Everyone is ready to buy a home at different times in their lives, and despite the health crisis, today is no exception. Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.
There are three main factors that go into determining how affordable homes are for buyers:
Mortgage Payments as a Percentage of Income
The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:
“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”
Their methodology states:
“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”
So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:The green bar represents today’s affordability. We can see that homes are more affordable now than they have been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market.
Why are homes so affordable today?
Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years.
If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.
If you feel ready to buy, purchasing a home this season may save you significantly over time based on historic affordability trends. Reach out to New Avenue Realty Group today to determine if now is the right time for you to make your move.
The time is here and you want to buy a home. There are so many people who are excited from moving from renter to homeowner throughout every year. However, with the Dallas-Fort Worth metroplex growing each and everyday, how do you decide on where to live?
For some people, the close proximity to work is important. For others, the close proximity to things outside of work is more important. I’ve actually had clients that had to live near Target. As a Target fanatic myself, I couldn’t blame them. After searching any and everywhere, they gave up the dream to buy a home near a Target. However, guess what? We found them a home in their price range ACROSS from a Target. LOOK AT GOD!
Now let’s talk a little more in depth on where to go. Many times we love where we rent or we hate it. Do you know the cost of homes where you live? Here is the chance to see where you can buy. One rule of thumb I tend to tell people is that you can either afford 2 times your monthly salary or four times your monthly salary. Why so? Well, when you purchase a home, a lender qualifies you based on your debt to income ratio.
Debt to Income Ratio
A debt-to-income, or DTI, ratio is derived by dividing your monthlydebt payments by your monthly gross income. The ratio is expressed as a percentage, and lenders use it to determine how well you manage monthly debts — and if you can afford to repay a loan.
Here’s a simple two-step formula for calculating your DTI ratio.
Add up all of your monthly debts. These payments may include:
Monthly mortgage or rent payment
Minimum credit card payments
Auto, student or personal loan payments
Monthly alimony or child support payments
Any other debt payments that show on your credit report
Divide the sum of your monthly debts by your monthly gross income (your take-home pay before taxes and other monthly deductions).
Convert the figure into a percentage and that is your DTI ratio.
Keep in mind that other monthly bills and financial obligations — utilities, groceries, insurance premiums, healthcare expenses, daycare, etc. — are not part of this calculation. Your lender isn’t going to factor these budget items into their decision on how much money to lend you. Keep in mind that just because you qualify for a $300,000 mortgage, that doesn’t mean you can actually afford the monthly payment that comes with it when considering your entire budget. – Excerpted from Bankrate.com
Your debt to income ratio (DTI) will determine which loan program makes sense for you as well. If you have a higher DTI, you may work best with a FHA loan as they have higher DTI qualifications up to 56.9%. If you are at 50% or below, you may qualify to do a conventional loan. If your DTI, exceeds any of these numbers, you may be asked to pay off some things to get where you need to be to get qualified.
Mortgages are NOT like rental qualifications. Rental qualifications are based on your monthly gross income being 3 times the monthly rent. A mortgage lender looks at ALL of your debt reported on your credit report. Let’s use an example for DTI qualifications.
Gross Income – $48,000 salary = $4000 per month
Debt: Car Note – $350; Student Loans – $200, Credit Card 1 – $55; Credit Card 2 – $75; Personal Loan – $100. These are all based on monhtly payments NOT the overall payment. The total debt in this situation is $780/month. Now let’s say that the mortgage payment on said home would be $1800. That would bring your total monthly debt up to $2580. Would the lender qualify you for that home? Well, let’s see. Divide $2580/4000. That equals 65% of debt to income. Now, the lender may not qualify you for a home that would cost $1800/month. However, you may can get qualified for a home that cost $1450/month. Want to spend a little more? Your next option would be to eliminate some of the debt. In this example, to get the home that cost $1800, you’d need to eliminate $350 of debt. Where would that be from?
I tell clients that the way they could afford more house would be to either eliminate some debt, increase income, put down more money on the home, or all of the above.
Cost of Homes in DFW
As you can see, the average price of homes in DFW have increased 2.9% from May 2018 to May 2019 to $330,766. This isn’t to say that all homes in DFW are $330,766 but on average the home sales are.
How do you find which areas fit more of your budget? Consider the average sales prices of area. Let’s break it down within counties.
Some of the top places that my clients are moving to are the following: Aubrey, Forney/Heartland, Celina, and McKinney. Check out the prices of those areas below:
Buyer’s Market or Seller’s Market
The month’s of inventory determine whether we are in a buyer’s market or a seller’s market. If there is 6 months of more of inventory, we are in a buyer’s market. That means there is a home out there for at least two buyers. Homes aren’t scarce and the options are there. If we have less than 6 months of inventory, we are in a seller’s market. That means inventory is tight and you are more than likely to see multiple offers.
If we go back and compare those cities that we just looked at (Aubrey, Celina, McKinney, and Forney), you will see what type of market these areas are in. Each city will have different stats which is why it is best to get very specific on 3-4 areas.
If we look at DFW as a whole, you will see that the overall metroplex is still in a seller’s market with 3.4 months of inventory which is up 17.2% from May 2018.
This is just the basics of a buyer’s consultation with New Avenue Realty Group. We help clients get from curiosity to possibility. Let’s get you into your new avenue in the metroplex. Book an appointment with me at atfowlerrealtor.appointy.com.
If you’re preparing to sell your home, curb appeal should be a priority. When someone is walking by or coming to your open house, the outside of your home is the first thing they will see. If there is no curb appeal, potential buyers may never even set foot in your home. Instead of ignoring your home’s outdoor appearance, consider making some budget-friendly changes that can add appeal to your home without breaking the bank.
1. Landscape Your Walkway
Create a smooth transition from the street to your front door. A clear path will allow a potential buyer’s eye to look straight to your home, rather than stopping to concentrate on unkept landscaping. Clean your walkway and create groupings of mid-size shrubby and florals close to the road and by your front door.
2. Hang a Wreath
Adding a wreath to your front door is a simple way to make your home look more welcoming. Consider a DIY wreath that is easy to create and cost-friendly.
3. Treat Your Lawn Better
Consistent upkeep is the best way to save money when it comes to your front lawn. You should apply a weed-and-feed treatment to your lawn as often as needed to supply the necessary nutrients while also killing off any weeds. Be sure to provide proper maintenance to your lawn mower and keep your mower blade sharp.
4. Add Porch Appeal
If you have a front porch, add an affordable outdoor furniture set. This can create an inviting space that will make potential buyers want to try it out!
5. Consider Color Accents
If your door or shutters need a fresh paint job, consider finding an accent color that will help your house pop. It doesn’t have to be extreme, just enough to catch the eye of a potential buyer. Be sure to test your paint color alongside your siding or brick before fully committing.
6. Restore Your Driveway
Your driveway can be a major eyesore if it isn’t taken care of. Fill any holes or cracks in your asphalt and apply a fresh sealer. A driveway that looks new is sure to help your curb appeal.
7. Power Wash Your Home
Sometimes, all your home needs is a good cleaning. If you don’t own power washer, rent one from your local home improvement store and take a weekend to power wash your entire exterior. Even if your home is relatively new, a deep cleaning can make it look like a new build.
Each year, respective counties send out new tax bills for the year to be paid by December. In Texas, one of the biggest expenses for homeowners are property taxes. We don’t have state income taxes therefore most local entities such as the county, school districts, county hospitals, cities, and sometimes county community colleges are paid through the property taxes.
The 2019 property tax assessments from various counties in the metroplex have been mailed out and guess what? Your property taxes have increased. What most people are seeing are a significant increase in their home value assessment (the property tax assessment value is getting really close to market values which we will talk more about later) by their counties. You have until May 15th to protest your assessment online or in person.
Did you know fewer than 20% of homeowners appeal their property taxes? This means they may pay more than their fair share. The best thing to do is to protest them. Why? You have a chance of lowering the amount you pay in property taxes by simply saying that this is too much. Let’s make a change in 2019 until the state government decides how they want to handle the property tax reform, shall we?
Here are tips to protesting your property tax assessment:
Make sure you have filed your homestead exemption.
You have until April 30th to file your homestead exemption with your county to save money on property taxes. You only have to do this once but if you failed to do it theJanuary – April AFTER you purchased your home, this is your chance to do it. A homestead exemption helps you save money on your property taxes. It also prevents your tax value from increasing more than 10% per year.
Check for mistake’s on the county’s description on your home.
Does the county have your 3 bedrooms, 2 bathrooms, formal dining home at 1805 square foot as 4 bedrooms and 3 bathrooms at 1925 square feet? It happens all the time and no one corrects it. A lot of county information is incorrect but we let it ride as gospel. Check your county’s website to make sure the square footage, number of bedrooms and bathrooms, and lot size are accurate in their assessment.
Gather Your Comps
It is important to keep up with the values of homes in your neighborhood. Most time people don’t realize what other homes are selling for. To gather more accurate comps, connect with a local REALTOR to see what homes have sold for within the last 3 months or 90 days in your neighborhood.
You can enter your address below to determine what your home is worth.
Highlight Flaws in Your Home
We all love our homes and it is the best thing since slice bread. However, this is the time to really compare your home and get very judgmental about it. If you notice most of the homes that have sold nearby all have hardwood or some wood-like material, while you have carpet everywhere, take pictures of it. If you know your home is in need of a new roof or has foundation issues, take pictures and/or provide the quotes of those repairs that are needed.
Consider the negative influences near your nearby such as backing up to a busy street, water tower behind the home, or being on the main road to the neighborhood. Those are items that an appraiser would dock off your home’s market value when it is time for you to sell, use it to your benefit for your property taxes. P.S. I am not saying to trash your home or that you won’t ever be able to sell your home, this is to save money on your property taxes. I sold a home in Fort Worth last year and my clients ended up getting the property for less because the appraiser thought it was in a less desirable location than other homes comparable to it. It’s a gorgeous home and my clients love it. However, they got a win to buy it at a lesser price.
New Construction Woes
In most cases for newly built homes, there is a tricky line for homeowners. The previous year, your home was assessed based on land value. Now, it is based on the value of the home with a home on it. Check the price of the home that they county says your home is. Is it higher than what you paid for the home? Is it higher than what new homeowners can build the same exact home for? If your answer is yes to either one, that’s your protest. Texas is a non-disclosure state. In order to win the battle on the first one, you may have to show what you paid for your new home. The other option is to stop by the builder’s office (if they are still in the neighborhood) or pull it offline and see what your home is being sold for at base price. Is it lower than the county’s assessment? If so, your argument here is that your home has been lived in. No one is going to purchase your home for higher than what they can build their home for. Then take pictures of the things that you got standard (if you built) with the builder and haven’t updated.
Check Local Real Estate Trends
In addition to talking to your REALTOR for comps, ask them to pull the real estate trends. Homes have the potential to increase in value or appreciate. However, a property can decrease in value or depreciate. Is the price of homes sales decreasing in your zip code? A decrease in value can be caused in excess supply, lack of demand, deflation or other reasons that take away the property value. Home values fluctuate so don’t get nervous. It is just something for you to know and use in your protest. Homes appreciate normally 2-4% a year. Find out what is happening in your local area. It can be completely different from Aubrey to Crowley.
It can be that your area isn’t appreciating as much as the county THINKS it is appreciating.
Things to Remember
The county’s assessor’s don’t see the inside of your home. They can only see the outside of it. This is the time to show and prove what your home looks like. Use the knowledge that you have from the tips above to help lower your tax assessment value which in return lowers your property taxes. After you have your evidence, schedule an appointment with the county to present your case OR present the information online. It is important to protest annually to minimize your property taxes.
If you need any assistance in gathering information to present your case, contact me at via email at email@example.com.
As a country girl from North Louisiana, I love being in areas that remind me of home…..for now anyways. However, Aubrey, gives me North Louisiana vibes. You have nature at its best. Quiet scenery with city amenities nearby. I call it the best of both worlds.
So when I discover a community that gives that vibe, I have to explore it. If you didn’t know, Aubrey is horse capital. It is still fairly rural but growing quickly. However, you’ll see that new communities are still harvesting what Aubrey is known for. The area will grow to be another suburban town but very well keep its horse capital, rural flair (at least I hope it does).
The developers at Sandbrock Ranch are keeping that mission alive. In this community, the neighborhood will certainly have its ranch moments. In fact, the neighborhood has it’s own cows considered to be “milk cows” that are stripped white in the middle and black on the rest of its body. Horses roam within the neighborhood too.
There are fences up to protect the animals but it brings such joy to my country heart. The winning piece of the community, The Carriage House. Sandbrock Ranch is a development created by the owners of Highland Homes. This piece of land is actually family land that they’ve decided to develop on. The family is still keeping pretty much a part of the land, ranch-style with a suburban twist. 😂
I know it seems funny but truly this is a one of a kind neighborhood that is amazing. I did a tour with the Lifestyle Directors and here is what you can expect “Living at Sandbrock Ranch.”
There are still even more things to come to this amenity center such as the rec space (sports fields), event amphitheater, and more. The neighborhood will also have a future Denton ISD elementary school in the community.
Let New Avenue Realty Group help you find your home in Sandbrock Ranch. Connect with us through via phone or email at 972-813-9788 or firstname.lastname@example.org. We can start with your own private tour with a New Home Specialist concierge service with New Avenue Realty.
Complete the form below to start your visit with us.
Real estate is a complex nature. WHO you work with really does matter. New Avenue Realty has worked with hundreds of homeowners (future and current) to buy or sell real estate in North Texas with over $15 million sold. The proof is in the numbers. Your experience will be royal.
Want to BUY or SELL a home? Chat with us at 972-813-9788 or email@example.com.
Yesterday was the grand opening for this long awaited cafeteria hall projectory in Plano. As if Legacy West wasn’t already amazing, it opened up a food galore called Legacy Hall. It features just about all you can think of when it comes to food. No longer will you and your friends bicker about what to eat anymore. Everyone can find something they enjoy ans meet back at the table to enjoy each other’s company.
I took a brief tour today since I was nearby checking out the Villas at Legacy West by Britton Homes. All I can say is the brunch lines will be LONG on the weekends. I fell in love with this place as soon as I entered it. However I hate crowds and know the weekend will be the time I would not want to be near. 😂
It has great seating with eclectic decor around. Take a view with my photos. You can learn more about the restaurants located inside the food hall here: Legacy Hall Restaurants. How are you living in your neighborhood?
One thing that I do with all new and potential clients is to schedule a consultation. The consultation helps each party set expectations but most importantly, it helps to properly educate a buyer or seller.
I never want to sell my clients just anything or any service. I want to be the one who helps you make the best educated decision in life’s biggest financial transaction. I value the relationship I have with my clients so I treat everyone as if they are a dear friend that I want the best for.
However, with so many things available at our fingertips, it is hard to not have knowledge on some things.
The market in Ohio may be a totally different market in Texas. The market in Dallas is a totally different market than Houston. You cannot take what person A in New Mexico said compared to where you are buying in let’s say Georgia. Markets differ. One market may have an abundance of foreclosures and another one not so much.
For consultations, I like to break down all myths and help a client know what’s happening in Dallas/Fort Worth. An example would be the southern suburbs and the northern suburbs of Dallas. The same home in Lancaster may cost $100K less than the same home in Little Elm. Dallas has one of the hottest real estate markets in the country and foreclosures are rare at the moment. What may have been available in 2009 may not be available in 2017. I get it. I miss the cheap housing of DFW too. Imagine the days where you can get a home in The Colony, Little Elm, or even McKinney for $150K? I was helping people find them in 2014. That’s the last time I’ve seen homes in those prices in the northern suburbs.
So you’re interested in buying a home and want to know where to start? I like some tips on the best way to start researching your market below.
Here’s the best way to start your research in the market.
A. Find areas that you like (Do 3-5 areas).
B. Look up homes in those areas. What do they cost? What do you like about them? We all have areas we desire but in today’s time that area may not fit our budgets. If you barely find a home available under $200K or even under $150K in these areas, the market is higher. If that may not be your budget, find other areas that fit your price range.
C. Know your OWN coin. Look at your gross or net income for the month. Subtract the expenses you have from bills (excluding rent). What is left over? That may be the amount you have realistically to pay for a home. Rule of thumb is to spend no more than 30% on mortgage/rent. Lenders generally include this as well. This is called debt to income ratio. They include housing expenses (mortgage) and debt expenses to help you know what you can afford. This also may be the time to find what you can eliminate to afford a home that you want.
D. Get Pre-Approved. It’s one thing to dream of the lovely $450K home but it is more responsible on knowing if you can afford it or not.
E. After getting pre-approved, go back to A and see if you are able to realistically do A. This becomes a one-on-one conversation with yourself to realize what you can and cannot do. Look at other areas that have more availability in your price range. Venture out to visit the areas and see if it is something that you can do. People are generally surprised what other areas offer.
F. Get a Realtor. Online research can only go so far. Find a knowledgeable Realtor that you can connect with.
The key to homeownership is to start. Your first home is not your forever home. YOUR FIRST HOME IS NOT YOUR FOREVER HOME. It is your first home. You second home may be that dream home you’ve always wanted. It may be your third or fourth. If you ever want to sit down and have a discussion with me about the DFW housing market, contact me today via phone or email at 972-183-9788 or atfowler@NewAvenueRealty.com. Book an Appointment here to schedule a consultation.
It’s time to sell your home and you’re stumped on what to do. What are the first steps? How do you prepare for the sale? All you know is that you are going to sell it to a buyer but how do you attract them? Hit play to discover the answer.
Reach out to New Avenue Realty for a complimentary consultation for selling your home: firstname.lastname@example.org.
Can you believe that we are near the end of 2016? This year is really over in a less than 48 hours. I am one who is excited about 2017. 2016 was a great year, ready to rock 2017! Thanks to all who were apart of 2016!