February 18, 2010

Housing Starts Rise 2.8%

Author: admin - Categories: Home Construction, Home Financing News, Housing Spotlight, New Home Starts, Real Estate News

Amid a trickle of economic reports like improved retail sales and declining credit card delinquency rates, most Wall Street analysts braced themselves for mixed real estate news, but the new home construction data released was welcomed. The AP announced Wednesday’s latest figures on the housing market and the good news spread quickly online.
According to the Department of Commerce, housing starts were up 2.8% in January to a seasonally adjusted 591,000 units, reversing a weather-related dip in December. The 21.1% year-over-year gain was the best monthly increase since April 2004.

Building permit applications dropped by 4.9% after two months of strong increases, but Burt White, chief investment officer for LPL Financial, said the disparity between the figures is likely a weather-related anomaly. Despite the volatility in housing data, the improvement points to a stronger economic backdrop. “It’s a good indication that Americans are beginning to reinvest again,” said White. “The biggest investment people make is in their homes.”

According to national FHA lenders, real estate financing continues to be supported by government loan programs like FHA, VA and Home Path, to name a few. Current mortgage interest rates remain at record levels with 30-year fixed rate mortgages still available below 5%. While the consumer won’t be at the fore of this recovery, housing starts did hit their highest level in six months–an indication that consumers are becoming more confident and comfortable with spending.

February 9, 2010

Why Buy a Home Instead of Renting?

Author: admin - Categories: Buying a New Home, Home Ownership, Home Vs Rent

Twenty years after “the American dream” was first coined, home ownership is still a meaningful goal for a large number of individuals and families.  As the years go by, you can build ownership interest, also known as home equity, which you may be able to borrow against for cash out or debt consolidation if you choose. In contrast to renters, most homeowners receive significant tax breaks, because interest paid on a mortgage loans is tax deductible in most cases. You will want to consult your tax adviser regarding deductibility of mortgage interest. And of course, most homeowners would tell you there is personal gratification of having a house you know is yours to share and enjoy with friends and family.

Owning a Home Can be More Cost Effective than Renting

Renting certainly has some advantages over owning. With FHA home loan financing is easier than you think.  FHA mortgage companies are more flexible with underwriting guidelines and credit and you only need 3 to 5% for a down-payment.  Many Americans assume that renting is less expensive than owning. A monthly mortgage payment may be lower than the monthly rent on a much smaller property.

Every month, the payment you make on your mortgage typically adds to the equity you have in your home and makes your home asset a more valuable part of your portfolio. Money paid for rent simply evaporates each month. Plus, research has shown that in the past real estate has proven to deliver a highly reliable increase in value compared to other types of investing. If you are renting, those returns are going into your landlord’s pocket, not yours.  When you add in the federal tax deductions for mortgage interest and real estate taxes, home ownership becomes an even more attractive idea.  Of course you should always consult your tax advisor for details.