This experience has been absolutely wonderful. I would recommend The Heritage Home Team to anyone buying or selling.
~ Tuan T.
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The story of The Heritage Home Team begins several years ago with a young woman from Olathe, KS with a passion for personal finance. Crystal wanted to learn how the average American grew their wealth. What her studies continually brought her back to was that Americans that owned homes were wealthier and more ‘comfortable’ then Americans that did not own their own home.
But, it’s not just about moving into any home. It’s about finding a home of good quality in a good area that will continue to appreciate year after year. Crystal Webster became a REALTOR to do just that. Crystal and The Heritage Home Team pride themselves in finding a good quality home, in the target price range, in the available time frame.
The Heritage Home Team also prides itself in being ‘green’. You’d be amazed at how wasteful a life on the go can be. The Heritage Home Team drives hybrid cars, only prints when needed – and double sided if possible, saves files in electronic format instead of paper format, shys away from prepackaged products, recycles, and is learning how to be greener every day.
Who doesn’t love a little free money – especially when it’s for a down payment on your new home!
Now, when you use the ‘Search Online Homes‘ function on our website and the home can qualify for special down payment assistance a little green icon will show up. Just click on the words “Down Payment Assistance‘ to the right of the green icon and it will take you to a page to input a little information about yourself. Based on the home and your information you will be presented with potential down payment resources.
That information isn’t always the easiest to read – however that’s what The Heritage Home Team is here for! Contact us and we can give you more information about the special programs and provide you with great lender referrals who can work with you on all the down payment options.
As a potential buyer, I can understand that you’re waiting until you are 100% sure the real estate market is fully recovered before you decide to make an offer on a home. Here are three reasons you might want to consider finding a home sooner rather than later:
1. Prices are rising, and at an accelerated rate
The price of a home is the major consideration when deciding whether or not it makes financial sense to purchase a house. Experts are not only projecting that house values will increase in 2013. They are also more optomistic in the level of appreciation they are projecting as the market begins to heat up. Here are some examples:
The Home Price Expectation Survey
The latest survey of a nationwide panel of 118 economists, real estate experts and investment and market strategists reveals they project home values to end 2013 up an average of 4.6% according to the first quarter. This is after they had projected a 3.1% increase just three months ago.
Bank of America
In a report titled, Someone Say House Party?, Bank of America analysts revised their projections upward:
“Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast of 4.7% for home prices this year. We now expect national home prices, as defined by the S&P Case Shiller home price index, to increase 8% this year.”
According to a report in DSNews, Capital Economics also upgraded their prediction:
“Strong demand and tight inventory have brought existing home sales back to ‘normal’ levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely.
These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5% price gain this year up to 8%.”
In an article from HousingWire, Morgan Stanley joined the party:
“Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013, according to its latest global securitized credit report…
“The momentum in most metrics of housing activity is running well ahead of the pace we had expected,” said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.”
Not only are prices projected to appreciate. Experts are actually revising their projections upward as demand maintains its momentum.
2. Interest Rate are Increasing
A big component in the cost of a home is the mortgage interest rate a purchaser pays. Understanding where rates are headed will help in making a decision whether to buy now or wait.
So, Where Are Rates Headed?
No one can know for sure. The Fed has been artificially holding rates down to stimulate the economy. However, as the economy improves, many experts expect rates to creep up. As an example, HSH Associates, the nation’s largest publisher of mortgage and consumer loan information, recently explained:
“The stronger the economy becomes, the higher rates may grind; the Federal Reserve is keeping them low to goose the economy, but an economy responding to the Fed’s medicine will soon see less of a need for it in order to function. If not otherwise manipulated, higher rates are the natural result of a growing economy, as rising demand for available credit supply and concerns about inflation allow costs to rise.”
The Mortgage Bankers Association (MBA) agrees. They were quoted in HousingWire late last year regarding their thoughts on where rates would be headed in 2013.
“After reaching record lows in 2012, mortgage rates are expected to creep up slowly in 2013, the Mortgage Bankers Association predicted.”
In the MBA’s latest Mortgage Finance Forecast they forecast that the 30 year interest rate will be 4.3% by the end of the year. This represents an increase of almost a full percentage point from the 3.4% rate available at the end of 2012.
Freddie Mac’s Weekly Primary Mortgage Market Survey reveals that rates have increased by 2/10ths of a percentage point already this year.
As we mentioned, no one knows for sure where rates will be a year from now. But, many experts think they may be as much as a point higher. With rising residential real estate prices and the possibility of higher mortgage rates, waiting to buy a home makes no sense in our opinion.
3. Rents are Skyrocketing
Whether you own or rent, you will have a monthly housing expense. The question is how that expense will change in the future. When you purchase a home, for the most part, you lock-in that monthly housing expense for the length of the mortgage you take (15 or 30 years for example). When you rent a home, your housing expense is impacted by movements in the supply and demand for rental properties.
Historically, residential rental rates increase by 3.2% on an annual basis. However, in the current housing environment, there is an increasing demand for residential rental properties. This increase in demand has dramatically impacted rates. Zillow, in their most recent report, revealed that rental rates in the U.S. increased by 4.5% over the last twelve months. Other studies have projected rental rate increases of 4-5% over the next few years.
The only way to have control of your housing expense is to buy.
But Isn’t Buying Much More Expensive Than Renting?
Not right now! As a matter of fact, with prices down and mortgage rates at historic lows, it is LESS EXPENSIVE to buy than rent in most areas. In a recent report, Trulia revealed it is cheaper to buy than rent in ALL of America’s largest regions.
According to Jed Kolko, Trulia’s Chief Economist:
“People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets.”
However, Kolko went on to say that this opportunity may soon disappear:
“Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.”
Again, the only way to lock-in your monthly housing expense is to take that decision out of the hands of a landlord by owning. With both prices and interest rates set to increase, the best time to buy is right now.
A big thanks to KCM for this great information!