during the housing bubble, plunged during the recession, and has been on the rise since 2011.

At the same time, houses have gotten larger, with the area of new houses over 3,000 square feet roughly doubling since 1999. Meanwhile, rental vacancies have shrunk.

And so it's not hard to understand why home ownership has plunged. In the first quarter, the home-ownership rate fell to 63.7%, the lowest level in 25 years.

Screen Shot 2015 07 17 at 3.40.25 PMMorgan StanleyMost people would rather rent than own.

This is particularly concerning for millennials — the cohort between the ages 15 and 35 with an average age of 25 — who are in the prime stage of their lives to buy their first homes.

So far, they are mostly opting to rent instead, or worse, still living in their parents' basements.

Strong fundamentals

But what's encouraging for some economists is that the fundamentals of the economy are strong.

For many experts, the first-quarter contraction was a blip in what's remained a bullish uptrend in an economy strong enough for the Fed to raise interest rates, however slowly it decides to do so.

"Job and income gains, low mortgage rates, good affordability, an easing in lending standards, and a gradual return to homeownership are all supporting single-family building," PNC's Hoffman and Faucher wrote. "New mortgage rules designed to support home buying, especially for first-time home owners, are also a positive. Residential construction will provide a big boost to GDP growth in the second quarter, and through the rest of 2015."

The second quarter is crucial. After a contraction in the first, economists are forecasting a better print when the first estimate for Q2 gross domestic product is released on July 30.

If economists' estimates are accurate, the housing-market recovery will have played a key role in rebounding and sustaining an economy on the mend.

Read more:

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 21st, 2015 11:48 AMLeave a Comment

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July 16th, 2015 12:46 PM
Homeownership: A Key to Well-Being in Retirement

Posted: 15 Jul 2015 04:00 AM PDT

Homeownership:¬ A Key to Well-Being in Retirement | Keeping Current Matters
There has been much talk about homeownership and whether it is a true vehicle for building wealth. A new report looks at the impact owning a home has on the financial wellbeing of people closing in on their retirement years (ages 55-64). In recently released study by the Hamilton Project, Ten Economic Facts about Financial Well-Being in Retirement, it was revealed that: 1. Middle-class households near retirement age have about as much wealth in their homes as they do in their retirement accounts.
“Over the past quarter century the largest single source of wealth for all but the richest households nearing retirement age has been their homes, which accounted for about two-fifths of net worth in the early 1990s and accounts for about one-third today.”
2. Home equity is a very important source of net worth to all but the wealthiest households near retirement age.
“Home equity is an important source of wealth for middle income households, accounting for more than one-third of total net worth for the second, third, and fourth quintiles of the net worth distribution… The fifth quintile has a much larger share in business equity—almost a quarter—than any other quintile. (The figure leaves out the bottom quintile of households because they have negative net worth. It is likely that these households will rely almost exclusively on Social Security in retirement.)”
Here is an asset breakdown for the middle 20% of Americans determined by median net worth ($165, 720): Components of Net Worth | Keeping Current Matters Obviously, the data again proves that homeownership has a big role in building wealth for American families.

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 16th, 2015 12:46 PMLeave a Comment

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What If I Wait Until Next Year to Buy?

Posted: 14 Jul 2015 04:00 AM PDT

What If I Wait Until Next Year to Buy? | Keeping Current Matters
First-time homebuyers are flocking to the housing market in greater numbers than any time in the last few years. Renters who are ready and willing to buy are now realizing that they are also able to as well. Many first-time buyers are Millennials (born between 1981 – 1997). If you are one of the many in this generation who sees your friends and family diving head first into the real estate market, and wonder if now is the time for you to do the same, keep reading! The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time. Let’s look at an example of what the experts are predicting for the upcoming year, and what that really would mean for you. Let’s say you’re 30 and your dream house costs $250,000 today. Right now mortgage interest rates are at or about 4%.

Your monthly mortgage payment (principal & interest only) would be $1,193.54.

But you’re busy, you like your apartment, and moving is such a hassle. You decide to wait until next year to buy. CoreLogic predicts that home prices will appreciate by 5.1% in the next 12 months; this means that same house you loved now costs, $262,750. Freddie Mac predicts that over this same period of time, interest rates will be a full point higher at 5.0%. Your new payment per month is now $1,410.50.

The difference in payment is $216.96 PER MONTH!

That’s basically like taking $8 and tossing it out the window EVERY DAY! Or you could look at it this way:
  • That’s your morning coffee everyday on the way to work (average $2) with $10 left for lunch!
  • There goes Friday Sushi Night! ($50 x 4)
  • Stressed Out? How about a few deep tissue massages with tip!
  • Need a new car? You could get a brand new car for $217 a month.
Let’s look at that number annually! Over the course of your new mortgage at 5.0%, your annual additional cost would be $2,603.52! Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining. We could come up with 100’s of ways to spend $2,603, and we’re sure you could too! Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $78,105.60, all because when you were 30 you thought moving in 2015 was such a hassle or loved your apartment too much to leave yet. Or maybe there wasn’t an agent out there who educated you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready. But if they showed you that you could save $78,000 you’d at least listen to what they had to say. They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now…

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Posted by Cheryl Talbot ABR,GRI,e-PRO,SFR on July 14th, 2015 12:37 PMLeave a Comment

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