Rents Skyrocket at Highest Rate in almost a Decade

The Consumer Price Index (CPI) was released by the Labor Department last week. An analysis by Market Watch revealed the cost of rent was 3.8% higher than a year ago for the second straight month in June. That’s the strongest yearly price gain since 2007.

This coincides with a report released earlier this month in which AxioMetrics announced that rents are continuing to increase in 2016. The report revealed:

·         There was a 3.7% increase in effective rents in the second quarter of 2016 as compared to the        same period last year.

·         That the effective rent growth this quarter compared to last quarter was 2.3%.

·           Annual effective rent growth was positive in 49 of the top 50 markets, based on number of            units. Only Houston was negative, at -1.4%, as the fallout from energy-industry job losses and      excess construction continues.

Here is a graph to illustrate the rate of increase over the last several years:

Bottom Line

With rents continuing to rise and mortgage interest rates still at historic lows, let's meet up today to determine if you could turn your monthly rental cost into a home of your own.

I believe everyone should feel confident when buying or selling a home.

You Can Always Reach Me @ 313 999-8900

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3 Questions Every Buyer Should Ask Themselves

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a recent survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons why people buy a home have nothing to do with money. They are:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not. 

2. Where are home values headed?

According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months. 

What does that mean to you?

Simply put, if you are planning on buying a home that costs $250,000 today, that same home will cost you an additional $13,250 if you wait till next year. Your down payment will need to be higher as well to account for the higher home price.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates. 

The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac have all projected that mortgage interest rates will increase over the next twelve months as you can see in the chart below:

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

I believe everyone should feel confident when buying or selling a home.

You Can Always Reach Me @ 313 999-8900

Feel free to Subscribe to "Real Estate with Patrice" Blog posts to stay up to date with our latest posts and information on the Real Estate Industry or you can Follow Us on Facebook , Twitter, LinkedIn & Google+  for regular updates.

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3 Crucial Questions Most Home Buyers Don’t Know the Answer To...DO YOU?

Whether you are considering the purchase of your first home or trading up to the home your family frequently fantasizes about, there are three crucial questions you must know the answer to:

1. What is the minimum down paymentrequired to purchase a home?

2. What is the minimum FICO scorerequired to qualify for a mortgage?

3. What is the maximum Back-End DTI Ratio allowed?

A survey conducted by Fannie Mae revealed startling information: most Americans don’t know the answer to these three crucially important questions. Here is a graphic showing the results of the survey:

The percentages are quite disturbing but can explain why so many people believe they are not eligible to purchase a home whether it is a first home or a trade-up home. Here are the actually requirements as per Fannie Mae:

Bottom Line

If you are considering purchasing a home, make sure you are aware of all your options before moving forward.

I believe everyone should feel confident when buying or selling a home.

You Can Always Reach Me @ 313 999-8900

Feel free to Subscribe to "Real Estate with Patrice" Blog posts to stay up to date with our latest posts and information on the Real Estate Industry or you can Follow Us on Facebook , Twitter, LinkedIn & Google+  for regular updates.

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Homeownership Builds Wealth & Offers Stability

The most recent Housing Pulse Survey released by the National Association of Realtors revealed that the two major reasons Americans prefer owning their own home instead of renting are:

1. They want the opportunity to build equity.
2. They want a stable and safe environment.

Building Equity

John Taylor, CEO of the National Community Reinvestment Coalition,explains that those who lack the opportunity to become homeowners have a weakened ability to reinvest their wealth:

“We traditionally have been huge supporters of homeownership. We see it as a way to provide stability for households but also as an asset-building strategy. If you continue to be a renter, locked out of the homeownership arena, increasingly those things are further and further out of reach. They’re joined at the hip. They perpetuate each other.” 

Family Stability

Does owning your home really create a more stable environment for your family?

A survey of property managers conducted by rent.com disclosed two reasons tenants should feel less stable with their housing situation:

• 68% of property managers predict that rental rates will continue to rise in the next year by an average of 8%.
• 53% of property managers said that they were more likely to bring in a new tenant at a higher rate than negotiate and renew a lease with a current tenant they already know.

We can see from these survey results that renting will provide anything but a stable environment in the near future. 

Bottom Line

Homeowners enjoy a more stable environment and at the same time are given the opportunity to build their family’s net worth.

If your interested in buying or selling a home  give me a call or send me a message.I believe everyone should feel confident when buying or selling a home.

You Can Always Reach Me @ 313 999-8900

Feel free to Subscribe to "Real Estate with Patrice" Blog posts to stay up to date with our latest posts and information on the Real Estate Industry or you can Follow Us on Facebook , Twitter, LinkedIn & Google+ for regular updates.

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Saving to Buy a Home? Do You Know the Difference Between Cost & Price?

As a seller, you will be most concerned with the ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not with price but instead with the ‘long term cost’ of the home.

Many economists have pointed to Brexit (Britain’s exit from the European Union) as a reason that interest rates will remain low for the next few months. But Trulia’s Chief Economist Ralph McLaughlin warns that this will not always be the case in a recent post:

“While the departure of the UK from the European Union has driven down the 10-year bond, and thus mortgage rates, we expect them to rebound later in the year as uncertainty over the economic consequences of the departure lifts.”

The Mortgage Bankers Association (MBA), the National Association of Realtors (NAR) and Freddie Mac all project that mortgage interest rates will increase by close to a full percentage point over the next twelve months.

According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.3% over the next 12 months.

What Does This Mean as a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.3% predicted by CoreLogic over the next twelve months:

I believe everyone should feel confident when buying or selling a home.

You Can Always Reach Me @ 313 999-8900

Feel free to Subscribe to "Real Estate with Patrice" Blog posts to stay up to date with our latest posts and information on the Real Estate Industry or you can Follow Us on Facebook , Twitter, LinkedIn & Google+ for regular updates.

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A Homeowner’s Net Worth is 45x Greater Than a Renter’s!

Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a Forbes article, the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.

The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

Put Your Housing Cost to Work for You

Simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

Bottom Line

 If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, let’s get together to discuss your next steps.

 I believe everyone should feel confident when buying or selling a home.

You Can Always Reach Me @ 313 999-8900

Feel free to Subscribe to "Real Estate with Patrice" Blog posts to stay up to date with our latest posts and information on the Real Estate Industry or you can Follow Us on Facebook , Twitter, LinkedIn & Google+  for regular updates.

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Housing Sales at Highest Pace in 9 Years!

Some Highlights:

• Sales of existing homes reached the highest annual pace in over 9 years at 5.29 million.
• Inventory remains below the 6-month norm and prices are still on the rise.
• Interest rates are at a historic low of 3.48%.

I believe every one should feel confident when buying and selling a home.

                                     You Can Always Reach Me @ 313 999-8900

Feel free to Subscribe to "Real Estate with Patrice" Blog posts to stay up to date with our latest posts and information on the Real Estate Industry or you can Follow Us on Facebook , Twitter, LinkedIn & Google+ for regular updates.

Patrice M  Miller

Realtor/Associate Broker

ReMax Innovation

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