Existing Home Sales Fall For 6th Month
According to the National Association of Realtors, the pace of U.S. existing home sales slowed for the sixth straight month in September, hitting an annual rate of 6.18 million units, which was a sharper drop than economists expected.
Price of homes fell from year-ago levels, with median home prices dropping 2.2 percent from September last year to $220,000.
The inventory of homes for sale was down 2.4 percent to 3.75 million units — a 7.3-month supply. It was the second consecutive drop in inventory.
Get the full story here…
Investing Borrowed Money Can Be Risky
You're getting into risky territory when you start investing borrowed money. At first glance, your plan may seem like an easy way to use the bank's money to easily rack up investment gains for yourself.
After all, you can probably get a home equity line of credit at or below the prime rate, which is now 8.25 percent. Assuming the interest on the loan is tax-deductible (which you can ascertain by checking out IRS Publication 936), you're actually paying 6.2 percent in interest after taxes, assuming a 25 percent tax rate.
So all you've got to do to come out ahead is earn more than 6.2 percent after-tax on the borrowed money you invest.
Some may think that sounds like a sure thing. But actually, several things could go wrong.
10 BIGGEST Home Buying Mistakes
Based on 25 years of home-building experience for 30,000 people, here are the 10 biggest mistakes in home buying:
1. Not doing your homework. Knowledge is power. Tremendous information is available on the Internet. There is no excuse for entering the market unprepared.
2. Trying to make a shrewd investment. People need to buy based on what fits their family. Don't try to guess what will happen to the market.
3. Choosing a poor location. Even within a neighborhood, location matters. Is it on the busiest street? Is there a shopping center out the back window?
Read about other home buying mistakes…
Rental Market Heats Up
Bidding wars, once waged by prospective home buyers in a red-hot housing market, may be moving to a new front: rental apartments.
As rising interest rates and flattening home values have made renting more attractive, renters are beginning to resort to the same one-upmanship tactics to secure a choice apartment.
In Washington, D.C., the owner of the Ellington, a 190-unit rental building on U Street, has a 12-person waiting list, and nearly a half dozen renters are paying rent two to three months before their move-in dates. San Francisco renters are showing up early to open houses and racing to fill out applications before other applicants. In Manhattan, some renters are offering landlords more money than asking rents, while others are paying the equivalent of the entire year's rent upfront in cash.
Read the complete story here…
Cheaper Housing Lower Costs?
Moving to an area with lower housing costs often doesn't pay off for low-income Americans, according to a study to be released today by the Center for Housing Policy, a nonprofit research group based in Washington.
The study, which looks at families with low to moderate incomes in 28 metropolitan areas, found that transportation costs in places with cheaper housing are often so high that they wipe out the savings from lower rent or mortgage payments. Such places tend to be farther from employers or short on public transportation, which makes commuting costlier.
The study found that housing and transportation costs combined eat up an average of 57% of annual income for "working" families, which the study defines as those with incomes of $20,000 to $50,000 a year. The combined costs ranged from 54% of income in Pittsburgh to 63% in San Francisco; in 25 of the 28 metro areas, the combined total was within three percentage points of the 57% average.
The findings contradict the common notion that many people would be better off financially if they moved from areas with high housing costs.
Read the complete story here…
