June 27, 2017
A traditional argument in favor of home ownership over renting is because it is such an excellent way to build personal financial stability. When all the facts are taken into account, this is a great argument on several levels:
- As you pay down the mortgage obligation, your ownership percentage increases
- Rise of home values in general over time
- Increase of your homes worth as you make improvements
- All available data indicates those who own a home are up to 66% wealthier than renters
Taken all together these indisputable facts make it easy to see why the current real estate market is flooded with buyers determined to take advantage of historically low mortgage interest rates.
THAT ISN’T THE ONLY REASON
Simply because buying a house is typically a long-term investment and given the fact that a home is a commodity not likely to suddenly become obsolete to consumer need, the tendency is for their value to increase over time. Losses will typical be short term occurrences.
In fact, much of the housing market’s most recent losses have been reversed. New numbers from CoreLogic show the number of homeowners still suffering from negative equity is not just dwindling but almost gone entirely. 92.9% of all mortgaged properties now have positive equity.
AND THE NEWS KEEPS GETTING BETTER
Frank Nothaft, CoreLogic’s chief economist, says price increases have played a large role in reducing the number of owners who owe more on their mortgage than their home is worth. “The CoreLogic Home Price Index for the U.S. recorded 5.2 percent growth in the year through June, an important reason the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier,” Nothaft said.
The term “underwater” is being applied less and less to the mortgage status of houses being offered for sale. “We see home prices rising another 5% in the coming year based on the latest projected national CoreLogic Home Price Index,” CoreLogic President and CEO Anand Nallathambi said.
WHY NOW IS A GOOD TIME TO SELL…AND BUY YOUR NEXT HOME
If you’ve been considering selling, consider this good news as well; not only have you regained equity for a more favorable sale price, but mortgage rates, still hovering in the low 3’s and 4% area, make that new home you’ve had an eye on moving to eminently affordable.
Wondering how these facts may have made changes to the market value of your home? Your local Montclair market specialist will gladly provide the numbers and help you understand the story they have to tell!