Over the past ten years, the cost of rental housing in the U.S. has increased an average of 3.5% per year. If that trend continues, that means that an apartment or
home renting for $1,000 per month will cost more than $1,300 a month in ten years. If you rent the same home for ten years, the total amount you would pay for rent
will equal $140,777!
Year / Monthly Rent* / Total Annual Rent
1 / $1,000 / $12,000
2 / $1,035 / $12,420
3 / $1,071 / $12,855
4 / $1,109 / $13,305
5 / $1,148 / $13,770
6 / $1,188 / $14,252
7 / $1,229 / $14,751
8 / $1,272 / $15,267
9 / $1,317 / $15,802
10 / $1,363 / $16,355
Total Rent Paid Over Ten Years = $140,777
*avg. increase 3.5% per year
VERSUS
Homeownership
As an example, let’s look at a $200,000 home. Unlike your rental unit, your home usually appreciates over time. Instead of assuming average growth, we assume
that prices are flat in the first year of ownership and pick up, but only slightly, in the second year. In the third year of ownership, your home has appreciated to a modest $210,858. After ten years, assuming a return to an average 4.5 percent appreciation rate*, your $200,000 home will be worth $286,948. Not only do you earn a rate of return on your original purchase price, you also get a return on any
subsequent appreciation.
* Average price appreciation from 1970 to 2008 was 6.0%
Homeownership Builds Wealth for Households
The Federal Reserve Board estimates that homeowners’ net worth has ranged between 31 and 46 times more than that of renters in the years 1998 to 2007. In 2007, the
median net worth for homeowners was $234,200 compared to $5,100 for renters. Even though that difference will surely narrow as a result of house price declines since 2007, homeowners will likely still have substantially greater net worth than renters.
How do you build up your net worth? As a homeowner, you build wealth in two ways: through paying down the principle on your mortgage and through those “appreciating returns” on your home.
We know how your $200,000 home could be worth $286,948 in ten years. In addition, you are paying down the principal on your mortgage. Remember that $200,000 you borrowed at 5.5 percent over 30 years – that debt amount is decreasing every month and every year as you make payments.
Year / Home Price / Mortgage Debt / Net Worth
1 / $200,000 / $187,441 / $12,559
2 / 201,200 / 184,737 / 16,463
3 / 210,858 / 181,880 / 28,977
4 / 220,346 / 178,863 / 41,483
5 / 230,262 / 175,675 / 54,587
6 / 240,624 / 172,308 / 68,316
7 / 251,452 / 168,750 / 82,701
8 / 262,767 / 164,992 / 97,775
9 / 274,591 / 161,022 / 113,570
10 / 286,948 / 156,828 / 130,120
**courtesy of National Associateion of Realtors
Monday, January 25, 2010
Saturday, January 23, 2010
Villebois, Award-Winner Yet Again....
We're in the news in Vegas....Kudos to Costa Pacific for developing this concept and winning!
"NAHB Names the Nationals Gold Award Winners
Awards Recognize Excellence in New Home Sales, Marketing and Design
COMMUNITY OF THE YEAR GOLD AWARDS
Community of the Year (Suburban)
Villebois
Wilsonville, Ore.
Builder: Costa Pacific Communities
Marketing Director: Rudy Kadlub"
for more details: http://www.buildersshow.com/news_details.aspx?newsID=10264§ionID=1753
"NAHB Names the Nationals Gold Award Winners
Awards Recognize Excellence in New Home Sales, Marketing and Design
COMMUNITY OF THE YEAR GOLD AWARDS
Community of the Year (Suburban)
Villebois
Wilsonville, Ore.
Builder: Costa Pacific Communities
Marketing Director: Rudy Kadlub"
for more details: http://www.buildersshow.com/news_details.aspx?newsID=10264§ionID=1753
Friday, January 22, 2010
Rates* for this weekend....crept up a bit....lock yours soon!
Product Interest Rate APR
Conforming and FHA Loans
30-Year Fixed 5.000% 5.191%
30-Year Fixed FHA 5.500% 6.245%
15-Year Fixed 4.375% 4.700%
5-Year ARM 3.875% 3.564%
5-Year ARM FHA 3.875% 3.401%
Larger Loan Amounts in Eligible Areas – Conforming and FHA.
30-Year Fixed 5.125% 5.264%
30-Year Fixed FHA 5.250% 5.924%
5-Year ARM 4.125% 3.606%
Jumbo Loans – Amounts that exceed conforming loan limits
30-Year Fixed 5.750% 5.895%
5-Year ARM 5.000% 3.930%
* courtesy of Wells Fargo
Conforming and FHA Loans
30-Year Fixed 5.000% 5.191%
30-Year Fixed FHA 5.500% 6.245%
15-Year Fixed 4.375% 4.700%
5-Year ARM 3.875% 3.564%
5-Year ARM FHA 3.875% 3.401%
Larger Loan Amounts in Eligible Areas – Conforming and FHA.
30-Year Fixed 5.125% 5.264%
30-Year Fixed FHA 5.250% 5.924%
5-Year ARM 4.125% 3.606%
Jumbo Loans – Amounts that exceed conforming loan limits
30-Year Fixed 5.750% 5.895%
5-Year ARM 5.000% 3.930%
* courtesy of Wells Fargo
Tuesday, January 19, 2010
No More 90-Day Waits on Foreclosed Properties?
HUD Takes Action to Speed Resale of Foreclosed Properties to New Owners
In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan Friday announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure.
With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.
"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.
The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
NASDAQ
• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website (www.hud.gov).
In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan Friday announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure.
With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.
"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.
The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
NASDAQ
• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website (www.hud.gov).
Monday, January 18, 2010
More Home Showings, More Home...Sales?
Supra Lockbox Activity - Updated Through Week of Jan. 4-10
Numbers are up considerably in Oregon and Washington
When comparing the week of January 4 - January 10 with the week prior, the number of times an RMLS™ subscriber opened a Supra lockbox increased 45.8% in Washington and 67.5% in Oregon*.
* courtesy of RMLS
Numbers are up considerably in Oregon and Washington
When comparing the week of January 4 - January 10 with the week prior, the number of times an RMLS™ subscriber opened a Supra lockbox increased 45.8% in Washington and 67.5% in Oregon*.
* courtesy of RMLS
Thursday, January 14, 2010
Helping Haiti....Coldwell Banker Reaches Out
Join Realogy’s Disaster Relief Efforts for People of Haiti*
Realogy Corporation, parent company of Coldwell Banker, today announced a campaign to raise funds through the Realogy Charitable Foundation to support the victims of the catastrophic earthquake that devastated Haiti on Jan. 12. The Realogy Charitable Foundation will distribute all funds raised by employees, franchisees, sales associates, vendors, partners, friends of Realogy and the general public directly to the American Red Cross International Response Fund.
“Our hearts go out to the people of Haiti, and we want to do all we can to support the international relief efforts in the wake of this natural disaster,” said Richard A. Smith, president and CEO of Realogy Corporation. “We invite all those who are able to donate to give whatever they can to help the American Red Cross provide the assistance that is so desperately needed.”
The Realogy Charitable Foundation is a 501(c)(3) public charity supporting the philanthropic and volunteer activities of Realogy Corporation and its family of companies. The Foundation is incorporated in Delaware and its tax ID is 20-0755090.
To make a donation to the American Red Cross International Response Fund through the Realogy Charitable Foundation, paste the following URL into your browser http://www.events.org/realogycares. This portal is a secure online donation system that allows any individual to use a credit card/debit card or electronic check. All gifts are tax-deductible to the extent allowable by law, and individuals should consult their tax professional to determine the amount they can claim as a tax deductible contribution.
*courtesy of Coldwell Banker
Realogy Corporation, parent company of Coldwell Banker, today announced a campaign to raise funds through the Realogy Charitable Foundation to support the victims of the catastrophic earthquake that devastated Haiti on Jan. 12. The Realogy Charitable Foundation will distribute all funds raised by employees, franchisees, sales associates, vendors, partners, friends of Realogy and the general public directly to the American Red Cross International Response Fund.
“Our hearts go out to the people of Haiti, and we want to do all we can to support the international relief efforts in the wake of this natural disaster,” said Richard A. Smith, president and CEO of Realogy Corporation. “We invite all those who are able to donate to give whatever they can to help the American Red Cross provide the assistance that is so desperately needed.”
The Realogy Charitable Foundation is a 501(c)(3) public charity supporting the philanthropic and volunteer activities of Realogy Corporation and its family of companies. The Foundation is incorporated in Delaware and its tax ID is 20-0755090.
To make a donation to the American Red Cross International Response Fund through the Realogy Charitable Foundation, paste the following URL into your browser http://www.events.org/realogycares. This portal is a secure online donation system that allows any individual to use a credit card/debit card or electronic check. All gifts are tax-deductible to the extent allowable by law, and individuals should consult their tax professional to determine the amount they can claim as a tax deductible contribution.
*courtesy of Coldwell Banker
Monday, January 4, 2010
Rates on the Rise?
Hm. Curious what you think...will rates be heading up this year?
Fed: Regulation 1st defense against speculation*
Stronger regulation is the best way to prevent financial speculation from getting out of hand and throwing the economy in a new crisis, Federal Reserve Chairman Ben Bernanke said Sunday.But he didn't rule out higher interest rates to stop new speculative investment bubbles from forming.
Important Markets
Critics blame the Fed for feeding that speculative boom in housing by holding interest rates too low for too long after the 2001 recession.
But Bernanke, in a speech to the American Economic Association's annual meeting in Atlanta, defended the central bank's actions. Extra-low rates were needed to get the economy and job creation back to full throttle after the Sept. 11 attacks and accounting scandals that rocked Wall Street, he said.
Bernanke said the direct links were weak between super-low interest rates and the rapid rise in house prices that occurred at roughly the same time. The stance of interest rates during that period "does not appear to have been inappropriate," he said.
Still, the enormous economic damage from the housing bust — the longest and deepest recession since the 1930s and double-digit unemployment — shows how important it is to guard against a repeat, Bernanke said.
*courtesy of Landover Mortgage
Fed: Regulation 1st defense against speculation*
Stronger regulation is the best way to prevent financial speculation from getting out of hand and throwing the economy in a new crisis, Federal Reserve Chairman Ben Bernanke said Sunday.But he didn't rule out higher interest rates to stop new speculative investment bubbles from forming.
Important Markets
Critics blame the Fed for feeding that speculative boom in housing by holding interest rates too low for too long after the 2001 recession.
But Bernanke, in a speech to the American Economic Association's annual meeting in Atlanta, defended the central bank's actions. Extra-low rates were needed to get the economy and job creation back to full throttle after the Sept. 11 attacks and accounting scandals that rocked Wall Street, he said.
Bernanke said the direct links were weak between super-low interest rates and the rapid rise in house prices that occurred at roughly the same time. The stance of interest rates during that period "does not appear to have been inappropriate," he said.
Still, the enormous economic damage from the housing bust — the longest and deepest recession since the 1930s and double-digit unemployment — shows how important it is to guard against a repeat, Bernanke said.
*courtesy of Landover Mortgage
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