NAHB States Homeownership Is One of the Highest Investments

According to over 80% of Americans surveyed by the National Association of Home Builders (NAHB), homeownership is one of the highest and best investments in not only a financial future but also an emotional and mental future as well.  Home provides security in investment, security in living (the physical walls of the home), security in family (many couples dream of owning a home to rear their children), and security in equity in the 2-Lot 34 Autumn Creek Family Roomfuture.  Homes are one of the largest financial investments that can be made that will absolutely return money to a homeowner in the form of equity loans that can be taken out of the house.

Most everyone has heard of the “American Dream” and Leonard Boswell, former U.S. Representative, described it best when he said, “The American Dream is one of success, home ownership, college education for one’s children, and have a secure job to provide these and other goals.” The (NAHB) believes this still holds true in today’s current housing market.   According to a polling done in July on over 2,800 registered voters “…..most Americans believe that owning a home remains an integral part of the American Dream and that policymakers need to take active steps to encourage and protect homeownership,” said NAHB Chairman Ed Brady.

The polling was done to explore the American peoples’ perspective on homeownership, housing production, and government programs that assist in homeownership.  Four out of five Americans still factor homeownership into the “American Dream’” believing it is still a worthy investment.  The key outcomes of the study were as follows: 82% of Americans feel that owning a home is the highest of investments, 81% of 18-29 year old Americans are 17-Lot 207 Fully Bricked Back Patioplanning to purchase a new home, 72% agree that the government providing tax incentives help fuel homeownership, 46% feel that now is a good time to purchase a new house and 36% of the Americans surveyed planned to purchase a new home within the next three years.

So with that said, homeownership is still a big part of the “American Dream” and to end with another quote, Maya Angelou describes homeownership as this, “The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.”

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Lot Values Rise at Record High Rate Nationally

With half as many homes being started before the Recession, a new record has been set for lots for sale.  Not since 2006 has the cost of a lot exceeded its highest amount of $43,000, but in 2015, the average cost of a lot was $45,000, which is a record high for lot sales.  Lot values indicate an appreciation in the investment of real estate nationwide.  It is another positive indication of the recovery of the housing market, and it also allows builders to be able to value the new homes they build at higher prices as well.

One of the reasons for the increase in lot values is that there is actually a shortage of lots for sale according to the15-229 Bedico Creek Backyard Swimming Pool National Association of Home Builders (NAHB).  This lot shortage seems to be a nationwide problem as the land is available, but developed lots are scarce.  Thanks to the regulatory costs which are going up at a significant rate, ultimately this translates to a rise in development costs.  The work to develop new lots for sale costs more and thus boosts the cost and value of the lot.

Another factor is that the land that is being purchased for development is trending closer to denser urban areas.  These areas typically have costlier land because of their location and proximity to the city.  Many areas of St. Tammany Parish are located close to shopping, dining, and entertainment hubs – some of which are brand new.  Shopping districts around Covington have increased exponentially in the last 8 years requiring a large amount of road construction, expansion, and renovation in order to handle the increase in drivers and traffic.

Luckily, there have been large tracts of land that were zoned residential or had zoning changes to accommodate residential construction close to Covington.  These new subdivisions and neighborhoods have been built with the distinct advantage of having lots and homes for sale that had easy access to an unusual amount of social and retail locations that would not typically be associated with quiet, country, bedroom community new home communities.  Lot values in the St. Tammany Parish area can be higher than the national average, but they come with amazing community amenities as well as location amenities.  There are many new communities springing up in St. Tammany Parish, and Ron Lee Homes, a custom home builder can design and build new custom homes on your lot or on a lot you purchase.  Contact Ron Lee Homes Today by calling 985-626-7619 or E-mail Info@RonLeeHomes.com.

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What to Know About Researching Your Loan

An article written on a popular website begins with the assumption that you, as the home buyer, are aware that you have the choice to shop your lender.  So let’s start there with the discussion of what you should be learning from the company which is going to be lending you money for what could be the most important investment of your life.

Researching Your Loan

As a home buyer, you have the right to shop your mortgage.  You can and should contact as many lenders, banks, and / or mortgage companies as possible and ask them the costs on application fees, appraisal fees, and the breakdown of your closing costs.  Specifically with your closing costs, you will want to check to see if they are a mortgage broker or if they are the company that has the underwriter who will approve your loan.  A mortgage broker can incur additional fees on top of your loan origination fees. When you contact your lender, you are going to be asking them what their loan origination fees are.  This is a way to “weed out” any unknown loan companies which may have higher fees.

Know Your Title Company

You, as the home buyer, do have some say in the title company that is used by the lender.  The lender works with specific title companies, therefore sometimes gets a better rate that you would as an individual.  However, if you are interested in cross-checking their rates, you can get quotes from title companies as well to make sure that you are not overpaying for those services.

Another big chunk of your closing costs is the cost of your escrow account, if you are doing one.  There is a deposit into your escrow account that is for your taxes and insurance.  If you haven’t yet shopped for the most competitive rate for your homeowner’s insurance, you should definitely do that before you choose your lender or title company.  Your insurance rate accounts for the amount of money that is added to your loan each month in order to pay your annual premium.  The better the rate, the lower the deposit and the lower monthly payment.

On the flip side, you should find out if there are any credits available to you depending on the type of loan that you are getting.  Some lenders are authorized to credit up to a certain amount of money depending on the loan-to-value ratio or the type of loan they are doing. If you are pulling money out of the loan for renovations or to create a home equity line of credit, make sure you get the most amount of money you can at the best interest rate.

Hidden Fees / Down Payment

Once you have done all of your research mentioned above, don’t forget to check with your lender on the following items:

You should find out what interest rates are offered and how much points would be if you chose to “buy down” your interest rate.  Many people don’t know about points, and lenders can sometimes add them into the cost of the loan in order to advertise a better rate to the home buyer.  Make sure that you are getting the base cost of the loan and then the cost of points.  Your lender can break down for you how the cost of points can save you money in the long run by showing how you “pay off” your points and still ssave money of your monthly payments.

Secondly, when you are finding out about the type of loan available to you, find out the specific information about the down payment.  Lending restrictions have loosened up in the last couple of years, so a 20% down payment is not necessarily required anymore to get a loan.

If you are able to obtain a fabulous rate, make SURE to find out exactly when you are required to close if you lock-in your rate in order to be able to keep that excellent rate for closing.  Locking in your rate means, though, that you can’t get a better rate later on, so if you feel like your closing can happen fast, and you have the best rate, go ahead and lock it down to get the most savings.

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New Construction Jobs Support Overall GDP

Home building generates a substantial amount of money for local governments and the federal government just by the nature of the industry.  According to the National Association of Home Builders, approximately 90,000 different governments receive approximately $111 million in taxes and fees from the construction and building of 1,000 single-family homes.

Sub-Contractors Contribute Greatest Share

In addition to the governments making a substantial amount of money from home building, sub-contractors also

are reported to make consistently higher wages because of home building.  One of the reasons for this is that sub-contractors actually do the work themselves instead of hiring the jobs out to employees.  Because sub-contractors make up the majority of the workforce when building a new home, the taxes on profit then paid by these sole proprietors also contribute greatly to the overall economy.

Tax Breakdown

The amount of taxes paid to the federal government is comprised mainly of income taxes and social security equaling an amount of $74.4 million.  State and local income taxes comes to $10.3 million, and city and county taxes equal approximately $6.9 million.  Other taxes consisting of impact fees, permit fees, and other fees for new construction bring in a total of $13.7 million.

A breakdown of industries which bring in the revenue shows that construction has the most jobs, and other affiliated companies related to construction such as manufacturing, bring in other revenue.  Other affiliated businesses include trade, transportation, warehousing, finance, insurance, real estate sales, rental and leasing, and professional, management, and admin services. A total of 2,975 jobs are created from building 1,000 single-family homes based on full-time jobs over one year.

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Tax Credits Still Available for Energy Efficient Home Features

New homes which are “green-built” to reduce energy consumption have several benefits to new home buyers.  Many people don’t know that tax credits are still available for the use of energy efficient home features. First of all, because of the usage of the proper insulation, tightly sealed caulking and weather stripping, the home’s interior temperature is more comfortable.  Through the control of air and vapor through the use of air/vapor retarder systems, the humidity of the home is reduced significantly making it a more dry environment.  Because of5-Lot 91 Maison du Lac Rustic Kitchen Design with Granite the insulation and tightly sealed yet ventilated structure of the home, there is a reduction of a significant amount of noise as well.  All of these factors contribute to a peaceful and comfortable living environment for our new homeowners.

At Ron Lee Homes, we use many different energy efficient building techniques.  Because he is Green Building Certified through the National Association of Home Builders, Ron Lee is an expert on applying the latest trends and technologies in building green homes.  Currently, the federal government is offering tax rebates for two different types of energy efficiencies: the Residential Energy Efficient Property Tax Credit, which benefits those who have incorporated renewable energy features into their home, and the Nonbusiness Energy Property Tax Credit, which benefits those who have installed materials that meet the U.S. Department of Energy’s energy efficiency standards.

Energy Efficient Materials

In order to clarify exactly which types of materials will help you in renovating and updating your home, saving you money on your utility bills, and receiving money off of the annual taxes you pay, Ron Lee Homes has provided a description of all of the potential changes or new building techniques you can use that are considered energy 1-Lot 859 Beau Chene Front Exteriorefficient enough for the IRS.

First of all, for new home building, you will want to make sure that your thermal envelope is designed and installed to help reduce moisture and air from flowing through your home.  Your thermal envelope includes the wall and roof, insulation, air / vapor retarders which reduce water vapor condensation, windows, weather stripping, and caulking.

A typical home loses more than 25% of its heat through its windows.  In addition to using Energy Star® rated double or triple-paned, energy efficient windows, something as simple as roof overhangs are excellent at providing shade keeping the heat and sun glare off of the sides of the house as well as the windows especially here in Southeast Louisiana.

Amazingly, properly applied caulking and weather stripping will reduce a home’s utility costs by 50%.  Sealing all of the potential places that air and moisture can escape or come into your home can enormously change your home’s environment – creating a less humid place to live with more stable temperatures.

Choosing the properly-sized heating and cooling system and then creating ventilation and air re-usage opportunities throughout the home will let the home “breathe,” which helps with reducing hot and cold air when it is not necessary.

Energy Star® water heaters, refrigerators, washing machines, dryers, dishwashers, lighting, and room air conditioners should be chosen to decrease entergy usage which makes it cost less to use your home appliances.

For more information about building a new home with energy efficient features or renvoting your current home with these features, Contact Ron Lee Homes at 985-626-7619 or E-mail Info@RonLeeHomes.com.

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NAHB Survey Shows Desire for Better Amenities Among Remodelers

Among the many reasons for remodeling your home, the National Association of Home Builders surveyed homeowners and found that the top reason for a remodel was a desire for better / newer amenities.  In conjunction with this reason, homeowners’ second reason for remodeling their current home was a need to repair / replace old components.

In order for a home to feel like “brand new,” homeowners can largely do an overhaul of their existing space, 003replacing or adding trim, repainting, putting down different flooring, replacing cabinets and countertops, and installing new fixtures, lighting, and appliances. The desire for new and better amenities includes all of these activities and also includes installing new components whether they be new faucets, sinks, toilets, tubs, showers, shower stalls / doors, kitchen islands, and much, much more.  Unused wall space can include new cabinetry, a kitchen desk or mini-office, a butler’s pantry, or a built-in wet bar designed specifically for entertaining, complete with ice maker, refrigerator, and / or wine cooler.

Other reasons for remodeling your home can include wanting to avoid moving or buying a new or existing home for sale, the ability or desire to stay where you are – age in place.  If you have children, you may love the area in which you live, your kids love their school, and you like the school district, your neighborhood is desirable and 1-Lot 52 Windermere Remodel Overviewyour neighbors are your friends, and other reasons for “staying put.”  Your home may not no longer be meeting your expectations for comfortable living, but remodeling your home to give it a fresh look or even adding on more space in the form of an expanded family room area, a new sun room, a new patio / screened-in porch, a mother-in-law suite, or even an upstairs apartment above your garage could make your life and your family’s life more enjoyable.

Whatever your reason for remodeling your home, Ron Lee Homes in St. Tammany Parish can help.  We have added entire outdoor space, completely reconstructed kitchens and bathrooms, and created private master suites for more comfort while you age in place.  To get more information on renovating your home with Ron Lee Homes, call 985-626-7619 or E-mail Info@RonLeeHomes.com.

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FHA Backed Loans Reported to Have Slight Increase

Certain pricing requirements, mortgage types, and age requirements are considered a trend for first-time home buyers.  Different housing market statistics are indicating that first-time home buyers may soon be increasing to pre-Recession levels. The first indication was a slight uptick in FHA (Federal Housing Authority) backed loans. 5-Lot 34 Autumn Creek Back Patio With the recent easement of FHA loan requirements including a lower percentage required for the down payment, more first-time home buyers are able to qualify for FHA mortgages.  The increase in FHA-backed mortgages went up to a 17% market share for a quarterly count of 23,000 FHA loans in the 1st quarter of 2016.

Pre-Recession Trends

Interestingly, in 2002 – 2003, well before the Great Recession, FHA backed mortgages were only 10% of the market share where in 2010, FHA loans had a 28% share of the housing market.  These statistics show a steady presence of FHA loans in real estate transactions.  It also indicates the necessity of a government supported loan program for struggling Americans who need assistance with their new home purchase.

Conventional home financing still makes up the majority of home purchases in America today.  For the first quarter of 2016, Conventional loans made up 68% of the homes achieved by home buyers.  The reason for this may be another market statistic which showed an overall increase of in personal income in the United States.  a 2.2% year-over-year increase for 2014 was reported with median income reported at $28,757.  This is 5.4% less than its high in 2007 right before the Recession, and it is still lower than income reported in 20000, but statistics show the trend of the total of personal income is and has been on the rise since it bottomed out in 2012.

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Discover the Value of Homeownership in America

The value of homeownership has just been assigned a number based on information regarding homeowners in 2013 in the United State.  Owning your own home in America can save $100 billion in tax savings and deductions. Statistics showed that only approximately 11.4% of Americans who had a mortgage by owning a home that they occupied in 2013 did not take advantage of being a homeowner by deducting the mortgage interest that they paid from their federal taxes according to the Joint Committee on Taxation (JCT) and National Association of Home2-54 Maison du Lac Exterior 2 Builders (NAHB) analysis.

It cannot be emphasized enough the huge advantages of becoming a home owner in today’s economy.  In addition to the $296.2 billion that was claimed on Americans’ taxes, there was also the amount of $174.3 billion in real estate taxes that were claimed on taxes as well. Overall, people who owned homes in the U.S. in 2013 were able to trim their tax bills by over $100 billion dollars.  Mortgage interest deductions accounted for $72.4 billion in savings on taxes while real estate taxes equaled $30.2 billion.

These numbers don’t include individual state programs for making improvements and installing energy efficient, “green” products in their homes.  These deductions are specialized each year by both the state and federal government and typically have timelines and requirements on the amount of money that can be deducted.  The bottom line is that if you own your own home, you have a significantly better chance of saving money on certain 1-Lot 52 Windermere Remodel Overviewhome improvements than if you were renting your home.

Another advantage to owning your own home is that on-time mortgage payments will vastly improve your credit.  Just by owning real estate, your credit score will improve as soon you close on your home and log your first mortgage payment.  With better credit, you can expand your opportunities for loans and investments, thereby creating even better credit for yourself and your family.  As you pay more and more principle on your mortgage payments, you will see your home equity rise as well.  You can use an equity line of credit to make improvements to your home (and get those tax deductions!) which also increases your home’s value.  Real estate can be one of your greatest assets that continually increases in value, appreciation, equity, and opportunity if it is handled correctly as one of your greatest investments.  So, what are you waiting for – discover the possibilities of becoming a homeowner today!

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Pace of New Home Sales and New Home Inventory on the Rise

Both the pace of new home sales and new home inventory are up according to the numbers reported for February, 2016.  New home sales went up by 2% bringing the seasonally adjusted amount to 502,000.  Standing new home inventory also moved upward slightly to a 5.6-month’s supply of homes meaning it would take this amount of time to sell off all of the standing supply of new homes for sale nationwide.  New home inventory has struggled to 1-Lot 207 Singing Rivers Front Exteriorrebound because of three factors: lots, construction workers and sub-contractors, and lending standards.

Lots available for building have actually been a problem for builders in pockets around the country as builders are ready to “get back to work” and build new homes for sale.  The lack of supply of ready lots have them searching more rural locations or building completely different floorplans to accommodate certain lot plats.

Construction employment demand has skyrocketed as opportunities begin to be more and more prevalent because of the surge in new construction.  Employees and sub-contractors seem to be now flooded with work, which leaves builders waiting on certain subs’ industries to come out to work on their new homes under construction.

Lenders have found ways to ease the home buyer’s woes by offering better standards of down payments with new FHA loan packages and rural development loans.  However, the kink in the industry came in late October and the beginning of November, 2015, when the new Closing Disclosure was implemented for real estate closings.  Banks, lenders, mortgage companies, and even title companies are on a fast learning curve to master the new system and get home buyers into their new homes fast.

In reality, it is better that the real estate industry is undergoing these types of struggles rather than a complete lack of demand and over 1.5 year’s inventory on the ground like it felt during the Recession.  The lack of all of the items mentioned above are actually a good problem for new home builders to have.  If you are interested in building a new, custom home in St. Tammany Parish, Contact Ron Lee Homes today to set up a meeting regarding new home plans and construction.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com to set up your appointment.

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Open Floorplans Are Popular in Today’s Real Estate Industry

The buzz word in the real estate industry today for new homes being built and existing home remodeling is an open floorplan.  What exactly does that mean?  The open floorplan refers mainly to the entire living area and possibly even the sunroom, screened-in porch, or patio area on the bottom or single floor of the home.  Open floorplans typically include the Family Room / Living Room, Dining Room, Kitchen, Sunroom, Keeping Room, Breakfast Room, and/or Porch / Patio.

Open floorplans discourage compartmentalization by encouraging each room or area to flow into the next.5-Lot 25 Woodstone Open Family Room & Kitchen  Kitchens in an open floorplan can be expansive with a full working island in the middle as well as an additional breakfast bar that can have extra space for family social gatherings.  The kitchen island may have an additional sink, icemaker, dishwasher, trash compactor, or even a wine cooler. The island can also include cabinet space and drawers for additional kitchen storage of utensils, dishes and appliances.

Most of the time, the kitchen will overlook the Family Room with a view of the floor to ceiling fireplace for a vaulted ceiling floorplan and the television, letting the cook enjoy shows and games while have to cook, clean, and entertain.  The kitchen may have additional bench seating against the wall of what typically would be a Breakfast Room or Keeping Room in order to create a place for people to talk if they are not watching television.

Family Room space flows into what would have been the formal Dining Room, so homeowners have the option of 2-79 Oleander Living 1buying a bigger living room set or adding built-in bookshelves, an informal office, or even a kids play area.  If there is enough room in the open floorplan, a screened-in or glassed-in porch may be easily accessible from the Family Room, or custom home buyers may choose to insulate a sunroom for a greenhouse effect for those that are plant lovers.

The obvious point here is that the days of separating out the “Formal Dining Room, Formal Living Room, Family Room, and Kitchen” are pretty much over – much like the disappearance of the “Parlor” in the ’50’s.  Home buyers and homeowners love their sprawl and space and having access to everything in the main living area of their home.

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