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$217,726: That’s What You’ll Save (Give or Take) If You Buy a Home Now

Categories: New Homes Chicago, New Homes Madison, New Homes Milwaukee, New Homes Phoenix, New Homes Tampa | Posted: June 19, 2015

money
Buying a home costs money. Lots of money. There’s the down payment and the monthly mortgage payment and the maintenance and taxes and the insurance and… Are you overwhelmed yet?

It might seem like so much that you just want to put off the house hunt and sign that yearlong lease with your landlord (even though he upped your rent 25% and will likely do the same next year).

But this is going to blow your mind: Even with all of those costs, you still stand to save more than $200,000 over the next 30 years if you buy right now.

“But that’s over the course of 30 years!” you say. “I’m thinking about my money right now!” you say.

Well, get this: Wait just one year, and you throw nearly $19,000 in savings down the drain. The penalties are so high because mortgage rates are forecast to increase and because home prices are rising quickly, according to our chief economist, Jonathan Smoke.

Yep, that’s right. There’s a financial benefit—and, similarly, a financial penalty—for every single day you pay your landlord instead of your mortgage company. At a national level, the 30-year financial benefit of owning today is $217,726, according to our economic data analysts, who crunched the numbers to determine the relative merits of buying vs. renting. (Their work doesn’t capture qualitative advantages such as more control over your living situation, flexibility with pets, and, generally, more options—all things many potential home buyers would argue are equally, if not more, important when deciding whether to take the plunge.)

Postpone for one year, and you’re losing out on an estimated $18,672 in savings. Delay for three years, and that figure jumps to $54,879.

“We’re at a critical juncture: Rents, home prices, and mortgage rates are all expected to rise significantly over the next several years,” Smoke says. “That means the cost of delaying homeownership will go up even more sharply, if you wait three years or even one. It’s much like the decision to start contributing to a 401(k). Delay contributing, and you lose out on the compounding returns.”

‘Financial calculus’ confirms it’s wise to buy ASAP

Smoke and his team used a lot of factors to come up with these estimates, and they made quite a few assumptions as well.* For instance, they assumed that any money saved by renters would be invested, and that the investment would enjoy a compound annual growth rate of 5% (that’s consistent with conservative long-term expected market returns).

We know—these are some pretty big assumptions. How many renters are actually saving and investing? But we’re telling you about these assumptions, because the bottom line is this: Our data team stacked the deck against owning and still came out with eye-popping figures in favor of buying.

“The financial calculus confirms it’s wise to buy—and buy as soon as possible,” Smoke says.

That’s because no matter how you slice it, you can’t deny a few key facts that make the case for buying: Nationally, it’s cheaper right now to buy than to rent, home prices are expected to appreciate, and, while renting is subject to inflation, homeownership costs are locked.

In some markets, financial ‘penalty’ is over $1M

But, as always, it depends on where you go.

For example, in Bismarck, ND, the financial benefit of buying is actually negative. That means you’d spend $12,350 more over the next 30 years to buy instead of rent. That’s because in places such as Bismarck, rents are low, and while home prices have risen dramatically over the past few years, they aren’t expected to rise much in the future. That seems like an incentive to buy, right? Not necessarily. Think about this in terms of home appreciation. Because home prices may have peaked for the foreseeable future, you don’t stand to gain much from owning a house here.

The following markets have the least financial benefit over the next 30 years:

1. Bismarck, ND: –$12,350
2. Dallas–Fort Worth, TX: $830
3. Grand Forks, ND–MN: $4,999
4. Kahului–Wailuku–Lahaina, HI: $7,965
5. Houston, TX: $8,951

But travel west to California and you’ll see an entirely different picture. In Santa Cruz, for instance, you stand to save more than $1 million over the next 30 years if you buy today. That’s because both rent and home prices are skyrocketing, thanks to strong economic drivers such as job growth, population growth, and household growth.

But it’s still hard to get a foot in the door: A median-income household in Santa Cruz could afford less than 10% of the homes available for sale there.

In order to realize a positive financial benefit from buying a house, owners have to wait for “break-even time periods”—when the transaction costs of buying and selling cancel out. Nationally, that wait time is just over three years. In markets that have higher home price to rent ratios, such as San Jose, CA, and New York City, owners normally need to wait longer—as long as six to seven years.

“From a pure financial perspective, you have to be committed to staying longer term,” Smoke says about those high-cost markets. “That’s one of the reasons why rents are also high and getting higher.”

The 30-year financial benefit of owning in the following markets exceeds $500,000:

1. Santa Cruz–Watsonville, CA: $1,006,413
2. Santa Rosa, CA: $883,068
3. San Jose–Sunnyvale–Santa Clara, CA: $782,144
4. Urban Honolulu, HI: $714,748
5. Napa, CA: $712,192

So, in some places you win, in other places you lose. That kind of means it all balances out, right?

Nope, Smoke says: Nearly 90% of the markets (335 of ‘em) produce a financial benefit of at least $100,000 from owning over 30 years. In addition, almost a quarter of the nation’s markets reap a financial return greater than the national average.

We’re not exactly math majors, but we’re picking up what Smoke is putting down. It might feel challenging to come up with a down payment, but we never saw the savings spelled out in such plain language. So BRB—gotta go buy a house.

*Our data analysts used the following assumptions to calculate the relative merit of buying vs. renting:

They factored in a 20% down payment with a closing cost of 3%. Maintenance and annual improvement costs are 1%, and the opportunity cost of capital is 5% (average U.S. investors required return on equity investments).

They assumed a marginal tax of 25% and the cost of selling a house is 8% of the sale price. Capital gains tax is 15% beyond $500,000 (for married couples). Rent brokerage is 1% of first year’s rent and rent insurance is 1% of monthly rent.

Source: Rachael Stuls, Realtor.com May 28th 2015

Confidence Among U.S. Homebuilders Increases to Nine-Month High

Categories: New Homes Chicago, New Homes Madison, New Homes Milwaukee | Posted: June 17, 2015

Confidence among U.S. homebuilders rebounded in June to a nine-month high as warmer weather and a brighter economic outlook drew prospective buyers back to the market.

homebuilder confidence

The National Association of Home Builders/Wells Fargo builder sentiment gauge rose to 59 this month, the strongest since September and exceeding all projections in a Bloomberg survey, from 54 in May, figures from the Washington-based group showed Monday. The median survey forecast called for 56.

Activity in the residential real estate market has shown a slow rebound as the busier selling season takes hold, which could help the economy overcome weakness in manufacturing. Employment gains and rising wages are giving would-be home buyers reason to take the plunge.

The data show “a growing optimism among builders that housing will continue to strengthen in the months ahead,” David Crowe, NAHB chief economist, said in a statement. “At the same time, builders remain sensitive to consumers’ ability to buy a new home.”

Estimates in a Bloomberg survey of 48 economists ranged from 54 to 58. Readings greater than 50 mean more respondents report good market conditions.

Another report Monday showed factory production unexpectedly declined in May as the slump in energy output deepened. The 0.2 percent decrease at manufacturers followed a 0.1 percent increase in April, according to figures from the Federal Reserve in Washington. Total industrial production, which adds mines and utilities, also dropped 0.2 percent.

Current Sales

The builders’ index of current single-family home sales rose to 65 in June, the highest since November 2005, from 58 in the prior month. The homebuilder group’s gauge of prospective buyer traffic climbed to 44, the strongest in five months, from 39.

The measure of the six-month sales outlook advanced to 69, the best since October 2005, from 63 in May.

“Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” NAHB Chairman Tom Woods, a homebuilder from Blue Springs, Missouri, said in a statement.

Builder confidence climbed in all four regions, led by an 8-point gain in the Midwest, to 57. Sentiment rose in the South to 63, the strongest since September, from 59 in May.

Home Sales

April housing data showed industry momentum was spotty at the start of the spring selling period. Purchases of new homes rose more than projected, increasing 6.8 percent to a 517,000 annualized pace from a 484,000 rate the prior month, according to Commerce Department figures.

Sales of existing homes unexpectedly fell 3.3 percent to a 5.04 million annualized rate after a 5.21 million pace in March that was the strongest in almost two years, National Association of Realtors figures showed.

Warmer weather has bred optimism among Federal Way, Washington-based Weyerhaeuser Co.’s customers.

“We’re seeing some real pickup in terms of demand from a housing perspective,” Chief Executive Officer Doyle Simons said at a June 9 investor forum. “In this time of year things dry up quick and people can get in and build the houses.”

Persistent labor-market progress should help sustain expectations for a pickup in economic activity. Employers added 280,000 jobs in May, the most in five months, after a 221,000 April advance. An increase in the number of people entering the labor force caused the jobless rate to creep up to 5.5 percent from 5.4 percent, which was the lowest since May 2008.

Wage Pickup

Wage growth also has begun to show signs of life. Average pay for all civilian workers climbed 4.2 percent in the first quarter from the same period in 2014 to $22.88 an hour, Labor Department figures showed Wednesday. That compares with a 4 percent year-over-year gain in the fourth quarter and is the strongest since July-September 2006.

Average hourly earnings reported with the Labor Department’s monthly jobs figures accelerated in May to a 2.3 percent year-over-year pace, the fastest since August 2013.

Relatively cheap borrowing costs also are supporting homebuyers. The average rare on a 30-year fixed mortgage was 4.04 percent in the week ended June 11, according to data from Freddie Mac in McLean, Virginia. That’s still below the average 6.06 percent in the last five years of the economic expansion that ended in December 2007.

A report Tuesday is projected to show housing starts slowed in May from a seven-year high. Builders broke ground at a 1.09 million annualized pace last month, down from a 1.14 million rate in April, according to the median forecast of economists surveyed before figures from the Commerce Department. Starts averaged a 1 million pace last year.

Source: Bloomberg Business: Michelle Jamrisko, June 15, 2015

10 Things To Do To Your Home Before Going On Vacation

Categories: New Homes Chicago, New Homes Madison, New Homes Milwaukee | Posted: June 11, 2015

family going on vacation
Vacations can be an amazing opportunity to relax and unwind but they also require a bit of prep work. After all, you can’t just leave for days of bliss without first getting your home in order. So before you set out on your vacation, make sure your home is ready for the time apart. Here are a few things you should do around your home before going on vacation.

1. Leave keys with a trustworthy neighbor. One of the first things you should do when planning a trip is to inform someone of your plans. They don’t necessarily need a full itinerary, but should have a head’s up in case of emergency. A neighbor is a great choice because they can not only keep an eye on your house, but also collect mail and perform occasional duties.

2. Make plans for plants and pets. Should you plan to be away for awhile, make plans for the living things in your home. Depending on how long of a vacation you plan to take, try using a plant feeder for self service. In addition, you must also decide if you will have someone watch your pet or pay for overnight care.

3. Turn off the air conditioner. There is no need to rack up a high electric bill while you are on vacation. Be sure to turn off your air conditioning unit(s) in your home so you won’t waste any energy while away. Those who have a programmable thermostat may be able to keep units idle by using a vacation setting.

4. Schedule lights on a timer. You and a few people may know about your vacation plans, but this shouldn’t be public information. Put lights around the home (not all, but a few) on timers so outdoor onlookers will think someone is home. After all, a house without lights for consecutive days can leave your abode vulnerable to intruders.

5. Unplug electronics. Did you know that certain electronics make up for almost 10 percent of your home’s energy costs just by being plugged in? When planning a vacation, always unplug all computers, televisions and any other accessory you don’t plan to use. This will not only help reduce energy consumption, but also protect your precious items in case of an electrical storm.

6. Lower, don’t turn off a water heater. Like air conditioners, water heaters can rack up some serious dough when left idle. However, it is very important that you never completely shut off a water heater while away as it can cause serious complications when turned back on. If you plan to be away for some time, consider lowering the temperature to save on energy and a little money.

7. Clear out the refrigerator. As your food has an expiration date, you might want to consider reviewing what is in your refrigerator. Discard all items that are close to their life expectancy to help save on post-vacation clean up.

8. Take out the garbage. No one likes a stinky house or unidentifiable odor. Start on one floor and make your way through each room collecting garbage. By removing trash from your home, you can also help keep your home free of bugs.

9. Close all blinds. Who would ever want to come home to a humid house? Even with your air conditioner off, help keep the house cooler by closing all the blinds. In addition to protecting your interior from direct sunlight, closed window treatments also keep wandering eyes away, providing more privacy.

10. Lock up everything. Once all of your bags are packed, it is important to lock up every possible entrance to your home. Everything from the windows to the fence should be locked for safety.

Once you have made it through the checklist, enjoy your vacation knowing your home will be ready and waiting upon return.

Source: Tanvier Lee is a New York based lifestyle decorator, stylist and freelance writer. Her work can be found at Examiner.com.

Dear College Grads: Start saving for your Dream Home now!

Categories: Uncategorized | Posted: June 4, 2015

grads-house

http://www.realtor.com/advice/buy/tips-for-new-college-grads-on-buying-a-home/

Rates on New Home Loans Stable, Under 4 Percent

Categories: New Homes Chicago, New Homes Madison, New Homes Milwaukee | Posted: June 3, 2015

rate

On May 28, the Federal Housing Finance Agency (FHFA) reported that mortgage rates overall were nearly stable in April, changing by a mere 2 basis points. The same was true for the subset of mortgages used to purchase newly built homes. The average contract interest rate on conventional mortgages for new homes edged down by 3 basis points, while the average initial fees on the mortgages increased. The combination caused the average effective interest rate on new home loans (amortizing the initial fee over the estimated life of the loan) to drop by only a single basis point, to 3.92 percent.

The terms on conventional mortgages for new homes have been generally stable for the past three months.

Meanwhile, the average size of conventional mortgages used to purchase newly built homes increased by $3,000, or 0.9 percent, to $342,000 in April. The average loan size set a record high in February and has continued to edge upward ever since.

The average price of a new home purchased with a convention loan also increased in April. The size of the increase was $7,500, or 1.7 percent, taking the average new home price up to $453,200. This is also a record high, as well as the first time the average price of a new home purchased with a conventional mortgage has been over $450K.

This information is based on FHFA’s Monthly Interest Rate Survey (MIRS) of loans closed during the last five working days in April. For other details about the survey, see the technical note at the end of FHFA’s May 28 news release.

Source: NAHB Eye on Housing, By Paul Emrath on June 2, 2015

Algonquin’s Towne Park reopens with updates

Categories: New Homes Chicago | Posted: June 2, 2015

Algonquin park open
After being closed since fall of 2012, Towne Park in Algonquin has re-opened with some improvements, and the village is accepting rental applications for people to use its facilities.
The park closed nearly two years ago to accommodate construction of the Western Algonquin Bypass, a $33.3 million project that widened reconstructed parts of Route 31.

The project, funded by the Illinois Department of Transportation, called for the renovation of many aspects of Towne Park, said Mike Kumbera, assistant village manager of Algonquin.

For example, Crystal Creek, which runs next to the park, was re-aligned and erosion problems were corrected. A 100-space parking lot was put in next to the park, and its restrooms were updated.

Additionally, the Prairie Path recreational trail is now accessible from the park.

“The (park’s) integration with the trail means there are two recreational focal points at one location,” Kumbera said. “It makes it really easy to enjoy both of those. It’s a really nice improvement.”

Towne Park is often used by families or groups who rent out the facilities for special events, Kumbera added, and the updates make the park more accessible and convenient for those groups.

Residents of Algonquin can apply to rent the park’s facilities, which include a pavilion and softball diamond, by submitting an application and a $75 nonrefundable park use fee to the village. The fee for nonresidents is $200, or $100 if the park is being used for educational purposes.

Source: Lauren Rohr, Daily Herald June 2nd, 2015

Owners Club Pools Open for the Season for Highland Woods Residents!

Categories: New Homes Chicago | Posted: May 30, 2015

Owners Club at Highland WoodsOverall pool shot photo credit to: Bill Werme / WermeCom Inc.

It’s hard to believe it’s that time of year already, but the sun is shining and the weather is warming up at Highland Woods in Elgin. This means one of our favorite events of the year is happening: the Owners Club pools are open for residents! Beginning Memorial Day weekend, the pools will be open on weekends and evenings until the school year comes to a close. Then the pools will be open every day!

The pools offer something for community residents of all ages:
•Splash in the water park’s shallow splash area or go down the main pool’s triple-loop water slide.
•Relax in the warm hydrotherapy pool.
•Exercise in the 25 meter, 6-lane lap pool.
•Swim, relax, or play in the free-form resort-style pool

Or if you are just looking for the chance to enjoy the sun, residents can lounge on the sundeck. With the warm weather fast approaching, Highland Woods residents will be sure to enjoy the pools all summer long!

Other Owners Club amenities are also open to residents. Residents can enjoy the competition-quality tennis courts, sand volleyball court, basketball court and state-of-the-art fitness room. For even more summer fun, Highland Woods also offers seven neighborhood parks and playgrounds, over five miles of nature trails and bicycle/walking paths.

May 28th, 2015

7 Ways to Make Your Home Smell Amazing

Categories: New Homes Chicago, New Homes Madison, New Homes Milwaukee | Posted: May 27, 2015

Here’s how to greet yourself with a sweet scent each time you open the door.
flowers for blog|
There’s just something about a special scent — you’re not always totally aware it’s there, but when you walk into a room that has a certain smell, you’re immediately hit with a memory of a time or place. (Remember how distinctive your grandma’s house used to smell?). Create that effect in your home — or simply kick a room’s stink — with these tricks.
1. Make a stove simmer.

“I learned this from my crafty and cleaning obsessed mother,” says interior designer Rhobin DelaCruz. “Simmer water in a small saucepan and add citrus slices and herbs, like lavender or mint.” The heat permeates the sweet scent throughout your house — an easy trick that is as lovely for a party as it is for any ol’ Tuesday.

2. Clean your garbage disposal.

Notice a lingering stink? Might want to check the sink. “First try spritzing a dollop of lemon-scented dish soap down into the disposal, run the water, then turn it on,” says interior designer Keita Turner. You can also run lemon or lime rinds through the disposal, followed by lots of water. If the smell persists, pour in a 1/2 cup of baking soda while running warm water.

3. Place candles strategically.

Candles are an obvious way to make your home smell sweet, but some clever placement can increase their efficiency. “Anchor a few candles where you would least expect them to be — but don’t light them,” says interior designer Dee Murphy. “Try the linen closet, or anywhere fabrics might live and be able to absorb the scent. Not only do you get a nice surprise every time you open the door, but your linens will carry the aroma with them wherever you use them.” Unstopables candles have a long-lasting scent and come in cool, modern designs.

4. Bring the outside in.

“Indoor plants clean the air while beautifying your home,” says Turner. And many offer pleasant fragrances, too. Turner suggests geraniums, Arabian jasmine, eucalyptus, gardenias, corsage orchids, and Cuban oregano.

5. Soup up your air vents.

“Clip a car deodorizer (like one from Febreze or Glade) to a vent’s metal slats,” says DelaCruz. “As the air blows through, the scent will waft throughout the room.”

6. Turn on the oven.

Nothing beats the aroma of warm baked goods. “When I know I am having guests over, I will purposely have a baked good on the agenda,” says Murphy. “Something simple like cinnamon rolls or a banana bread fills the house with good ol’ fashioned yumminess.”

7. Use dryer sheets outside the laundry room.

“I like to place a few sheets in my family’s closets and in our dressers. Our clothes always come out smelling fresh,” says Dela Cruz.

Good Housekeeping May 27th 2015 ; By Rebecca Deczynski

Housing Construction Hits Pre-Recession Pace

Categories: New Homes Chicago, New Homes Madison, New Homes Milwaukee | Posted: May 25, 2015

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Home construction thawed in April as housing starts surged.
The U.S. housing sector was in full bloom in April, as construction during the month revved up to its fastest pace since before the Great Recession.

New privately owned housing starts – a category that includes single-family and multiunit housing – rose to a seasonally adjusted rate of 1.14 million, according to data from the U.S. Census Bureau and Department of Housing and Urban Development. Up 20.2 percent month over month, it was the sector’s largest monthly gain since November 2007 and represented a 9.2 percent jump year over year.

Housing construction was sluggish during a particularly rough winter, especially in the Northeast and Midwest. And the numbers didn’t rebound markedly in March, making some analysts anxious for April’s numbers.

The uptick is good news for a housing sector that has largely lagged behind the rest of the economy. It’s also a good sign for domestic construction, which shed nearly 30 percent of its employees between April 2006 and January 2011 but has since gained steadily, according to the Labor Department.

Single-family housing starts in April were up 16.7 percent month over month, while construction of buildings with at least five units jumped nearly 32 percent.

“The share of multifamily apartment buildings, in simple terms, is a whole lot greater than normal,” David Blitzer, chairman and managing director of the S&P Dow Jones Index Committee, said in an interview last month with U.S. News. “A lot of the multifamily construction is going into rental buildings.”

Rental vacancy rates continue to hover near all-time lows as strong demand for temporary housing pushes prices through the roof. The homeownership rate in April, meanwhile, sunk to its lowest level since 1993 as consumers continue to shy away from buying a home.

“What I fear has set in is a negative dynamic where those rents are so high and income growth has been so tepid that people can’t accumulate the savings for the down payment and the closing cost in order to effect that transition from the rent line into the ownership line,” Stan Humphries, chief economist at Zillow, told U.S. News in a recent interview. “That has left more people in rental housing than has been the case, normally.”

But the sharp uptick in multiunit homes could alleviate some of the price pressures in particularly saturated markets. With more apartments available for rent, people will have more options, which could make pricing a more competitive game for rival building owners.

The number of rental buildings with at least five units that were completed in the month of April was up nearly 40 percent over March and a full 28 percent year over year.

Meanwhile, single-unit construction rebounded particularly well in two regions where construction was severely crippled by inclement winter weather, with the number of new single-unit houses started in April up 43.2 percent month over month in the Midwest and 24.4 percent in the Northeast.

The number of total completed houses was up 73.3 percent in the Northeast and 82.5 percent in the Midwest month over month.

Such marked April gains may not hold up long-term, considering an index released Monday by the National Association of Home Builders and Wells Fargo saw builder confidence drop off in May.

The Housing Market Index in May was up 20 percent year over year but shed nearly 4 percent from April. The index surveys builders’ perception of current sales conditions and buyer traffic (both of which scored more negatively in May than in April), as well as sales expectations over the next six months (which ticked up slightly from April).

“Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home,” David Crowe, chief economist at the National Association of Home Builders, said in a statement accompanying the index. “On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low and house prices are affordable. These factors should spur the release of pent-up demand moving forward.”

By Andrew Soergel May 19, 2015: US NEWS

Saluting Our Military

Categories: New Homes Tampa | Posted: May 22, 2015

William Ryan Homes Tampa and Building Homes for Heroes

While WRH has always supported our men and women in Public Service, as exhibited by our relationship with Building Homes for Heroes, it’s this time of year that reminds us of the ultimate commitment that these men and women make to protect our freedom.

We remember the commitments of Sargent Joel Tavera, who we have constructed a mortgage-free home for, as well as Army Corporal Jesse Murphree and U.S. Marine Corps Staff Sargent Scott Nichols who are both anxiously awaiting the completion of their new homes in concert with Building Homes for Heroes.

It is with this in mind that we extend to all active duty and retired military personnel a special Selection Center Allowance of up to $2,000 for homes purchased in the month of June*.

“This is our way of thanking the many military families who make their home in Tampa, for their service to our country,” said Jeff Thorson, Division President. “Whether based in the area or supporting family members here while in service around the world, these people give so much for all of us. This is our way of giving back. We want to help these families in uniform live in a beautiful home.”

Ladies and Gentlemen: THANK YOU ALL for your commitment to our country.

*This special allowance applies to any William Ryan Home, whether the home is already under construction, or a to-be-built home in one of our 13 communities across the Tampa Bay area.

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