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For more than 79 years, Veterans Affairs (VA) home loans have helped millions of veterans buy their own homes. If you or someone you care about has served in the military, it’s essential to learn about this program and its advantages.
Here are some important things to know about VA loans before you buy a home.
VA home loans provide a pathway to homeownership for those who have served our nation, and they’re a great benefit for buyers who qualify. According to the Department of Veteran Affairs:
A recent article from Veterans United sums up just how impactful this loan option can be:
“For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”
Owning a home is the American Dream. Veterans sacrifice a lot to protect our country, and one way we can show our appreciation is by making sure they know all the benefits of VA home loans. Thank you for your service.
Are you dreaming of buying your own home and wondering about how you’ll save for a down payment? You’re not alone. Some people think about tapping into their 401(k) savings to make it happen. But before you decide to dip into your retirement to buy a home, be sure to consider all possible alternatives and talk with a financial expert. Here’s why.
The data shows many Americans have saved a considerable amount for retirement (see chart below):
It can be really tempting when you have a lot of money saved up in your 401(k) and you see your dream home on the horizon. But remember, dipping into your retirement savings for a home could cost you a penalty and affect your finances later on. That’s why it’s important to explore all your options when it comes to saving for a down payment and buying a home. As Experian says:
“It’s possible to use funds from your 401(k) to buy a house, but whether you should depends on several factors, including taxes and penalties, how much you’ve already saved and your unique financial circumstances.”
Using your 401(k) is one way to finance a home, but it’s not the only option. Before you decide, consider a couple of other methods, courtesy of Experian:
No matter what route you take to purchase a home, be sure to talk with a financial expert before you do anything. Working with a team of experts to develop a concrete plan prior to starting your journey to homeownership is the key to success. Kelly Palmer, Founder of The Wealthy Parent, says:
“I have seen parents pausing contributions to their retirement plans in favor of affording a larger home often with the hope they can refinance in the future… As long as there is a tangible plan in place to get back to saving for their retirement goals, I encourage families to consider all their options.”
If you’re still thinking about using your 401(k)-retirement savings for a home down payment, consider all your options and work with a financial professional before you make any decisions.
If you’re weighing your options to decide whether it makes more sense to rent or buy a home today, here’s one key data point that could help you feel more confident in making your decision. Every three years, the Federal Reserve Board releases the Survey of Consumer Finances (SCF). That report covers the difference in net worth for both homeowners and renters. Spoiler alert: the gap between the two is significant.
The average homeowner’s net worth is almost 40X greater than a renter’s. And here’s the data to prove it (see graph below):
In the previous version of that report, the net worth of the average homeowner was roughly $255,000 and that of the average renter was $6,300. But in the release that just came out this year, the gap widened as homeowner net worth climbed dramatically. As the Survey of Consumer Finances (SCF) report says:
“. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”
One of the biggest reasons homeowner net worth skyrocketed is home equity.
Over the last few years, known as the ‘unicorn’ years for housing, home prices went through the roof. That’s because there weren’t enough homes for sale, and there was a big influx of buyers rushing to buy them and take advantage of the then record-low mortgage rates. That imbalance of supply and demand pushed prices higher and higher. As a result, most homeowners who had a home during that time saw their equity grow a lot.
If you’re still in the middle of making your decision on whether to rent or buy, you may wonder if you missed the boat on the big net worth boost. But here’s what you need to realize. As a recent article in The Ascent explains:
“Whether your net worth increased in recent years or not, there are steps you can take to boost that number in the coming years. . . buying a home can be a great way to grow your net worth, since home values have a tendency to rise over time.”
Historically, home prices climb over time. Even now that mortgage rates are closer to 7-8%, prices are still rising in many areas of the country because supply is still low compared to demand. That’s why expert forecasts for the next few years call for ongoing appreciation – just at a pace that’s more typical for the housing market.
While it likely won’t be the record ramp-up that happened over the last few years, people who buy now should continue to grow equity in the years ahead. That means, if you’re ready and able to buy a home today, you’ll be making an investment that’ll help build your net worth in the long run.
As Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:
“. . . when deciding to rent vs buy, one must calculate the total cost of homeownership (maintenance, utilities, commuting, etc.) and the total financial benefit. Based on new Fed data . . . the median net worth of homeowners was $396,200 vs renters at $10,400. There is no question about the wealth gains that homeownership provides.”
If you’re on the fence about whether to rent or buy a home, remember that homeownership can give your net worth a big boost over time. If you want to learn more about this or the many other benefits of owning a home, connect with a local real estate agent.
According to the latest data from Fannie Mae, 23% of Americans still think home prices will go down over the next twelve months. But why do roughly 1 in 4 people feel that way?
It has a lot to do with all the negative talk about home prices over the past year. Since late 2022, the media has created a lot of fear about a price crash and those concerns are still lingering. You may be hearing people in your own life saying they’re worried about home prices or see on social media that some influencers are saying prices are going to come tumbling down.
If you’re someone who still thinks prices are going to fall, ask yourself this: Which is a more reliable place to get your information – clickbait headlines and social media or a trusted expert on the housing market?
The answer is simple. Listen to the professionals who specialize in residential real estate.
Here’s the latest data you can actually trust. Housing market experts acknowledge that nationally, prices did dip down slightly late last year, but that was short-lived. Data shows prices have already rebounded this year after that slight decline in 2022 (see graph below):
But it’s not just Fannie Mae that’s reporting this bounce back. Experts from across the industry are showing it in their data too. And that’s why so many forecasts now project home prices will net positive this year – not negative. The graph below helps prove this point with the latest forecasts from each organization:
What’s worth noting is that, just a few short weeks ago, the Fannie Mae forecast was for 3.9% appreciation in 2023. In the forecast that just came out, that projection was updated from 3.9% to 6.7% for the year. This increase goes to show just how confident experts are that home prices will net positive this year.
So, if you believe home prices are falling, it may be time to get your insights from the experts instead – and they’re saying prices aren’t falling, they’re climbing.
There’s been a lot of misleading information about home prices over the past year. And that’s still having an impact on how people are feeling about the housing market today. But it’s best not to believe everything you hear or read.
If you want information you can trust, turn to the real estate experts. Their data shows home prices are on the way back up and will net positive for the year. If you have questions about what’s happening in your area, connect with a local real estate agent.
Do negative headlines and talk on social media have you feeling worried about the housing market? Maybe you’ve even seen or heard something lately that scares you and makes you wonder if you should still buy or sell a home right now.
Regrettably, when news in the media isn’t easy to understand, it can make people feel scared and unsure. Similarly, negative talk on social media spreads fast and creates fear. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You should lean on a trusted real estate agent to help you separate fact from fiction and get the answers you need.
That agent will use their knowledge of what’s really happening with home prices, housing supply, expert forecasts, and more to give you the best possible advice. The National Association of Realtors (NAR) explains:
“. . . agents combat uncertainty and fear with a combination of historical perspective, training and facts.”
The right agent will help you figure out what’s going on at the national level and in your local area.
They’ll debunk headlines using data you can trust. Plus, they have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the housing market, historical data, and more.
Then, to make sure you have the full picture, an agent can tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision.
After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in.
If you need reliable information about the housing market and expert advice about your own move, get in touch with a real estate agent in your area.
The idea of owning a home has always been a big part of the American Dream. It’s a symbol of stability, independence, and having a place to truly call your own. But for Gen Z, the “Zoomers” born between 1997 and 2012, making that dream a reality can feel like quite the challenge today with higher mortgage rates and rising home prices.
But achieving that goal of owning your first home can still be attainable, even today, with some strategic planning and resourcefulness.
With prices rising all around you, it can be hard to save up for a home. If you’ve been struggling to stash away enough cash for that down payment, it’s worth it to look into the various down payment assistance programs available. These programs can really help you save big on the upfront costs of buying a home.
There are a lot more options out there than you may realize. According to Down Payment Resource, there are over 2,000 programs designed to help hopeful homebuyers with down payments and closing costs.
If you qualify for one of these programs, you may not need to save up as much money for your down payment. A local real estate agent can help you explore these programs in your area, making it much easier to turn your homeownership dream into a reality.
If you still need a bit more time to save, even with the down payment assistance programs out there, there are ways you can make that happen. Many savvy Zoomers have made a strategic choice to live with relatives so they can get to their savings goals even faster.
According to the National Association of Realtors (NAR), around 30% of Gen Z homebuyers transition directly from their relative’s home to a home of their own.
By sharing living costs, such as mortgage payments, utility bills, and even grocery expenses, you can substantially reduce your monthly expenses. This frees up more of your income to tackle any outstanding debt, boost your credit score, and reach your down payment target in less time. And, all of this can bring homeownership one step closer to becoming a reality. Clare Trapasso, Executive News Editor at Realtor.com, explains:
“Faced with ongoing housing affordability issues . . . we’re seeing parents and children becoming roommates again in later years as the ‘kids’ save up to purchase their own place . . .”
When you’re on the path to becoming a homeowner, it’s a good idea to get some help along the way. And one of your best resources on this journey as a young homebuyer is a trusted real estate agent. They’ll steer you through the process of buying a home and help you find one you can afford.
For Gen Z, the path to homeownership may not be straightforward, but it’s still within reach. With the right strategies, you can turn your dream of owning a home into a reality.
Are you wondering if it makes sense to buy a home right now? While today’s mortgage rates might seem a bit intimidating, here are two compelling reasons why it still may be a good time to become a homeowner.
There’s been a lot of confusion around what’s happened with home prices over the past two years. While they did dip ever so slightly in late 2022, this year they’ve been appreciating at a more normal pace, which is good news for the housing market. And while looking at price movement over just a year or two can make you worry prices are usually this unpredictable, history shows in the long run, home values rise (see graph below):
Using data from the Federal Reserve for the past 60 years, you can see the overall trend is home prices have climbed quite steadily. Sure, there was an exception around the housing crash of 2008 that caused prices to break the usual trend for a time, but overall, home values have been consistently on the rise.
Increasing home values is one great reason why buying may make more sense than renting. As prices rise, and as you pay down your mortgage, you build equity. Over time, that growing equity gives your net worth a boost.
Another reason you may want to consider buying a home instead of renting is the never-ending rent hike. If you’ve ever felt the pinch of rent increasing year after year, you’re not alone. That’s because, rents have climbed steadily over the past six decades (see graph below):
By buying a home, you can lock in your monthly housing costs and bid farewell to those pesky rent hikes. That stability is a game-changer.
In the end, it all boils down to this: your housing payments are an investment, and you’ve got a choice to make. Do you want to invest in yourself or your landlord?
By becoming a homeowner, you’re investing in your own future. When you rent, that’s money you never get back.
When you factor in home values consistently rising, plus the opportunity to get relief from never-ending rent hikes, homeownership can be a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), states:
“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”
When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to avoid increasing rents and take advantage of long-term home price appreciation, connect with a local real estate agent to go over your options.
