Borrowers who have conventional mortgages are the most likely to pay on time, while borrowers with loans backed by the Federal Housing Administration tend to pay late nearly three times more often. (Still, 91 percent of FHA borrowers pay on time.) FHA borrowers tend to have lower credit scores, higher debt-to-income ratios, and lower down payments. But the FHA delinquency rate of 8.65 percent is still a big improvement over a decade ago, when it was about 14 percent. Why are more Americans paying their mortgages on time? For one, more homeowners now have greater equity in their homes. Also, stricter federal underwriting rules since 2010 have limited who can get a mortgage. Fannie Mae and Freddie Mac require borrowers to have an average FICO credit score near 750, which is much higher than they required before the financial crisis. However, “if the lending industry begins to relax underwriting standards in any significant way to dig deeper into the pool of riskier credit applicants to plump up their volume of home-purchase mortgages, it’s inevitable that delinquencies will rise,” writes Ken Harney, a syndicated real estate columnist for The Washington Post. The FHA also has posted a decrease in average credit scores and is now approving debt-to-income ratios well above 50 percent.
Located at 214 W. 39th Street in Manhattan, the spot boasts co-working spaces, curated “PropTech” exhibits and a full calendar of educational events and programming. Last month, Savills named the Big Apple the No. 1 tech city in the nation. And though Amazon might have called it quits on its NYC headquarters, other tech giants have stepped in to fill the void. At any rate, PropTech Place is set to help NYC—and the real estate tech sector in general—continue its record-breaking expansion. “New York City is the undisputed real estate capital of the world,” Patchett said. New York’s PropTech Place will be the first stop for industry leaders looking for a window into the best real estate technology innovations.” Aaron Block, a cofounder at MetaProp, said his company is already working to add an additional 10,000 square feet to the PropTech Place facility. The center is currently home to three educational exhibits: “History of PropTech,” “Tomorrow’s PropTech” and “Today’s PropTech,” which features live piloting of up to 12 current real estate technologies. According to real estate analytics firm CREtech, venture capital funds invested more than $9.6 billion into real estate technology last year. MetaProp’s 2018 Year-End Confidence Index shows that 60% of those investors plan to make even more investments in 2019.
Or are there better ways to invest that are just as effective and efficient—with less risk? Is ownership really the dream we’re after—or is it more about control? Here are some of ways you can mix up “pure” ownership with other ways of controlling deals. Trusts Of course, some things make more sense to own outright, like shares of the business you run, but there are many things we can control without owning and still enjoy a lot of the benefits of without all the risks that could come along with ownership. As I’ve always said, “The best form of asset protection is not to own anything.” Fractional Ownership Another great way to invest in real estate without taking on too much risk is to only own part of the deal. Another way that comes to mind is if you passively, usually for a preferred return with or without upside, invest in a company or fund that invests in real estate. Related: 10 Real Estate Markets Where The “Buy and Hold” Strategy Actually Made Sense Control Without Ownership Other than managing a trust, the next big way to have control of real estate without ownership is through options. For example, doing a sandwich lease option is the epitome of being able to capitalize on a deal you don’t even own. Control With Ownership That said, it is also possible to have control with ownership in a way where there is very little risk, and a perfect example of this is buying a property “subject to” the mortgage. So what are some of your favorite strategies for mitigating or limiting risk while investing in real estate?
Fewer homes were flipped in 2018, but investors are still on the hunt and have not shied away from quick resales, according to a new report from ATTOM Data Solutions, a real estate data firm. Home Flip Characteristics for 2018 Average time: Homes flipped in 2018 took an average of 180 days to complete, down from 181 days in 2017. Single-family homes and condos that were flipped fell 4 percent in 2018, reaching 207,957 homes, according to ATTOM’s 2018 U.S. Home Flipping Report, released this week. Home flips comprised 5.6 percent of all single-family home and condo sales last year, the same as the year before. ATTOM Data Solutions defines a home flip as an arms-length transaction that occurs in the year where a previous arms-length sale on the same property occurred within the last 12 months. Completed home flips returns in 2018 fell to a four-year low. “People are staying in their home longer,” says Todd Teta, chief product officer at ATTOM Data Solutions. However, this isn’t to say home flipping is going away. Some markets saw notable increases in flipping rates in the fourth quarter of last year. The largest increases in home flipping were in Boston (up 33.3 percent), Tucson, Ariz. (up 27.3 percent), Raleigh, N.C. (up 24.5 percent), and Columbus, Ohio (13.1 percent), according to the report.
Millennials are buying houses. Lots of them. By the end of 2018, Millennials represented 45% of all new mortgages, compared to 36% for Generation X, and 17% for Baby Boomers. What's new is that Millennials also finally surpassed older generations in the total dollar amount of those mortgages. According to the data, Millennials now represent the largest dollar volume by age group as well. "In November 2018, Millennials finally overtook Generation X as having the largest share of new loans by dollar volume, with a share of 42% in December, compared to a share of 40% for Generation X and 17% for Baby Boomers. "The stereotype that Millennials primarily choose to buy homes and live in large metro areas isn't the reality," Vivas said. “Within the last year, Millennials have moved to affordable areas with strong job markets where they have more buying power,” the company writes. “At the end of 2018, the median price of a mortgaged home purchased by Millennials was $238,000, $26,000 less than the median price of a home mortgaged by Baby Boomers and $51,000 than Generation X.” Realtor.com notes in addition to increasing their buying power and taking on larger mortgages, data reveals Millennials have consistently made lower down payments than other generation since 2015. “This is likely a driver of their activity in more affordable markets, where their money goes further.” NOTE: Realtor.com’s report is based on an analysis of a sample of residential mortgage originations from Optimal Blue.
Sure, we've had nearly a decade of booming home sales and prices. That's because the financial factors that helped cause last decade's crash don't exist this time around. It hiked rates four times last year, when the economy was hurtling along, but this year it may do it only once, if at all. Will a recession lower home prices? "There are just more expensive homes [than affordable ones] for sale, and so the luxury market is likely to be more vulnerable to price corrections in the event of a recession," says Hale. Only about 875,00 single-family homes were built last year, according to the National Association of Home Builders. If another downturn hits, builders will likely construct even fewer homes, says Rob Dietz, chief economist of the NAHB. The pace of single-family home construction growth is already slowing down, from 9% in 2017 to about 3% in 2018. Meanwhile, inflation results in higher land, materials, and construction labor costs. “For builders, it means that demands will fall back in some markets and they will pull back," says Dietz.
Our affordable housing collaboration officially launched in Evansville, Indiana with Mayor Lloyd Winnecke and Evansville Promise Zone. We are thrilled to have such amazing coverage by 44News on how we are making an impact on families quality...
In any case, it's important to know your options when it comes to dealing with a good tenant with bad credit. While you don't want to ask those references what caused the poor credit — that's a question for your tenant applicant — you can ask them about the tenant's responsibility and behavior in the past. On the other hand, a tenant who was frequently late or who didn't pay their rent every month might not be a smart risk. • Did the tenant take good care of the property? Were they a good neighbor, or were there frequent complaints about them? If a tenant left the property in great shape when they moved out, they were likely responsible with the property in other ways. Offer Options For Bad Credit If you're considering renting to a tenant who has a bad credit score, you may want to have options available that will make you more comfortable and confident with your choice. When you have a tenant with poor credit, you might want to charge them more in rent. If you're worried about a poor credit score, consider what milestones you'd like them to meet in order to prove that they are a responsible renter and that you'll get the funds you need on time each month. Good credit can indicate a tenant who is in a better position to make sure that their rent is paid on time every month, which will make it easier for you to manage your finances.
In a CNBC article, self-made millionaire David Bach explained that: “The biggest mistake millennials are making is not buying their first home.” He goes on to say that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.” Bach went on to explain: “Homeowners are worth 40 times more than renters. You might literally have to buy a small studio apartment, but that’s how you get started.” Then he explains the secret to buying that home! Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).” What will it cost to pay your mortgage in fifteen years? He explains further: “For fifteen years, you got to brownbag your lunch. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one. Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists. He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. Members: Sign in now to set up your Personalized Posts & start sharing today!
Here’s where first-time buyers can afford to buy a home around the country. Lending Tree recently released research on the top cities that still offer first-time buyer affordability. The best cities for first-time homeowners include Pittsburgh, Cleveland, and Oklahoma City. Lending Tree crunched the numbers by ranking the country’s 50 largest metros looking at down payment amounts, down payments as a percentage of purchase price, share of affordable homes to median income families and the percent of buyers with credit scores below 680. “The first-time buyer has fewer financial resources than the move-up buyer who can use equity towards their down payment,” notes Lending Tree's chief economist Tendayi Kapfidze. According to Lending Tree’s research, Oklahoma City, Cleveland, and Memphis have the lowest down payments, averaging $32,000. That’s lower than the average down payment in the 50 top metros, Lending Tree looked at. After renting a one-bedroom apartment for a few years the couple wanted more space, but rental prices were rising. In Pittsburgh, according to Lending Tree’s findings, an average down payment is $34,049. In Oklahoma City, where the average down payment is $30,234 and 13% as a percentage of the purchase price, there are good affordable choices.