Another Gain In Single Family and Multifamily Permits

 

The U.S. housing market is still going strong. According to the National Association of Home Builders, the total number of single-family permits issued year-to-date nationwide reached 276,110 in March, up 25.3% over the March 2020 level of 220,416 and total number of multifamily permits issued year-to-date nationwide reached 131,227 in March, up 20.4% over the March 2020 level of 108,977.

Single-family permits were high in all four regions. The Midwest reported a 40% increase, next the Northeast with a 27.3% increase, followed by the West with a 23.9% increase and the South saw a 23.1% increase. There was also an increase in 49 states and the District of Columbia.

The highest growth rate was 300% from 20 to 80 in the District of Columbia between March 2020 YTD and March 2021 YTD. The top 10 states on the list accounted for a total of 62.8% of the total single-family permits issued. The top 10 metropolitan areas with the highest number of single-family home permits were Dallas-Fort Worth-Arlington (13,094), Houston-The Woodlands-Sugarland (12,745) and Austin-Round Rock (6,189), and two were in Florida; Tampa-St. Petersburg-Clearwater (5,219) and Jacksonville (3,391).

All four regions also saw a gain in multifamily permits in March 2021. The South reported the highest at 22.1%, the Northeast 21.3%, the West 20.3% and the Midwest 13.5% increase. During the time between March 2020 YTD and March 2021 YTD 36 states saw an increase in multifamily permits.

The highest was seen in New Mexico with an increase of 1,267.7%. The top 10 metropolitan areas with the highest number of multifamily home permits were New York-Newark-Jersey City, NY-NJ-PA (9,222), Austin-Round Rock, TX (7,359), Los Angeles-Long Beach-Anaheim, CA (6,661), Dallas-Fort Worth-Arlington,TX (5.594), Seattle-Tacoma-Bellevue, WA (5,555), Washington-Arlington-Alexandria, DC-VA-MD-WV (5,183), Philadelphia-Camden-Wilmington, PA-NJ-DE-ME (3,881), Phoenix-Mesa-Scottsdale, AZ (3,095) and Nashville-Davidson-Murfreesboro-Franklin, TN (2,888).

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Buying Your First Home, Here's the Scoop on How Much Money You Should Set Aside

 

Buying a home is a big life decision and knowing the facts before you buy can be priceless. Many buyers are shocked when they see how much money they need upfront to purchase a home. According to Unison’s 2019 Home Affordability Report, it takes buyers across the country an average of around 14 years to save for a home downpayment.

“As a general rule of thumb, experts say you should not be spending more than 30% of your income on housing expenses,” says USA TODAY Housing and Economy reporter Swapna Venugopal. “Aside from the mortgage payment, this includes costs like mortgage interest, property taxes and maintenance.”

The price of an existing single-family home rose 18.4% to $334,500 in March 2021. Here are some things you can do to achieve your goal of saving for a downpayment.

Start with savings, income, good credit

Before you even start your home search, you need to look at your finances and understand where you stand with your financial obligations. A good thing, to begin with, is how much house can you afford with your current income, how much you have saved for a downpayment, the mortgage you can qualify for, and what the local real estate market is currently doing. There are other living expenses and costs that come with owning a home. You will have annual taxes and home maintenance to pay for.

“You should have secure employment, some savings set aside, and be able to secure a good mortgage with an excellent credit score,” says Omer Reiner, a licensed Realtor and President of FL Cash Home Buyers LLC in Florida.

In order to get good rates on a mortgage, you will need good credit. It is best to check your credit score by obtaining your credit report before you start your home search. The rule of thumb says a good score is around 670 - 739. It depends on the lender, but a score closer to 700 is ideal if you’re thinking about getting preapproved for a mortgage,” Venugopal says.

The down payment

The down payment is a big part of the deal when it comes to owning a home. The down payment is a percent of cash that you pay at the closing. Usually, you need to put at least 20% of the purchase price down upfront.

If a downpayment is a concern, some government-backed loans from FHA or USDA will allow as little as 3.5% down or no down payment. If you have to put less than 20% down, then you will also have to have private mortgage insurance (PMI). Most lenders require PMI which does increase your monthly expenses.

Mortgage terms

Just like anything else, lenders are in competition and want your business. When shopping for a mortgage, ask what the rate and closing costs are. You will want to get preapproved by a lender who will verify your income and credit. A seller is more prone to choose a buyer with a pre-approval than one without.

Get a quote from several lenders for a mortgage. Have your credit reviewed for the quotes. It would be a disappointment to be told you could get a certain rate and then be given a higher rate because of your credit score.

Closing costs

The down payment is only one part of the finances you need to bring to the table at closing. Homebuyers will have to also pay closing costs which include expenses on title insurance, attorney fees, appraisals and taxes.

A homebuyer should be prepared to pay 1% to 5% of the sale price. Remember when buying a house you should also have money set aside to cover home maintenance, repairs and upgrades.

If you are in the market for a new home, call a local Realtor who can help you through the home buying process.

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Questions Homeowners Should Ask Themselves Before Downsizing

 

One of the most popular reasons to downsize is becoming empty nesters but this is not the only reason to downsize. Many homeowners just want a smaller home or move to the city into a high-rise condo. If you are considering downsizing your home for whatever reasons, making an informed decision is best. Before taking the leap, do an honest evaluation of what you feel your outcome will be if you decide to downsize. Here are several questions Realtor.com advises those who are seeking to downsize need to ask themselves.

Does it make financial sense to downsize?

Just because you downsize doesn't mean you are saving money. If you are downsizing to a condo, there will be additional condo fees that will add to your monthly expenses. Homeowner association fees for townhomes and condos usually include things such as landscaping, maintenance of common areas, trash and pest control.

“Consider the amount you will spend on these fees, and be mindful that HOAs tend to go up every year,” says Susan Bozinovic, a Realtor® with Century 21 Town & Country in Troy, MI.

Also, there are many other factors that can increase your expenses such as your new mortgage, taxes, cost of insurance, home maintenance and upgrades. You might be moving into a more expensive area of town or your smaller new home might need upgrades or renovations before moving in.

2. What are the financial implications of selling my home?

“Sellers need to be aware of how this sale affects their overall financial picture in regard to possible property tax increases or basis transfers and capital gains tax, and how that fits into their long-term financial planning,” says Wendy Gladson, a real estate consultant at Compass in Los Angeles.

You need to take into consideration other expenses that will occur when selling your home. These other expenses include local real estate transfer taxes, loan payoffs, home warranty, commission fees. You might be selling your home for $50,000 more than you paid for it but these fees will affect your bottom line.

3. What am I most excited about leaving behind?

Leaving a home that has many memories is hard. A smaller home means less cleaning and maintenance but make sure you are ready to leave your bigger house. If you dream of sitting outdoors on your patio instead of cleaning rooms that are rarely ever used then it is time to downsize.

4. Where will I park?

If you are downsizing to live in the city, then parking might be an issue. In the city, you might have to rent a space in a parking garage or park on the side of the street. This is not the only issue, if you are still moving in the suburbs, some smaller homes only have a one-car garage. It would not be fun to have to move cars each time you need to go somewhere.

5. What will I do with all my stuff?

A smaller living space will mean fewer rooms. If you currently have a home office, a gym, guest room or two living rooms then you will need to get rid of some of your furniture. Go through your stuff and determine what you want to keep. If you do not have enough space in your new home, then a storage unit might be the answer.

6. Should I consider a condo instead of a smaller house?

There are pros and cons to both a condo and a single-family home. There is less privacy in condos but you do not have to keep up with a yard. There is less maintenance with a condo but there are higher HOA fees associated with condo living.

7. Is the floor plan practical for your needs?

When you are downsizing, every square inch is a place to put your stuff. The floor plan is very important when it comes to getting the most space out of a smaller home.

8. Where do I want to move?

This is determined by several factors. If you are not yet retired then you will probably want to be close to work. Those that can work from home need to make sure to have some space for a home office.

When making a decision to move to a new city, state or country, make sure to determine if there are the services and lifestyle options you want in the new areas. A good idea would be to rent for a year in the new area to make sure that it is right for you.

9. Am I ready to downsize?

A good idea would be to take a look at homes in your desired area before you make a decision to downsize. You might envision yourself in a quaint one-bedroom bungalow but actually walking into one and visualizing you living there is the best way to determine if you could live in a smaller space.

“That’s when you’ll realize how small smaller really is. You’ll find yourself comparing what you have now to what you’ll have in the smaller home,” says ays Leneiva Head, principal broker/owner of Welcome Home Realty in Antioch, TN.

In a smaller home, you will have smaller rooms as well. You might be in a space that is more confined than you would want. Being mentally prepared for such a move is imperative. If you jump the gun and downsize without thinking through your decision, you could be making a big mistake.

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What Homeowners Want To Know About Homeowners Insurance

 

Realtor.com asks home shoppers what they would like to know about homeowners insurance and their questions were answered by Allstate insurance experts. If you are in the market for a home, you should become familiar with homeowners insurance. It is important to get good homeowners insurance and understand your policy. Here are some questions and answers below.

1. I’m a first-time home buyer. What should I consider when choosing insurance? – Cynda from Florida

Just like the home you choose, your insurance policy will fit you and your needs. A musician will be interested in protecting their musical instruments while other homeowners might want protection on their garage because of their car collections.

An insurance expert can help you set up your policy with your unique coverage. You can get a personalized quote and make sure all your needs are covered.

“Your home is one of your most valuable assets,” say the experts at Allstate. “Make sure your homeowners insurance protects you and your family in many kinds of situations involving not only your home itself but also the things you own.”

2. What are the most common types of claims? What is the claims process like? – Emily from Colorado

Prepare for the unexpected, that is why homeowners insurance is so important. Many homes get damaged from wind, hail, plumbing failures, theft, and fire. When you do have to put a claim in for damage to your home, your insurance company will work with you and answer all your questions and concerns. Your agent will help you with the process by assessing the damage and helping you recover your losses.

3. How is condo insurance different from home insurance? How can I make sure my condo insurance has the coverage I need? – Maria from Virginia

Condo insurance is different because it only covers your unit and the belongings in the unit. Usually, the condo building is insured under your condo association's insurance policy which covers things like the boiler room, the roof, hallways and other shared spaces. Make sure to get your agent to explain what is covered. Some policies will cover the wall and floor in your specific unit.

4. Are there any surprising things that aren’t covered by a typical homeowners insurance policy? – Emily from Colorado

Surprisingly a flood and earthquake damage are not covered in a regular insurance policy. Both require a separate additional policy on top of your regular homeowners insurance. Make sure you have a clear understanding of what is covered. Things such as an outside sewer or drain might need additional coverage.

5. Does my homeowners insurance cover small damages, like a stolen bike? – Maria from Virginia

This would be under personal property coverage which usually covers theft. Make sure the stolen items are worth more than your deductible before you claim it on your insurance. If your deductible is not met your insurance will not pay for the claim. Make sure to review coverage limits with your agent who will customize your coverage to fit your needs. An agent can help you choose any additional coverage if you take note of the possessions such as sports equipment and riding lawn mowers that might need to be part of your policy.

6. What are some things homeowners can do to help lower the cost of their homeowners insurance? – Emily from Colorado

There are several things you can do to help reduce your rates. Increasing your deductible can reduce your premium payments. Bundling policies such as home and auto will give you a discount. Other ways you might get a discount are if you are a new homeowner, switch insurance providers without having a recent claim,
set up automatic payments to pay your insurance premium or are age 55+ and retired.

Remember when looking for homeowners insurance always seek a professional's advice. Even though a policy is cheaper than another, it might not cover everything you need. Shop around and talk to a couple of insurance agents in your area for the best fit and price for you.

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