The True Cost Of NOT Owning Your Home

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for the entirety of America’s existence. reported that:

“Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option…as people get more savings in their pockets, buying becomes the better option.”

What proof exists that owning is financially better than renting?

1. In a previous blog, we highlighted the top 5 financial benefits of homeownership:

  • Homeownership is a form of forced savings.
  • Homeownership provides tax savings.
  • Homeownership allows you to lock in your monthly housing cost.
  • Buying a home is cheaper than renting.
  • No other investment lets you live inside of it.

2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.

3. Less than a month ago, we explained that a family that purchased an average-priced home at the beginning of 2018 could build more than $49,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment – along with a profit margin!

Bottom Line

Owning your home has many social and financial benefits that cannot be achieved by renting.

Source: Keeping Current Matters, 10-8-18

Posted on October 8, 2018 at 4:43 pm
Beverly & Doug Moser | Posted in Uncategorized |

Here are Oregon’s 50 best public high schools for 2019

The roster of Oregon’s top public high schools is dotted with representatives from the Portland area.

However, it’s not quite as Portland-centered as one might think. Indeed, the top-rated public high school sits far outside the Portland metro area. What’s more, such cities as Corvallis have multiple representatives on the list, which is based on information Pittsburgh-based researcher prepared in advance of the 2018-19 school year.

An examination of top public high schools provides businesses with several excellent metrics. Those relocating may take a facility’s geographic info into consideration as a way to keep employees with families happy. What’s more, many top-rated schools have strong engineering and science programs that might offer work study candidates to savvy companies. bases its rankings on statistics from the U.S. Department of education, along with millions of reviews from students and parents. Ranking factors include state test scores, college readiness, graduation rates and the quality of the school’s teachers.

The rankings are based on the degree to which certain factors affect the overall grade. A school in the top 10, for instance, might have the same overall grade as another school but rank higher because it performed better in academics, which comprises a big part of the overall mark.

The rankings breakdown goes like this:

  • Academics account for 60 percent of the grade. The figure is derived from state assessment proficiency, SAT/ACT scores and survey responses on academics from students and parents.
  • Culture and Diversity accounts for 10 percent of the overall grade. The category is based on racial and economic diversity and survey responses on school culture and diversity from students and parents
  • “Parent/Student Surveys on Overall Experience” comprises another 10 percent of the grade. Those responding to the surveys rank their experiences on a scale of one to five.
  • Quality of Teachers contributes to 10 percent of the grade. The score is predicated on teacher salaries and teacher absenteeism, as well as state test results and survey responses from students and parents.
  • The availability of clubs and activities, the quality of health and safety at the schools, resources and facility and sports each comprise 2.5 percent of the overall grade.

A few notes about the final rankings:

  • The No. 1 overall school has risen quickly, ranking sixth among public high schools in 2016.
  • Nine of the schools are based in Portland. Just two of those rank in the top 10.
  • Another eight are based in the city’s western suburbs. The highest-rated public high school among that list ranks third.
  • Lake Oswego counts two schools in the top 50. Both rank in the top 10.
  • Eleven of the schools are based in other Portland suburbs.
  • Central Oregon counts three schools on the list while just one Oregon Coast public high school made it.

Source: Andy Geigerich, Portland Business Journal, 8-14-18

Posted on September 10, 2018 at 4:28 pm
Beverly & Doug Moser | Posted in Uncategorized |

Why this housing boom is different from the last

The rising home prices and strong demand in the current housing market have some making comparisons with the previous boom in the mid-2000s; but it’s very different according to a new analysis.

Mark Fleming, chief economist of First American Financial, says that market fundamentals remain strong but there are signs that price appreciation may be slowing.

However, he does not see the risk of a market crash like the one that followed the previous boom.

“The price appreciation experienced in the housing market during the mid-2000s was characterized by a surge in demand driven by wider access to mortgage financing,” he says. “Price appreciation in today’s housing market is characterized by a shortage of supply. The supply of homes on the market remains extremely low, and the homes that hit the market sell very quickly – an indication that demand is outpacing supply.”

Low mortgage rates, high demand, low supply, and the strong US economy, are all supporting the market. And even where buyers pull back, frustrated by a lack of available homes, Fleming expects an easing of prices rather than a slump.

“As buyers pull back from the market and sellers adjust their price expectations, house prices will adjust, but the strong economic conditions and the shortage of supply relative to demand continue to support the housing market,” says Fleming. “We’re seeing the first indications that price appreciation may be slowing, but the underlying fundamental housing market conditions support a natural moderation of house prices rather than a sharp decline.”

Homebuying power is strong
First American’s Real House Price Index for June, which is based on changes in single-family home prices, interest rates, and incomes; shows an increase in prices of 1.5% between April and May 2018, 11.4% year-over-year.

Consumer house-buying power declined 1.0% between April and May 2018 and declined 3.6% year over year.

“While unadjusted house prices are 1.3% above the housing market peak in 2006, consumer house-buying power has increased by 55% over the same time period. House-buying power, how much one can buy based on household income and the 30-year, fixed-rate mortgage, has benefited from a declining rate environment, and slow, but steady household income growth,” Fleming explains.

The five states with the greatest year-over-year increase in the RHPI are: Nevada (+21.0%), Ohio (+18.5%), New York (+18.3%), Michigan (+17.5%), and New Hampshire (+17.2%).

No state had a year-over-year decrease in the RHPI in June.

“Consumers buy homes based on how much it costs each month to make a mortgage payment, not the price of the home. Lower mortgage interest rates and growing incomes mean home buyers can afford to borrow more and buy more, which drives price appreciation,” concludes Fleming.

Source: Mortgage Professional America, Steve Randall, 8-28-18

Posted on August 28, 2018 at 7:26 pm
Beverly & Doug Moser | Posted in Uncategorized |

Hottest markets see slowdown in home-value growth

Home value appreciation is slowing down in two-thirds of the largest housing markets in the US, according to the Real Estate Market Report released by Zillow for July.

Seattle, Tampa, Fla., Sacramento, Calif., and Portland, Ore., recorded the greatest home-value growth slowdowns in July.

After leading the US in home-value growth in the year-ago period, Seattle reported the greatest slowdown over the past year and is now only the 12th fastest-appreciating housing market. The city’s home values had a 14% annual appreciation rate at this time last year, but they have since slowed down to 9%.

Despite the local slowdowns, national home value growth has not slowed yet, with US home values rising 8% in the past year. The median home value in the US is $218,000, the highest value ever reported. However, Zillow forecasts the annual appreciation rate to drop to 6.8% over the next 12 months.

“The nation’s pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade,” Zillow Senior Economist Aaron Terrazas said. “But despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it’s far too soon to call it a buyer’s market. And in many of the nation’s more affordable areas, aside from the pricey and exclusive San Francisco Bay Area, home value growth has perked up as buyers continue to seek good value for their money. But it’s clear that the winds that have boosted sellers over the past few years are ever-so-slightly starting to shift.”

Although most of the largest markets recorded slowdowns in home-value growth, the current annual appreciation rate is still higher than historical norms in all but four of the markets analyzed. For example, while home-value growth slowed significantly in Tampa, values still increased 10.5% in the past year. Meanwhile, the historic average rate of appreciation is just over 5%.

Source: Mortgage Professional America, Francis Monfort, 8-27-18

Posted on August 28, 2018 at 4:10 pm
Beverly & Doug Moser | Posted in Uncategorized |

Housing market slowdown worries are unfounded, expert says

A decade after the financial crisis and the housing meltdown, worries that the housing market is headed for another significant downturn are unfounded, according to the chief economist for the National Association of Realtors.

The housing market has essentially recovered from the financial crisis, with mortgage default and foreclosure rates near record lows, Lawrence Yun said. He said that he believed some of the nation’s most overheated real estate markets will see sales slow this year – as many already have – but stressed that those slowdowns were due to low inventory and rising prices, not weak demand. However, Yun did warn that home prices in many areas were rising at an unsustainable rate.

“Over the past 10 years, prudent policy reforms and consumer protections have strengthened lending standards and eliminated loose credit, as evidenced by the higher-than-normal credit scores of those who are able to obtain a mortgage and near record-low defaults and foreclosures, which contributed to the last recession,” Yun said. “Today, even as mortgage rates begin to increase and home sales decline in some markets, the most significant challenges facing the housing market stem from insufficient inventory accompanying unsustainable home-price increases.”

Yun cited strangled inventory as the main issue in the housing market right now. Inventory levels have fallen for three consecutive years, according to NAR.

“The answer is to encourage builders to increase supply, and there is a good probability for solid home-sales growth once the supply issue is addressed,” he said. “Additional inventory will also help contain rapid home-price growth and open up the market to prospective homebuyers who are consequently – and increasingly – being priced out. In the end, slower price growth is healthier price growth.”

Yun anticipated a rise in inventory and moderate price growth in 2019, according to NAR. He projected that existing-home sales would rise 2% in 2019, while home prices would rise by 3.5%.

Source: Mortgage Professional America, Ryan Smith, 8-27-18

Posted on August 28, 2018 at 4:03 pm
Beverly & Doug Moser | Posted in Uncategorized |

What Does The Recent Rash Of Price Reductions Mean To The Real Estate Market?

Last week, in a new report from Zillow, it was revealed that there has been a rash of price reductions across the country. According to the report:

  • There are more price cuts now than a year ago in over two-thirds of the nation’s largest metros
  • About 14% of all listings had a price cut in June
  • Since the beginning of the year, the share of listings with a price cut increased 1.2%
  • This is the greatest January-to-June increase ever reported, and more than double the January-to-June increase last year

Senior Economist Aaron Terrazas further explained:

“A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsized price gains in recent years.”

What this DOESN’T MEAN for the real estate market…

This doesn’t mean home values have depreciated or are about to depreciate.

A seller may put a home worth $300,000 on the market for $325,000 hoping a bidding war will occur and an overanxious buyer will pay more than its actual value. That has happened often over the last few years. If the seller gets no offers and reduces the price to $300,000, it doesn’t mean the home dropped in value. It is still worth $300,000.

Home prices will continue to appreciate over the next 12 months. In this same report, Terrazas remarks:

“It’s far too soon to call this a buyer’s market, home values are still expected to appreciate at double their historic rate over the next 12 months, but the frenetic pace of the housing market over the past few years is starting to return toward a more normal trend.”

What this DOES MEAN for the real estate market…

This does mean that sellers should be more conservative when it comes to the price at which they list their homes – especially sellers in the upper end of each market.

Sellers have been listing their homes at inflated prices hoping a super-hot market will deliver a buyer willing to pay virtually any price to ensure they don’t lose the house. That strategy has worked somewhat successfully over the last two years. However, the time that strategy would have worked may have passed.

Again, quoting Aaron Terrazas in the report:

“The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly.”

Bottom Line

Prices are not depreciating. However, if you want to sell your house quickly and with the least amount of hassles, pricing it correctly from the beginning makes the most sense.

Source: Keeping Current Matters, 8-23-18

Posted on August 23, 2018 at 9:07 pm
Beverly & Doug Moser | Posted in Uncategorized |

Lack Of Listings Slowing Down The Market

As the real estate market continues to move down the road to a complete recovery, we see home values and home sales increasing while distressed sales (foreclosures and short sales) continue to fall to their lowest points in years. There is no doubt that the housing market will continue to strengthen throughout 2018.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory!

Here’s what a few industry experts have to say about the current inventory crisis:

Lawrence Yun, Chief Economist for the National Association of Realtors

“Inventory coming onto the market during this year’s spring buying season…was not even close to being enough to satisfy demand, that is why home prices keep outpacing incomes and listings are going under contract in less than a month – and much faster – in many parts of the country.”

Sam Khater, Chief Economist for Freddie Mac

“While this spring’s sudden rise in mortgage rates [took] up a good chunk of the conversation, it’s the stubbornly low inventory levels in much of the country that are preventing sales from really taking off like they should… Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.”

Alexandra Lee, Housing Data Analyst for Trulia

This seasonal inventory jump wasn’t enough to offset the historical year-over-year downward trend that has continued over 14 consecutive quarters…Despite the second-quarter gain, inventory was down 5.3% from a year ago. Still, this represents an easing of the double-digit drops we’ve been seeing since the second quarter of 2017.”

Bottom Line

If you are thinking about selling, now may be the time. Demand for your house will be strongest while there is still very little competition which could lead to a quick sale for a great price.

Source: Keeping Current Matters, 7-23-18

Posted on July 23, 2018 at 7:30 pm
Beverly & Doug Moser | Posted in Uncategorized |

Homes More Affordable Today Than 1985-2000

Rising home prices have many concerned that the average family will no longer be able to afford the most precious piece of the American Dream – their own home.

However, it is not just the price of a home that determines its affordability. The monthly cost of a home is determined by the price and the interest rate on the mortgage used to purchase it.

Today, mortgage interest rates stand at about 4.5%. The average annual mortgage interest rate from 1985 to 2000 was almost double that number, at 8.92%. When comparing affordability of homeownership over the decades, we must also realize that incomes have increased.

This is why most indexes use the percentage of median income required to make monthly mortgage payments on a typical home as the point of comparison.

Zillow recently released a report comparing home affordability over the decades using this formula. The report revealed that, though homes are less affordable this year than last year, they are more affordable today (17.1%) than they were between 1985-2000 (21%). Additionally, homes are more affordable now than at the peak of the housing bubble in 2006 (25.4%). Here is a chart of these findings:

Homes More Affordable Today than 1985-2000 | Keeping Current Matters

What will happen when mortgage interest rates rise?

Most experts think that the mortgage interest rate will increase to about 5% by year’s end. How will that impact affordability? Zillow also covered this in their report:

Homes More Affordable Today than 1985-2000 | Keeping Current Matters

Rates would need to approach 6% before homes became less affordable than they had been historically.

Bottom Line

Though homes are less affordable today than they were last year, they are still a great purchase while interest rates are below the 6% mark.

Source: Keeping Current Matters, 7-5-18

Posted on July 10, 2018 at 7:46 pm
Beverly & Doug Moser | Posted in Uncategorized |

Portland Business Journal’s Ranking of Residential Real Estate Firms

Posted on June 14, 2018 at 11:50 pm
Beverly & Doug Moser | Posted in Uncategorized |

Moving Up To Your Dream Home? Don’t Wait!

Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values will fall. History, however, has shown this not to be true.

Where are home values today compared to the beginning of the year?

While rates have been rising, so have home values. Here are the most recent monthly price increases reported in the Home Price Insights Report from CoreLogic:

  • January: Prices were up 0.5% over the month before.
  • February: Prices were up 1% over the month before.
  • March: Prices were up 1.4% over the month before.

Not only did prices continue to appreciate, the level of appreciation accelerated over the first quarter. CoreLogic believes that home prices will increase by 5.2% over the next twelve months.

How can prices rise while mortgage rates increase?

Freddie Mac explained in a recent Insight Report:

“In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

Bottom Line

If you are thinking about moving up to your dream home, waiting until later this year and hoping for prices to fall may not be a good strategy.

Source: Keeping Current Matters, 5-17-18

Posted on May 17, 2018 at 5:54 pm
Beverly & Doug Moser | Posted in Uncategorized |