The RE/MAX Associates Louisville Real Estate Blog

College Tuition

Why do colleges keep raising the tuition rates for students, who are already taking out massive loans to pay for their education. These universities aren’t full of dummies, they know how economics work, yet they still raise their prices despite burdening their customers and hurting the economy. One of the most major ways it’s hurting the economy is preventing young graduates from buying a home. 

The Federal Reserve Bank of New York published their research and it’s the first to quantify the impact of recent rate hikes in colleges. Since 2009, we have seen student debt Double to more than $1.4 trillion; and homeownership is declining from young Americans 28-30.  The news about this will impact the economy because paychecks aren’t large enough to cover the expenses. When people buy a home, it’s almost guaranteed they will continue to spend, and spend big on things like furniture, tools, appliances, etc. It’s not hard to see that the drop in home buying is affecting the economy in other ways. 

35% of the drop in homeownership by young Americans from 2007 to 2015 is largely due to higher student loan debt. The study surveyed the entire sample size of 28-30 year-olds despite if they forfeited a college education, and suggested that the drop in home buying from this demographic is likely even greater. 

hey study also suggests that if tuition rates had stayed where they were in 2001, more than 360,000 young people would be homeowners in 2015. That would've made the total roughly 2.9 million 28-30 year-olds owning a home. Keep in mind this does not take count for other millennial's who are outside the age range also crippled by student debt. 

More than likely the total number of millennial's opting out of buying a home has grown since the period the economist studied. What's really fascinating is that since the constant yearly increase of raising tuition student debt has prison 13% every...

Fannie Mae and Freddie Mac

So far in 2017 Fannie Mae has lowered the benchmark interest rate for standard mortgage modifications, and now is about to do it again. 

Usually, Fannie and Freddie increase or decrease the benchmark interest rate together, but apparently not this time.

Last Wednesday they said they would be lowering the benchmark rate from 4.125% to 4%, but Freddie didn't make a statement about it. Housing wire has reached out to the government run entity, but they have yet to give a response. 

This January Freddie increased the benchmark from 3.87%to 4.25% which is the highest point it had been since July of 2015. But just this May, they both cut it back down to 4.125% together. 

Yet again Fannie is cutting the benchmark back down again. This number is influenced by prevailing market rates, so the GSE's change the benchmark intermittently to stay current w the market rates. 

January was the second treatment of an increase, since Fannie and Freddie did decreased the benchmark throughout 2016, even below 4%.

The GSE's dipped the standard mortgage modification benchmark interest rate to its lowest level ever at 3.5% in August 2016, and shortly after they started rising again. It made another spike in December, and even the month after in January.

We don't know if Freddie will be doing the same but for right now it's benchmark is 4.125%.


The True Cost of Home Ownership

Zillow has just come out with some new data: the average U.S. homeowner spends an extra $9,080 on their home each year, and sometimes up to $16,000 in certain cities. Homes cost way more than just their listing price, so this is a major point to consider when debating if you can actually afford a house. 

Some buyers only look at homes listing price, or monthly mortgage when they are determining if they c an afford it. The hidden costs are what they should be thinking about that will determine if they actually can or not. 

Zillow concluded there are “unavoidable costs” like taxes, utilities, insurance, etc. and homeowners pay an average of $6,060 for these. These costs are highest in cities like Seattle, New York, and San Francisco, and lowest in cities like Indianapolis where the average is $4,700. 

Then there are maintenance and repair costs. These include repairs to your HVAC system, yard maintenance, plumbing, carpet cleaning etc. These run the average homeowner to a total of $3,020 per year. Seattle also takes the cake for the highest maintenance cost here too. San Antonio was awarded with the lowest. 

What is important for potential homeowners is to figure out how much the home will ultimately cost you, and what you truly can afford. Know where you stand when it comes to finances and know what you can reasonably spend each month. While the house with the luxurious deck catches your eye, keeping it in pristine condition may cost you more than you are ready to shell out. 

For the record San Francisco has the highest cost of living for homeowners at $16,290. Boston was next at $14,377. To finish the top five San Diego placed third at $13,488, Seattle at $12,924, and Los Angeles at $12,556. 

According to Zillow, a third of all buyers exceed their budget when buying a home. To make sure this doesn’t happen to you, find a budget calculator to help you better organize your monthly expenses....

How to Buy A Home the Smart Way

If you’re about to take the plunge into buying a home, you’ll want to be ready for what’s about to come. It can be a breeze of a process, or a long, drawn-out, painful one if you don’t do it right. It’s best to buy a home quick and smart. Usually, it can take anywhere from two to three months, sometimes longer, and sometimes shorter depending on what type of market you are in. Check out how we advise to buy a home quickly and wisely. 

  1. Let Uncle Sam help

Saving for a downpayment is one of the toughest parts of buying a home. Luckily, the government offers more than 2,200 down payment assistance programs. These are programs offering grants, tax credits, and low-interest loans. A ton of buyers don’t even know these are available to them, or think they are next to impossible to get. Good news for you, they’re not that difficult to get. 

You’ll need to meet specific eligibility requirements regarding income, occupation, or credit, but buyers who use these tools save an average of $17,766 between upfront costs and lower monthly mortgage payments over the life of a loan. 

  1. Be watchful for new listings

Check the real estate websites every day to see if any new homes pop up in your area. Another tool is asking your real estate agent to set up an automated email service that alerts you to new homes that hit the market. 

Watching new listings will give you the advantage over your competition because you’ll be ready to make an offer before your completion even pulls in the driveway. 

  1. Consider a foreclosure

Many potential buyers pass right over foreclosures or bank owned properties because they are weary of the homes condition. Yes, a valid reason, but this is where the real deals are made.Despite the fact that banks won’t fix any problems found during inspections, there are still huge advantages....

First Time Landlord Woes

Homeowners have a lot to keep up with, but landlords have even more. If you own a home and are thinking about renting it out, you should definitely read the common mistakes most first-time landlords make. Learning by trial-and-error could cost you dearly and make want to get out of the business altogether. 

  1. Live near the rental property

Living close to the property allows you to check on it occasionally, fix any problems yourself, and show it often when it's time to find new renters. Look for the best investment areas, and if it's in your long-term budget you can hire a property manager to handle the daily details.

  1. Know the landlord-tenant law

Majority of states have strict landlord-tenant laws that cover issues like security deposits, certain access times to the property, and how much notice you give the tenants before you ask them to leave.

A few laws to know are the "Habitability" and "anti-discrimination" laws. Most landlords scrim over this and tell themselves they'll be fine as long as they don't say or do anything racist or sexist. If only it were this easy. Many strange situations can arise so familiarize yourself with the law so you won't be caught in a stick situation. 

  1. Enforce timely rent payment 

This does not seem like a big problem, but if you get too friendly with your tenants they may start thinking it's okay to be late on rent. And if it continues they might skip or give partial payments when they are in between work. Eventually this might put you several months behind on rent and your mortgage has become a burden. Be firm with your tenants and foster a good relationship with them, and rent should never be an issue.

  1. Interview potential tenants

Online tenant screening services are well worth your time, money, and effort to screen who will be living in your properties. You may look at their credit score and their...

Market Update for June

Redfin’s newest data has stated home prices in June increased 7.1% to a median sale price of $298,000. Redfin began tracking home prices back in 2010, and last month and June was the highest jump they’ve ever recorded. Another interesting stat is that 26.6% of homes listed sold above their list price, which is another record for Redfin. 

June saw home prices rise by 1.9% since last June, all while the total amount of inventory fell 10.7%. The average home that went to market in June only lasted an average of 36 days. This also happens to be another record for Redfin, as these homes sold one day earlier than the previous month. Some homes around the country in the hotter markets only lasted a week. 

Some of these markets are unseen before this point. Records are being set almost every month, prices are soaring, demand is still booming all while supply isn’t making any gains. In order to survive in these markets, one must know what they’re doing and do whatever it takes to buy that house fast. The better offers are the ones that usually win in these instances.


Amazon and Real Estate

Something big happened last Tuesday while we were all shopping on Amazon for it’s day of deals. It very quietly disclosed part of its future, and what new service they will offer their customers. They are about to set out into the real estate world, becoming a competitor of Zillow and Redfin. 

On the website’s section under Home & Business Service, they now list “Hire A Realtor”, and when clicked on takes you to a page that isn’t fully set up yet, but it’s under construction. This is the area where you can hire someone to assemble something you use bought. So hiring a realtor will be another premium service being offered. 

The only information available about this service is the blank webpage you are taken to after clicking the link. 

What is interesting to note is that when Amazon’s “Hire a Realtor” page became knowledge, Zillow’s stock priced took a hit from $46.15 to $44.54, according to an article in 

If they continue building that webpage by deciding to enter the market, it’s not the first new market they will have encroached on this summer. Earlier this summer they launched their own version of Best Buy’s Geek Squad, which is an in-home service for product installation, and electronic repairs. It’s also a service where consumers can find local electricians, plumbers, house cleaners, etc. 

Amazon’s new Smart Home Services Store on its website allows users to schedule appointments for installations, maintenance, and free consultations. Amazon product experts will answer calls and walk a user through things like smart lights, smart thermostats, etc. 

According to the National Association of Realtors, Amazon has not yet received permission to coordinate with them to use the world “Realtor”, given it is trademarked by the Association. Realtor is often used in short for “real...

American Real Estate v. European Real Estate

Real estate is different throughout the world. Each country has their own culture, laws, practices, norms, taboos, etc. They all come to life when dealing with business such as real estate. Let’s take a look at the European way of handling real estate, and how different it really is. 

  1. The MLS is American

European real estate doesn’t have a centralized database, or industry infrastructure for that matter. They simply don’t have one. However, Japan and Mexico have been working on creating their own version of the MLS. 

There’s no real structure for real estate information, as one listing may contain several different agents. Since this is the case, the buyer is the most important part of the deal, not so much the listing itself. 

The way it goes is anyone can bring a buyer and that’s not a strong point for the industries professionalism. Accompanied with other factors, this is one reason why real estate isn’t viewed as gloriously as it is here in America. 

  1. Not much entrepreneurial spirit in Europe

Another major difference is the company and office structure. A large portion of European agents work in small offices who are content with their lives. Typically the office is a small shop right on the street, and they have anywhere from three to six agents, and the owner is one of them. The owner is also usually the top selling agent. 

Europe is changing though. The traditional real estate models are fading as technology is pushing them out, and creating a greater significance on franchising. 

European markets have seen some American brands like Century 21 and Remax. The emergence of these companies have changed the way europeans do business. They have a new way of thinking about business, and a real sense of professionalism. 

The bigger firms began offering more resources in marketing and training to its agents, which generates more money...

Mortgage Rate Update 7/10/17

Last week the planet saw interest rates rise, and the United States followed. They saw a slight jump in the 10-year Treasury. It rose 10 basis points while interest rates across the globe rose quickly. 

The 30-year fixed rate mortgage rose to 3.96% for the week ending July 6th, 2017. That’s quite a jump considering the average of the prior week was 3.88%, which is 8 basis points. This time last year the rate was 3.41%, so yes that is still a remarkable jump. 

The 15-year fixed rate mortgage also increased to 3.22% for the week. The week prior it held at a stead 3.17%, and up from last year’s 2.74%. 

The five-year Treasury Indexed hybrid adjustable rate mortgage rose to 3.21%. Last week it was at 3.17%, and the year before it was 2.68%. 


How Do Millennials Enter the Housing Market?

Bankrate recently published a report that held some astonishing finishings. It was centered around how Millennials find their way into the housing market despite all the obstacles they face. It found that millennials between the ages of 18-26 spend way more daily on habitual expenses than any other generation. These expenses are things like going out with friends for a beer, getting coffee multiples times a week, buying things online, eating out etc. With all this spending it’s a wonder how they manage to save any money for a down payment. 

From the report, 54% of the surveyors say they eat out at least three times a week; the Gen-Xers who tallied at 33%. 30% of them say they buy coffee at least three times a week. And the millennials of drinking age to 26 say they go out drinking with friends at least once a week. 

The other problem facing millennials that no other generation had, is crippling student debt. The total amount of student debt in our country is a whopping 1.3 Trillion dollars, all while college tuition keeps rising every year. How in the world do the find the money to stash away for a downpayment. 

One method that seems to be working pretty well is the low-downpayment mortgages offered by some big name banks. Another method is utilizing the Veteran and active-duty service member private loan, which is issued by the Department of Veteran’s Affairs, and the Navy Federal Credit Union is an option where they can get a zero-down mortgage. Who needs to tighten their belt when they have the options before them?

You don’t need to be in the military to qualify for a low-downpayment loan. All you need is nearly perfect credit. Now they will be required to have mortgage insurance, either through FHA or a private company. 


Shortage of Labor for Developers

Roughly 66% of contractors are having a difficult time finding quality labor that finishes jobs on time. There is simply not enough skilled craftsmen to go around. More than a third of contractors are having to decline job offers, all while increasing their prices. USG Corp. and the U.S. Chamber of Commerce took a survey and found that 3/4 of the contractors they surveyed are lacking skilled labor so bad, they are just asking their employees to work harder. Pretty much they are asking them to work harder in order to cope with the lack of skill available. 

The survey that took place was part of the development of new economic indicator launched in early June.  It was designed to measure trends like backlogs, revenue projections, access to financing, and labor issues.  

Of the contractors surveyed, 2/3 of them predicted more labor help would come in the next several months, but 61% of them said skilled labor like concrete masons, electrical, plumbing, etc. were terribly hard to find or book. There just isn’t enough qualified talent. 

Industry leaders are a bit worried for the future. The Trump administration has promised it will spend $1 trillion on new infrastructure, and industry workers can barely keep up with the work they have now. To spend that much on new work could surely make the situation even more dire. 

A big part of the shortage of labor is due to the amount of construction projects in the near future. From January tip April of this year construction spending amounted to $359.5 billion, which is 5.8% more than the same time of 2016. 

It didn’t help that thousands of skilled laborers left the market when the economic crisis hit. On top of that, even before the crisis, the labor market was aging. It was essentially like a large chunk of the labor market retired around the financial crisis. 

What will happen for the future? We will just have to wait and see.


9 Ways to Sell Your Home Fast

No matter where you were selling your home the process can always be stressful. There are mountains of paperwork, weeks of showings and all the prepping in between. Having pets and children multipliers the stress because they only seem to make the matter 10 times harder. It's best to hit the ground running and sell your home before it grows still on the market. The secret to selling a home quickly is it has to show well, be marketed well, and priced precisely. If you are looking to sell your home fast you'll want to read these tips.

  1. Get a storage unit

Fight the urge to shove all your clutter in a closet, because anyone who comes to your open house can and will look at your storage spaces. Then they will see the disorganization, the overstuffed closets and believe you are a slob who doesn't take care of your things. What you should do is buy yourself a storage unit for a few months. Put a third of your belongings in there while your house is on the market so your clutter won't scare off buyers. 

  1. Have a professional stage and photograph your home

A professional home stager views your home from the buyers point of view. They will see how to highlight your strengths and hide your flaws. The first thing a buyer will see are the listing photos. These are proven to help sell a home quicker. Staging your home is necessary because it markets it in a way that is neutral to whoever walks in, allowing them to see the home as they may one day wish it to be. 

  1. Find the right real estate agent

Hiring the right real estate agent is crucial when selling your home. They need to have a strong track record of sales that proves they know what they are doing. Are they familiar with the neighborhood? Can they see your home...

Home Prices Slow for April

There is new data for the month of April regarding home sales. The home-price growth slowed for the first time in months, and if the trend continues it may mean markets are beginning to lose steam.

The S&P, according to CoreLogic Case-Shiller Indices, rose 5.5% on the year, which ends in April. It was also down from a revised 5.6% year-over-year increase which was reported in March.

Back in September home prices were setting records, and the pace of their gross continue to rise at a healthy rate.

Across the 10 city indexed, there were chains of 4.9% throughout the year, but was still down 5.2% since March. Meanwhile, the 20 city index Rose 5.7% but still down 5.9% from the prior month. 

Economists from the wall street journal were expecting a rise of 6% in April, which is quite a bit different from what they had planned. The high demand in the market has pushed the accelerated gains to new heights, all of which is fueled by rising wages and young people looking to buy homes. The one problem economists fear is that Price growth that continues to outpace income growth will not sustain itself.

They are worried if home price gains gently slow, or if they crash and take the Eckman bony down with them. They are not expecting a disastrous crash.

The price of homes are still growing quickly but are slowing nonetheless, and growing faster than incomes. The good news is that home price growth is still less than half of what it was during the pre-crisis in 2005, at 14%. 

On the other hand there are several markets that are beginning to see double-digit (or near double-digit) growth. The markets are Seattle, Portland, Dallas, and Denver. 

Of the top 20 cities, seven reported greater year over year price increases for April.

Month over month, US index saw a chain of 0.9% in April which was not seasonally adjusted. The tin city rose 0.8%, and the 20 city index saw a decrease of 0.9% from March to April.

After the seasonal adjustments...

Mortgage Rates & What's Next

The federal reserve raise the rates for the third time in seven months. Is this the end of our low mortgage rates? Let's see how it will impact your home buying adventures, and refinancing plans. 

The fed funds rate is an overnight bank-to-bank lending rate.  This isn't the rate for the every day home shoppers, it's the rate the Federal Reserve uses to influence the economic rates. 

When there's been a slow down in the market, feds usually lower rates to help boost the economy. During the financial crisis of 2008, the Fed lowered rates all the way down to .25% and it basically stayed in that area until the end of 2015. 

After 2000After 2015, rates were increased in installments of .25% and have been raised four times since then. 

Currently the fed funds rate is 1.25%, but mortgage rates for Americans have not risen much and are actually looking at some of the lowest points of 2017. 

OneOne product that isOne product that is affected by Lee's fit hikes is the Home Equity Line of Credit, HELOC. 

These rates are based on two things, a set base rate is called a margin, plus a fluctuating right called an index.

HELOC's index is the Prime Rate, and the prime rate is what is directly effected by the Fed Funds. The prime rate is the fed funds rate plus an additional 3%.

Given the fed funds rate is 1.25%, this makes the prime rate at 4.25%.

So anyone with a HELOC has a rate of 4.25% plus their margin.  Margins are usually between zero and 3%, plus prime, and your margin is factored by your credit quality and wet you're borrowing relative to the price of your home.

For example, if HELOC rates rose 1%, your monthly interest cost on a $100,000 HELOC is rising by $83 per month. 

Traditional mortgages are staying low

Traditional mortgage rates are linked to trading in mortgage bonds, not the fed funds rate. This is why they are not...

The Right Way to Do Art at Home

Empty walls can be quite the bore in a beautiful home. You'll want to show off your personality when you move in to a new home, and the way to do that is through art. He really special piece of art can transform a room in ways you cannot imagine. It expresses who you are and your personal interests. 

Jumping into the art culture can be scary when you really know nothing about it, but here are a few tips to know from art that you can remember for life!

Stay within your budget

Chances are if you have to look at the price tag of art you cannot afford the real stuff. So go check out your local flea market’s where Art is made locally and it's everywhere. You can find some great stuff there for not a lot of money.

Know your own goals

Do you need to ask yourselfDo you need to ask yourself a couple questions. Do you want to decorate the entire house, or just a few rooms? Or are you wanting to invest in art and hope one day original pieces become worth something significant? These questions will determine what kind of money you want to spend on art. If you only have $1500 then you may be only able to afford one piece. If you're looking to decorate portions of your house you may need to buy several and expensive pieces of art which will serve its intended purpose. 

Check out theCheck out the art circuits

Checking outChecking out the local art galleries can help you determine your own it taste, and make you more confident in knowing which art you fancy. Also you are able to meet local artists whose careers you may be interested in the following. 

ConsiderConsider auctions

No matter your budget art auctions are open to everyone. You were able to see what is out there and what types...

Saving Money In Summer

Well summer is officially here and you know what that means, high electric bills to keep your house cool. If you're worried about the money you're shelling out over energy bills, just relax. Here's a list of ways to reduce your monthly energy bills. 

Stop running appliances during the day

Instead of running your appliances like the dishwasher and washing machine during the day, run them at night so the heat they generate won't be noticed. You can also ask your utility companies if there are certain times to use your appliances that can earn you discounts.

Have your ceiling fan moving in the right direction

Ceiling fans help circulate Coulier throughout your home, but only if they are to turning counterclockwise. All it takes is the flip of a switch or simply flipping over the blades.

Cool your lights

Change out your incandescent lightbulbs which emit heat with cooler compact fluorescent lightbulbs.

Lower your water heater temperature to 120°. 

When your water heater is set to the regular 140° there's a large amount of waste that can range from $30-$60. Once you tweak it you won't even notice the temperature change. 

Clean your AC

Clean your air conditioner unit by removing all the dead leaves around it and the encroaching shrubs by your unit. Turn it off completely and spray the coils with the hose. Take a vacuum and clear out the vents and make sure none of them are blocked. If you have window units simply just them inside and out and replace them if they are older than 10 years. 

Replace your filters

Moe Stacy the...

Signs You Are Renting From A Slumlord

Before committing to a lease, keep on the lookout for these possible problems from my landlord. The location and layout might be the most important factors to your renting hunt, but don't overlook the landlord most importantly. Since they run the show, having a bad landlord experience can become a nightmare. Pay attention to these warning signs before you sign any lease.

Slumlord signs

  1. Common areas of a building are in bad shape

Having a smelly home, cracks throughout, and a nasty laundry room are perfect warning signs of what is happening throughout the whole house. If the public places of a building or not maintain, the individual rooms won't be either.

2.Individual units aren't in good shape either

Not maintaining a property is a huge red flag. If you're checking it out and notice a bunch of little things wrong, there's probably a few bigger things wrong too. This should tell you the absolute minimum is used in keeping up the living spaces. 

  1. Can't put your finger on the landlord

If the landlord almost appears more as a magician, by not being able to get a hold of them, there's a good warning sign. It almost cannot get any worse than needing your landlord to fix a maintenance problem and not be around to make the fox happen. 

  1. A confusing lease, or no lease at all

Having a lease that is unquestionably clear is helpful if you want to avoid unmet expectations, and problems down the road. A couple details it should be laid out clearly besides the obvious amount and time rent is due.

You will want to know the terms of the lease termination, occupancy limits, and pet policies before you agree to sign any lease....

Transform Your Garage

The new trends today are transforming garages into an extra hangout room. Most Americans store their vehicles in their garages, which is totally normal, but are they being used to the full potential?

Homeowners across the country are converting their garages into a room that can be used by the entire family. If this is something that strikes your interest consider some of these ideas on how to do it right.

Think of the shape and location of your garage

It is a sensual to plan carefully when thinking of renovating your garage. Most garages have vaulted ceilings, strange angles, and tricky corners, which makes it a challenge to find storage space and decorate it eloquently. 

Keep in mind if you live in a place that gets cold you may be sacrificing your car to the outside elements during winter.

Focus on the details

In order for a garage to be comfortable you'll have to make sure the insulation, heating, cooling, and lighting are installed correctly. It won't be comfy if it's too hot or cold. And don't forget about the garage door. It would be ideal to have a separate entrance so the main entry point isn't pulling up and down the garage door all the time. 

For all the items that reside in the garage like a lawnmower, you may want to get yourself an outside shed to place in the backyard.

Use it to replace a room you pay for

You can use this room as a gym, office space, or even a art or music studio. Saving money is always cool, especially when you use your new space to take the place of the office you've been renting, or the gym you've been going to for years. 

All you need is a elliptical, some free weights, and you got yourself your own personal gym where there's never a line to use weights. Be sure to add the proper Decour for whatever room he...

Important Contingencies

When markets are competitive, a buyer should do their best to make their offer stand out. They may offer significant down payments, strategic offer letters, or leave a fancy bottle of wine on the doorstep. 

Some sellers receive several offers that are similar, but very different in the contingencies field of the contract. It isn't uncommon to waive contingencies, which allows buyers to back out if they need. 

Hold on! Waving a contingency may speed things up and entice the seller even more, but you could find yourself paying for the black mold treatment in the basement, or things of the like. Keep in mind if you write in too many contingencies in your offer it may discourage the seller for potential contract delays, risks, or the cost they could incur.

Some contingencies are needed, like the purchase agreement contingency which protects buyers from unexpected fees. There are also things called two-tier contingencies, which protect the buyer if they want to pull out after finding they cannot paint their house because of the HOA rules. 

Pretty much you want to keep your offer protected from the unpredictable and you can walk away from a deal without losing a penny. However, when the market is competitive, you may want to take out the smaller ones. Below are the four most important contingencies you'll want in your offer.

Inspection contingency

The home inspection contingency is wet any decent real estate agent will recommend. This ensures you get a licensed home inspector to view the property within a week of signing the purchase agreement. After the inspection you may request the seller to make repairs of your choice. At this point the seller may make the repair, or counter offer. If an agreement cannot be reached, the buyer is allowed to back out of their purchase agreement with their deposit back.

Financing contingency


Pros & Cons of Owning A Home

The generation of baby boomers had a vision for successful homeownership. It began with buying a starter home, which was a small household for a small family.

As their careers and families grew they would move into bigger and better homes. Nowadays, plenty of Americans struggle with coming up with a down payment for their first home. They are torn between buying something now, or waiting and saving more money to buy a more long-term house. They may also buy a starter home and stay in it for quite a while.

At any level, it's a personal and financial choice we must make but let's take a look at the pros and cons before coming to a decision.

Pro: build stability faster

Homeownership teaches a person a lot of new things about life. You're exposed to making decisions you've never seen before. First time homeowners experience wave of accomplishment when they buy their first home they may feel a real sense of community and become more grounded. 

After changing a few things that make a new home their's, they will enjoy it by having friends over, and enjoying their own space.

Con: buying twice is moving twice

If you are planning on upgrading in a few years, you may be better served by saving your money for the larger house, so you can stay longer. 

Despite mortgage rates being historically low, there are still several hefty costs with buying and selling a home. There is title insurance brokerage commissions, loan fees, and inspections etc.

Moving is also quite expensive and exhausting; nobody likes to move. Some people are happy with one home for the rest of their lives, but it's not a bad model to follow if you plan on staying for the foreseeable future.

Pro: building equity

Getting in your first home almost certainly will provide equity, however it is not...