Rent vs. Buy – Page 10 – Jerry Torres Blog | #TechieLoanOriginator | Best Mortgage Lender & Broker in Hacienda Heights, CA

Renters Paying Substantially More While Owning Costs Less

April 25, 2019/in First Time Home Buyers, For Buyers, For Sellers, Housing Market Updates, Move-Up Buyers, Rent vs. Buy /by Jerry Torres

In a recent Insights Blog, CoreLogic reported that rent prices have skyrocketed since 2005. Meanwhile, the typical mortgage payment has actually decreased.

“CoreLogic’s national rent index was up 36% in December 2018 compared with December 2005, while the typical mortgage payment was down 4% over that period.”

Why the difference between the costs of renting versus owning?

It makes sense that rents have risen. However, how did mortgage payments decrease? CoreLogic explained:

“It’s mainly because mortgage rates back in December 2005 were significantly higher, averaging 6.3% for a fixed-rate 30-year loan, compared with 4.6% in December 2018.

The national median sale price in December 2005 – $190,000 – was lower than the $220,305 median in December 2018, but because of higher mortgage rates in 2005 the typical monthly mortgage payment was slightly higher back then – $941 – compared with $904 in December 2018.”

Additionally, a recent report by the National Association of Realtors (NAR) showed that purchasing a home requires less of your monthly paycheck.

According to the Economists’ Outlook Blog, NAR’s February 2019 Housing Affordability Index showed that the “percentage of income needed” to pay the typical mortgage has decreased the last three months.

November – 17.3%
December – 16.9%
January – 16.2%
February – 15.9%

Bottom Line

What does this all mean to the current housing market? We think First American said it best in a post last week:

“The mortgage rate-driven affordability surge has arrived just in time… Rising affordability has already benefited home buyers and, if the lower rate environment persists, we’re in for a great spring home-buying season.”

JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”

Cell: (626) 269-9945
Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

Slaying the Largest Homebuying Myths Today [INFOGRAPHIC]

April 12, 2019/in Buying Myths, Down Payments, First Time Home Buyers, For Buyers, For Sellers, Housing Market Updates, Infographics, Interest Rates, Move-Up Buyers, Pricing, Rent vs. Buy /by Jerry Torres

Some Highlights:

The average down payment for first-time homebuyers is only 6%!
Mortgage interest rates have been on the decline since November! Hop in now to lock in a low rate!
88% of property managers raised their rents in the last 12 months!
The average credit score on approved loans continues to fall across many loan types!

JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”

Cell: (626) 269-9945
Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

Home Buyer Demand Will Be Strong for Years to Come

April 10, 2019/in Demographics, First Time Home Buyers, For Buyers, For Sellers, Housing Market Updates, Millennials, Move-Up Buyers, Rent vs. Buy /by Jerry Torres

There has been a lot written about millennials and their preference to live in city centers above their favorite pizza place. Some have even gone so far as to say that millennials are a “Renter-Generation”.

And while this might be true for some millennials, more and more research has surfaced that shows for the vast majority, owning a home is a major part of their American Dream!

New research shows that 66% of millennials who currently rent are determined to buy a home! Seventy-three percent of those surveyed by Pulsenomics plan to buy a home in the next five years, with 40% planning to do so within the next two years!

“Millennials want to own a home as much as prior generations,” Ali Wolf, Director of Economic Research at Meyers Research says. “We saw millennial shoppers scooping up homes in 2018—and 2019 will be no different.”

Bottom Line

Are you one of the millions of renters who are ready and willing to buy a home? Let’s get together to determine your ability to buy now!

JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”

Cell: (626) 269-9945
Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

Homeownership is a Cornerstone of the American Dream

March 14, 2019/in First Time Home Buyers, For Buyers, For Sellers, Housing Market Updates, Move-Up Buyers, Rent vs. Buy /by Jerry Torres

“The rumors of my death are greatly exaggerated.”

The famous quote attributed to Mark Twain can apply to homeownership in the United States today. During the housing bubble of the last decade, the homeownership rate soared to over sixty-nine percent. After the crash, that percentage continued to fall for the next ten years.

That led to speculation that homeownership was no longer seen as a major component of the American Dream. That belief became so widespread that the term “renters’ society” began to be used by some to define American consumers.

However, the latest report by the Census Bureau on homeownership shows that over the last two years, the percentage of homeowners has increased in each of the last eight quarters.

Going forward…

It appears the homeownership rate will continue to increase.

The 2019 Aspiring Home Buyers Profile recently released by the National Association of Realtors revealed that 84% of non-owners want to own a home in the future. That percentage increased from 73% earlier last year.

Bottom Line

In the United States, the concept of homeownership as part of the American Dream is very much alive and well.

JERRY TORRES
TEAM

Sr. Mortgage Loan Originator | Vision One Mortgage, Inc
NMLS #365615
| Company NMLS 7861

“THE PERFORMANCE TEAM”

Cell: (626) 269-9945
Fax: (800) 339-5004

https://www.JerryTorres.Pro/

#TechieLoanOriginator | #JerryTorresPro

What are the Benefits of Becoming a Homeowner?

February 26, 2019/in First Time Home Buyers, For Buyers, Move-Up Buyers, Rent vs. Buy /by Jerry Torres

Every family has a list of important dates. We celebrate birthdays, anniversaries, pet adoptions…and the list goes on. For 64.4 percent of households in the United States, this list includes the day they became a homeowner for the first time!

Why is this date important? Homeownership is not just a roof over your head! It represents shelter, stability, wealth, and pride! For decades, homeownership has been an important part of the American Dream!

However, many question if the next generations see the same benefits of homeownership as their predecessors.

In case we have forgotten, some of those benefits are:

Non-Financial Benefits

Educational Achievement: Homeownership has a positive impact on academic achievement, including reading and math performance in children 3-12 years old.
Civic Participation: “Owning a home means owning a part of the neighborhood.” Homeowners have a stronger connection to their neighborhood and are more committed to volunteer.
Health Benefits: Adjusting for a range of demographic, socioeconomic and housing-related characteristics, homeowners have a substantial health advantage over renters.
Public Assistance: The report shows 47% of homeowners use their home equity credit lines to help pay other debts, diminishing their need for public assistance.
Property Maintenance and Improvement: A well-maintained home not only generates benefits through consumption and safety, but a high-quality structure also raises mental health.
Pride of Ownership: This place is uniquely “yours.” You can customize it according to your likes and personality.

In addition to financial benefits, homeownership also brings significant social benefits. These not only pertain to the family, but extend to the communities, the state, and the country!

Financial Benefits

Buying a home is an investment in your future!

Appreciation: On average, home prices are appreciating annually at a rate of 3.6%. This helps to create a safety net.
Forced Savings: Your mortgage is like a forced savings plan! With each payment, you are reducing the principal of your loan.
Home Equity: Homeownership builds equity every single month. You can later use that equity to start a business, send your children to college, etc.
Net Worth: A homeowners’ net worth is 44x greater than renters! This gives you the financial freedom to invest.
Stability: Rent prices increase 4% annually! A fixed mortgage payment allows you to save for future projects and guard against inflation.
Tax Benefits: The government has created tax benefits to encourage customers to purchase. (Talk to your CPA to see which benefits apply to you).

Bottom Line

Homeownership is and will always be part of the American Dream! There are many financial and non-financial benefits to take advantage of when owning a home. If owning a home is part of your dream, let’s get together to help you with the process!

How Can I Increase My Family’s Net Worth?

February 25, 2019/in First Time Home Buyers, For Buyers, Move-Up Buyers, Rent vs. Buy /by Jerry Torres

Every three years, the Federal Reserve conducts their Survey of Consumer Finances. Data is collected across all economic and social groups. The latest survey data covers 2013-2016.

The study revealed that the median net worth of a homeowner is $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

Owning a home is a great way to build family wealth.

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

That is why Gallup reported that Americans picked real estate as the best long-term investment for the fifth year in a row. According to this year’s results, 34% of Americans chose real estate. Stocks followed at 26%, and then gold, savings accounts/CDs, or bonds.

Bottom Line

If you want to find out how you can use your monthly housing cost to increase your family’s wealth, let’s get together to guide you through the process.

Why A Normal Market is Just What We Need

February 20, 2019/in First Time Home Buyers, For Buyers, For Sellers, Move-Up Buyers, Pricing, Rent vs. Buy /by Jerry Torres

The housing market has been hot for a while now. Homes have been flying off the shelves as fast as they have been listed. Buyers have been competing in bidding wars just to find a home to buy, let alone find their dream home.

This ‘seller’s market’ has driven home prices to new heights. Home price appreciation averaged over 6% across the country.

However, home price growth has recently started to cool down. The latest report from CoreLogic shows that home prices have only risen by 4.7% over the last 12 months.

Many buyers and sellers planning to enter the housing market this year have started to wonder if we are headed towards another housing crash. Ralph McLaughlin, Deputy Chief Economist at CoreLogic, recently stated in an interview,

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.

The real elephant in the room here is housing supply.”

The simple answer is we are returning to a ‘normal’ market. The inventory of homes for sale more closely matches the demand in the market. The added supply means fewer buyers are outbidding each other. Therefore, prices are experiencing less upward pressure. McLaughlin went on to explain,

“If there are a lot of homes on the market and suddenly no one wants to buy them, you’ll get into a downward spiral of price competition. Right now, however, we’re in the opposite situation, there isn’t an over-abundance of homes on the market.”

As more renters looking for their piece of the American Dream enter the housing market, demand for housing will continue to grow. The Joint Center for Housing Studies at Harvard University estimates over 30 million new households will enter the market from now through 2040.

“There’s the natural life cycle of young people getting older and starting to do adult life things which include … buying a house and that’s a lot of potential inertia that could last indefinitely.”

Bottom Line

Home prices will start to appreciate by historical norms as we continue to head towards a more ‘normal’ market, rather than the over 6% seen over the course of the last couple of years. This is great news! Homeowners looking to sell their home will have buyers, as more buyers will be able to afford them!

Millionaire To Millennials: Don’t Get Stuck Renting A Home… Buy One!

February 18, 2019/in First Time Home Buyers, For Buyers, Millennials, Move-Up Buyers, Rent vs. Buy /by Jerry Torres

In a CNBC article, self-made millionaire David Bach explained that: “The biggest mistake millennials are making is not buying their first home.” He goes on to say that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.”

Bach went on to explain:

“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.”

Then he explains the secret to buying that home!

“Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

What will it cost to pay your mortgage in fifteen years? He explains further:

“For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.