As a REALTOR®, it’s important for me to continually analyze housing statistics and monitor housing news so I can provide my clients with the most up-to-date information about what’s happening in the real estate market both locally and nationally. During my research, I’ve found some interesting stories over the past couple weeks that I’d like to share in this column.

Money magazine says buying a home is a no-brainer

In Money magazine’s December issue, Ali Velshi, chief business correspondent for CNN, discussed the question of whether now is the right time to invest in a house. According to Velshi, it is a great time to buy if someone has 20 percent to put down and good credit.

The author explained that because Americans take out such long mortgages, interest rates are what really matter. Even though home prices may vacillate over the coming year, rates could rise which would increase the cost of homeownership because interest is such a large part of the monthly payment. 

The second question the author addresses is whether a house is a good investment. While a home might not have as big of returns as money invested in the stock market, the author said a buyer who chooses the right location may see a bigger-than-average return. Velshi said the most important thing to remember is “Buying a fairly priced home at today’s rates may be the best deal you will ever get. And who knows? It may even turn out to be a good investment.”

Housing agency showing strength

Over the past few years, Federal Housing Administration-insured loans have been a primary source of financing for home buyers. That’s why it was great news when I read that a recent audit of the Administration shows the agency’s financial condition has improved from last year.

With the rise in foreclosures, concern was raised last year when the agency’s capital reserve fund fell below the level mandated by Congress. But the new audit shows the reserves have stabilized and the agency will continue its 76-year tradition of operating without the use of taxpayer dollars.

The audit showed the agency’s mortgage insurance fund grew by more than $1 billion in 2010, and combined total reserves increased to $33 billion.

Hopefully the good news will support the continuation of FHA’s low minimum down payment of 3.5 percent, which has allowed many first-time buyers to become homeowners.

Homeowners’ net worth 41 times greater than renters’

The average homeowner has a net worth 41 times greater than that of a renter, according to a new report from the National Association of REALTORS®.

This year, homeowners’ net worth averaged between $150,000 and $200,000, with a substantial part of that net worth coming from homeowner equity. The NAR research is based on a Federal Reserve survey on family income that is released every three years.

A separate survey from the trade association also reported that the typical home seller is experiencing positive returns on their investment, and the vast majority of homeowners see their property as a good investment.

Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase. Those who stayed in their homes from 11 to 15 years saw an increase of 40 percent.

These are just a few of the interesting news reports on housing. To learn more about the real estate conditions in your particular area, make sure to contact a local REALTOR®.

By Lerron Little, CRS, GRI
Appeared in the Salt Lake Tribune and Deseret News December 4, 2010