Top 3 Reasons Why Americans Want to Own

DAILY REAL ESTATE NEWS | WEDNESDAY, OCTOBER 14, 2015

The top reasons Americans say they want to own a home: The opportunity to build equity, the desire for a stable and safe environment, and the freedom to choose their neighborhood. That’s according to the National Association of REALTORS®’ 2015 National Housing Pulse Survey, a poll of 1,000 adults nationwide in the 50 largest metro areas.

Read more: Owners Say Their Home Is Worth More

More than eight in 10 Americans say that purchasing a home is a good financial decision, and 68 percent say now is a good time to buy a home, according to the survey. What’s more, 71 percent of those surveyed also believe they could sell their house for what they paid for it –up 16 percentage points from 2013.

“Home ownership is part of the American Dream, and this survey proves that dream is alive and thriving in our communities,” says NAR President Chris Polychron.

But some obstacles remain. Seventy-eight percent of respondents say college debt and student loans are the main barriers to them in making a home purchase affordable. Seventy-six percent of those surveyed say they have a full-time job but still do not make enough money to purchase a home, and 74 percent say they do not have enough money for a down payment and closing costs. A growing number of respondents are also concerned about climbing housing costs: 41 percent call the lack of affordable homes a “very big” or “fairly big” problem in their area – an increase of 9 percent points from 2013.

Source: National Association of REALTORS®

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Owners Say Their Home Is Worth More

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 13, 2015

Home owners are overvaluing the price of their homes compared to appraiser opinions, according to Quicken Loans’ Home Price Perception Index for September, which monitors the difference between appraisers’ and home owners’ opinions of home values.

Appraiser opinions of home values in September were 2 percent lower than home owner’s views. The gap of the two values did narrow in September for the first time since February, but the findings marked the eighth consecutive month that home owners’ price perceptions outpaced appraiser opinions.

Here's a breakdown of cities where the gap between home owner and appraiser price opinions was the greatest.

Source: Quicken Loans

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5 Common Buyer's Remorse Culprits

DAILY REAL ESTATE NEWS | MONDAY, OCTOBER 12, 2015

Some home buyers suffer from post-purchase regret. Realtor.com® recently spoke to real estate industry experts to find out what home features tend to spark the biggest regrets among buyers. Topping the list:

1. Buying too big of a home. Buyers may think at the time having a big home is what they want, but after moving in, they may later regret the expense and upkeep of maintaining a big home. Cooling and heating bills can be much higher and just cleaning the place can become a much bigger chore. Also if the room size is big, buyers may find their furniture a mismatch and too small. Urge buyers to bring a tape measure to verify their furniture would work in the space and also to consider the utility bills.

Read more: What's at the Root of Buyer Remorse

2. Awkward layouts. The kitchen island is often a desirable amenity among home buyers – it can add prep space, after all. But “kitchen islands can be a mistake if you don’t take your ‘work triangle’ into account,” Baumbusch says. She urges buyers to walk around the kitchen and consider their usual prepping and cooking patterns.

3. Not considering what’s missing. Architects and remodelers sometimes will remove something from a room to give it a more modern, cleaner feel. For example, “there is a trend to eliminate the bathtub in favor of just a shower,” Baumbusch says. “Some home owners regret that decision because sometimes they find themselves wishing for a nice long soak after a tough day.”

4. Pools. For some home buyers, the pool can become a selling-point that later turns into a source of regret. Pools can be costly and some buyers may fail to consider the all of the additional costs. For example, there’s regularly monthly maintenance and cleaning as well as pools in seasonal areas often are opened and closed by a professional. “It can cost upward of $600 just to open a pool and prepare it for swimmers,” Baumbusch says.

5. Falling for fads. “Today’s popular ice-white appliances, steel countertops, and Edison bulb light fixtures are yesterday’s saloon doors, linoleum, and brass hardware,” realtor.com® notes. “If you buy a house just for its trendy look, you may end up regretting it when the styles change, especially if you have to sell the outdated design.” Baumbusch recommends buyers look for timeless features – classic, well-designed homes.

Source: “Skip the Pain: 7 Things That Will Fill You With Buyer’s Remorse,” realtor.com® (Oct. 12, 2015)

Study: Most Buyers Fail to Shop for a Mortgage

DAILY REAL ESTATE NEWS | MONDAY, OCTOBER 12, 2015

Nearly 80 percent of Americans consider themselves bargain hunters, with the majority saying they search prices online before purchasing an item. However, when consumers are asked how often they search for better prices on big-ticket items, like a mortgage, they fail to shop around, according to a new LendingTree survey of more than 1,000 American customers.

Read more: Tap Local Banks for Better Mortgage Options

Less than one-third – or 30 percent – of consumers say they always shop around for the best rates on major financial loans, such as a mortgage or auto loan, the survey found. About 18 percent say they never looked for better rates or prices on loans.

“It’s an interesting phenomenon,” says Andrea Woroch, LendingTree’s consumer savings expert. “Consumers are generally very savvy with their shopping behavior when it comes to day-to-day purchases and material goods. But, once it comes to a major financial investment, we see a collapse of the normally rational pattern of behavior and mentality for saving. Consumers sometimes may be too focused on price and fail to consider the lifetime cost of interest, which is really where banks and lenders make their money. Over a five-year auto loan, or thirty-year mortgage, a one percent difference between interest rates can easily translate to thousands of dollars.”

The survey found more than 80 percent of consumers say they would drive out of their way to save 10 cents per gallon on gas. However, only 17 percent of car owners negotiated the interest rate when financing their new car.

“There could be a number of causes for this irrational behavior and it may vary among types of consumers,” Woroch says. “One is simply that many Americans don’t understand the long-term costs associated with compounding interest and the time-value of money. Another possibility is that consumers are uneducated about loan shopping and the importance of comparing interest rates before financing a purchase. It’s easy to become emotionally involved with the purchase itself or to find the loan process so frustrating that you would rather finalize the purchase instead of shopping around.”

Source: LendingTree

First-Time Buyer Share Edging Up

DAILY REAL ESTATE NEWS | MONDAY, OCTOBER 12, 2015

First-time home buyers comprised 32 percent of existing-home sales in August, up from 29 percent a year ago, according to the August 2015 REALTORS® Confidence Index Survey.

“Sustained net job creation, a low interest rate environment with 30-year fixed rates at below four percent for most of 2015, and better pricing of FHA-insured mortgages appear to be helping first-time home buyers,” according to the REALTORS® survey.

Buyers age 34 and under accounted for 29 percent of sales reported by the respondents. Nearly half of buyers were 35- to 55-years-old. Renters, meanwhile, accounted for 38 percent of sales.

REALTOR®s surveyed report that tight inventory, increasingly unaffordable prices, and weak credit profiles that fail to meet tighter underwriting standards are conditions that continue to work against first-time home buyers.

Source: “Sales to First-Time Buyers: 32 Percent of Sales in August 2015,” National Association of REALTORS® Economists’ Outlook blog (Oct. 6, 2015)