Midwest wins Housing Market Index for 2014. Midwest is Best!

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Builder confidence in the market for newly built, single-family homes rose for a fourth consecutive month in September to a nine-year high.

In September The HMI (Housing Market Index) was reported at a level of 59.00 up from 55.00 last month and up from 57.00 one year ago.  Anything above 50 is considered to be a positive sentiment.  This is the highest level since November 2005.

To put this September HMI report into perspective, in the period following the housing crash in 2009, HMI sentiment around was all the way down to 17.

Looking forward, the estimate of single-family sales for the next six months rose to a 13-month high of 67 from 65

Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction.

A firming job market is helping as are low interest rates.  Mortgage rates are hitting new lows.  Mortgage Company Freddie Mac said that the nationwide average for 30-year fixed-rate mortgages dropped to 3.97 percent, down from 4.12 – the lowest level since June 20, 2013.

In October U.S. homebuilders’ confidence fell slightly after four months of gains which had pushed the indicator to the highest point in nine years.

Analysts said readings in the mid-50s were in line with the current modest pace of recovery in housing.

Economists said the small decline did not alter their views that housing prospects remained favorable in coming months.

By region of the country, builder sentiment in October was highest in the Midwest with a reading of 59 followed by readings of 58 in the South, 57 in the West and 41 in the Northeast.

Unconventional Loans Buyers Should Consider

Most homebuyers are unaware of their options when it comes to a mortgage. Many think they need a conventional mortgage, ensuring they have 20% of the home’s purchase price on hand for a down payment and a good enough credit score to qualify. However, there are other options on the table. For those who might not have the funds up front or the credit history to qualify for a conventional mortgage, there are unconventional ones.

FHA home loans. Homebuyers benefit by learning about the unconventional mortgage choices. Where someone might not qualify for a conventional mortgage loan, he or she might have no problem getting a loan backed by the Federal Housing Administration.

And because these loans are backed by the federal government, lenders don’t have to use the same stringent qualifications as conventional loans. Where some people with a less-than-perfect credit score would have trouble securing financing for a loan, the FHA has found a way for them to fulfill their dream of being a homeowner.

In addition to having looser qualification standards, FHA loans don’t require as high of a down payment. Homeowners can put as little as 3.5% down for these loans. FHA loans are also assumable, therefore they can be passed on to another buyer when it’s time to sell.

USDA home loansThe United States Department of Agriculture provides unconventional loans, offering benefits that are not awarded to the typical residential mortgages. Similar to FHA loans, USDA mortgages allow those without the best credit history to qualify for a loan. However, these loans are only issued for low- and very low-income areas in rural parts of the country. These loans also require no down payment whatsoever, making them a highly attractive option.

Hey Wisconsin, are You Pondering The Question…Rent vs. Own?

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The American Dream. In most cases, this tag line refers to the accomplishment of purchasing and owning a home in the United States. Yet for some, renting has been a long-term situation and the true benefits of home ownership may be unclear or confusing.

Aside from the obvious benefits to homeownership (i.e. – your walls, your decisions!), there are numerous financial benefits of owning a home over renting. Here are the top 7:

  1. Homeownership builds wealth over time.
  2. Equity is typically achieved with every payment.
  3. Mortgage tax deduction benefits at year end.
  4. Tax deductions on home equity lines.
  5. Capital gains exclusions for primary residences.
  6. A mortgage is like a forced savings plan.
  7. Over time, buying is cheaper than rent.

We could elaborate much on each of these 7 benefits, and your accountant or tax specialist can also help you further understand how these may impact you. But first and foremost, the investment you make in the purchase of your home far outweighs your financial position when renting, with long term benefits and asset protection. Home buying is smart money management, especially in today’s market with low interest rates and attractive mortgage options!

Energy Efficiency in Newly Built Homes

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While it doesn’t feel like it today, the winter months are approaching, and some areas of the country will get cold pretty soon.  This means that heating costs will be on people’s minds.  They can potentially save thousands of dollars each year with a better energy efficient home.

Newly built homes have many amenities such as access to jogging, hiking and bike trails, sports complexes and aquatic centers. Builders and developers are also giving more attention to green lifestyles and energy efficiency.

Almost half of the energy you use in your home goes to heating and cooling. Newly built homes take this into consideration and have come up with ways to battle the loss of energy and help keep money in your pocket.

Here is a list of how they do it:

  • High Performance windows- improved frames and protective coatings keep the heat in during winter and heat out during summer.
  • Insulation- Quality insulation as well as special attention during installation makes a huge difference in energy use.
  • Air Sealing- Comprehensive air sealing helps reduce maintenance costs and lower monthly utility bills.
  • Use of recycled materials as well as the latest energy efficient building materials currently available.
  • Programmable thermostats
  • Water management systems to lower water heater costs.

Newly built homes offer these energy efficient options, which will greatly reduce maintenance, and utility costs. Giving you some peace of mind going into the cold winter months.

Wall Street Journal…. Mortgage Standards are Easing, Fed Finds……

Large banks just don’t get it – “stupid is as stupid does” is all that comes to mind regarding current commercial and industrial loan standards and mortgage loans for homeowners.

August 5, 2014 Wall Street Journal…. Mortgage Standards are Easing, Fed Finds……

The Federal Reserve’s quarterly survey of bank Sr. Loan Officers showed that nearly half of large banks and foreign institutions believe the standards for riskier syndicated loans to companies with non-investment- grade or junk, credit rating are easier than post- 2005 norm.

What does this really mean? Banks are making risky loans again and that’s how we got in trouble in the first place!

Banks said they had eased standards on commercial loans and industrial loans primarily because of more aggressive competition from other lenders, and amid growing competition between banks and a slow growth low interest-rate environment. Some have also said an improving economic outlook has contributed somewhat.

What does all of this mean for homeowners? Even with the easing of standards, and their willingness to make risky commercial and industrial loans, if banks can’t get the rate of return they are looking for they will hold back and not make mortgage loans with the excess money they’ve been required to put in their stockpiles! They are just more cautious about lending to households.

Top policymakers have raised concerns over the past year that the tight credit standards could hamper the housing recovery. While standards should have ratcheted up after the housing bubble, it has now become the case that any borrower without a pretty pristine credit rating finds it awfully hard to get a mortgage.

What does this mean? The very same banks that caused this trouble will not give loans to the people who lost their houses. Former homeowners who had short sale or foreclosure, the only blemish on their credit report, can’t get the banks to give them a loan. Instead, they keep them financially handcuffed for up to seven years. This is why the market has not rebounded as expected – banks won’t shorten the time span to two years. It would be that simple and cost the taxpayers nothing!

Also, if you want to spark home buying amongst the baby boomers and the millennials, quit talking about killing the tax advantages…..it breeds uncertainty.

Remember, history always repeats itself….the oil embargo in the 1970’s change the US driving pattern for the next 10 years and this last recession will change the spending habits of US consumers for the next 10 years. We must educate the public that home ownership is still the American dream and lenders need to get on board!

 

 

20 Reasons to Buy New Home Construction!

 

  1. It’s fun. You get to design it. And, it’s under warranty!
  2. Floor plan is designed for you and your family and your lifestyle
  3. Everything is new, never used and selected by you
  4. More energy efficiency saves $$thousands over time
  5. New homes cost less to run and maintain
  6. Renewable energy options like solar
  7. Community amenities
  8. Superior safety codes and design
  9. Advanced technology and energy-saving appliances
  10. Better paints, cabinets and materials for more healthy home
  11. Hot new trends available
  12. Quicker appreciation over the first five years
  13. Special new home neighborhood friendships
  14. Special financing incentives
  15. Builders must be licensed, bonded and insured
  16. Frame and final walk-thru
  17. Periodic inspections and code checks
  18. Builder has a complete team of professionals
  19. No clouds or liens on the title
  20. Friends, family and co-workers can help

NEW HOME BUYERS DICTATE TRENDS IN NEW CONSTRUCTION OF HOMES

If you are looking for a time-tested plan, these Builders features rank at the top of the charts Nationwide. Builders have quickly discovered that consumers want homes that are built quickly yet by an expert, and are economical and functional.

New home builders are delivering the features that buyers want the most:

  • New home construction buyers want open concept homes that offer spacious, easy going, flowing, floor plans and high ceilings. Outdoor Living Spaces that feature fireplaces are essential to buyers even in seasonal climates.
  • Believe it or not, new home construction buyers are gravitating toward newer, bolder colors rather than neutral décor. Designer Jonathan Adler from Kohler is bringing vibrant sinks to the kitchen.
  • Modern kitchens are the focal point of every home and new home construction buyers want the latest and greatest designs including cabinets, lighting, countertops and state-of-the-art and energy efficient appliances.
  • Builders know that their buyers want large linen closets and smart storage options. Large walk-in closets appeal to today’s new home construction buyer.
  • 2 or 3-car garages are also huge on the new home buyers’ criteria list with lots of work and storage space.

With all this in mind, buying a new construction home vs. resale WINS hands down.