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Housing Market is En Fuego?

#TruVest #HouseHunting #HousingMarket #FICO

It has become even harder to purchase a house in the last 90 days. The information that is discussed in this article is outside typical challenges we will face when buying a house such as credit score, down payment, monthly payment hurdles, conventional loan versus FHA loan, and mortgage rates. But the focus of this post is to discuss the external influences of the housing market that we cannot control whatsoever.
Housing Starts (New Homes)- Decreased 6% in January to 1.580 million units. Existing home inventories fell 16.4% or 1.1M homes (1.9 months worth of homes). Record-setting low since 1999.
Soaring Lumber Prices- Prices have tripled in the last 90 days to where the price of 1,000 board feet peaked at $1,004.90. For a 1,000 square foot home, you would need 6,300 board feet to complete. That would be just $60,000 to frame your home.
Compared to just 4 short months ago it would have cost you $30,000 or $491 per 1,000 board feet. 100% increase in 4 short months. And it would add an additional 30% to the sales price of a $100,000 home.
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Homeownership: 3 Reasons Why it is Even Harder!

Looking to become a homeowner? It has become even harder to purchase a house in the last 90 days. The information that is discussed in this article is outside typical challenges buyers face when buying a house such as credit, down payment, monthly payment hurdles, conventional loan versus FHA loan, and mortgage rates. But the focus of this post is to discuss the external influences of homeownership that we cannot control whatsoever.

Housing Starts (New Homes)

Decreased 6% in January to 1.580 million units. Existing home inventories fell 16.4% or 1.1M homes (1.9 months worth of homes). Record-setting low since 1999.

Soaring Lumber Prices

Prices have tripled in the last 90 days to where the price of 1,000 board feet peaked at $1,004.90. For a 1,000 square foot home, you would need 6,300 board feet to complete. That would be just $60,000 to frame your home.
Compared to just 4 short months ago it would have cost you $30,000 or $491 per 1,000 board feet. 100% increase in 4 short months. And it would add an additional 30% to the sales price of a $100,000 home.
Remember: Homebuilders typically have margins between 20% and 40%. For example: If the builder has a target margin of 30% on each home then the pass-through costs to you the buyer would be 60%. And the math behind that is their margin of 30% plus the increase in lumber costs in relation to the sales price of the home. To make things simple that would total $60,000 additional you would have to pay on a home that used to sell for $100,000

Homeownership is Overpriced

Housing Prices are En Fuego - For a single-family home in the USA, it will cost you $266,222 to purchase a home. That same home in January 2020, would have cost you $244,000, an increase of $22,000 or 10%.
Now, I can hear some of you saying that is only 10%, but let's look at it this way. What does that additional $22,000 cost you over the life of your loan? Have a guess? You will pay an extra $11,358 over the life of your 30-year loan at a 2.99% interest rate. What could you do with the extra $$$$? Better seek help from a financial coach!

To Sum It All Up

The housing market is overpriced, supply is WAY DOWN, and demand is through the roof. So, what do you do if you are in the market for a home? Start looking outside the traditional channels that most buyers search in. A few channels that I could suggest are:
Look for homes in up and coming neighborhoods that are run down (The ugliest house on the block)
REO's- Work with a local Realtor to locate any REO's (Real Estate Owned) properties that are being sold by lenders.
Foreclosures- Even though this channel is not hot right now it would not hurt to take a look at them to see what prices are going for in the neighborhoods you want to live in.
Note Purchase- This is a channel that is not covered very much, but it is a viable one if you know how to buy notes (A.K.A. Mortgages) from lenders directly.
Hope this post helps shed a bit of light on the housing market and the external influences that we all face as a part of homeownership. I know purchasing a house is the largest investment you will make in yourself, but remember one thing: Do not fall in love with buying a home until the math works in your favor, and your monthly mortgage payment fits into your budget. There are other houses out there it will just take some time to find the right one for you. Good luck and happy house hunting!

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TruHome In Action on Bayard Park

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TruHome Trucks Hitting the Road

We could not be happier with how our Logo looks on our trucks! Be on the lookout for us around Evansville and the surrounding areas! Please follow us on FaceBook!

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Business Unfiltered

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TruPodcast Episode 2 Chasing Happiness

In this episode, I talk about how the Corona Virus has and will make HUGE impacts on our economy. And how we can use common sense when it comes to protecting ourselves from getting it. The first thing we need to do is to stop raiding stores for basic supplies! The world is not coming to an end, and you do not need a lifetime supply of toilet paper, paper towels, and top roman. The panic that we are displaying is just crazy, and when we start using common sense we will start seeing things change for the better! With all this panic going on there is a huge group of people that are being impacted by this virus. Small business owners all over the USA are wondering if they will be open when this all passes. We need to band together and help each other out and find ways to support small business owners around our great country. We at TruVest will do whatever we can to help other fellow small business owners. We are here for you!

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TruPodcast

TruPodcast-Chasing Happiness

TruPodcast Episode 1

We are excited to be re-launching TruPodcast. The TruPodcast is going to cover three life topics:

  1. Chasing Happiness
  2. Business-Real Estate included of course
  3. Failure- How it is not a four-letter word, and how we can grow from our failures

In this episode, our guest is Alex Burton the President of the Evansville City Council. We discussed what drives his happiness, and how it took numerous times to be elected to City Council (Persistence), and his passion for Evansville! Hope you enjoy and please subscribe!

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