A Guide to Property Taxes in 2021: States With the Highest (and Lowest) Rates

With tax season upon us, it seems like a good time to check what homeowners pay in property taxes—and a new survey confirms that where you live makes a huge difference in how much you’ll have to cough up.

According to researchers at WalletHub, which analyzed tax data on all 50 states and the District of Columbia, the average American household pays $2,471 on real estate property taxes. But that can vary widely. And just in case you thought the country wasn’t polarized enough already, political leanings can often be an indicator of state tax rates: “Blue states” (defined by WalletHub as how they voted in the 2020 presidential election) generally pay higher property taxes than “red states.”

As for the state with the highest property tax rate, that’s New Jersey, where residents pay a rate of 2.49%, which means that people living in a median-priced home in the area ($335,600) will pay Uncle Sam $8,362 in property tax per year.

In fact, the five states with the highest tax rates are all east of the Mississippi.

Meanwhile, people in Hawaii are blessed with the lowest real estate tax rate of 0.28%. So even though a median-priced home in the area is expensive ($615,300), homeowners end up paying only $1,715 in taxes per year. In Alabama, the state with the second-lowest tax rate (0.41%) as well as bargain-basement median home prices ($142,700), you’ll pay even lower property taxes of just $587 per year.

Curious how your state stacks up? Below are the top 10 states with the highest—and lowest—property taxes:

States with the highest property taxes

  1. New Jersey: $8,362 (2.49%)
  2. Illinois: $4,419 (2.27%)
  3. New Hampshire: $5,701 ( 2.18%)
  4. Connecticut: $5,898 (2.14%)
  5. Vermont: $4,329 (1.90%)
  6. Wisconsin: $3,344 (1.85%)
  7. Texas: $3,099 (1.80%)
  8. Nebraska: $2,689 (1.73%)
  9. New York: $5,407 (1.72%)
  10. Rhode Island: $4,272 (1.63%)

States with the lowest property taxes

  1. Hawaii: $1,715 (0.28%)
  2. Alabama: $587 (0.41%)
  3. Colorado: $1,756 (0.51%)
  4. Louisiana: $890 (0.55%)
  5. District of Columbia: $3,378 (0.56%)
  6. South Carolina: $924 (0.57%)
  7. Delaware: $1,431 (0.57%)
  8. West Virginia: $698 (0.58%)
  9. Nevada: $1,614 (0.60%)
  10. Wyoming: $1,337 (0.61%)

Why are my property taxes so high—or low?

While property taxes may be high in some states, lower home prices may offset this tax burden. For example, Illinois—which has the second-highest tax rate, at 2.27%—has a low median home price of only $194,500, resulting in annual property taxes hovering around $4,419. That’s less than you’d pay in other states with lower tax rates (like New Hampshire and Connecticut).

So what can you do if you live in a state with high tax rates and high home prices?

“Unfortunately, living in the Northeast has become a very expensive proposition if you want to own properties,” says Ralph DiBugnara, president of Home Qualified and senior vice president at Cardinal Financial. “But homeowners should be aware of what they can write off when it comes to homeownership, especially in these high-tax areas.”

In other words, in high-tax-rate states with pricy properties, the good news is that you are allowed to write off (or deduct) up to $10,000 of your property taxes. Just remember that this may not cover all of your property taxes; it depends on how much your home is worth.

“If your home is worth $500,000 or below, you should be able to write off all of your property taxes,” says DiBugnara. “But if your home value is above $500,000 and in a state with tax rates around 2%, most of the time this is not enough of a write-off to cover all of your property taxes.”

This problem is typical in Northeast states. Still, any write-off is better than none, right?

To help with your overall tax bill, you can also write off mortgage interest as a tax deduction for a balance of up to $750,000. And if you buy or sell a home in a tax year, in most cases you will be able to write off transfer taxes—local or state taxes charged in any real estate transaction.

Green energy sources for homes that are powered by solar are also tax-deductible. You also have the right to appeal the amount of your property taxes if you think the assessed value of your home is too high.

Also weigh what your property taxes go toward when deciding where you want to live.

“People should definitely consider property taxes when they move, alongside information about the local services that those property taxes pay for,” says Stephanie Leiser, lecturer in public policy at the Ford School at the University of Michigan. “They should consider the ‘value for the dollar’ they would get from paying property taxes.”

For example, in some communities, services like trash pickup will be covered by property taxes, while in others, there will be a separate fee.

“It’s also important to keep the overall tax picture in mind when deciding where to move,” adds Leiser. “Low property taxes may sound great, but they may be offset by higher local sales taxes or other taxes and fees.”

Source: realtor.com

Years of Work Needed to Afford a Down Payment – 2021 Edition

Years of Work Needed to Afford a Down Payment – 2021 Edition – SmartAsset

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Assembling enough money for a down payment is typically the largest hurdle to clear when securing a mortgage. The median home price in the U.S. is up 14% year-over-year, according to a November 2020 Redfin report, and as the housing market gets more expensive, so too will the deposit that you have to front for a home. Working with professional financial advisors can help you strategize so that your money’s doing the most for you, but in some places compared to others, scraping together that bundle of cash can be particularly daunting. Keeping all this in mind, SmartAsset investigated where it takes longest to save for a down payment.

To do this, we examined data on the 50 largest U.S. cities, using median home values, median income figures and assuming that workers would save 20% of their income each year. We calculated the years needed to save for both the recommended 20% down payment as well a 12% down payment (the median down payment among all homebuyers in 2019, according to the National Association of Realtors). For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

This is SmartAsset’s fifth look at how many years of work it takes to afford a down payment. You can read the 2020 edition here.

Key Findings

  • Oakland takes over in the Bay. In the last three editions of this study, San Francisco homeowners have always needed to work longer than Oakland homeowners to afford a down payment. This year, however, Oakland has surpassed San Francisco and moved to the No. 2 spot, bumping the Golden Gate City to No. 3. San Francisco real estate is still pricier – with a median home value of more than $1.2 million – but the differences in average income make Oakland second only to Los Angeles on our list.
  • It still takes less time in Midwestern and Southern cities to assemble funds for a down payment. Residents in the East Coast and West Coast cities that comprise our top 10 will need more than three times longer to save up for a down payment than residents in the Midwestern and Southern cities that comprise the bottom 10. To save up for a 20% down payment, those in the top 10 will need to work an average of 8.90 years, compared to only 2.83 years in the bottom 10. For a 12% down payment, it will take 5.34 years for residents in the top 10 cities to reach their home buying goals, while it will take 1.70 years for residents in the bottom 10 to do so.

1. Los Angeles, CA

It will take residents in Los Angeles, California the longest to save for a down payment. The median home value is $697,200, which means that they will need to save $139,440 for a 20% down payment. If a person earns the median household income of $67,418 and saves 20% of that each year, then he or she will need to work 10.34 years to have enough money to afford a down payment.

2. Oakland, CA

In Oakland, California where the median home costs $807,600, a 20% down payment equals $161,520. The median household income here is $82,018, so a person saving 20% annually will need to work for 9.85 years to afford a down payment. For comparison, saving up a 12% down payment of $96,912 will require 5.91 years, but this means having to pay significantly higher mortgage payments.

3. San Francisco, CA

The median home value in San Francisco, California is $1,217,500 – the only city in our study with a seven-figure price tag. A 20% down payment on that median value would cost $243,500. With a median household income of $123,859, the average person saving 20% annually could afford a down payment in 9.83 years.

4. New York, NY

In the Big Apple, homeowners will need 9.81 years to make a 20% down payment on a home. The median home value is $680,800, which means a 20% down payment is $136,160. And for a comparison, a New Yorker saving 20% annually at a median household income of $69,407 will need 5.89 years to save for a 12% down payment of $81,696.

5. Long Beach, CA

Long Beach, California has a median home value of $614,400. To buy the median house with a 20% down payment, the average resident will need $122,880. If you earn the median income of $67,804 and save 20% of your income each year, then you will be able to afford a down payment in 9.06 years.

6. San Jose, CA

San Jose, California is in the heart of Silicon Valley, and as you might expect, the median home value is fairly high – at $999,990. A 20% payment on that home value is $199,980. The median household income in the city is $115,893, so if a resident saves 20% of his or her income each year, then the person could afford a down payment in 8.63 years.

7. Miami, FL

Miami, Florida is the only Southeastern city in the top 10 of our study. The median home value is $358,500, which means that a 20% down payment costs $71,700. The median income in Miami, however, is $42,966. So a resident saving 20% of that median household income ($8,593) each year could afford a 20% down payment in 8.34 years.

8. Boston, MA

It takes someone saving 20% of the median household income in Boston, Massachusetts 7.93 years of work to afford a 20% down payment on a home. The median home value is $627,000, with a 20% down payment coming to $125,400. The median household income in Boston is $79,018.

9. San Diego, CA

The median home value in San Diego, California is $658,400, which means that a 20% down payment is $131,680. Someone earning the median household income of $85,507 will need 7.70 years to afford that down payment. For comparison, a 12% down payment of $79,008 takes 4.62 years to save up for, with the caveat that paying a smaller down payment now means larger mortgage payments later.

10. Seattle, WA

Seattle, Washington rounds out the top 10 on our list, with a median home value of $767,000. This means that a 20% down payment is $153,400. So if you earn the median household income of $102,486, then it will take you 7.48 years – saving 20% of your income each year – to afford that payment.

Data and Methodology

To rank the cities where the average household would need to save the longest to afford a down payment, we analyzed data on the 50 largest U.S. cities. We specifically considered two pieces of data:

  • 2019 median home value.
  • 2019 median household income.

Data for both factors comes from the Census Bureau’s 2019 1-year American Community Survey.

We started by determining the annual savings for households by assuming they would save 20% of the median annual pre-tax income. Next, we determined how much a 20% down payment as well as a 12% down payment for the median home in each city would cost. Then, we divided each of the estimated down payments in each city by the estimated annual savings. The result was the estimated number of years of saving needed to afford each down payment, assuming zero savings to begin with. Finally, we created our final ranking by ordering the cities from the greatest number of years needed to the least number of years needed for each.

Tips for Hassle-Free Home Buying

  • Consider investing in expert advice. If you’re thinking of buying a home or starting to save, consider working with a financial advisor before you take the plunge. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors, get started now.
  • Prevent potential mortgage mishaps. The payments don’t stop after you’ve put money down; you’ll also need to make mortgage payments. Figure out what those might be before you move forward by using SmartAsset’s mortgage calculator.
  • It pays to read the fine print. When thinking about your home buying transaction, don’t forget closing costs. These may seem small compared to the down payment, but every dollar counts.

Questions about our study? Contact press@smartasset.com. 

Photo credit: ©iStock.com/valentinrussanov

Ben Geier, CEPF® Ben Geier is an experienced financial writer currently serving as a retirement and investing expert at SmartAsset. His work has appeared on Fortune, Mic.com and CNNMoney. Ben is a graduate of Northwestern University and a part-time student at the City University of New York Graduate Center. He is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance (CEPF®). When he isn’t helping people understand their finances, Ben likes watching hockey, listening to music and experimenting in the kitchen. Originally from Alexandria, VA, he now lives in Brooklyn with his wife.
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Price-to-Rent Ratio in 50 Cities

Better to buy or rent? The price-to-rent ratio helps to gauge affordability in any city, especially for people on the move, and millions of Americans are, thanks in part to a remote-work boom.

The number can be helpful when looking at a certain area and deciding whether to plunk down your life savings into a home—if it’s even within reach—or pay a landlord and wait.

Read on to see the home price-to-rent ratio in 50 of the biggest U.S. cities.

First, What Is the Price-to-Rent Ratio?

The price-to-rent ratio compares the median home price and median annual rent in a given area. (You’ll remember that the median is the midpoint, where half the numbers are lower and half are higher.)

Median home sale price divided by median annual rent equals the ratio.

Let’s say the median rent in a city is $3,000 a month and the median sale price is $1,000,000. The price-to-rent ratio would be nearly 28—$1,000,000 divided by $36,000.

To make sense of that number:

•  A ratio of 1 to 15 typically indicates that it is more favorable to buy than rent in a given community.
•  A ratio of 16 to 20 indicates it is typically better to rent than buy.
•  A ratio of 21 or more indicates it is much better to rent than buy.

The ratios could be useful when considering whether to rent or buy. And investors often look at the ratios before purchasing a rental property.

The number also may be used as an indicator of an impending housing bubble, as a substantial increase in the ratio could mean that renting is becoming a much more attractive option in that specific housing market.

If you’re exploring different areas, it might be a good idea to estimate mortgage payments based on median home prices.

A Snapshot of Real-Life Ratios

Here are 50 (plus one) popular metropolitan areas and their price-to-rent ratios as 2021 began, when the U.S. median home sale price was $346,800, the Federal Reserve Bank of St. Louis reported.

Median sale price listed comes from Redfin as of December 2020. Median rents listed come from a Zumper national rent report from February 2021, based on a one-bedroom apartment.

Remember, as home prices and rents shift over time, so do the ratios.

San Francisco

It’s no secret that San Francisco housing prices are way up there. The median sale price was $1,350,000, and median rent was $2,680 per month (or $32,160 a year). That gives the hilly city a price-to-rent ratio of 42.

A snug studio at, say, $2,000 a month yields a ratio of 56.

San Jose, Calif.

Golden State housing continues its pricey rep. The median sale price in San Jose was $1,050,000, and the city had median rent of $25,560 yearly ($2,130 a month), leading to a price-to-rent ratio of 41.

Seattle

The Emerald City had a median sale price of $725,000 and median annual rent of $20,388, for a price-to-rent ratio of close to 39.

Los Angeles

A median sale price of $831,000 and median one-bedroom rent of $23,280 a year ($1,940 a month) shines a Hollywood light on renting, with a ratio of 36.

Long Beach, Calif.

With a median home price of $675,000 and rent of $1,600 a month, Long Beach earned a ratio of 35.

Santa Ana and Anaheim, just north of Santa Ana, were in the same league, with ratios of 33 and 34.

Honolulu

The ratio in the capital of Hawaii is a steamy 35, with a $620,000 median sale price and median rent of $17,520.

Oakland, Calif.

Oakland, across the bay from San Francisco, had a median sale price of $785,000 and median rent of $24,000 a year ($2,000 a month), earning a price-to-rent ratio of close to 33.

Austin, Texas

A hotbed for artists, musicians, and techies, Austin had a price-to-rent ratio of 33, thanks to a median sale price of $475,000 and median annual rent of $14,400.

San Diego

Hop back to Southern California beaches and “America’s Finest City,” where a median sale price of $690,000 and median rent of $21,600 led to a ratio of 32.

New York, NY

The median sale price here was $725,000 and median rent was $28,200 a year ($2,350 a month), which equates to a price-to-rent ratio of nearly 26.

Of course the city is composed of five boroughs, the Bronx, Brooklyn, Manhattan, Queens, and Staten Island, and it’s probable that most of the sales under $725,000 were not in Manhattan (where the median was $1.18 million) or Brooklyn (where the median was $915,000).

Just looking at Manhattan, even with rents falling to under $3,000 a month, the ratio looks more like 34 or 35.

Boston

With a median sale price of $702,000 and median rent of $24,240 a year, Beantown had a price-to-rent ratio of 29.

Portland, Ore.

The midpoint of buying here of late was $485,000, compared with median rent of $16,800, for a price-to-rent ratio of 29.

Tucson, Ariz.

In Tucson, the median sale price of $251,000 and median annual rent of $8,760 rounded up to a ratio of 29.

Denver

The Mile High City logged a renter-leaning ratio of 28, thanks to a median sale price of $476,000 and median annual rent cost of $16,800.

Colorado Springs, Colo.

With a median sale price of $366,000 and annual rent of $13,080, this city at the eastern foot of the Rocky Mountains had a recent price-to-rent ratio of 28.

Albuquerque, N.M.

In the Southwest, Albuquerque heated up to a ratio of 28, based on a median home sale price of $250,000 and rent of $8,880.

Washington, D.C.

The nation’s capital is another pushpin on the map with a high cost of living. The median sale price of $640,650 compares with median rent of $23,520 annually ($1,960 a month), translating to a ratio of 27.

Mesa, Ariz.

With a median sale price of $325,000 and median rent of $12,240, Mesa slithers to a price-to-rent ratio of nearly 27.

Las Vegas

Sin City has reached a ratio of 26, based on a $314,900 median sale price vs. $12,000 in rent.

Phoenix

Phoenix’s price-to-rent ratio has revved up to 26, with a median home sale price of $320,000 and $12,120 in rent.

Raleigh, N.C.

The North Carolina capital, the City of Oaks, logs a ratio of 25, based on a $320,000 median home sale price and median rent of $12,600.

Tulsa, Okla.

Tulsa had a price-to-rent ratio of 25, with low median rent of $7,680 but home sale prices ticking up to a median of $192,000.

Dallas

This sprawling city had a recent median sale price of $374,000 and median annual rent of $14,640, leading to a price-to-rent ratio of 25.5.

Sacramento, Calif.

This Northern California city had a recent median sale price of $402,000 and rent of $16,800, for a price-to-rent ratio of 24.

Fresno, Calif.

Fresno makes the list with a price-to-rent ratio of nearly 23, based on figures of $300,000 and $13,200.

Oklahoma City

The capital of Oklahoma had one of the lower price-to-rent ratios until recent home price spikes. It logs a ratio of 23 lately, based on figures of $215,000 and $9,240.

Arlington, Texas

Back to the Lone Star State, this city between Fort Worth and Dallas, with median figures of $250,000 and $11,400, had a ratio of 22.

San Antonio

This Texas city southwest of Austin had a median sale price of $244,000 and median annual rent of $11,280, resulting in a price-to-rent ratio near 22.

El Paso, Texas

El Paso traded a low price-to-rent ratio for a higher one when home prices rose. It’s at a 22, based on recent figures of $187,000 and $8,520.

Omaha, Neb.

With a median sale price of $206,750 and median annual rent of $9,600, Omaha had a recent home price-to-rent ratio of 21.5.

Nashville, Tenn.

The first Tennessee city on this list is the Music City, with a ratio of 21.

Virginia Beach, Va.

The ratio here has reached 21, based on a median home sale price of $290,000 and rent of $13,560.

Tampa, Fla.

This major Sunshine State city had a price-to-rent ratio of 20, based on figures of $290,000 and $14,400.

Jacksonville, Fla.

This east coast Florida city had a recent ratio of 20, based on a median sale price of $233,000 and rent of $11,640.

Charlotte, N.C.

Charlotte’s price-to-rent ratio of 20 arises from a median home sale price of $295,000 and median annual rent of $14,640.

Fort Worth, Texas

Panther City’s price-to-rent ratio has crept up to 20, based on a home sale price of $262,000 and rent of $12,960.

Houston

Houston, we have a number. It’s 20. That’s based on a median sale price of $269,000 and median annual rent of $13,200.

Louisville, Ky.

Despite having a different median sale price ($205,000) and rent ($10,440), Louisville had the same price-to-rent ratio as some bigger cities, at about 20.

Columbus, Ohio

The only Ohio city on this list had a price-to-rent ratio of 20, due to a median sale price of $208,000 and median annual rent of $10,320.

Atlanta

Heading South, Atlanta had a median sale price of $349,450 and median annual rent of $18,480, for a price-to-rent ratio of 19.

Miami

Those looking to put down roots in this vibrant city will find a price-to-rent ratio of a hair under 19, based on $360,000 and $19,200.

Minneapolis

The Mini-Apple is sweeter on renting, with a ratio of 19, based on a median sale price of $295,000 and rent of $15,600.

New Orleans

Next up is another charming Southern city, with a price-to-rent ratio of 18, given a median sale price of $312,500 and median rent of $17,040.

Kansas City, Mo.

In this Show-Me State city, a median home value of $218,000 and median annual rent of $12,000 equate to a price-to-rent ratio of 18.

Chicago

Chi-Town’s 16.5 ratio is based on a $305,000 median home sale price and $18,480 median rent.

Memphis, Tenn.

Memphis logs a ratio of 16, with a median home sale price of $163,000 and median annual rent of $9,960.

Indianapolis

The ratio in this capital city is 16, thanks to a median home sale price of $185,000 and rent of $11,280.

Philadelphia

This major East Coast city had a recent median sale price of $240,000 and median annual rent of $16,200, for a price-to-rent ratio of 15, the number that begins to signal that a place may be more favorable for buying over renting.

Baltimore

Charm City had a recent median home sale price of $198,000 and median rent of $14,160, for a price-to-rent ratio of 14.

Newark, N.J.

Newark, anyone? The median sale price here was $271,000, but median rent spiked to $1,750 a month, leading to a buyer-friendly ratio of 13.

Milwaukee

Milwaukee is more favorable to homebuyers than renters, thanks to a price-to-rent ratio of 11. This Midwest city had a recent median sale price of $155,000 and rent of $14,400.

Detroit

Detroit saw a spike in home sale prices, though the latest median was a relatively low $71,000, compared with median rent of $10,800, for a ratio of 6.5.

The Takeaway

The price-to-rent ratio lends insight into whether a city is more favorable to buyers or renters. Usually in a range of 1 to 21-plus, the ratio is useful to house hunters, renters, and investors who want to get the lay of the land.

If you’re in the market to buy, whether as a primary-home owner or investor, give SoFi mortgage loans a look.

SoFi home loans have competitive rates and no hidden fees. Plus, you may qualify for a loan with well under 20% down.

Interested in a home loan with SoFi? Find your rate in two minutes.



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The 15 Hottest Real Estate Markets of 2020

Despite the current COVID-19 recession and the initial drop in home sales, the national housing market expanded significantly in 2020. According to a report by the Joint Center for Housing Studies of Harvard University, record low home inventories in tandem with historically low mortgage interest rates will most likely ensure home prices continue to rise.

Data from Zillow shows that the national average monthly home value index for 2020 was 4.7 percent higher than in 2019. Yet some housing markets have significantly exceeded this growth. A comprehensive look at state-level data and data from the nation’s 95 largest real estate markets reveals that home prices in the Western U.S. are projected to increase more than in any other region over the next 12 months.

Chart1 Despite COVID 19 home prices have risen to record highs in 2020

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Younger adults, including millennials, drove much of the increase in home sales during 2020, with millennials making up the largest share of home buyers at 38 percent. Higher earners—often less affected by detrimental COVID-19 economic and financial repercussions—also accounted for higher home sales in 2020.

According to statistics from the National Association of Realtors, the median household income of first-time buyers in 2020 was $80,000; the median household income of repeat buyers was $106,700. By comparison, the median household income in 2019 was $68,703. These higher earners also typically work in industries that allow for remote work, which, in conjunction with historically low mortgage rates, incentivizes larger home purchases outside of urban centers.

In addition to strong financial drivers, experts attribute several other factors to the uptick in home buying since the May 2020 trough: delayed purchasing of homes due to the pandemic, an increased need for larger spaces to accommodate parents working from home and children attending school virtually, a departure from multi-family buildings to single-family homes to mitigate exposure to the virus, and an increased ability to attend virtual home tours and close on a purchase virtually.

To find the hottest real estate markets of 2020, researchers at Construction Coverage analyzed data from Zillow on the largest 95 real estate markets in the U.S. They created a composite score of each city based on the following metrics:

  • Previous 1-year change in home price (the percentage by which median home price increased or decreased over the last 12 months)
  • Median price cut (the median percentage by which the final selling price was reduced from the original listing price)
  • Median days on the market (from listing to pending)
  • Projected 1-year change in home price (the percentage by which median home price is expected to increase or decrease over the next 12 months)

At the state level, certain Western states like Idaho, Arizona, Washington, and Utah experienced some of the largest changes in price since 2019, and are also forecasted to see the biggest increases in the coming 12 months. On the contrary, Alaska and parts of the Great Plains region saw limited price growth in 2020, and prices are expected to trail the national average in the months ahead.

Chart2 Home prices in the Western US are projected to increase most in 2021

At the city level, Western locations are also disproportionately represented among the nation’s hottest real estate markets. In these areas, prices are growing quickly, homes are moving off the market fast, and buyers are typically paying very close to asking prices. Here are the 15 hottest real estate markets of 2020.

The Top 15 Hottest Real Estate Markets of 2020

15 Tennessee Memphis KXW7P6

15 Tennessee Memphis KXW7P6
Photo Credit: Alamy Stock Photo

15. Memphis, TN

  • Composite score: 70.75
  • Median home price 2020: $161,066
  • Previous 1-year change in home price: 7.7%
  • Median price cut: 2.3%
  • Median days on the market: 10
  • Projected 1-year change in home price: 5.9%

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14 Texas Austin DJN886

14 Texas Austin DJN886
Photo Credit: Alamy Stock Photo

14. Austin, TX

  • Composite score: 71.25
  • Median home price 2020: $348,838
  • Previous 1-year change in home price: 5.4%
  • Median price cut: 1.8%
  • Median days on the market: 11
  • Projected 1-year change in home price: 6.1%

13 Ohio Columbus KH4JT5

13 Ohio Columbus KH4JT5
Photo Credit: Alamy Stock Photo

13. Columbus, OH

  • Composite score: 74.00
  • Median home price 2020: $218,158
  • Previous 1-year change in home price: 6.6%
  • Median price cut: 2.2%
  • Median days on the market: 7
  • Projected 1-year change in home price: 6.2%

12 California San Diego E18BY4

12 California San Diego E18BY4
Photo Credit: Alamy Stock Photo

12. San Diego, CA

  • Composite score: 74.50
  • Median home price 2020: $620,635
  • Previous 1-year change in home price: 5.8%
  • Median price cut: 2.1%
  • Median days on the market: 15
  • Projected 1-year change in home price: 8.2%

11 North Carolina Charlotte FC0BCK

11 North Carolina Charlotte FC0BCK
Photo Credit: Alamy Stock Photo

11. Charlotte, NC

  • Composite score: 74.75
  • Median home price 2020: $249,275
  • Previous 1-year change in home price: 7.0%
  • Median price cut: 1.9%
  • Median days on the market: 11
  • Projected 1-year change in home price: 6.0%

TRENDING ON CONSTRUCTION COVERAGE

Breaking ground on a new construction project? Make sure to have a builders risk policy with adequate coverage.


10 Florida Tampa EE4CHC

10 Florida Tampa EE4CHC
Photo Credit: Alamy Stock Photo

10. Tampa, FL

  • Composite score: 75.75
  • Median home price 2020: $230,627
  • Previous 1-year change in home price: 6.1%
  • Median price cut: 2.0%
  • Median days on the market: 17
  • Projected 1-year change in home price: 8.1%

09 Washington Seattle TRMHDY

09 Washington Seattle TRMHDY
Photo Credit: Alamy Stock Photo

9. Seattle, WA

  • Composite score: 77.50
  • Median home price 2020: $536,718
  • Previous 1-year change in home price: 7.5%
  • Median price cut: 2.6%
  • Median days on the market: 7
  • Projected 1-year change in home price: 7.7%

08 California Sacramento JANT9C

08 California Sacramento JANT9C
Photo Credit: Alamy Stock Photo

8. Sacramento, CA

  • Composite score: 79.00
  • Median home price 2020: $438,115
  • Previous 1-year change in home price: 5.5%
  • Median price cut: 2.1%
  • Median days on the market: 11
  • Projected 1-year change in home price: 8.8%

07 New Mexico Albuquerque W320RC

07 New Mexico Albuquerque W320RC
Photo Credit: Alamy Stock Photo

7. Albuquerque, NM

  • Composite score: 79.50
  • Median home price 2020: $219,355
  • Previous 1-year change in home price: 8.0%
  • Median price cut: 2.1%
  • Median days on the market: 10
  • Projected 1-year change in home price: 6.4%

06 Utah Provo 2BWAETY

06 Utah Provo 2BWAETY
Photo Credit: Alamy Stock Photo

6. Provo, UT

  • Composite score: 79.50
  • Median home price 2020: $362,479
  • Previous 1-year change in home price: 6.1%
  • Median price cut: 1.6%
  • Median days on the market: 12
  • Projected 1-year change in home price: 6.6%

05 Utah Salt Lake City D44ETX

05 Utah Salt Lake City D44ETX
Photo Credit: Alamy Stock Photo

5. Salt Lake City, UT

  • Composite score: 80.75
  • Median home price 2020: $398,728
  • Previous 1-year change in home price: 6.6%
  • Median price cut: 2.0%
  • Median days on the market: 9
  • Projected 1-year change in home price: 6.3%

04 Arizona Tucson MWRFTC

04 Arizona Tucson MWRFTC
Photo Credit: Alamy Stock Photo

4. Tucson, AZ

  • Composite score: 81.50
  • Median home price 2020: $227,902
  • Previous 1-year change in home price: 8.3%
  • Median price cut: 2.2%
  • Median days on the market: 11
  • Projected 1-year change in home price: 7.6%

03 Utah Ogden HM9DXF

03 Utah Ogden HM9DXF
Photo Credit: Alamy Stock Photo

3. Ogden, UT

  • Composite score: 82.50
  • Median home price 2020: $341,196
  • Previous 1-year change in home price: 8.1%
  • Median price cut: 2.0%
  • Median days on the market: 11
  • Projected 1-year change in home price: 6.7%

02 Arizona Phoenix PAN2Y4

02 Arizona Phoenix PAN2Y4
Photo Credit: Alamy Stock Photo

2. Phoenix, AZ

  • Composite score: 87.00
  • Median home price 2020: $298,322
  • Previous 1-year change in home price: 9.4%
  • Median price cut: 1.6%
  • Median days on the market: 17
  • Projected 1-year change in home price: 8.5%

01 Idaho Boise 2A4ENPE

01 Idaho Boise 2A4ENPE
Photo Credit: Alamy Stock Photo

1. Boise City, ID

  • Composite score: 92.00
  • Median home price 2020: $337,099
  • Previous 1-year change in home price: 11.5%
  • Median price cut: 1.8%
  • Median days on the market: 10
  • Projected 1-year change in home price: 7.8%

Methodology & Detailed Findings

To identify the hottest real estate markets of 2020, researchers at Construction Coverage used data from Zillow to create a composite score based on the following metrics (all weighted equally):

  • Previous 1-year change in home price
  • Median price cut
  • Median days on the market (from listing to pending)
  • Projected 1-year change in home price

Only the 95 largest real estate markets in the U.S. with available data from Zillow were included in the analysis.

Source: constructioncoverage.com

Lessons From Listing Photos: Why This Modest Home Sold in 5 Days and Grew In Value

It doesn’t matter how perfect your home is—if your listing photos don’t stand out, potential buyers won’t come by to take a look. In our series “Lessons From Listing Photos,” we dissect the smart updates sellers have made to their homes, and how their listing pictures highlight the home’s best assets.

All over the country, housing markets go through boom and bust, even in normal times. But during a pandemic, you might expect that real estate would slow down, and that many buyers would hold their ground—and their cash, waiting for a moment with more economic stability.

However, last summer, when COVID-19 cases were surging and social restrictions made house hunting especially challenging in certain areas, home prices hit record highs.

In July 2020, the median home price hit a new all-time high of $349,000, according to realtor.com® data. Why? We chalk it up to a low inventory of homes, historically low mortgage interest rates, and people’s desire to own property in less crowded, less expensive locations.

In the suburban areas of Dallas, as in other suburbs around the country, home prices continued to grow as mortgage rates dropped, and city dwellers began to dream of the beauty of a little space.

That may help explain why this three-bedroom, two-bathroom home just outside the city was such a success when it hit the market in July 2020.

It took a mere five days for a buyer to come calling, and the sellers made a profit of nearly $200,000. They purchased the house in 2016 for $596,000, and just four years later, sold it for $779,000.

Of course, a popular housing market isn’t the only reason that this home sold so fast. We’re pretty sure the stylish home improvements, staging, and compelling listing photos had a lot to do with it, too.

Profits like that pique our interest, so we had to take a closer look at the interior changes that were made.

We asked our panel of design and real estate experts to pinpoint what you can glean for your own home projects from the updates the sellers made, as shown in these before and after photos.

Living room

“This room transformation is all about the magic of staging,” says Danny Davis, the owner/broker of San Diego Brokerage in Encinitas, CA.

“New shutters have been added to the windows, and the room has been painted, but beyond those smart upgrades, no major changes have been made to this lovely living room.”

Jonathan Spears, founder of Spears Group with Scenic Sotheby’s International Realty, says the new furniture makes a world of difference.

“The low-profile furniture upgrades are thoughtfully arranged to create a welcoming space,” he says, “allowing for a more comfortable atmosphere.”

As you can see, the color palette—seen in the wall paint, furniture, and accessories—has also been updated.

“They’ve used color in a really smart way,” says Nicole Michael, founder of the Los Angeles and Orange County-based interior design firm Nicole Michael Designs.

“These neutral colors, like the gray sofa, are far more in style than the colors used in the before photos, as are the pops of ginger-colored accents. Adding in pops of color to the bookcases makes them stand out as the great feature they are.”

___

Watch: Point, Shoot, Sell? To Show Off Your Home, Avoid These Listing Photo Mistakes

___

Kitchen

This kitchen update demonstrates that you don’t need to undergo a major renovation to make a strong impact.

“The cabinets, countertops, appliances, and even the under-cabinet lighting have all remained the same,” says Davis.

“Keeping the existing cabinets and appliances saved thousands of dollars,” says Michael.

“The use of aged brass finishes for the lighting, cabinet hardware, and faucet are right on trend. When you have the same color/material traveling through a room, it unifies a space and instantly elevates it.”

She adds that the new, lighter flooring makes the room feel much larger than it did before.

Davis also approves of the new banquette seating in the breakfast nook, which he says provides extra seating and storage.

“The result is a spacious, modern, light, bright kitchen that any home buyer could easily imagine themselves in,” he says.

Bathroom

Most of the home received merely cosmetic updates, and it’s likely that every penny saved was poured into the more substantial expansion of this bathroom.

“The bathroom has literally gone from eyesore to selling point,” says John Atamian, a Glendale-based real estate agent.

“And while this extensive renovation is somewhat costly, these upgrades will more than pay for themselves in value added.”

“So many elements in the before photo—the plastic laminate countertop, single-lever faucet, and molded sink—look like a rental apartment, not a single-family home. The after photo, on the other hand, has the spa feeling that home buyers absolutely love,” says Michael.

The experts agreed that the black and white color choices make the room feel crisp and clean, exactly the kind of vibe every bathroom needs.

Davis focused on the change he thinks made the biggest impact.

“Here is one absolute truth I have learned from my many years in real estate: Couples do not want to share a bathroom sink, and dual vanities are high on most home buyers’ lists for that reason,” he says.

Bedroom

While both iterations of this bedroom look cozy and comfortable, the after photo cultivates a more modern vibe, with boho-Scandinavian furnishings. The area rug, bench, and nightstands are all pieces we’d expect to see in current design magazines.

Michael got into more details, explaining the the new gray walls appeal to more buyers. She also says the headboard—which is now the same color as the walls—blends into the room to make the space feel larger.

The sellers pulled a similar trick by changing the fan from wood-toned to white.

“Home buyers want the functionality of ceiling fans, but they don’t necessarily like the look of them,” she says.

So why do all these changes—both big and small—draw in so many more potential buyers? Davis summed it up best.

“A home buyer needs to imagine themselves living in a home when they view it, and ultimately, they want to believe their life will be better if they buy this home,” he says. “Adding glamour, light, and modern flair to a room will have a potential home buyer swooning.”

Source: realtor.com

The 15 Best-Paying Cities for Millennials

millennials working office
Jacob Lund / Shutterstock.com

This story originally appeared on HireAHelper.

Numbering over 72 million, millennials have surpassed baby boomers to become the largest living adult generation. Millennials, defined by the Pew Research Center as people born between 1981-1996, are now in their prime homebuying years. However, millennial homeownership rates have lagged that of older generations — in part, because while home prices have been rising, income has not kept pace. According to the latest data from the U.S. Census Bureau, the median annual income for full-time working millennials was $42,000 in 2019, leaving many millennials struggling to afford a home.

Nationally, data from the Census Bureau shows that while the homeownership rate in the U.S. was 64.6% in 2019, the rate for millennials was just 39.9%. The median income for 25- to 34-year-olds has increased 2½-fold since 1980; however, housing prices have more than tripled over the same time period. Median income growth for that age group kept pace with housing prices until the year 2000, when housing prices began to rise more steeply. Although housing prices dropped significantly during the Great Recession, they have been rising rapidly since 2012.

At the state level, millennials living in Minnesota and Massachusetts had the highest median incomes after adjusting for cost of living, at $51,282 and $50,137 in 2019, respectively. Due to its very high cost of living, millennials living in Hawaii tend to earn less with a cost-of-living adjusted median income of $37,849 last year. The cost of living in Florida is about the same as the national average, but millennials in Florida earned just $34,990 in adjusted median income, the lowest in the country.

To find the best-paying cities for millennials, researchers at HireAHelper analyzed the latest data on income and home prices from the Census Bureau and Zillow. The researchers ranked metro areas according to the cost-of-living adjusted median income for full-time working millennials. Researchers also calculated the unadjusted median income for full-time millennials, the median home price, and the millennial homeownership rate.

To improve relevance, only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, metro areas were grouped into the following cohorts based on population size:

  • Small metros: 100,000–349,999
  • Midsize metros: 350,000–999,999
  • Large metros: 1 million or more

Keep reading to see the large metros with the highest median income for full-time millennials, after adjusting for cost of living.

15. Columbus, OH

Women in Columbus Ohio
Joshua Resnick / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $46,790
  • Median income for full-time millennials (unadjusted): $43,000
  • Median home price: $223,010
  • Millennial homeownership rate: 37.9%
  • Cost of living: 8.1% below the national average

14. Baltimore-Columbia-Towson, MD

Port of Baltimore, Maryland tugboat
Cascade Creatives / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $46,860
  • Median income for full-time millennials (unadjusted): $50,000
  • Median home price: $307,675
  • Millennial homeownership rate: 44.3%
  • Cost of living: 6.7% above the national average

13. Milwaukee-Waukesha, WI

The Bronze Fonz statue
Nejdet Duzen / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $47,489
  • Median income for full-time millennials (unadjusted): $45,020
  • Median home price: $200,213
  • Millennial homeownership rate: 35.4%
  • Cost of living: 5.2% below the national average

12. Denver-Aurora-Lakewood, CO

Denver skyline
Andrew Zarivny / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $47,664
  • Median income for full-time millennials (unadjusted): $50,000
  • Median home price: $462,724
  • Millennial homeownership rate: 42.9%
  • Cost of living: 4.9% above the national average

11. St. Louis, MO-IL

f11photo / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $47,967
  • Median income for full-time millennials (unadjusted): $43,650
  • Median home price: $188,845
  • Millennial homeownership rate: 48.0%
  • Cost of living: 9.0% below the national average

10. Kansas City, MO-KS

Kansas City, Missouri
Scruggelgreen / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $48,439
  • Median income for full-time millennials (unadjusted): $45,000
  • Median home price: $218,314
  • Millennial homeownership rate: 43.9%
  • Cost of living: 7.1% below the national average

9. Cincinnati, OH-KY-IN

Cincinnati
Anne Kitzman / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $48,667
  • Median income for full-time millennials (unadjusted): $43,800
  • Median home price: $201,822
  • Millennial homeownership rate: 43.9%
  • Cost of living: 10.0% below the national average

8. Minneapolis-St. Paul-Bloomington, MN-WI

Minneapolis, Minnesota
nikitsin.smugmug.com / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $48,733
  • Median income for full-time millennials (unadjusted): $50,000
  • Median home price: $307,156
  • Millennial homeownership rate: 48.8%
  • Cost of living: 2.6% above the national average

7. Hartford-East Hartford-Middletown, CT

Hartford, Connecticut
James Kirkikis / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $48,972
  • Median income for full-time millennials (unadjusted): $50,000
  • Median home price: $246,266
  • Millennial homeownership rate: 41.3%
  • Cost of living: 2.1% above the national average

6. Washington-Arlington-Alexandria, DC-VA-MD-WV

Woman in Washington, D.C.
eurobanks / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $50,934
  • Median income for full-time millennials (unadjusted): $60,000
  • Median home price: $455,038
  • Millennial homeownership rate: 38.0%
  • Cost of living: 17.8% above the national average

5. Pittsburgh, PA

Pittsburgh, Pennsylvania
James Kirkikis / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $51,557
  • Median income for full-time millennials (unadjusted): $48,000
  • Median home price: $172,719
  • Millennial homeownership rate: 44.3%
  • Cost of living: 6.9% below the national average

4. Boston-Cambridge-Newton, MA-NH

Page Light Studios / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $51,664
  • Median income for full-time millennials (unadjusted): $59,000
  • Median home price: $520,206
  • Millennial homeownership rate: 35.4%
  • Cost of living: 14.2% above the national average

3. Seattle-Tacoma-Bellevue, WA

Seattle, Washington
kwest / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $51,727
  • Median income for full-time millennials (unadjusted): $58,400
  • Median home price: $555,689
  • Millennial homeownership rate: 36.3%
  • Cost of living: 2.9% above the national average

2. San Francisco-Oakland-Berkeley, CA

San Francisco, California
Ekaterina Pokrovsky / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $53,191
  • Median income for full-time millennials (unadjusted): $70,000
  • Median home price: $1,113,664
  • Millennial homeownership rate: 25.0%
  • Cost of living: 31.6% above the national average

1. San Jose-Sunnyvale-Santa Clara, CA

The skyline of San Jose, which has a lower median rent than median mortgage payment
stellamc / Shutterstock.com
  • Median income for full-time millennials (cost-of-living adjusted): $60,201
  • Median income for full-time millennials (unadjusted): $77,900
  • Median home price: $1,219,074
  • Millennial homeownership rate: 26.6%
  • Cost of living: 29.4% above the national average

Methodology

Jacob Lund / Shutterstock.com

The best-paying metros for millennials are a diverse set, with a mix of high-cost coastal cities and more affordable cities in the Midwest. The top two best-paying large metro areas — San Jose and San Francisco — are among the most expensive areas in the country, but millennials earn enough there to make up for the high cost of living. Because home prices in the Bay Area are disproportionately more expensive than the prices of other goods and services, homeownership rates still lag many of the best-paying metro areas with more affordable housing.

The best-paying small and midsize metros are similarly spread out across the country. Most of these metros boast affordability and lower home prices, meaning that millennials do not need to earn as much to live comfortably. Millennial homeownership rates tend to be higher in these metros as well. Overall, the millennial homeownership rate is close to 50 percent among the best-paying small and midsize metros.

To determine the best-paying cities for millennials, HireAHelper analyzed data from the U.S. Census Bureau’s 2019 American Community Survey Public Use Microdata Sample (ACS PUMS), the Bureau of Economic Analysis’s 2018 Regional Price Parity (RPP) dataset, and Zillow. Statistics on the median income for full-time millennial workers and the millennial homeownership rate are from the ACS PUMS, and the cost of living index is from the RPP. Median home prices come from the Zillow Home Value Index for September 2020.

To make income in expensive areas and cheaper areas comparable, the median income for each metro was adjusted using the cost of living index for that metro. Income in expensive metros was adjusted down to reflect lower purchasing power while income in relatively affordable cities was adjusted up to reflect higher purchasing power.

Metro areas are ranked by the cost-of-living adjusted median income for full-time millennial workers. The Pew Research Center defines millennials as the generation of people born in 1981–1996, meaning millennials were 23 to 38 years old in 2019.

Only metropolitan areas with at least 100,000 people were included in the analysis.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

FHA loan limits increase for single-family and multifamily loans

2021 FHA loan limits range from
$350K to over $1.5 million

FHA loan limits just increased for all home buyers
and refinancing homeowners.

The new baseline FHA loan limit is $356,362 for single-family homes.

Multifamily loan limits now go up to $685,400 for a 4-unit property.

And that’s just the “floor.” In high-cost areas, the FHA loan limit “ceiling” goes all the way up to $822,375 for a single-family home and over $1.5 million for a 4-unit property.

Though loan limits have increased, FHA mortgages are still available with a credit score starting at 580 and 3.5% down.

And, FHA mortgage rates are still sitting at historic lows.

Verify your FHA loan eligibility (Jan 22nd, 2021)


In this article (Skip to…)


FHA loan limits by county for
2021

In order to get approved for an FHA loan, your mortgage must be within the maximum loan amount the FHA will insure. Known as “FHA
loan limits”, these maximums vary by county.

This year the Department of Housing and Urban
Development (HUD) is increasing FHA loan limits in almost every county (3,100)
while just 125 counties will remain the same.

There are four different pricing tiers for FHA loan
limits: a standard tier, a mid-range
tier, a high-cost tier, and a special exception tier.

In low-cost counties, FHA loan limits are now capped at $356,362 for a single-family home loan.

In high-cost counties, FHA’s single-family loan limit is $822,375.

However, many counties fall in the ‘mid-range’ category with limits somewhere between the floor and ceiling.

Single-family (one-unit) FHA loan limits

Low-Cost Area $356,362
Mid-Range Area $356,363–$822,374
High-Cost Area $822,375
AK, HI, Guam, & Virgin Islands $1,233,550

According to FHA’s guidelines, a low-cost area is
one where you can multiply the
median home price by 115% and the product is less than $356,362.

Similarly, a high-cost area is one where the median home price
multiplied by 115% is greater than $822,375.
There are just 65 U.S. counties
with home prices high enough to qualify for FHA’s maximum loan limit.

There are also ‘special exception’ loan limits in
Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, FHA caps
single-family home loans at a surprising $1,233,550.

FHA says the higher
loan limits in Alaska, Hawaii, Guam, and the Virgin Islands are meant to “account for higher costs of construction.”

You can look up your local FHA loan limits using this search tool.

Verify your FHA loan eligibility (Jan 22nd, 2021)

FHA multifamily loan limits

The Federal Housing Administration also backs
mortgages on 2-, 3-, and 4-unit properties. These types of homes have higher
loan limits than single-family residences.

FHA multifamily loan limits

  2-Unit Property 3-Unit Property 4-Unit Property
Low-Cost Area $456,275 $551,500 $685,400
Mid-Range Area $456,276–$1,052,999 $551,501–$1,272,749 $685,401–$1,581,749
High-Cost Area $1,053,000 $1,272,750 $1,581,750
AK, HI, Guam, & Virgin Islands $1,579,500 $1,909,125 $2,372,625

Although FHA allows multifamily home loans, the
property must still be considered a ‘primary residence.’ That means the
homebuyer needs to live in one of the units full time.

In other words, an FHA loan cannot be used to
purchase an investment property. However, you can use an FHA mortgage to
purchase a 2-4 unit property, live in one unit, and rent out the others.

In this way it’s possible to get a multifamily loan
up to $1.5 million with a low-rate FHA loan and just 3.5% down payment.

What is an
FHA loan?

It can be confusing, but the Federal Housing Administration is not actually a mortgage lender. Rather, it’s a
mortgage loan insurer

The FHA provides insurance for banks and lenders that make FHA loans.

Payment for this insurance is known as the FHA ‘mortgage insurance
premium’ (MIP). It’s paid by homeowners but protects FHA mortgage lenders against
losses from loan defaults or foreclosure.

The main benefit of FHA-backed loans is that they’re often easier to qualify for than conforming mortgages.

FHA loan requirements
tend to be more lenient for first-time, low-credit, and lower-income borrowers.

As a few examples of the FHA’s buyer-friendly rules:

  • FHA mortgages require a down payment of just 3.5 percent
  • FHA loan down payment monies can be gifted from a family member
  • The minimum credit score requirement for an FHA loan is 580 in most cases

There are other FHA loan perks, too.

For example, FHA loans are assumable. This means that a
future buyer of your home can “assume” its existing mortgage at whatever
the mortgage rate happens to be.

If today’s mortgage rates are 3% and rates are 10% when
you sell, instead of applying for a new loan, your buyer can assume your
existing 3% FHA mortgage rate instead. This can make your home much easier
to sell in the future.

Another FHA loan perk is that FHA mortgage rates don’t change
with low credit scores or property type. FHA mortgage rates are the same, no
matter whether your score is a 740 or a 580; or, whether you live in a
single-family home or a 4-unit.

All FHA borrowers get access to the same, below market mortgage
rates that make FHA financing so attractive.

Check today’s FHA loan rates (Jan 22nd, 2021)

FHA vs. conforming loan limits

FHA mortgage limits are closely tied to conforming loan limits.

Every year, the Federal Housing Finance Agency
(FHFA) updates its home price index. This is used to set both conforming loan
limits and FHA loan limits. But the two are calculated differently. 

Conforming loans — which follow guidelines set by
Fannie Mae and Freddie Mac — have higher loan limits than FHA mortgages.

For example, look at the standard, single-family loan limits for 2021.

  • FHA’s loan
    limit “floor” is $356,362
  • The
    conforming loan “floor” is $548,250 — a full $190K higher

However, not everyone can qualify for higher loan amounts via a conventional mortgage.

Fannie Mae and Freddie Mac require a minimum credit
score of 620 for a conforming loan. And for borrowers with credit on the lower
end of the spectrum, they charge higher rates and expensive private mortgage
insurance (PMI).

FHA loans are more attractive for borrowers with
fair credit despite having lower loan limits.

It’s possible to qualify for FHA financing with a
credit score as low as 580, and a low score won’t force you into a high
interest rate.

The FHA does charge its own mortgage insurance premium.
But this is often more affordable than conventional loan PMI for borrowers with
low credit and a small down payment.

FHA
Streamline Refinance loan limits

One perk of having an FHA loan is that you can refinance using the FHA Streamline Refinance program.

The FHA Streamline is a low-doc loan that gives homeowners the ability to
refinance without having to verify income, credit, or employment.

When you refinance via the FHA Streamline program, your new loan
must be within local FHA loan limits. But this will not be an issue.

Since the FHA Streamline can only be used on an existing FHA loan —
and no cash-out is allowed — you won’t be able to increase your loan balance
above current FHA mortgage limits.  

Other requirements for the FHA Streamline Refinance include:

  • You
    must be making your current mortgage payments on time. The FHA wants to see
    that your last 3 mortgage payments have been paid on time, and that you’ve been
    late on payments no more than one time in the last 12 months
  • Your
    current FHA mortgage must be at least 6 months old. The FHA will verify that
    you’ve made at least six payments on your current mortgage before allowing you
    to use the FHA Streamline Refinance program
  • The
    agency will verify that there’s a “benefit” to your refinance. Known as the Net
    Tangible Benefit clause, your “combined rate” must drop by at least 0.5%. You
    can achieve this portion of FHA eligibility by dropping your interest rate,
    mortgage insurance rate, or a combination of both

If you meet these guidelines, the FHA Streamline is a great way to
refinance into today’s ultra-low mortgage rates and lower your monthly payment.

Today’s FHA loan rates

FHA mortgages are riding the low-interest-rate
wave. With mortgage rates at historic lows, and loan limits on the rise, it’s
an excellent time to consider FHA financing.

Check with a lender to see how much home you can
afford thanks to 2021 FHA loan limits.

Verify your new rate (Jan 22nd, 2021)

Source: themortgagereports.com

Existing home sales explode, up 27% from last year

Existing home sales have risen for the fifth consecutive month as the housing industry continues to show its resilience in the face of the COVID-19 pandemic.

The National Association of Realtors reported Thursday that homes sales are up an astonishing 27% from the same time one year ago. In addition, it was reported this week that single-family home construction rose by its fastest pace since spring 2007, as buyers increase their interest in newly built homes.

At the same time, buyers are having to deal with higher prices, and sales are happening very quickly. Median existing-home prices went up again last month and are now up almost 16% from the same time last year, to $313,000, the NAR said.

“Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector performed remarkably well this year,” said NAR Chief Economist Lawrence Yun.

Existing home sales refer to completed transactions that include single-family homes, townhomes, condos and co-ops, and hit a seasonally adjusted annual rate of 6.85 million in October, up 43% from September. Meanwhile, the inventory of homes listed for sale dropped again, and is now down almost 20% from what it was one year ago, at just 1.42 million. According to the NAR, that’s just a 2.5 month supply of homes at the current sales pace, a record low since it began recording such data.

Homes listed on the market are selling extremely quickly too, with 72% of homes that sold in October having been on the market for under a month.

“The surge in sales in recent months has now offset the spring market losses,” Yun said. “With news that a COVID-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, I expect the market’s growth to continue into 2021.”

Yun forecast that existing-home sales will increase by around 10% to 6 million in the next year.

Meanwhile, the Commerce Department said home builders are also enjoying the fruits of the pent up buyer demand. On Wednesday it reported that single-family construction had risen by 6.4% in October compared to September, to a seasonally adjusted annual rate of 1.18 million new homes, up 8.6% from a year ago.

The most single-family and multifamily starts occurred in the Midwest region, growing by 15.5% year over year, with gains of 7.5% in the South and 4.7% in the West. The Northeast region saw new home starts decline by 6.4%, however.

“Faced with many uncertainties in 2020, the real estate industry has been able to meet surprisingly strong home buying demand and help lead our country’s economic recovery,” NAR President Charlie Oppler said. “As we continue to help consumers secure housing and property, we will also remain vigilant in working to expand housing options, equality, and affordability for all who are entering the marketplace.”

Source: realtybiznews.com