The affordability of homes starts with the price of the empty lot. A home usually sells for 5 to 6 times what the lots costs. So a $50,000 lot may yield a $300,000 house. Homes are affordable when prices are between 3.2 & 3.8 times a household’s income. Dr. James Gaines, chief economist at the TX A&M Real Estate Center, looks for a 5% downturn in single family homebuilding as lack of affordable retail lots.

Median age of homebuyer 47 years old & median household income is $101,700. 32% are first-time homebuyers, but 5% of buyers over 50 years of age purchase senior-related housing. 10 weeks is median length of time buyers spent searching for a home & looked at 10 homes. 13% buyers purchased a home for multi-generational family due to aging parents or children over 18 living at home.

(1) LIMIT SPENDING. The Conservative Texas Budget limits spending increases. Limit population growth to 4% & cut property taxes with the rest. (2) IMPOSE REVENUE TRIGGERS. Triggers of 2.5% would limit the escalation of tax of tax bills. (3) ELIMINATE M&O PROPERTY TAXES. That is maintenance & operations. If above 4% state level could eliminate in about 11 years. M&O is about 1/2 of today’s property tax burden.

Pre-approval means your financial situation has been verified by the lender. You have filled out a loan application to show your credit report, employment history, your income as the lender has looked at this & can probably make you the loan. PRE-APPROVAL provides more certainty to a borrower than PRE-QUAL , but still have processes to go through to make the loan.

Now PLC or PRICE, LOCATION, CONDITION! It is still the right home for the right person at the right time! Your experienced Realtor can give you a personalized home assessment & NOT an online database. You get what you pay for & your Realtor can HELP with that. So many factors to buying & selling a home. GET A RELIABLE REALTOR!

PRE-QUALIFIED. Means a lender has done an initial calculation of how much money you might be eligible to borrow. You provide the lender your approximate income, the amount of debt you carry & credit information. There is no guarantee of a mortgage loan, as your financial situation has not been verified. Just that you MIGHT get a loan. PRE-APPROVED NEXT TIME.

Meet with your lender in PERSON, so use a Tyler/Smith County lender. Mortgages are different now as FHA loans only require 3% down, VA requires 0 down & others can be small down payments. 20% is still a goal, as monthly payments less but small down payments & can invest some in the stock market. MANY OPTIONS NOW!

BUT in the moderate price range. Upper price range is not selling as quickly. Affordability is what consumers are looking. What happened with Amazon in New York is a cautionary tale. Average wages increased to $23.18 per hour, up 3.5%. Consumer confidence is following suit. Typically medium-priced home is now $259,300, but may rise. BUY NOW WITH INTEREST RATES LOW.

With interest rates still low best for a fixed interest rate mortgage, but still choices. 20% down is a reasonable cash to put into a home, but now FHA only requires 3% cash down. Some conventional lenders may require only 3.5% down & some with 10% or less. You can stash your cash to use in the stock market. JUST TALK TO SEVERAL IN-TOWN LENDERS!

Are we experiencing a small bubble? “The markets are different from 10 years ago. Stronger, more stable market compared to the loosely regulated market leading up to the bust” according to Lawrence Yun, chief economist at the National Association of Realtors. Inventory is at a 5 months low. One Realtor said homeownership is on a social level – how these homeowners tend to be better physical and mental health and economically more self-sufficient. MORE TO COME!