MarketWatch | Since the recession, first-time home buyers, who’ve made up around 40 percent of all buyers, have been shrinking. In 2015, they made up just under 30 percent of the market share, according to the National Association of REALTORS®.
The culprit seems to be a lack of knowledge about low-down payment programs such as those available by the Federal Housing Administration.
Consumers believe on average that they need 16 percent for a down payment in order to qualify for a mortgage, but in reality, homes can be purchased with as little as a 3 percent down payment.
Rules enacted in 2015 that decreased the amount of mortgage insurance borrowers must pay on FHA loans and Fannie Mae and Freddie Mac lowering down payment minimums may have boosted first-time participation slightly, say housing analysts.
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Source: MarketWatch | Renovations are mostly done not only for a home owner’s comfort but to add value to their home. However, in some cases, home owners may end up making their home worth less. Here are three of the most common renovations that can potentially decrease the value of a home:
1. Eliminating a bedroom:
The more bedrooms a home has, the higher the price it can usually sell for. Even if the home owner plans to remove a bedroom in order to expand another one or make a living space larger, this renovation project could likely burn them at resale by completely changing the comparable value of the home in the neighborhood.
2. Renovating the garage into living space:
Getting rid of the garage space in favor of an extra office, family room, or bedroom can be a turnoff to many potential buyers at resale. Seventy-four percent of recent buyers said that having a garage is extremely or very important, according to a survey of 7,500 people by Crescent Communities.
3. Removing closets:
People need closets, and will many times count the number of closets per room. This is why it can hurt the resale value of a home when a closet is removed in order to make a bedroom, or master suite larger.
Realtor.org | Following the housing market’s best year since the recession, existing-home sales are expected to increase in 2016 at a moderate pace; according to an economic forecast forum here at the 2015 REALTORS® Conference & Expo.
The pent-up demand for buying in recent years finally broke out in a meaningful way in 2015, fueled by sustained job growth in many parts of the country and rising home values, giving homeowners the incentive to sell – a trend that Lawrence Yun, chief economist of the National Association of Realtors®, expects to continue into next year.
“Sales activity in 2016 will once again be primarily driven by the ongoing release of more pent-up sellers finally realizing their equity gains and using it towards the down payment on their next home,” said Yun.