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REAL ESTATE, COMMUNITY, EVENTS, INFORMATION

You’ll find our blogs to be a wealth of information, covering everything from local market statistics and trends, home value information, mortgage and loan rates and information, valuable tips and tricks for homeowners. Community events including local things to do with your kids, concerts, and happenings in Shreveport and Bossier City. Subdivision information, local schools and school events. "How to" for the investor, or maybe you want to try your hand at a flip, general investment information

Why? - because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all or any ideas your would like to see more on. We’d love to talk with you!

Jan. 7, 2019

You can use Homeownership as an Investment

Belief in Homeownership as an Investment is Far from Dead

Belief in Homeownership as an Investment is Far from Dead | MyKCM

Following last year’s real estate market was like riding a rollercoaster. The market started off strong in 2018 and then softened before finishing with a mild flurry. However, one thing that did not waiver was America’s belief that owning a home makes sense from a financial standpoint.

An end-of-the-year survey by the Federal Reserve Bank’s Center for Microeconomic Data revealed that:

“The majority of households continue to view housing as a good financial investment.”

And that percentage has increased over the last three years.

 

Belief in Homeownership as an Investment is Far from Dead | MyKCM

Bottom Line

Though there is some uncertainty as to how the real estate market will perform over the next twelve months, one thing remains very certain: America’s belief in homeownership.

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Jan. 4, 2019

Excited About Buying A Home This Year?

Here’s What to Watch

Excited About Buying A Home This Year? Here's What to Watch | MyKCM

As we kick off the new year, many families have made resolutions to enter the housing market in 2019. Whether you are thinking of finally ditching your landlord and buying your first home or selling your starter house to move into your forever home, there are two pieces of the real estate puzzle you need to watch carefully: interest rates & inventory.

Interest Rates

Mortgage interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. Despite the recent drop, interest rates are projected to reach 5% in 2019.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.

Excited About Buying A Home This Year? Here's What to Watch | MyKCM

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000).

Inventory

A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 3.9-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 81 straight months.

The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last six months.

The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, since June, inventory levels have started to increase as compared to the same time last year.

Excited About Buying A Home This Year? Here's What to Watch | MyKCM

This is a trend to watch as we move further into the new year. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and closer to a normal market.

Bottom Line

If you are planning to enter the housing market, either as a buyer or a seller, let’s get together to discuss the changes in mortgage interest rates and inventory and what they could mean for you.

Jan. 2, 2019

Where is the Housing Market Headed in 2019?

Where is the Housing Market Headed in 2019?

Where is the Housing Market Headed in 2019? [INFOGRAPHIC] | MyKCM

Some Highlights:

  • ­Interest rates are projected to increase steadily throughout 2019, but buyers will still be able to lock in a rate lower than their parents or grandparents did when they bought their homes!
  • Home prices will rise at a rate of 4.8% over the course of 2019 according to CoreLogic.
  • All four major reporting agencies believe that home sales will outpace 2018!
Jan. 1, 2019

24 Hours that Suddenly Improved the Market

 

24 Hours that Suddenly Improved the Market | MyKCM

This year started strong for real estate, but then the market began to soften. Home inventory in the starter and move-up categories dwindled to almost nothing, mortgage rates were projected to rise, and home sales had decreased for several months in a row.

To many, the outlook heading into 2019 appeared dim… at best.

Then, in a 24-hour window last week, things seemed to change. On Wednesday, the National Association of Realtors’ (NAR) revealed in their Existing Homes Sales Report that home sales had INCREASED for the second consecutive month. The next day, NAR’s economic research team announced that the percentage of first-time buyers in the market was higher than last month and even higher than a year ago.

What happened to turn around the downward momentum in the market? 

You only needed to wait a few hours to find out. On the heels of NAR’s revelations, Zillow released their November Real Estate Market Report that explained:

“After nearly four years of annual declines in inventory, the number of homes for sale has now increased year-over-year for three straight months…”

Ending 2018, we now know two things:

  1. Listing inventory increased over the last three months
  2. Home sales increased over the last two months

Maybe a lack of inventory was the major challenge all along.

But, what about those pesky interest rates?

Last Thursday (the day after all of the above news), Freddie Mac announced that mortgage rates did not increase but instead decreased…again. From their release:

“The response to the recent decline in mortgage rates is already being felt in the housing market. After declining for six consecutive months, existing home sales finally rose in October and November and are essentially at the same level as during the summer months.

This modest rebound in sales indicates that homebuyers are very sensitive to mortgage rate changes – and given the further drop in rates we’ve seen this month, we expect to see a modest rebound in home sales as well.”

Bottom Line

Will 2019 start out better than many have predicted? Perhaps, but we’ll have to wait and see. Things do look much better today, though, than they did just a month ago.

Dec. 31, 2018

How to Save Thousands of Dollars in Interest on Your Mortgage

How to Save Thousands of Dollars in Interest on Your Mortgage | MyKCM

One of the most common loans you can get to buy a home is a 30-year fixed rate mortgage. If the thought of paying for your home over the course of 30-years seems daunting, here are some easy ways to shorten that term which will actually end up saving you money over the life of your loan.

Any additional payments to the principal amount (the original sum of money borrowed in a loan), helps to cut down the amount of interest that you will pay over the life of your loan and can also help to shave years off the loan as well.

When you make ‘extra’ payments toward your loan, the key is to let your lender/bank know that you want the extra funds to go toward your principal balance as they will not automatically do this for you.

You don’t have to double your mortgage payment to make a big difference either!

If you have a 30-year mortgage on a median-priced home ($250,000) with a 5% interest rate, you’ll be responsible for a $1,342.05 monthly principal and interest payment. Over the course of the loan, if you pay your exact monthly payment, you will have paid $233,133.89 in interest alone!

Paying a Little Extra Can Pay Off Big

1. Pay an additional 1/12th of your mortgage payment every month

Benefit: In the example above, adding $111.84 to your monthly mortgage payment might not seem like a lot, but each year you will have paid one extra month’s worth of payments which will shorten the term of your loan by 4 years and 8 months, all while saving you $42,000 in interest!

2. Pay an additional $50 per month towards your mortgage

Benefit: Fifty dollars might not seem like enough to make a difference on the term of your loan, but that small amount will save you over $21,000 in interest and will take over 2 years off the end of your loan. Twenty-eight years from now, you’ll be happy to pay off your loan that much sooner!

3. Make one-time lump sum payments when you can

Benefit: If you find yourself with a little extra money after a yearly bonus, a tax return, or from investment dividends, paying that money towards the principal can cut your costs. This option, however, is less predictable than the extra monthly payments.

If you have higher interest debts, like credit cards, consider using any extra funds you have to pay those debts down before applying that money towards your mortgage. Also, if you do not plan on staying in your home for more than 10 years, paying extra toward your mortgage might not make sense.

Bottom Line

If you’re wondering what strategies would work best for you to shorten the term of your loan, let’s get together to answer your questions.

Dec. 28, 2018

What Makes a House a HOME

What Makes a House a Home For You?

What Makes a House a Home For You? | MyKCM

We frequently talk about why it makes sense to buy a home financially, but more often than not the emotional reasons are the more powerful or compelling ones.

No matter what shape or size your living space is, the concept and feeling of a home can mean different things to different people. Whether it’s a certain scent or a favorite chair, the emotional reasons why we choose to buy our own homes are typically more important to us than the financial ones.

1. Owning your home offers stability to start and raise a family

From the best neighborhoods to the best school districts, even those without children at the time of purchase may have this in the back of their minds as a major reason for choosing the location of the home that they purchase.

2. There’s no place like home

Owning your own home offers you not only safety and security, but also a comfortable place that allows you to relax after a long day!

3. You have more space for you and your family

Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take all this into consideration when buying your dream home!

4. You have control over renovations, updates, and style

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t do all of these things in your own home?

Bottom Line

Whether you are a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.

Dec. 26, 2018

Happy Holidays - We are here to help!

Thank You for All Your Support

Thank You for All Your Support | MyKCM
Dec. 21, 2018

No Bubble Here!

How New Mortgage Standards Are Helping

No Bubble Here! How New Mortgage Standards Are Helping | MyKCM

Real estate is shifting to a more normal market; the days of national home appreciation topping 6% annually are over and inventories are increasing which is causing bidding wars to almost disappear. Some see these as signs that the market will soon come tumbling down as it did in 2008.

As it becomes easier for buyers to obtain mortgages, many are suggesting that this is definite proof that banks are repeating the same mistakes they made a decade ago. Today, we want to assure everyone that we are not heading to another housing “bubble & bust.”

Each month, the Mortgage Bankers’ Association (MBA) releases a measurement which indicates the availability of mortgage credit known as the Mortgage Credit Availability Index (MCAI). According to the MBA:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).” *

The higher the measurement, the easier it is to get a mortgage. During the buildup to the last housing bubble, the measurement sat at around 400. In 2005 and 2006, the measurement more than doubled to over 800 and was still at almost 600 in 2007. When the market crashed in 2008, the index fell to just over 100.

Over the last decade, as credit began to ease, the index increased to where it is today at 186.7 – still less than half of what it was prior to the buildup of last decade and less than one-quarter of where it was during the bubble.

Here is a graph depicting this information (remember, the higher the index, the easier it was to get a mortgage):

No Bubble Here! How New Mortgage Standards Are Helping | MyKCM

Bottom Line

Though mortgage standards have loosened somewhat during the last few years, we are nowhere near the standards that helped create the housing crisis ten years ago.

*For more information on the MCAI, including methodology, FAQs, and other helpful resources, please click here.

Dec. 19, 2018

4 Reasons to Sell this Winter

4 Reasons to Sell Your House This Winter [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Buyer demand continues to outpace the supply of homes for sale which means that buyers are often competing with one another for the few listings that are available!
  • Housing inventory is still under the 6-month supply needed to sustain a normal housing market.
  • Perhaps the time has come for you and your family to move on and start living the life you desire.
Dec. 17, 2018

Don’t Get Caught in the Rental Trap in 2019

You can Escape the Rental Trap

Don't Get Caught in the Rental Trap in 2019 | MyKCM

Every year around this time, we take time to reflect and plan for next year. If you are renting your current home but have dreams of homeownership, your plan for the new year may include buying, and you wouldn’t be alone!

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years!

When those same renters were asked why they disliked renting, 52% said that rising rental costs were their top reason, and 42% of renters believe that their rent will rise every year. The full results of the survey can be seen below:

Don't Get Caught in the Rental Trap in 2019 | MyKCM

It’s no wonder that rising rental costs came in as the top answer! The median asking rent price has risen steadily over the last 30 years, as you can see below!

Don't Get Caught in the Rental Trap in 2019 | MyKCM

There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again… why are they renting?

When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

If the majority of those who believe they haven’t saved a large enough down payment believe that they need 20% down to buy, that means a large number of renters may be able to buy now!

Bottom Line

If you are one of the many renters who is fed up with rising rents but may be confused about what is required to buy in today’s market, let’s get together to help you on your path to homeownership.