Millennials Win When It Comes to Buying Homes

 The National Association of Realtors revealed in the most recent buyers' report that millennials make up 37% of the homebuyers. Millennials (22-40 years old) make up the largest share of homebuyers in 2021.

The report breaks up the millennial generation into two groups. The older millennials who make up 23% of homebuyers range from 31-40 years old and the young millennials (ages 22-30) make up 14%. Combined this makes up the 37% reported and has not changed since 2014.

This year the report also includes Gen Z buyers for the first time. These buyers are between 18 and 21 years old and only make up around 2% of home buyers and sellers. Gen X (ages 42 - 57) comes in at 24% when it comes to buying a home. Gen X has the highest median income of $113,300 and they usually purchase the largest houses (2,100 square feet).

The oldest generation reported was the Silent Generation which is from 74 - 95 years old. This generation just purchased 5% of the homes this year. This is a small group which probably is due to the fact that this age bracket is retired. The largest group for selling homes was the Baby Boomers (ages 56 - 74) which consisted of 43% of home sellers.

If you would like to view the NAR's report which also includes characteristics of home buyers and sellers click here.

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2022 Tax Deductions For Homeowners

 Everyone in America will be filing for taxes if they earned any money in 2021. Current homeowners have tax incentives that will help protect their investment and make homeownership easier for everyone. If you are a homeowner then you will want to understand how these tax incentives will benefit you.

Mortgage interest deductions are one of these incentives. This will reduce your taxable income. A homeowner can deduct mortgage interest on the first $750,000 of their mortgage. Premiums paid on qualified mortgage insurance and home equity loans that are specifically used to buy, build or improve your home can also be itemized under deductions. If you are married but filing separately, the maximum deduction will be $375,000 for each.

A homeowner can also deduct state and local taxes. You can deduct up to $10,000 in state and local taxes. In fact, this includes property taxes! Remember again, if you are married and filing separately you will receive $5,000.

Another tax incentive for a homeowner is residential energy credits. There are two kinds, residential energy credit, and non-business energy credit. For residential energy credit, a homeowner can get 26% of the cost of residential energy property equipment plus labor. This includes solar, wind, and geothermal equipment. Examples of geothermal equipment are solar panels, advanced circulation fans, or natural gas water heaters. Non-business energy credits will give homeowners 10% of the cost of qualified energy efficiency improvements and 100% of residential energy property costs. There is a maximum of $500 from the time the credit was created in 2006 to 2022.

Homeowners have many financial benefits when it comes to owning a home. During tax season you need to add up your tax breaks. Speaking to a tax professional will help you with potentially getting thousands of dollars in tax deductions.

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Thinking About Moving To A New City?

 Moving to a new city is a fun and exciting adventure, but take the time to get to know the area before you do it. Here are five tips to do before getting to know a new city.

1. Explore like a local.

This is the perfect way to become emersed in an area from the get-go. The tourist parts of town are always the best features for some, but to get a real feel for an area, you will want to visit the areas where residents live work, and play. A good way to get to know the area is from a local's perspective. When in town, ask a local such as a barista, bartender, or concierge. An example would be to ask where do locals frequent on the weekends?

2. Gather info as you get around.

Having to travel through a city will get you familiar with the lay of the land. You figure out quickly if there is public transportation, and how accessible and well-connected the city is. Take the time to take public transit or see how easy it is to get a taxi or Lyft.

 

3. Find a connection.

You always know someone through six degrees of separation. Social media is an easy way to find someone who knows someone in the city you are interested in. It is much easier to find connections to almost any place with social media. A good idea is to get out on social media and let others know you are interested in moving to a certain city and ask if  they know anyone who might live there.

4. Reach out to the experts for help.

Cities and chambers of commerce are finding creative ways to get people to move to their cities. Towns and cities across America are competing for new residents. A good idea is to contact the local chamber of commerce to see what assistance they might offer. For example, in Iowa City/Cedar Rapids, new residents can get connected with job opportunities and a local resident to help them make friends in the area.

5. Get lost.

What does this mean? Sometimes how a place makes you feel is more important than the black and white information and the pros and cons. Visit the area and just go with the flow and get lost in the city. This is a great way to see if the place feels like home.

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The Cost of Buying a Home

Buying a home is one of life's big moments and is a huge financial expense. If you are in the market for a home, then you will want to factor in all the costs associated. Here are the true costs of owning a home.

A home inspection is a cost that you will occur and if there are any issues with the home, you will either negotiate with the seller or have to come up with the money to fix the problems. A detailed, in-depth home inspection is a good idea to get on the home you are going to purchase.

When you purchase a home, you will need to bring closing costs to the table. Closing costs include title fees, lawyer fees, contract fees, and more. Future homeowners need to realize the listing price is not the only expense but closing costs will be added on.

Potential homeowners will need to consider monthly utility expenses. Operating home expenses can be a surprise to first-time homebuyers. Some of these expenses, just to name a few, include heat or cooling, appliances, lights, gas, water, trash and recycling.

Along with a mortgage monthly payment, you will need to pay homeowner's insurance. A homeowner's insurance agent can explain what is included in these monthly costs. The homeowner's insurance premiums are held in the escrow account and paid each year. They are collected monthly on top of the mortgage monthly payment.

Moving costs are many times looked over. These costs need to be considered whether your move is local or far. These costs can include time off work, packing, loading and unloading, and in some cases storage facilities and packing supplies.

When you live in a neighborhood with a homeowners association there will be HOA fees that are due each year. These will be paid either monthly or annually. You will need to factor this cost into your budget.

If you are in the market for a new home, using a Realtor is a smart choice. Remember to leave the house shopping, buying, and selling to the professionals.

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What To Expect With the Mortgage Process

 

Purchasing a home is a big life decision and the mortgage process is a big part. Especially in today's hot housing market, a buyer needs to have all their ducks in a row. Here are several steps to take which will walk you through the mortgage process.

1. Get a free rate quote (or two)

With anything you buy, you always shop around for the best deal. This is the same for mortgages. You will want to obtain a free rate quote from at least a couple of different lenders. Before contacting a lender, have the answers to these questions. Are you buying a home or refinancing your current mortgage? What kind of home are you looking for? Will this be your primary residence? When are you looking to buy/refinance? Where do you want to live? The majority of lenders will want you to answer these questions when you are asking them for a free quote.

2. Choose a loan originator

Once you find the best quote, you will want to choose a loan originator. Once you have chosen a loan originator, they will be your point of contact when it comes to the mortgage application. The loan originator is the middle man and can make communication between all parties run smoothly.

3. Get preapproved

In the current seller's market, this is a must. Getting preapproved lets a seller and an agent know that you as a buyer are serious. In order to get preapproved, you will need to give your chosen lender your credit score, income, debts, and any other financial obligations. Once you are preapproved, the lender will give you a letter that will last 90 days.

4. House shop

Once you know the amount you are preapproved for, it is now time to shop for a home. Remember to choose the right Realtor who can help you narrow down your options.

5. Make an offer

When you and your Realtor have found your dream home, you need to make an offer. This is where your preapproval letter comes into play. A preapproval letter will give you a leg up on other buyers.

6. Lock your rate and get an appraisal

Once your offer has been accepted it is time to get into the loan options and rates. You will want to choose the right type of loan and rate that fits your budget. During this time you will also want to get an appraisal on the home. Usually, the appraisal is requested by the lender. The lender wants to make sure the loan amount is not over what the value of the home is appraised for.

7. Apply for financing

Now is the time to apply for your loan. Plan on a week to two weeks to finalize your loan application. You will need to gather all your documentation which includes your most recent pay stubs, employment records, bank statements, tax returns, government-issued ID, and social security number.

8. Underwriting

This is part of the mortgage process where a lender will assess the risk of approving your loan. This is the final decision stage for your loan application.

9. Final review

Once your loan is approved it is time to go over all of the paperwork. Your lend will review everything and make sure it is ready for closing. You will also get a closing statement which will show you how much money you need to bring to the closing.

10. Closing time

The final step is the closing. At the closing, you will sign documents and pay the closing costs. Once you have completed this, you are given the keys to your new home!

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A Kitchen's Design Begins With the Layout

The kitchen is the heart of the home and every kitchen has its own layout. A luxury kitchen is not defined by the best design, appliances, fixtures, or features but by the layout. Industry professionals say there are six different categories the layout of a kitchen falls under.

1. The Island

This style type of kitchen will fit most home designs. It gives additional counter, cabinet, and appliance space. There will need to be a large footprint allotted to the kitchen as the island will take up a good bit of space. An island requires space for itself and space for walking room around the island.

2. The Peninsula

A peninsula kitchen works great in a home with a kitchen that has many walls. Benefits include an extension of cabinet space and counter space that looks out into open space. Similar to the island, the peninsula is not free-standing and takes up less space. It does close off part of the kitchen almost like a wall would.

3. The One-Wall Kitchen

A one-wall kitchen is the best layout for saving space. This is a great layout for lofts, studios, or extremely long kitchens. In this style of kitchen, everything is fixed to a singular wall. This creates a very clean design with plenty of room. The only downside is the lack of prep space. An island can be added in front of the wall to create more prep space but this takes this layout and changes it to more of a galley kitchen.

4. The L-Shaped Kitchen

An L-shaped kitchen is the best layout to get the most corner space and fits into any home design. This layout can limit foot traffic in a large kitchen. The space made by the L can have many unique features such as a large kitchen island.

5. The Galley Kitchen

A galley kitchen is a little bit on the smaller footprint side. There can only be one cook in the kitchen so to speak. This layout maximizes functionality in a narrow space. The only home design this layout will not work in is a layout with a great room or keeping room concept. It is not functional as an eat-in kitchen and is isolated from the rest of the home.

6. The "U" Kitchen

A "U" kitchen is great for creating an open cooking space with tons of cabinetry, prep space, and functionality for multiple cooks. This type of kitchen can have an eat-in kitchen or huge island. This layout is perfect for a large footprint and it needs at least 2 walls if not 3.

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