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Home Buying Myths Slayed [INFOGRAPHIC]

Home Buying Myths Slayed [INFOGRAPHIC] | Simplifying the Market

Home Buying Myths Slayed [INFOGRAPHIC] | Simplifying the Market

Some Highlights:

  • The average down payment for first-time homebuyers is only 6%!
  • Despite mortgage interest rates being over 4%, rates are still below historic numbers.
  • 88% of property managers raised their rents in the last 12 months!
  • The credit score requirements for mortgage approval continue to fall.
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Is Family Mortgage Debt Out of Control?

Is Family Mortgage Debt Out of Control? | Simplifying The Market

Some homeowners have recently done a “cash out” refinance and have taken a portion of their increased equity from their house. Others have sold their homes and purchased more expensive homes with larger mortgages. At the same time, first-time buyers have become homeowners and now have mortgage payments for the first time.

These developments have caused concern that families might be reaching unsustainable levels of mortgage debt. Some are worried that we may be repeating a behavior that helped precipitate the housing crash ten years ago.

Today, we want to assure everyone that this is not the case. Here is a graph created from data released by the Federal Reserve Board which shows the Household Debt Service Ratio for mortgages as a percentage of disposable personal income. The ratio is the total quarterly required mortgage payments divided by total quarterly disposable personal income. In other words, the percentage of spendable income people are using to pay their mortgage.

Is Family Mortgage Debt Out of Control? | Simplifying The Market

Today’s ratio of 4.44% is nowhere near the ratio of 7.21% during the peak of the housing bubble and is instead at the lowest rate since 1980 (4.38%).

Bill McBride of Calculated Risk recently commented on the ratio:

“The Debt Service Ratio for mortgages is near the low for the last 38 years. This ratio increased rapidly during the housing bubble and continued to increase until 2007. With falling interest rates, and less mortgage debt, the mortgage ratio has declined significantly.”

Bottom Line

Many families paid a heavy price because of questionable practices that led to last decade’s housing crash. It seems the American people have learned a lesson and are not repeating that same behavior regarding their mortgage debt.

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How Much Do You Need to Make to Buy a Home in Your State?

How Much Do You Need to Make to Buy a Home in Your State? | Simplifying The Market

It’s no mystery that cost of living varies drastically depending on where you live, so a new study by GOBankingRates set out to find out what minimum salary you would need to make in order to buy a median-priced home in each of the 50 states, and Washington, D.C.

States in the Midwest came out on top as most affordable, requiring the smallest salaries in order to buy a median-priced home. States with large metropolitan areas saw a bump in the average salary needed to buy with California, Washington, D.C., and Hawaii edging out all others with the highest salaries required.

Below is a map with the full results of the study:

How Much Do You Need to Make to Buy a Home in Your State? | Simplifying The Market

GoBankingRates gave this advice to anyone considering a home purchase,

“Before you buy a home, it’s important to find out if you can afford the monthly mortgage payment. To do this, some financial experts recommend your housing costs — primarily your mortgage payments — shouldn’t consume more than 30 percent of your monthly income.”

As we recently reported, research from Zillow shows that historically, Americans had spent 21% of their income on owning a median-priced home. The latest data from the fourth quarter of 2017 shows that the percentage of income needed today is only 15.7%!

Bottom Line

If you are considering buying a home, whether it’s your first time or your fifth time, let’s get together to evaluate your ability to do so in today’s market!

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JULIE CVERCKO
386-668-8668
840 Deltona Blvd. St. F-1
Deltona, Florida 32725
Julie@primerealestateinc.com

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This sales associate team has the best experience and guidance to provide any home buyer. I could seriously go on and on. They are authentic. They have integrity. They approach each case covering all the bases. It has been two weeks since I moved into my home and I am still a bit reactionary yet, they have reached out to check on me. I am so grateful. They have real knowledge and experience in so many ways, other parts of the country, the market, dealing with other agents, experience with lenders; they gave me confidence. I feel they treated me with respect and whether I was a multi millionaire or the truth, a person with a tenuous credit score, they did their best for me and with me. Every home we looked at, they provided positive options to flaws or problems. They utilized every communication modality possible to assist me and get thru the whole process. They are down to earth authentic people that understood my fears and gave me time for explanations every time. I learned so much from them. Plus, they dont stop at the end of the sale! They continue to provide excellent service with contacts and advice. I am seriously very grateful. Mary Robison
Julie and Jake best team ever. They are easy-going to work with. Their genuine interest in our needs and desires made buying our property a fantastic experience. They were patient, extremely attentive,and offered sound advice during the entire process. We couldn't be happier with our new home or with the service we received from them. Isabel Candelas Sanabria
Thanks to you and Jake for a great job done. When I first called you I received a wonderful service from you. Thank to your son for being there at the closing. Anthony Mangogna
After a great experience with Prime Real Estate Inc., Julie and her family deserve recognition for their dedication to us during this exciting, yet stressful time. Tommy met with us multiple occasions to view homes and Jake called to check in on us during the process as well. Julie was always prompt with answering questions and ensuring needs were met, and every problem was always met with a solution! We wouldn't be in a home yet if it weren't for the hard work of Julie and her team. We are now two weeks into our new home and we are so happy with the outcome, all thanks to Julie, Jake, and Tommy! Thank you Jeff & Sharon Mathews
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