The Cost Of Renting Vs. Buying Today

Some Highlights:

• Historically, the choice between renting or buying a home has been a tough decision.
• Looking at the percentage of income needed to rent a median-priced home today (28.9%) vs. the percentage needed to buy a median-priced home (15.7%), the choice becomes obvious.
• Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

Source: Keeping Current Matters | The KCM Crew

University of Memphis Graduate Students Help Shape City’s Future through Community Engagement

Graduate students at the Department of City and Regional Planning at the University of Memphis use asset mapping to mark areas of great significance in neighborhoods, as expressed by neighborhood residents during community engagement processes.

As Memphis prepares to enter its third century as a city in 2019, graduate students at the University of Memphis are helping the City of Memphis and its partners mold a mega-plan to create great neighborhoods, smart land use, connectivity, and better opportunities and improved quality of life for all residents.

The students at the Department of City and Regional Planning at the University of Memphis — part of the School of Urban Affairs and Public Policy — are lending their time, talent and the skills they’ve developed through their education to Memphis 3.0, the city’s first comprehensive development plan in four decades.

The previous plan, drafted roughly 40 years ago, focused on the suburbs and neglected to include citizen input, but Memphis 3.0 is meeting the people where they are — in their own neighborhoods. Graduate students are on the ground in districts throughout the community engaging with residents to ask them what assets are unique to their district, what challenges their neighborhoods face and which areas need improvement.

The Department of City and Regional Planning at the University of Memphis have been part of the planning process since the City launched the Memphis 3.0 initiative in late 2016. In late 2017, the city kicked off a series of meetings in the 14 districts to give the public opportunities to voice their opinions. Citizens participated in neighborhood meetings, online surveys, in-person surveys and one-on-one interviews.

The graduate students toured neighborhoods across the city and conducted workshops where residents participated in asset-mapping exercises, using large maps to mark the neighborhood amenities, sites and resources they most value.

Professor Charlie Santo is chair of the Department of City and Regional Planning at the University of Memphis, which is part of the School of Urban Affairs and Public Policy. The master’s degree program, accredited by the Planning Accreditation Board, prepares students for careers focused on the physical development of communities with concern for their social, economic and environmental wellbeing.

Graduate students at the Department of City and Regional Planning at the University of Memphis are lending their time, talent, and the skills they’ve developed through their education to Memphis 3.0, the city’s first comprehensive development plan in four decades. The plan includes urban art projects, like this one by Memphis artist Yancy Villa Calvo, which engages residents by asking them what they consider to be their neighborhood’s assets or “gems.”

Santo says hands-on learning with strong community partners is an integral aspect of the program; the curriculum emphasizes action and classes and research are structured to support long-term community engagement projects.

He said the long-term emphasis of the program sets it apart from other graduate programs in city planning.

“We have a process where we try, when we’re working with a community partner — whether it be Klondike Smokey City or North Memphis or the Soulsville neighborhood — we get involved for more than one semester. Students get to work with community members to address real challenges, but they also have the opportunity to see planning solutions finish implementation.”

And many graduates of the University of Memphis’ Department of City and Regional Planning have not only continued to work in the community but have become prominent city planning professionals.

Graduates include Ashley Cash, Memphis 3.0 Administrator; John Zeanah, Director of the Division of Planning and Development, a joint agency that serves both Memphis and Shelby County; Paul Young, City of Memphis Director of Housing and Community Development; and John Paul Shaffer with BLDG Memphis, a 3.0 partner that supports the development and redevelopment of healthy, economically sustainable neighborhoods.

Graduate students at the Department of City and Regional Planning at the University of Memphis meet with residents in North Memphis to ask them what assets are unique to their district, what challenges their neighborhoods face, and which areas need improvement.

“Our folks are everywhere and they’re having an impact,” Santo said. “If you look around at what’s going on in Memphis in terms of changing the city, the impact that graduates of our program have had has been amazing.”

Santo said it’s been satisfying to see his students matriculate from the classroom environment to become real-world colleagues. One of those graduates is Jessica Mason, an alumn of the Department of City and Regional Planning at the University of Memphis who has transitioned to a career in city planning as planning coordinator at Self-Tucker Architects, a Memphis 3.0 partner.

“The program at the University of Memphis was very hands-on and project oriented, so I felt very comfortable going into the workplace knowing how to analyze data and how to communicate with community members,” she said.
“It really prepared me to feel comfortable in practice. They did a good job with projects that were related to actual issues in Memphis.”

As a graduate student, she worked on the ground in several districts, including Midtown and North Memphis, serving as a facilitator at community meetings in the pre-planning phase of Memphis 3.0 in late 2016 and early 2017 and volunteering in a workforce development focus group.

“It was a chance for me to be part of a real-life planning process, talking to real people, facilitating and using the skills I learned in the classroom in actual practice,” said Mason, a native Memphian whose graduate work engaged her with residents in historic Memphis neighborhoods like Klondike Smokey City and Orange Mound.

“Growing up, I’ve always seen the differences in Memphis,” she said. “As we all know, things can look really different one street over. I’ve always been curious about the relationship between people and place, and asking why things are the way they are and what can I do to better the city I live in.”

At Self-Tucker, Mason’s on-the-ground projects include working with Knowledge Quest, a youth-focused nonprofit in South Memphis, to help create the Greenleaf Learning Farm, an organic farm that uses hands-on learning techniques to educate students about urban agriculture and healthy eating.

Mason continues her 3.0 engagement work by helping to prepare for community meetings and gather information about what resident want to see in their neighborhoods.

“I’m very excited this process is happening during the time that it is … I feel like 3.0 happened just at the right time and I’m excited to be part of the future of Memphis,” she added.

Source: High Ground | Aisling Maki 032118

Are You Aware Of How Much Equity You Have In Your Home? You May Be Surprised!

CoreLogic’s latest Equity Report revealed that 675,000 US homeowners regained positive equity in their homes in 2017. This is great news for the country, as 95.1% of all mortgaged properties are now in a positive equity situation.

“U.S homeowners with mortgages (roughly 63% of all the properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2%, year over year.”

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

“Home-price growth has been the primary driver of home-equity wealth creation. The CoreLogic Home Price Index grew 6.2 percent during 2017. The largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years.”

He also believes this is a great sign for the market in 2018, saying:

“Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”  

This is great news for homeowners! But, do they realize that their equity position has changed?

A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their homes as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 4.9% of homes are in that position (down from 6.3% in Q4 2016).

The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%) when in actuality, 83% do!

This means that 46% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a house (either larger or smaller) that better meets their current needs.

Fannie Mae spoke out on this issue in their report:

“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

Bottom Line

If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2018! Meet with a local real estate professional today who can help you evaluate your situation and assist you along the way!

Source: Keeping Current Matters | The KCM Crew 032018

The Cost Of Waiting: Interest Rates Edition

Some Highlights:

• Interest rates are projected to increase steadily heading into 2019.
• The higher your interest rate, the more money you end up paying for your home and the higher your monthly payment will be.
• Rates are still low right now. Don’t wait until rates hit 5% to start searching for your dream home!

Source: Keeping Current Matters | The KCM Crew 031618

Moving Up Is MORE Affordable Now Than Almost Any Other Time In 40 Years

If you are considering selling your current home, to either move up to a larger home or into a home in an area that better suits your current family needs, great news was just revealed.

Last week, Trulia posted a blog, Not Your Father’s Housing Market, which examined home affordability over the last 40+ years (1975-2016). Their research revealed that:

“Nationally, homes are just about the most affordable they’ve been in the last 40 years… the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about 3/4 of the median home price.

Despite relatively stagnant incomes, affordability has grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16% in the 1980s to under 4% by 2016.

Of the nation’s 100 largest metros, only Miami became unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped from being unaffordable to becoming affordable in that same time frame.”

Here is a graph showing the Affordability Index compared to the 40-year average:

The graph shows that housing affordability is better now than at any other time in the last forty years, except during the housing crash last decade.

(Remember that during the crash you could purchase distressed properties – foreclosures and short sales – at 20-50% discounts.)

There is no doubt that with home prices and mortgage rates on the rise, the affordability index will continue to fall. That is why if you are thinking of moving up, you probably shouldn’t wait.

Bottom Line

If you have held off on moving up to your family’s dream home because you were hoping to time the market, that time has come.

Source: Keeping Current Matters | The KCM Crew 031518

You Can Save For A Down Payment Faster Than You Think!

Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long it would take to save for a down payment in each state.

Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.

By determining the percentage of income spent renting in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.

According to the data, residents in Ohio can save for a down payment the quickest in just under 3 years (2.44). Below is a map that was 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 Freddie Mac’s or Fannie Mae’s 3%-down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes possible in a year or two in many states as shown on the map below.

Bottom Line

Whether you have just begun to save for a down payment, or have been saving 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.

Source: Keeping Current Matters | The KCM Crew 031318

4 Reasons Spring Is A Great Time To Buy A Home!

Here are four great reasons to consider buying a home today instead of waiting.

Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.3% over the next year.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage hovered close to 4.0% in 2017. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

Either Way, You Are Paying a Mortgage

There are some renters who have not yet 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 yours or your landlord’s.

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.

Are you ready to put your housing cost to work for you?

It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Source: Keeping Current Matters | The KCM Crew 031218

Want To Buy A House? Here's How To Save For A Down Payment

Thinking about buying a house within the next 3 years? Or a bit farther down the road? Timing is everything and it turns out that simple question makes a difference.

According to Zillow, the median home value in Diamond Bar is $697,000. So how much of that should you put down? Down payments vary depending on the loan type, but in general they are:

*0% for VA loans 

*3.5% for FHA loans 

*20% for conventional loans 

*Or use this handy down payment calculator to help you.

20% is the recommended down payment on a house.

You may have heard this before, but we'll say it again. Try to put at least 20% down. Why? If you finance more than 80% of the home value, you will have to pay Private Mortgage Insurance (PMI). (But if you can take out a VA loan, PMI is not required.)

Even just 3.5% or $24,395 on a home in Diamond Bar, CA is a good chunk of money. And whether you're fighting the good fight as a small business owner, still paying back those student loans, or just trying to save a bit each month like all of us, it's hard to know what to do with that money you have managed to save. Which brings us to …

When are you looking to purchase a home?

1. I want to buy a home within 3 years.

If you're looking to buy sooner rather than later, consider keeping your money in a cash account, like a savings account or something similar. Remember that savings accounts will yield greater interest than a regular checking account. You don't want to invest this money for such a short period because of market volatility. Just think:

Imagine you've built up a decent amount for a down payment and you invested this money in the stock market. A recession comes and you take a 30% hit on your balance. That will likely prevent you from buying your home within your three-year goal.

2. I want to wait at least 4 years before buying a home.

If you're not in a big rush, investing in the market might be a better option for you. Should you invest, do so with caution and don't be too aggressive. Be smart, calculated, and balanced with your portfolio picks. Make sure you have a healthy mix of stocks and bonds. And keep in mind that you'll want to rebalance your portfolio at least once a year. Why?

Imagine that you have a portfolio of 10 different stock and bond ETFs, or Exchange-traded funds. Each ETF is invested at a fixed percentage of your overall portfolio. As the year goes on, the allocations will wander from their targets. Those doing well will become a larger part of your portfolio. Those not doing so well will become a smaller part of your portfolio. When you rebalance, you bring things back in line with your target percentages, so you're selling high and buying low.

Also keep in mind dollar-cost averaging, or investing a certain fixed amount on a regular schedule. Basically, you buy a larger number of shares when the markets are down and everything is at a lower price, and fewer shares when prices are high. This is recommended over making large, infrequent, lump sum contributions because it will bring the average cost per share down over time.

If these investing ideas are a bit daunting to you, you're not alone! Speak with a financial planner to help you evaluate your options and navigate these uncertain waters. An advisor can be just the direction you need to reach your goal and buy a house.

Source: Realty Times | David Yu, CFP 030618