Buying a home with someone else, whether it’s a spouse, partner, or friend, can be a great way to split the costs of homeownership and share in the joys of decorating and living in a new space.

However, it can also lead to disagreements and challenges when trying to agree on everything from the location to the price to the style of the home.

Buying a house before marriage is the perfect example of two people who can end up disagreeing on simple things when tastes clash.

Here are 10 tips for compromising when buying a home with someone else:

1. Set a budget and stick to it

One of the biggest sources of disagreements when buying a home is money. It’s important to set a budget together and agree on a price range you’re both comfortable with. This will help you avoid overspending or being tempted by homes outside your price range.

2. Consider the location carefully

If you’re buying in an expensive area, you may need to compromise on the size or style of the home to stay within your budget. Discuss your priorities and decide what’s most important to both of you regarding location, such as proximity to work, hospitals, and shopping. If you’re moving with kids, you’ll also want to consider the school district. 

3. Communicate openly and honestly

It’s important to have open and honest communication with your partner. Be clear about your needs and wants, and be willing to listen to the other person’s perspective. This will help you avoid misunderstandings and make compromises that work for both of you.

4. Be willing to compromise on style

If you have different decorating styles, it may be challenging to agree on the look and feel of the home. Try to find common ground and be open to incorporating elements of both styles. You may also want to consider hiring a decorator to help you find a style that works for both of you.

5. Hire a real estate agent

A good real estate agent can help you navigate the buying process and provide valuable insights and advice.

They can also help mediate disagreements and negotiate with the seller on your behalf. Just be sure to choose an experienced, trustworthy agent who doesn’t charge an excessive commission.

6. Be flexible on the timeline

If one person needs to move long-distance, for example, adjusting the timeline for buying a home may be necessary. Be willing to be flexible and make adjustments as needed to accommodate both of your schedules and needs.

7. Make a list of must-haves and nice-to-haves

Prioritize your needs and wants and make a list of non-negotiables versus things that would be nice to have but aren’t essential. For example, if you have pets or kids, having sidewalks may be essential. On the other hand, if you don’t tend to spend a lot of time outside, not having sidewalks may not be a dealbreaker. This will help you focus on what’s most important and avoid getting sidetracked by minor disagreements. 

8. Take turns compromising

When you hit a roadblock or disagreement, try taking turns compromising. For example, if one person is set on having a large backyard, but the other person is more focused on having a large kitchen, you could take turns compromising on those features.

This could involve the first person giving up their insistence on a large backyard in order to compromise on a larger kitchen, and then the second person later compromising on something else that the first person is more concerned about. This approach helps to ensure that both parties feel heard and that you can both get some of what you want, while also avoiding a situation where one person always has to compromise more than the other.

9. Get pre-approved for a mortgage 

Getting pre-approved for a mortgage can help you avoid surprises and give you a better idea of what you can afford. This can also help avoid disagreements over finances later in the home-buying process.

10. Keep an open mind 

Finally, it’s important to keep an open mind throughout the entire process – from house hunting to closing day. Be willing to consider different options and be open to compromise. Remember, you’re buying a home together, so making decisions that work for both of you is important.

Buying a home with someone else can be a great way to achieve homeownership and share in the joys of creating a home. However, it’s important to be aware of the potential challenges and disagreements that can arise.

By setting a budget, communicating openly, and being willing to compromise, you can navigate the homebuying process and find a home that works for both of you.

Remember, buying a home together is a partnership, and it’s important to work together and make decisions that benefit both parties. With these tips, you can turn your dream of homeownership into a reality and enjoy the benefits of sharing a home with someone you care about.

Costs Not to Forget When Buying a House

The residential real estate market is booming. Although real estate is a traditionally attractive investment because of the potential for high returns, and owning property is considered a fundamental part of living the “American Dream,” historically low-interest rates and a wave of first-time millennial homebuyers have led to fierce competition.

Bidding wars on houses are happening all over the country right now and have been for a while.

However, you shouldn’t buy a house just because everyone else is doing so. After understanding the true costs involved, you may not want to become a homeowner. 

The cost of homeownership has skyrocketed because of high demand, limited inventory, inflation, and supply chain issues. Market forecasts predict that the housing market will continue to grow in 2022, albeit at a slower pace. 

A home costs more than $15,000 a year in non-mortgage expenses on average, and a majority (52%) of homeowners say annual expenses took them by surprise, according to Clever Real Estate’s True Cost of Homeownership survey. Additionally, 3 in 5 say they’ve experienced buyer’s remorse.

From maintenance and emergency repairs to property taxes, there are several hidden and surprise costs that prospective buyers should consider before closing.

Maintenance and Upkeep

One of the benefits of renting is that your landlord typically takes care of the property’s maintenance and upkeep.

However, as a homeowner, recurring expenses such as landscaping, gutter cleaning, pest control, and pool care all fall on you – and it can get pricey.

One-third of homeowners in the True Cost of Homeownership survey say they spent $5,000 on maintenance in 2021, not including emergency repairs.

These responsibilities are also time-consuming, with homeowners indicating that they spent nearly 20 hours a month on painting and fixing plumbing, electrical, and roofing problems, as well as appliances.

Repairs and Renovations

In a competitive housing market, a growing number of first-time buyers would purchase a fixer-upper to get a better deal. More than 4 out of 5 millennials say they’d buy a house in need of major repairs, but 1 in 4 who do so regret it, according to Real Estate Witch’s 2022 Millennial Home Buyer Report. 

Structural problems, a leaky roof, termites, and mold are just a few hidden flaws that buyers may not notice during a walk-through. That’s why a home inspection is important to include in your purchase agreement, but many buyers are foregoing that contingency to make their offer more attractive. 

However, more than 40% of homeowners say they would have negotiated a better price or more contingencies if they had realized the actual cost of homeownership, according to the True Cost of Homeownership survey. 

If you’re buying a fixer-upper, having a good real estate agent is imperative. A Realtor’s responsibilities are many, and negotiating on your behalf is a big part of the job. If a home inspection reveals damage you’re not aware of, an agent can ask the seller to pay for repairs before closing or offer you money so you can fix it yourself.

If a house will take thousands of dollars to repair, it may be wise to keep looking or build a home from scratch. There are ways to build a house cheaply, and with all new systems and appliances, you shouldn’t need to make major repairs for quite some time, potentially saving you money in the long run.

Utilities, Insurance, and Taxes

Utilities, homeowners insurance, and property taxes aren’t necessarily surprising expenses, but the actual cost can be shocking. Homeowners’ insurance costs an average of $1,680 each year. Moreover, homeowners spend about $2,000 more on utilities each year than renters because larger living spaces require more energy to heat and cool.

Property taxes vary by state and are heavily influenced by a home’s value. The most expensive property taxes are in New Jersey, where they cost approximately $8,400 annually. Alabama, on the other hand, has the lowest property taxes at around $600 per year.

Mortgage Costs

Most homeowners have a mortgage, but the monthly amount can take some by surprise. About 1 in 4 millennial homeowners say they regret that their mortgage is too expensive, according to the Millennial Home Buyer Report. 

Buyers are typically advised to make a 20% down payment, but with rising home prices, that’s become more difficult. It isn’t mandatory to put down 20%, but if you put down less, you’ll also need to pay private mortgage insurance (PMI), which is meant to protect the lender and alleviate some of the risk if you stop making payments on your loan. 

Pro tip: Getting a side hustle can help you earn extra money to put toward a down payment if you want to avoid PMI.

It’s normal for first-time home buyers to ask questions before submitting an offer or signing a loan. Choose a Realtor and a lender who can explain all of the potential expenses in your monthly mortgage payment.

Buying property is a great investment, but sometimes owning a house — especially the wrong house — is more trouble than it’s worth.

Homeownership is a big financial decision, and it requires proper planning and budgeting. To make a purchase you won’t regret, make sure you have enough money set aside for regular expenses, as well as unexpected costs. 

Most first-time home buyers are a bit overwhelmed with the amount of stuff that is needed for their new house.

While it may seem absurd, since they have been living for a while and have accumulated a lot of stuff, there are still quite a few items that new homeowners overlook.

The following collection points out the necessities that will be needed for a home to be functional and make the owner feel prepared for the majority of situations that arise.

Cleaning Supply

Some of these will be items that you may have on hand if you have been living on your own for a while.

But if you are moving to your first-ever spot away from home, you will need to have several things available for day-to-day cleanliness. You should have separate moving boxes for these items.

• Broom and dustpan
• Mop
• Mop bucket
• General floor cleaner
• Paper towels
• Sponges or scrubbing pads
• Rubber gloves if you have sensitive skin
• All-purpose cleaner for hard surfaces (sinks, toilets, countertops, etc.)
• Window cleaner for windows, mirrors, and light fixtures
• Scrubbing brush for toilets
• Duster with a long handle to reach higher corners and ceiling fans
• Vacuum (if the new home has carpet)
• Carpet odorizes (again if the home has carpet)
• Garbage bags
• Dishwashing liquid

This should be enough to keep the house clean and ready for your first group of visitors. If you like to have a nice aroma in the home, you should also consider scented candles or odor eliminators that plug in the wall.

Flashlight

Owning a home means you might have to crawl under the home or climb up in the attic, or both, to check on some kind of issue or investigate a weird noise. And there is always the chance that a power outage will leave you in the dark.

Most local stores will have inexpensive flashlights. Pro tip: get some small, circular stickers and place them on the bottom of the flashlight with the date that you bought the batteries. Make a note, on your calendar, to check the batteries every 6 months.

Smoke Detector

Along with keeping a home clean, you also want to protect yourself and your loved ones in the event of a fire or carbon monoxide leak.

Make sure to have a smoke detector in the kitchen as well as in each bedroom.

It is wise to spend the money on devices that can alert you to both smoke and carbon monoxide, to save space and money on batteries.

Along with the note on your calendar for the flashlights, also check the batteries in the smoke detector at the same time.

Lightbulbs

One thing that most people underestimate with a new home is the sheer number of light bulbs that will be needed.

Consider for a moment that the kitchen will likely have multiple lights, and each bathroom will likely have at least one fixture with multiple bulbs. Add to that the number of bedrooms, the living room, the dining room, and don’t forget the garage and rear deck.

In just a few rooms, you may need a total of 12 or more light bulbs. And they may not be the same size or wattage, so you need to check the current bulbs to get the right design and the correct wattage.

Curtains and Window Coverings

Most people like to have a bit of privacy in their home, regardless of what they are doing.

For this reason, it is a good idea to have some type of curtains and possibly some blinds or shades.

These items will depend on the overall color scheme of your furniture and decorations as well as your personal preference.

Small Kitchen Items

There are a few items that will be necessary for the kitchen to keep things safe, tidy, and functional

First, get a reliable can opener. Whether you choose the old-fashioned manual kind or an electric version, being without a can opener when you need one can be extremely frustrating.

If you have the extra money, consider buying one of the under-cabinet varieties. This puts the appliance in one spot and you always have access to it, plus it clears up countertop space.

The next item that a kitchen will need is some type of garbage can along with the liners. Between cooking and eating, the kitchen is the main room in a home that has the biggest need for a garbage can. Choose one that complements the appliances and still maximizes space at the same time.

Finally, you really should consider a small fire extinguisher to keep in the kitchen. Even if you don’t have a gas stove, there are lots of ways that a fire can start in a home. Grease fires are quite common, especially for people that are new to homeownership. These fires can spread quickly and do a lot of damage in a short amount of time.

Door Locks

You just bought your first home and the real estate agent hands you the key! What an exciting moment in your life! However, throw away the key and replace the locks on all the exterior doors.

There is no way to know how many people had a key to your existing home. From previous owners to relatives to ex-girlfriends and ex-boyfriends, there could be a lot of keys floating out there.

It is best to start on a new page with fresh locks and new keys. This puts you in control of who can enter your home and who is locked out. And it will provide a small piece of security knowing that you have your home under lock and key.

Securing the Home

Along with the new locks mentioned above, it is a smart idea to install some sort of security system to scare off intruders.

It can be as inexpensive and simple as alarms on the windows along with one of the modern smart doorbells or it can be as lavish and expensive as one of the wireless monitoring systems with multiple videos and a monthly service that alerts the authorities.

Whichever route you go, pay special attention to the windows that face the road along with all the exterior doors. These represent the most vulnerable and often targeted spots on homes.

Small Toolbox with Tools

When you move into a home, you find yourself doing a lot of manual labor tasks. Hanging pictures or mirrors, repairing a damaged light fixture, attempting to stop a leak in a bathroom and a lot of other items require some basic tools.

Now is a time to invest in a toolbox. Get a simple, sturdy box and add the following items

• Hammer
• Pliers
• Adjustable wrench
• Various sizes of screws and nails
• Tape measure
• Small carpenter’s level
• Flathead screwdriver
• Phillips head screwdriver
• Nut driver with adjustable head
• Utility knife

This basic kit should be enough to handle most of the simple household chores and home maintenance you will encounter when you move to a new place.

Locking Storage Box

While some families might need a large safe to store family jewels and other important items, most people can simply get a locking storage box.

After buying a home, you will have a deed, some mortgage papers, and home insurance documents that need to be kept in a safe space. You will likely also want to draw up a will in case something happens to you or your significant other.

A locking storage box is a perfect place to store these documents.

These boxes are much cheaper than a safe and easier to transport, and much easier to store in a closet or under a bed.

The box should be fireproof and give you enough room to store the above items comfortably.

Shower Curtains

A shower curtain does a couple of things to help you out.

First, it gives you some privacy while you are getting cleaned up.

Secondly, it keeps the water in the tub and protects the bathroom floor from a flood.

Plan to get a crisp, new curtain for each bathroom. Since you have no idea how long the old one has been in the home, it is a good idea to throw out all the old ones along with their germs.

If you have a decorative streak in you, you may choose to hang double shower curtains. One curtain is designed to keep out the water and hangs on the inside of the tub. The other curtain, which faces out into the bathroom, can be a solid color, a pattern, or just about anything you can dream of to match the bathroom décor.

Supply of Batteries

It seems that a home is always in need of at least one or two batteries. The smoke detectors and carbon monoxide detectors that were mentioned earlier will run on batteries. So will the flashlights that we discussed previously.

If you have a TV, there will likely be a remote that needs a battery or two.

Some thermostats run on batteries, instead of electrical power from the home.

Needless to say, you will need a few backup batteries in various sizes after you move into your new home.

Clothes Hanger

You most likely have lots of clothes on hangers now. But you will be surprised how often you find yourself looking for a hanger.

Super cheap plastic ones can be purchased in bulk at several stores and online.

If you have a nice suit or evening gown, you may want to get at least one wooden hanger. Wooden hangers help clothes keep their original shape, and they last much longer than the cheap hangers.

Plunger

This tool is only used in case of a very nasty bathroom situation, but it is very handy and extremely useful.

Most hardware stores and general department stores will have these in the bathroom section, typically for a low price.

There is a difference between a plunger intended for the bathroom toiled compared to a plunger intended for a kitchen sink. Compare the two and make sure to get the right one. You don’t want to mix them up if you have two in your home.

Laundry Items

You want to make sure you have a place for dirty clothes before they head to the wash. And you may want to have a separate item to move the clothes.

Most people like to have at least one large basket or container that is used for dirty clothes. Some people also like to have a basket for moving clean items from the dryer to their destination for folding.

If you have several people living in your home, you may want to have multiple dirty laundry containers, and designate them for outer clothes, undergarments, towels, and bed linen. This makes separation a breeze and easier to process multiple loads of laundry.

You will also need some laundry detergent and stain remover for those unexpected accidents. If you like some clean fragrance to your clothes, you may also like to get some add-in items to combine with the detergent to help with the aroma of the clothes.

Finally, you want to have some static guard sheets for the dryer. This prevents the build-up of static electricity on the clothes.

Front Door

Some people like to have a simple mat at the front door that reads Welcome. Others like to have something that speaks to their hobbies or interests, such as their pets, their enthusiasm for race cars, or their love of planting.

Some people like to have an entire theme at the front door. A small chair, with a few plants, and a sign above the chair with a whimsical expression are pretty common fare.

Whatever you choose, keep in mind that it will be seen by anyone that comes to your doorstep. This includes your old college buddies, your siblings, your parents, and your neighbors.

Final Thoughts On Things To Buy For Your New House

This list should get your home stocked with necessary items that you will use for as long as you own a house. Having these things on hand will help you take care of most tasks and make the whole process of homeownership much easier.

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What to Know About Your First House Purchase

Buying your first home: It’s an exciting time, and a major milestone to be celebrated. But the road to homeownership can also feel overwhelming — saving for a down payment, getting approved for a mortgage, finding the right home in the right location, and everything in between. 

A successful experience for first-time buyers — one that ends with you holding the keys to your new home — starts with careful planning and smart strategies. Read on to learn more about priorities for first-time home buyers. 

There are many questions to be answered before you’ll be fully prepared.

Sometimes knowing what not to do is just as vital as following sound buying tips.

1. Prepare for Your Home Buying Journey 

Before you start attending open houses, spend some time assessing your finances and getting organized. 

• Start saving: Not only for a downpayment but also for closing costs and moving expenses. Some first-time home buyers can qualify for conventional mortgages with as little as a 3% down payment, but remember that a 20% down payment will help you avoid the added expense of Private Mortgage Insurance (PMI). Use a down payment calculator to set a savings goal, so you can start putting money aside. 
• Know your credit score: If you’re not sure what your current credit score is, now is the time to find out. You can get a free credit report from any of the three leading credit reporting bureaus: Experian, TransUnion, or Equifax. Ideally, you should review your credit report at least once a year to ensure your report is accurate and up to date. 

Maintain your good credit score by continuing to pay bills on time. And hold off on opening new lines of credit, applying for loans, or making other major purchases at this time.

Potential lenders want to see consistent financial behavior, so avoid risking final mortgage approval by taking financial chances for now.

• Get preapproved: A mortgage preapproval letter is different from prequalification.  Prequalification is a baseline estimate of how much of a home loan you may be able to secure, based on an assessment of your income and other information you’ve provided. A mortgage preapproval letter is a document from a lender stating the exact amount of loan they’re willing to lend you, based on a more rigorous process that includes evaluation of your W-2s, bank statements, and credit score. 

Home shopping with a mortgage preapproval letter in hand gives you the ability to make an offer with confidence knowing it’s within your budget. It also demonstrates to a seller that your offer is serious and backed by a lender. 

2. Understand Your Mortgage Options

Mortgage loans have a variety of options, each with its own parameters and eligibility requirements. 

• Conventional mortgages are the most common type of home loan. Some eligible first-time home buyers are able to obtain a conventional mortgage with as little as 3% down. Conventional mortgages are not guaranteed by the government. 
• FHA mortgages are backed by the Federal Housing Administration and allow eligible buyers with lower credit scores to put down 3.5%. 
• VA loans are available through the Department of Veterans Affairs for current or veteran military service members or qualified spouses and typically require no down payment. 

A 30-year fixed-rate mortgage means the loan is paid off in 30 years at an interest rate that remains the same over time. A 15-year loan usually has a lower interest rate than a 30-year mortgage, but with a larger monthly payment. 

It’s also important to be clear with your own goals and assess how much house you can afford, according to the bank, and how much house you want to afford.

If you have other debt to contend with such as student loans, car payments, or credit cards, you may choose to spend well under budget in order to keep your debt-to-income ratio in check. 

3. Make Informed Buying Decisions

With your finances in order and preapproval letter in hand, it’s time to give serious thought to home shopping.  

• Find the right agent: Working with an established real estate agent is a smart choice, especially for a first-time home buyer. A buyer’s agent works on your behalf, helping you find homes that suit your needs and budget, gives advice in crafting an offer and helps to navigate the negotiation process all the way through to closing.   

Depending on your needs, you might consider working with a flat-fee real estate agent or broker which could net you significant savings in commission rates or fees.  

• Find the right location: The old real estate adage “location, location, location” still holds true. Research neighborhoods you’re interested in and attend open houses, either in person or virtually. Check out the neighborhood’s walkability score, research property value trends, crime rates, and other municipal information like economic trends or planned improvement projects. 

If you’re moving to an area you’re not familiar with, for a job opportunity. For example, make sure you understand the cost of living in the new location.

Use the expertise of a good local realtor who knows the area to help you find the right house in the right location at the right budget. 

• Find the right home: In contrast to previous generations, many millennial home buyers are prioritizing shorter commutes in walkable communities with better schools and amenities. They’re seeking low-maintenance homes with smaller square footage. While single-family homes are the right fit for some, townhomes and condos offer affordable choices as well. 

You may have a mental list of must-haves for your first home, but zero in on three or four priorities to help you focus your search. What’s most important? Proximity to work? Having designated space to work from home? A home you can “grow into” with an expanding family? Urban setting or quiet suburb? Starter or forever home? 

First-time buyers who are handy and willing to take on a few projects might consider a fixer-upper as an affordable option, particularly if the home is in a desirable area. However, be realistic.

Don’t overestimate your skills, or underestimate the amount of time or money you’re willing to invest in updating an older home.

Make sure you understand the basics of the appraisal process so you don’t end up overpaying for a property or making improvements that have a low return on investment.

Knowing your priorities will help you determine what kind of home fits your goals for the next five years, the amount of time typically recommended when investing in homeownership. Staying put for a minimum of five years decreases your chances of taking a financial hit when it’s time to sell. 

Purchasing your first home is a process that takes planning, patience, and persistence, but it’s all worth it when you’re holding the keys to your new living space. 

Understanding first-time home buyer priorities are your first step to a successful purchase. Best of luck!

Are you ready to make the big financial leap and purchase your first home? Going from your parent’s home or even a rental property to your own house is a significant financial decision.

There are many questions to be asked, especially when it comes to your finances.

A new research report shows that while U.S. home prices are skyrocketing, income has remained mostly flat, making homeownership for Gen X, millennials, and younger generations more of a dream than a reality.

Since 1965, home prices have increased 7.6 times faster than income, and 3.1 times faster since 2008. Average home values grew from $171,942 to $374,900, an increase of 118%, while median household income grew from $59,920 to $69,178, an increase of just 15%, adjusted for inflation.

Financial experts recommend home buyers use a house-price-to-income (PTI) ratio of 2.6 when estimating how much mortgage they can afford. But from 2019 to 2021 alone, the median PTI ratio increased by 14.9% — from an already elevated 4.7 to 5.4 — meaning homes in 2021 cost 5.4 times what the average person earns in one year.

The PTI ratio crisis in the U.S. may impact both current and aspiring homeowners. Homeowners who paid top-dollar prices when they bought during the pandemic may currently be enjoying high home values, but they could be in trouble if those values plummet in the next housing crash.

Likewise, more home buyers are getting priced out of the market as mortgage rates climb (up from 3.14% to 3.18%), supply remains low, and prices remain high.

Read on for more insights into how these shifts are affecting the U.S. market and how home buyers can determine if they’re ready to get a foot in the door of homeownership.

How Much Income Do Americans Need to Buy a Home?

The median household income is currently $69,178. To afford a home in 2021, a U.S. home buyer needs an average income of $144,192 to afford the current median home price of $374,900.

The current PTI ratio of 5.4 translates to the number of years the average home buyer needs to save in order to purchase a home.

But more than a down payment and closing costs, sky-high home prices also translate to monthly mortgage payments that may be out of reach for some buyers who may already be at the limits of their home-buying budget.

Don’t forget to factor in the monies needed for escrows on taxes, insurance, and mortgage insurance.

Homes that need renovations and other improvements require even more financial considerations.

Housing affordability is a combination of home prices and income, and while the price-to-income problem is widespread with historic highs, it is low-income service workers who are most affected.

Though wages may be higher in larger metro areas, the lack of new affordable housing and exorbitant prices on existing housing stock undermine any wage advantage. 

The Most and Least Affordable Places to Live in the U.S.

The same research study found that nearly 90% of major U.S. metros have a PTI that exceeds the 2.6 ratio considered healthy by economic experts.

Only six out of the 50 largest major metro areas have a PTI ratio in the recommended range of 2.6 or lower:

• Pittsburgh (2.2)
• Cleveland (2.4)
• Oklahoma City (2.5)
• St. Louis (2.5)
• Birmingham, AL (2.5) 
• Cincinnati (2.6)

California is home to the least affordable housing in the U.S. with exceptionally high PTI ratios:

• Los Angeles (9.8)
• San Jose (9.1)
• San Francisco (8.3)
• San Diego (7.8)

The gap between soaring home price growth compared to relatively flat income growth touches other corners of the U.S. besides California. New York’s home-price-to-income ratio clocks in at 6.6, Miami at 5.6, Seattle at 5.5, and Salt Lake City at 5.2.

And as home prices outpace income rates nearly everywhere in the U.S. in the 50 most populated cities home values between 2017 and 2021 on average increased 17.8%, while income increased only 6.2% — meaning home prices grew 2.8 times faster than income.

Average home values in America’s 50 most populated cities grew from $271,70 in 2000 to $304,589 by the 2008 housing crisis, to $376,826 by 2021, reflecting the effects of the COVID-19 pandemic on the U.S. housing market.

Not surprisingly, in America’s most expensive cities, housing got more expensive: The average PTI ratio increased 61% since 2000, creeping up to 6.9%. In comparison, cities with the lowest PTI ratio grew just 10% since 2000, averaging 2.3.

More Equity Now Could Sink Homeowners Later

Climbing home prices increased homeowners’ equity from 2015 to 2020, likely a factor for the 54% decrease in underwater mortgages in the largest metro areas, a change of 12.2% to 5.6%.  

The cities with the biggest decrease in underwater mortgages include:

• Salt Lake City (1081% decrease from 18.5% to 1.6%)
• Las Vegas (513% decrease from 21% to 3.4%)
• Phoenix (471% decrease from 16% to 2.8%)
• Seattle (467% decrease from 10.3% to 1.2%)
• Tampa, Fla. (315% decrease from 16% to 3.9%)

While homeowners are seeing increased equity now because ofo high home prices, it’s possible they could find themselves underwater in the next housing crash.

The housing crisis that was predicted in the first months of the COVID-19 pandemic never happened. Thanks to government aid, low-interest rates, and homebuyers seeking a geographic adjustment to pandemic problems, the housing market took off, sending prices skyrocketing as stock became limited.

In particular, homeowners who bought at the peak could find themselves underwater on their mortgages when the period of high demand and low supply tapers off as it historically does, and the housing bubble pops. And while it might be great for sellers, high home prices create a strain on the market if the pool of home buyers shrinks due to an inability to find an affordable property.

Can You Afford to Buy Right Now? 

Home buyers determined to purchase now should proceed with caution and consider the market and their personal situation carefully. Work with a qualified real estate agent who can help you navigate an uncertain climate.

Some questions to consider before you buy: 

• Do you have 20% for a downpayment? Not only does a traditional 20% down payment lower your mortgage payment, but it also saves you the cost of private mortgage insurance, which can be anywhere between 0.3% and 1.2% of the balance of your loan.

• How long do you plan to stay in the home? When the market pops, how likely is it you’ll be underwater on your mortgage? If you’re planning to stay in the home for the long haul, you’ll have time to build back any equity lost in a housing crash. 
• What’s the post-purchase cost to live in this home? If you’re buying at the peak of the market, can you afford the monthly mortgage, plus taxes, insurance, and maintenance? 

Final Thoughts

Buying a home for the first time is a big deal both financially and mentally. A home purchase should never be ready until you are truly ready. Make sure your financial house is in order before making such a life-changing decision.

You should make absolutely certain you have the income needed to buy a home in 2021 and into 2022.

Purchasing a Haunted House in 2022

With Halloween just around the corner we thought we would take a look at buying a home that has paranormal activity. Would you buy a haunted house?

If you said yes, you’re not alone. According to new research, 73% of Americans say they’d consider purchasing haunted real estate in a competitive market (but 52% say they wouldn’t pay full market value). 

Read on to learn more spooky stats and freaky findings from the survey.

76% of Americans Believe in the Supernatural in 2021 

Of those supernatural believers, 44% say they’ve experienced more supernatural events since the start of the pandemic. Millennials are 3x more likely than boomers to report an increase in supernatural activity. 

44% of Americans Believe They’ve Lived in a Haunted House 

Perhaps with 71% of Americans with remote-friendly jobs now working significantly more hours from home, there’s more opportunity to observe ghostly comings and goings than in the pre-pandemic days. In 2020, just 24% of Americans believed they have lived in a haunted house. 

Some Things Are Scarier to Homeowners Than a Haunted House

Only 5% of respondents said ghosts were the scariest part of homeownership. Homeowners, instead, are more afraid of:

• ​​Mold (57%)
• Foundation issues (56%)
• Termites (54%)
• Asbestos (54%)
• Water damage (54%)
• Pests (e.g., cockroaches, mice, spiders, etc.) (53%)
• A leaky roof (53%)
• Outdated electrical system (51%)
• Lead paint (51%)
• A leaky basement (48%)
• Old plumbing (47%)
• Radon (44%)
• A broken furnace (41%)
• Broken central air conditioning (41%)

Whether you’re buying a home for your family or are an investor taking advantage of a 1031 exchange, there may be worse things than ghosts when it comes to living in or flipping a home.

If the potential for ghosts or other paranormal activity is there it may be one of the questions you ask when buying a house.

Also Scary: Many Americans Lack Basic Safety Features in Their Homes

Although American homeowners fear floods, tornadoes and other natural disasters (54%), fires (49%), and other hazardous threats, many households don’t have basic safety features in their homes. 

For example, many homeowners lack a radon detector (66%), an alarm system (45%), a carbon monoxide detector (40%), fire extinguishers (38%), and smoke detectors (29%). 

Ghosts Are Not a Top Deal Breaker for Most Americans

Nearly half (48%) of Americans would rather purchase a haunted house than live within a mile of a dump or waste management facility. Other deal breakers that top home buyers’ lists include buying a home near the scene of a violent crime (47%), a former meth lab (45%), or within a mile of a prison (44%). 

Many homebuyers are also not interested in property located next to a cemetery (39%), where someone died of natural causes (26%), or with an address featuring “666” (33%).  It might take some sleuthing to know if your potential home has a haunted or notorious history, but if it means you’ll be more comfortable knowing, it’s time well-spent. 

Americans Find a Competitive Housing Market Scarier Than a Haunted House

Buying a home in the 2021 ultra-competitive housing market is tough, and 73% of Americans said they’d consider purchasing a haunted home — up from 59% in 2020 — especially if there were other benefits to offset the occasional paranormal activity. 

A surprising 27% of respondents even said they’d be willing to pay above market value for a haunted house. 

For the most part, though, 63% of respondents said they’d consider a haunted house if it came with a lower price tag. Respondents also said they would consider one if it had: 

• A safer neighborhood (57%)
• Friendly ghosts (53%)
• Modern renovations and/or appliances (41%)
• A larger yard or more land (39%)
• More square footage (38%)
• A better school district (37%)
• Closer to amenities (28%)

In a competitive market, buyers have less opportunity to be selective based on limited housing stock. 

The tight market could also be why more than 1 in 10 Americans said they wouldn’t move immediately even if they saw signs of paranormal activity. In one survey, 48% of respondents said they’d try to get to know the ghost, 13% said they’d try to get rid of the ghost, 17% said they’d ignore the ghost, while 21% said they would sell their house. 

Buying or Selling a Stigmatized House in a Competitive Market

Although many homeowners apparently feel comfortable sharing their space with spirits, others said they would put their home on the market immediately under certain conditions, including if objects moved or levitated on their own (45%), they saw a ghost (37%), or their children suddenly behaved strangely in the home (40%).

Others said they’d move if a serious crime was committed nearby (38%) or if they learned about a crime previously committed in the home (34%). 

Buying or selling a stigmatized home in a competitive market can be either a blessing or a curse, depending on which side of the buying/selling coin you’re on. A home might be stigmatized from its reputation for hosting paranormal guests, but it can also suffer from negative associations with infamous crimes, violence or other unfortunate events that may have occurred in or near the home. A famous home featured in movies or TV might also be stigmatized if it attracts an endless stream of tourists or fans. 

Because stigmatized properties are harder to sell — typically they sell for 3% less and take 45% longer to sell — buyers willing to overlook the negative psychological impact of such a home may be able to get a bargain. As a buyer, tell your real estate agent that you’re open to the possibility of a haunted or other hard-to-sell home if it means you can make an offer that allows you to stretch your dollars further. 

Keep in mind that even if the house you’re buying is stigmatized, you still need to do your due diligence, especially if the market is ultra competitive. Make sure your credit score is healthy, your financing is in order, and this is the right house for you. Remember, chances are, you may encounter the same challenges in eventually selling the home in the future. 

Homeowners desperate to unload a stigmatized home and move as quickly as possible should be aware of the disclosure laws in their state. Some states require that sellers inform buyers of any stigmas associated with the property, but 62% of the survey’s respondents said they wouldn’t disclose a haunting to potential buyers if possible, (including 10% who would refuse even if the law required it). 

Work with a broker who can help you frame the sale as an opportunity for buyers looking to make a wise purchase and don’t mind working with, rather than against, the notoriety.