A new survey by the National Association of Realtors® found that a majority of renters say homeownership is one of their highest priorities for the future and they are thinking more about purchasing a home now than in past years. Given that information, it shouldn’t come as a surprise that the survey also found that Americans overwhelmingly believe owning a home is a good financial decision.
“Renters are increasingly recognizing the benefits of homeownership,” said Donald Byrd, President of the Johnston County Association of Realtors. “In addition to its many social benefits - such as providing a stable, safe environment - the financial benefits of owning a home are even more apparent to renters now. In some areas of the country it’s cheaper to own a home than it is to rent. Homeownership also is one of the best ways to build financial security over the long term. In most cases, the benefits of homeownership far outweigh the benefits of renting.”
The 2013 National Housing Pulse Survey, which measures consumers’ attitudes and concerns about housing opportunities, found that Americans’ outlook on the housing market is improving. Nearly four in 10 Americans (38 percent) identified an increase in activity within their local housing market in the past year, compared to just 22 percent who reported a slowdown in activity. Respondents were also less concerned than in the past about the drop in home values and foreclosures.
The survey also found that more than two-thirds of those surveyed said now is a good time to buy. The Johnston County Association of Realtors believes that despite a recent rise in mortgage rates and lower home inventory levels, affordability conditions remain favorable for buyers.
“It’s a seller’s market in many areas of the country,” said Byrd. “However, that doesn’t mean there aren’t still opportunities for buyers. Home prices are still very affordable for the typical buyer. Buyer traffic is also up from this time last year, so it’s evident that people want to be homeowners.”
JCAR has a few tips for renters or move up buyers looking for a new place to call home. First, know your credit history and understand how the credit system works. Next, do your research. Home inventories are low in many areas and sellers are receiving multiple bids, so it’s imperative to be ready to make an offer when you see a home you like. Then, identify neighborhoods that you like and think about what you need and want in a home.
“Most importantly, contact a Realtor® in your area,” said Byrd. “Realtors® are the most trusted resource for real estate information and can give buyers the advantage they need in today’s market.”
The Johnston County Association of REALTORS® is sponsoring continuing education classes for brokers and agents on May 1, 2013. If anyone still needs CE hours for his or her license, the class is open not only to REALTORS®, but also non- REALTORS®. George Bell will be teaching both courses, and the elective will discuss Real Estate Commission hot topics. The classes will be held in Smithfield at the Medical Mall Auditorium located at 514 North Brightleaf Boulevard. The mandatory update class begins promptly at 9:00 am, and the elective course begins at 2:00 pm.
Members can register online at www.jcrealtors.org. Non-members can call 919-989-9797.
Being a homeowner requires responsibility. Owning a home comes with yard work, repairs, insurance and of course, figuring out your taxes. With tax season in full swing now is a good time to review what tax benefits are available to homeowners.
“If you’re not already aware, a Realtor® can tell you about the significant savings that comes with owning a home,” said Donald Byrd, President of the Johnston County Association of REALTORS®. “Especially now when many families are struggling financially and the economy is still recovering, the tax benefits that come along with being a homeowner are a welcome relief to many. Owning a home is one of the best ways to build financial security over the long term, providing both equity accumulation and tax benefits over time.”
One of the most notable tax benefits associated with homeownership is the mortgage interest deduction. The MID allows homeowners to deduct the interest paid on a mortgage debt of up to $1 million on a primary residence and one additional residence.
“The ability to deduct the interest paid on a mortgage can mean significant savings at tax time,” said Byrd. “For people who don’t have hundreds of thousands of dollars in savings to buy a home outright, tax benefits like the MID help them begin building their future through homeownership.”
Another tax benefit allows sellers to exclude certain capital gains from the sale of a principle residence. Couples who file a joint federal return can exclude from taxation up to $500,000 of any gain in their home’s value. Singles can exclude gains of up to $250,000.
The American Taxpayer Relief Act of 2012, which was signed into law in January 2013, also extended two important tax incentives for homeowners, which had expired. One is the deduction for mortgage insurance premiums. Homeowners with incomes of no more than $100,000 can deduct their mortgage insurance premiums if they were required to obtain insurance as a condition of receiving financing for the home.
The other provision is a credit of up to $500 for making certain improvements that increase a home’s energy efficiency. The tax credit included costs related to buying and installing certain products such as a new water heater, central air conditioner, insulation, windows or roof.
“Homeownership is an investment in your future,” said Byrd. “It provides social benefits, strengthens communities and offers homeowners financial stability. These tax breaks are just one of many benefits to being a homeowner.”
To learn more on homeownership and tax tips visit www.houselogic.com
According to a recent survey, more and more renters aspire to become homeowners. Data shows that nearly sixty percent of current renters plan to purchase a home in the next two years.
The survey also revealed key motivations behind the respondents’ plans for home ownership. Forty-nine per cent simply want the chance to call themselves homeowners, and forty-four per cent view owning a home as a good
financial investment while thirty-six per cent need more space for their family and/or children
On February 23rd, the Johnston County Association of REALTORS® is hosting a Home Ownership Expo at Johnston
Community College in the Paul A Johnson Auditorium from 10am-4pm. This event is free to the public. The purpose of the expo is to educate the public on the benefits of home ownership and affordability in today's market. The expo
will be used to stimulate home sales through educating the public as to the local housing options in regards to availability and affordability including the benefits of home ownership.
At the Expo, you can talk to Realtors®, builders, mortgage lenders, home inspectors, carpet-flooring representatives, cabinet-counter top representatives, landscapers, and interior designers. There will be associates with many products related to home ownership as well as individuals throughout the day speaking on pertinent home ownership information. In addition to many resources, one can enjoy food, cash prizes, and giveaways at the Home Ownership Expo.
Over the past year the U.S. housing market has made significant strides. A look ahead, however, shows a number of regulatory issues left unresolved that could potentially harm the industry in 2013.
Several regulations on the horizon stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act could affect housing, mortgage finance, and homeownership. In addition, the question of how to reform Fannie Mae and Freddie Mac still remains unclear. As the leading advocate for homeownership, Realtors® want to make sure these changes will not harm the progress already experienced in the housing market or make mortgage lending more challenging.
One regulation that stems from Dodd-Frank is Qualified Mortgage. This regulation requires that no lender make a mortgage loan without making a reasonable and good faith determination that the borrower has the ability to repay the loan. The full rule for QM has not been determined yet, but depending on the definition, this regulation could reduce many consumers’ access to credit. The National Association of Realtors® supports a definition of QM that establishes strong consumer protections, promotes mortgage liquidity, and offers lenders a safe harbor to reduce litigation.
“Dodd-Frank was created to address abuses in the industry. While Realtors® recognize the need for additional regulation, regulators must avoid adopting unrealistic requirements that will affect homeowners and potential buyers, as well as do harm to the recovering housing market,” said Donald Byrd, President of the Johnston County Association of REALTORS®.
What potentially could be another burdensome regulation is the Qualified Residential Mortgage. This requires that financial institutions retain 5 percent of the risk on loans they securitize. Exempt from the requirement are mortgages that meet the QRM definition, as well as FHA and VA mortgages. Currently, the proposed rule narrowly defines QRMs as requiring an 80 percent loan-to-value, which would require a 20 percent down payment. The rule would also limit mortgage payments to 28 percent of gross income – a very tight standard, according to Realtors®.
“The definition of QRM is important because it will determine the types of mortgages that will be available to borrowers in the future,” said Byrd. “NAR firmly believes Congress intended to create a broad QRM exemption - strong evidence shows that responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk, and not high down payments.”
GSE reform is also likely to come up this year. Fannie Mae and Freddie Mac were placed under conservatorship by the Federal Housing Finance Agency in September 2008 and the debate continues over how to reform them. A number of comprehensive plans have been introduced to the public, as well as comprehensive legislation aimed at reforming the secondary mortgage market. Currently, there is no proverbial favorite, and discussion surrounding the GSEs is expected to continue through 2013.
NAR supports a comprehensive GSE reform strategy. Realtors® believe the new system must involve some government presence to ensure a continual flow of capital at all times and in all markets. Also, the secondary mortgage market model must ensure that mortgages are affordable and always available to creditworthy buyers, require sound underwriting standards, and provide for rigorous oversight.
“Issues like affordable financing and available credit doesn’t just affect people who own a home – homeownership shapes communities and strengthens the nation’s economy,” said Byrd. “We need to ensure that any regulations and reforms do not jeopardize a housing recovery and ensure the dream of homeownership is available to all Americans.”
In an effort to find sources of revenue to avoid the looming “fiscal cliff,” Congress and the White House are deep in debate over limits on a broad array of deductions for taxpayers. One of these is the mortgage interest deduction, a tax break that Realtors® say is vital to the stability of the American housing market and economy.
Specific legislation capping or eliminating the MID has not been proposed, however some have speculated that it could be on the table as public policy makers in Washington look for ways to address the U.S. budget deficit.
The National Association of Realtors® will not speculate on any hypothetical scenarios, but has always been a long-standing supporter of the MID. “Until Congress introduces specific legislation, there’s nothing to say about any proposed changes to the mortgage interest deduction,” said 2013 NAR President Gary Thomas. “We will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest.”
If a deal is not reached, many believe a “fiscal cliff” could have severe damages on the economy and may result in another recession. Realtors® believe this could in turn have a significant effect on the recovering housing market.
“The housing market is still healing,” said Donald Byrd, President of the Johnston County Association of REALTORS® “We’ve made some progress, but the market is continuing to recover. Another recession could severely impact the growth we’ve experienced to date. The debate over limiting deductions is an important one, but the MID should not be part of it. Too many Americans rely on this crucial tax break.”
Johnston County Association of REALTORS® points out the MID facilitates homeownership by reducing the carrying costs of owning a home. It also benefits primarily middle- and lower income families. Sixty-five percent of families who claim the MID earn less than $100,000 per year. In addition, American homeowners already pay 80 to 90 percent of U.S. federal income tax, and this share would rise if the MID were eliminated or reduced.
“Changes to this important homeownership benefit would destroy the wealth accumulation of millions of hardworking middle-class families and the dreams they’ve worked hard to achieve such as college, retirement or starting a small business,” said Byrd. “The ability to deduct the interest paid on a mortgage can mean significant savings for many families in this country. Tampering with the MID could tip the economy into another recession resulting in further job losses for the country, and could effectively close the door on the American dream. Realtors® will fight hard to keep that door open for current and future generations of Americans.”
On Tuesday, November 20th, the Johnston County Association of REALTORS® hosted their annual Awards and Installation Luncheon in Smithfield. Each year REALTORS® are recognized for their dedication and service to the association members and the community. This is also the time of year that the 2013 board is inducted into service for a 1 year term. Our 2 term outgoing President Denise Pilkington with Century 21 Suburban presented various awards before handing over the gavel to the incoming 2013 President Donald Byrd with Carolina Realty. Raleigh REALTORS® Association REALTOR® Of The Year Wendell Bullard was on hand for the ceremonies.
Recognition was given to the following members:
President's Service Award: Membership Committee chaired by Allyson Caison, Century 21 Suburban
Affiliate Partner Of The Year: Kathryn Youngs, Wells Fargo Mortgage
President's Award: Donald Millard, Carolina Realty
REALTOR® Of The Year: Tracy Riba, Carolina Realty
Hurricane Sandy’s destruction left hundreds of thousands of homes and businesses destroyed along the east coast, leaving many Americans without a place to call home. While the full impact of Sandy won’t be known for weeks or months, there are a few things we can count on.
While Sandy has left significant impact on individual homeowners, she is not expected to affect overarching trends in the real estate market. According to the National Association of Realtors®, temporary disruptions in sales closings from major weather events will sometimes cause a dip in monthly regional sales but are usually followed by a bounce over the next few months with no impact to underlying demand.
The Johnston County Association of REALTORS® uses another devastating hurricane as an example, Hurricane Katrina in 2005. “After Katrina there was a surge in sales in areas that survived serious damage,” said Denise Pilkington, President. “People who lost their homes to the hurricane relocated and sales in unaffected areas rose above expected levels.”
Another thing we can predict as a result of this devastation is that the mid-Atlantic will likely see a boost in home construction, as well as jobs. “The need to rebuild businesses and homes will create jobs, thus making the impacted regions stronger,” said Pilkington. “And rebuilding communities is something Realtors® are very familiar with.”
For more than 11 years the Realtor® Relief Foundation has provided housing-related assistance to victims of natural disasters and is now working with state Realtor® associations in affected areas to distribute funds as quickly as possible.
“Realtors® help build and maintain communities and it’s only natural that we come together when so many communities are in need right now,” said Pilkington. “Donations from Realtors® across the country will go to those affected by Hurricane Sandy and will help rebuild thousands of homes along the East Coast.”
Formed in response to September 11, 2001, the foundation has assisted with more than 30 disasters and provided more than $22 million in emergency housing assistance. One hundred percent of the money donated by Realtors® goes directly to help the victims of natural disasters.
“When natural disasters strike and we see individuals and families losing their homes we are reminded that homeownership really does matter,” said Pilkington. “Realtors® are helping those who have lost their homes get back on their feet and rebuild a stronger community and place to call home.”
For more information about the Realtor® Relief Foundation, visit www.realtor.org/programs/realtors-relief-foundation