Time and again, we hear from potential buyers that one of the most challenging parts of buying a home is saving up for the down payment.
Many people believe that they need a 20% down payment in order to buy a home, but that’s not really true. While 20% is a standard, it is by no means the only option for putting down a deposit on a home.
In fact, there are a wide variety of mortgage loans out there that may only require as little as a 3% down payment. If you’re still saving up for your home’s down payment, here are a few things to keep in mind about your buying timeline.
How Long Does it Take to Save up a 20% Down Payment?
This depends largely on your financial circumstances. How much you make in a year, your current debt and monthly expenses, and your saving patterns will largely dictate how much (and how quickly) you’ll be able to save.
Many financial advisors suggest saving around 20% of your monthly income throughout the year, and this is certainly a great place to start! However, if you want to buy a home as soon as possible, you may have to be a more aggressive saver.
It also depends on what state you live in. In fact, the number of years it takes a median-income earner to save up for a 20% down payment differs largely by state.
How Long Does it Take Buyers in North Carolina?
In North Carolina, it generally takes someone around two years to save up enough money for a down payment. In other states, depending on median housing prices, this may be as high as 30 years, or as low as a little over one.
But that’s just for the 20% down payment option. If you’re eligible for a 3% down payment program, it may only take you about half a year to save up for a down payment.
All in all, it depends largely on your financial situation!
How Much Should I Spend on Housing in a Month?
The age-old rule for handling your income is the 50/30/20 rule. Half of your monthly income should go to necessities like housing, healthcare, and food. 30% should go towards discretionary spending, and 20% should go to savings.
Experts in real estate agree that of that 50%, no more than 30% of your income should go towards your housing expenses.
How Do I Navigate the Financial Side of Buying a Home?
Find out about all the ways to celebrate Independence Day 2019 in Raleigh, Durham, Chapel Hill and beyond. Enjoy fireworks, parades, festivals and more.
Olde Fashioned Fourth of July Thursday, July 4th, 2019, 9 a.m. to 1 p.m. Historic Downtown Apex Flag-raising, inflatables, face-painting, karaoke, parade of wheels, fire department splashdown Free to attend. Might be cost for some activities.
Cary Independence Eve Celebration Wednesday, July 3rd, 2019, 6:30 p.m. Cary Arts Center
The Cary Town Band will celebrate and honor our nation’s veterans in this year’s Independence Eve Celebration. Speaker Deborah Tilton, a Specialist in the NC Army National Guard and decorated veteran, will answer the question, “What is a Veteran?” Musical selections will be played to honor those who have served. The band will pay special tribute to our military service personnel and their spouses past and present who have helped secure our freedom and liberty. For more info call (919) 469-4069. Free
Cary Independence Day Celebration Thursday, July 4th, 2019, 7:00 a.m. – 6 p.m. Fred G. Metro Bond Park, Boathouse Enjoy the fishing tournament, parade, and various activities. The activities start at 8 a.m. Free
July Fourth at Booth Amphitheatre Thursday, July 4th, 2019, 3 p.m. Koka Booth Amphitheatre Enjoy an afternoon and evening of fun, family festivities. The North Carolina Symphony will be performing. There will be a fireworks display at the end of the event. Free but there will be a charge for some of the amusements.
Town of Chapel Hill 4th of July Fireworks and Community Celebration Thursday, July 4th, 2019, 6 p.m. Southern Village, 400 Market Street, Chapel Hill
The celebration and fireworks are moving from Kenan Memorial Stadium this year. They will be launched from Scrogg’s Elementary School, and the prime viewing areas will be Southern Village, where there will be a pre-fireworks community celebration with kids’ activities and music, and Southern Community Park, 1000 Sumac Road.
Clayton’s Fourth of July Celebration Thursday, July 4th, 2019, 4 p.m. Municipal Park, 325 McCullers Drive, Clayton.
Live music by Big Love, free watermelon slices, free ice cream, inflatables, fair rides, and more.fireworks at the end of the day.
Children’s Independence Day Celebration Thursday, July 4th, 9:30 a.m. Durham Central Park, 501 Foster Street, Durham Bring the kids and celebrate the birth of our nation in this fun and patriotic parade. Come early to help your kids decorate their bikes, big wheels, tricycles, wagons, even strollers. Parade starts at 10:30 am. Free popsicles and fire truck tours after the parade. Free
Durham Fourth of July Celebration Thursday, July 4th, after the ballgame ends Durham Bulls Athletic Park Patriotic fireworks show immediately following the USA baseball game. Free, but you should consider buying tickets to the baseball game to make sure you get in. This is strongly suggested. Follow the above link for more information.
Watts-Hillandale Fourth of July parade and Celebration Thursday, July 4th, 10 a.m. Oval Drive Park, 2200 W. Club Boulevard, Durham This tradition started in 1950 with six neighborhood kids riding their bikes up and back on the sidewalk. Today, 1,000 people attend. The parade is led by the fire truck and features patriotic singing. Afterwards, participants cool down with bottles of ice-cold Coca-Cola.
Independence Day Celebration at Stagville Friday, July 5th, 2019, 11 a.m. Stagville State Historic Site 5828 Old Oxford Highway, Durham Free
Frederick Douglass Community Reading: Commemorate Independence Day with a community reading of Frederick Douglass’ powerful Fourth of July address, “What to the Slave is the Fourth of July.” This is a participatory event, open to people of all ages! We will provide copies of the speech to all attendees, and read it out loud together as a community.
Independence Day Celebration Wednesday, July 3rd, gates at 6 p.m., Spare Change plays at 6:30 p.m., fireworks at sundown South Park, 900 S. Main Street Food vendors, music, free rides for kids, splash pad 6 p.m. until sundown, and fireworks. Free
Garner Independence Day Celebration Wednesday, July 3rd, 5 p.m. Lake Benson Park, 921 Buffaloe Road, Garner Celebrate Independence day with food, music, and inflatable games. The North Carolina Symphony will be performing. The event will end with a fireworks show.
Hillsborough’s Independence Day Picnic Sunday, June 30th, 11 a.m. Eno River Farmers Market Pavilion Live music by Alabama Slim and more. Food trucks and family activities in River Park until 3 p.m. Free
Holly Springs Independence Day Celebration Friday, July 5th, 5 p.m. Jefferson L. Sugg Farm at Bass Lake Park A pet-friendly festival with food, games, crafts, activities, and more. There will be a fireworks display at 9:15. Free
Knightdale Fourth of July Celebration Thursday, July 4th, 5 p.m. Knightdale Station Park This celebration features food trucks, vendors, and kids’ activities, as well as a live performance by The Embers. There will be fireworks to close out the celebration. Free
Morrisville Fireworks Wednesday, July 3rd, 2019, 6 p.m. Morrisville Community Park Fireworks and food trucks. Bring blankets, chairs, and tents to watch the show. Free, but bring money for the food trucks
Raleigh Fireworks Thursday, July 4th, 6 p.m. PNC Arena/Carter-Finley Stadium/NC State Fairgrounds Area Raleigh’s fireworks will take place in the PNC Arena area.
Fireworks will be launched from property owned by North Carolina State University along Trinity Road, which is adjacent to PNC Arena, Carter-Finley Stadium, and the North Carolina State Fairgrounds. There are no major visual obstructions in the vicinity so the fireworks can be viewed from all directions.
Parking lot gates will open at 6 p.m. and fireworks are scheduled to launch at 9:30 p.m. There will be free parking at the PNC Arena lots, Carter-Finely Stadium lots, and North Carolina State Fairgrounds Bunn Field lots along Trinity Road.
Finley Freedom Festival Sunday, June 30th, 2019 6:30 p.m. A.E. Finley YMCA, 9216 Baileywick Road, Raleigh Free
The whole community is invited. You don’t need to be a member of the YMCA. Music, games, face painting, food vendors, balloons, and afireworks show.
Brier Creek Independence Day Celebration Thursday, July 4th, 7 p.m. Brier Creek Commons Games, bounce houses, prizes, and face painting. Ends with a fireworksdisplay at dusk.
Joel Lane House Celebration Thursday, July 4th, 11 a.m. to 4 p.m. Joel Lane Museum House The historic Joel Lane Museum House offers free admission on July 4th. Take a tour of the house, and enjoy historical activities. Free
Independence Day Celebration at the State Capitol Thursday, July 4th, 11 a.m. to 4 p.m. NC State Capitol, 1 E. Edenton Street, Raleigh This great Raleigh tradition includes a naturalization ceremony for new citizens and patriotic music by Raleigh Concert Band. Check back soon for more information. Last year it also featured carriage rides, food trucks, and free family-friendly activities. Free
Rolesville Fourth of July Parade and Celebration Thursday, July 4th, 5 p.m. 121 Redford Place Drive The event will include live entertainment, food trucks, a beer garden and a fireworks display.
Selma’s all-American Festival Thursday, July 4th, 2019, 6 p.m. Uptown Selma A family-fun event featuring food, special events, a children’s area, and fireworks. Free
Smithfield Independence Celebration Sunday, June 30th, 2019, 6:30 p.m. South Third Street, Historic Downtown Smithfield Food vendors, water wars, and music by The Seaside Band. The celebration ends with a fireworks display at 9 p.m.
Wake Forest Fireworks Display Wednesday, July 3rd, 5:30 p.m. Heritage High School, 1150 Forestville Road, Wake Forest The band, Crush, is performing, followed fireworks. Free
Wake Forest Children’s Parade Thursday, July 4th, 10 a.m. North Main Street Children can ride their bikes, walk, or be pulled in a wagon along North Main Street. Free
Arts and Games in the Park Thursday, July 4th, 11 a.m. Holding Park, 133 West Owen Avenue Arts activities for kids Free
Wendell’s Independence Day Celebration Thursday, July 4th, 10 a.m. to 2 p.m. Wendell’s annual Independence Day celebration features a citizen’s and children’s parade down Main Street, starting at Wendell United Methodist Church, and ending at the J. Ashley Wall Town Square. Free
Money magazine named the Greater Raleigh area as the Best Place to Live, and Forbes has ranked this area #1 Best City for Jobs and #1 Best City for Education. If you are looking for a home in the Triangle, we can help.
Contact us at 919-235-0007 and we can schedule your personal tour of neighborhoods or homes in your desired area.
Interest rates are at a historic low. In fact, they’ve been on a slow decline since November of 2018, resulting in some of the best mortgage interest rates we’ve seen in a while!
In fact, these are the lowest they’ve been since January 2018. If you’ve kept up to date on the Raleigh real estate market, you may have encountered conflicting information about whether or not now is a good time to buy a home. We’re here to set the record straight.
Market experts at Freddie Mac predict that rates will rise back to 4.6% by the end of 2019. This is sending would-be homebuyers a strong signal: now is the best time to buy a home in the greater Raleigh real estate market!
Lock In Those Low Interest Rates
If you buy a home in Raleigh now, or before the end of the summer, you’ll lock in these historically low interest rates. Your mortgage interest rate has a huge effect on your monthly payment, and the lower they are the less you’ll have to pay over the long run!
So, if you’ve been thinking about about buying a home in Raleigh, now is the best time to act. With high inventory and low mortgage rates, you stand to make the deal of a lifetime.
If you’re currently searching for a home to buy in Raleigh, chances are you’ve already thought about applying for a mortgage.
Obtaining a mortgage loan is a huge part of the buying process, as it has an enormous impact on how much you can afford and how much your monthly payments will be.
As such, it’s important to be extra cautious with your finances—and your credit—while you’re applying for a mortgage in Raleigh. Time and time again, we hear from clients about the mistakes they’ve made while waiting for their mortgage loan to finalize. We want you to make decisions that guarantee financial success—which is why we want to share with you the following list of things to avoid after you’ve applied for a mortgage:
Don’t Change Jobs or Get a Demotion at Work
While this may sometimes be out of your control, do everything in your power to maintain consistent employment during the approval process.
Changing from salary to commission, or deciding to go freelance, should really wait until after you’ve closed on your home.
Avoid Depositing Large Sums of Cash Into Your Account
Cash is untraceable, and during the approval process your loan officer will be taking a close look at your checking account.
They want to make sure your cash flow is accounted for and traceable, so if you do need to deposit cash into your checking account make sure you talk it over with your bank first.
Do Not Make Any Huge Purchases
This includes buying a car, expensive furniture, or anything else that’s going to put you in any more debt! Hide your credit cards from yourself if you must.
If you go into too much debt during the approval process, you may no longer qualify for that loan amount. This happens if your ratio of debt to income becomes too debt-heavy.
Don’t Volunteer to be a Cosigner
When you cosign on someone’s loan, you’re then obligated for their loan if they default. This affects your debt-to-income ratio which may then disqualify you from the loan that you’ve applied for.
Don’t Change Bank Accounts
Remember, your loan officer needs to be able to track your sources of income and spending. Having a consistent bank account and transactions makes this ten times easier.
Don’t Apply for New Credit Cards or Loans
Don’t apply for any new credit accounts! Hard inquiries on your credit may negatively affect your FICO score.
If your score drops too much in a short amount of time, you may no longer qualify for your loan.
Don’t Close Any Accounts
Closing a credit account also negatively impacts your score! Your credit score is based upon both the length and depth of your credit history.
Closing an account affects that depth. Your credit score is essential to your mortgage loan interest rates, so it’s critical to keep them as high as possible when applying for a mortgage!
Still Shopping for a New Home? Our Team is Here to Help With That
After the housing market crash of 2008, homeownership rates throughout the country have decreased dramatically. At one point prior to the crash, the homeownership rate was over 69%. In the years following, it dropped to its lowest point at 63.7%.
As homeownership in Raleigh continued to decrease throughout the late 2000s and early 2010s, many began to wonder if it was no longer an essential part of the American dream.
Here’s our take on it:
Homeownership Will Always Be a Cornerstone of the American Dream
Owning a home is as American as apple pie and baseball. According to a recent report by the Census Bureau, the home ownership rate has actually increased steadily over the last two years.
The Desire for Homeownership is Strong Across All Generations
With millennials poised to take over the real estate market, we’re expecting homeownership rates to continue rising steadily in the following years.
After all, there are so many benefits—both financially and emotionally—to buying a home. We’ve written about it extensively, but owning a home improves your life in more ways than one. It gives you financial security, allows you to grow your wealth by building equity over the longer term, and provides you a stronger emotional attachment and investment in your community.
If you’ve long been thinking about joining the ranks of homeownership, now is the time to act!
Over the last several years, home prices have increased substantially throughout the country. Many homeowners are worried that this means we’re headed towards another housing crash.
Luckily, that’s not the case. We’ve written about it at length, but the real estate market is not heading towards a crash. While it’s true that home values are not increasing as dramatically as they have in the past five years, they’re by no means crashing or even declining.
Here’s What’s Going On
It’s not that the average price of homes in the market are decreasing. Rather, the appreciation of home values is slowing down.
This is because the market is shifting from an advantageous sellers market, to a more “normal” market where the intense demand of homes is matched by its inventory. That doesn’t mean we’re headed towards a crash!
The real estate market is stronger than it’s ever been.
This is Different than the 2008 Crash
The last real estate market crash was caused in large part to extremely lenient mortgage standards. This created an artificial demand for new homes.
When this demand faltered, a rush of homes hit the market. Many of these properties were in distress or suffering from foreclosure, so they were heavily discounted.
Plus, mortgage standards are much stricter today than they were in 2008. In addition, foreclosures today are lower than they have been since 1996.
Home Prices are Leveling Up
And that’s a good thing! It means the market is returning to “normal,” which is good for buyers and sellers.
Want to Learn More About the Greater Raleigh Real Estate Market?
In the past few months, you may have heard whisperings about an incoming housing market crash. We’re here to put you at ease: we are not headed towards a crash!
A lot of this concern comes from average home prices slowing in growth across the country. We wrote a blog about it last week, but this is not a bad thing! It just means the market is shifting back towards normal.
The Three Most Important Factors
Today’s market is wildly different than the pre-crash housing market of the late 2000s. We’re going to show you why and how using three important metrics that measure the Raleigh real estate market.
Beginning in 2008, average home prices in the U.S. dropped almost 29% over a four year period. That’s drastic, and it’s what spurred the housing market crash!
Today’s average home prices are not depreciating. It’s just that the level of appreciation is slowing down. Over the last year, homes have increased by more than 4%.
While this is less than the 6-7% prices appreciated over years prior, it in no way indicates that we’re headed towards a crash!
In the current real estate market, it’s considered easier to get a loan from the bank than in years prior. Many are concerned that these “lenient standards” will contribute to a housing crash.
However, the Urban Institute’s Housing Finance Policy Center released a quarterly index that details the percentage of home purchase loans that are likely to default. When this rate is very low, it indicates that lenders are unwilling to tolerate defaults. This makes it much harder to get a loan.
When that percentage is higher, it indicates that lenders are more lenient so it is easier to get a loan.
In another report called the Housing Credit Availability Index, the Urban Institute also revealed that there is still ample space to expand the housing market credit box. Even if the current risk of default was twice what it currently is, it would still be well within the pre-crisis standard of 12.5%.
In the last 10 years, foreclosures and short sales have made up 35% of all home sales. That’s huge!
At the end of the fourth quarter of 2018, the percentage of loans in the foreclosure process was just 0.95%. It hasn’t been that low since 1996!
In the past couple of months, we’ve written about how the Raleigh real estate market is primed for sellers. That’s because of a discrepancy between housing demand and housing supply.
When there aren’t enough homes for sale to satisfy buyer demand, home prices rise. In fact, over the past few years, home price appreciation has averaged around 6% across the country. These conditions are known as a “seller’s market.”
So What’s Changing?
The market is starting to level out a bit. Home price growth has begun to cool down, with a recent report by CoreLogic showing that prices have only risen by 4.7% over the last year.
While housing prices have by no means stagnated, many buyers and sellers are still worrying that this recent activity means another housing crash is on the horizon.
Don’t Worry, the Market is Doing Just Fine
Sure, the market is cooling off a bit, but that’s not a bad thing! It also does not indicate that we are headed for a crash.
It means that the real estate market is returning to “normal.” The inventory of homes for sale is growing to meet buyer demand, so housing prices aren’t increasing dramatically.
This is good for buyers: it means that housing prices aren’t skyrocketing, so more people will be able to afford homes in their preferred neighborhood.
Will Housing Prices Go Up Again?
Most likely, yes! The Joint Center for Housing Studies at Harvard University estimates that over 30 million new households will enter the market from now through 2040.
If you stay up to date on real estate trends, you’ve probably noticed that interest rates and home prices are rising. Many homeowners are taking this as a sign that it’s a bad time to sell their homes because buyers won’t be as interested.
However, that couldn’t be further from the truth! Buyers are still highly motivated—especially in the greater Raleigh area.
Buyers are Out in Full Force
According to NerdWallet’s 2018 Home Buyer Report, around 32% of Americans are planning to buy a home in the next five years. Millennials in particular are most likely at 49%.
Homebuyers have their own personal reasons for buying real estate. Of those Americans surveyed by NerdWallet, 44% want to buy a home because they think it’s a good investment.
They’re not wrong! We’ve written about it many times before, but buying a home is the most efficient way to build your wealth. When you own a home and pay off your mortgage every month, you’re really paying yourself. You’re building up your equity for the long term, and you can expect your hard work to pay off!
That’s Why Now is the Time to Sell
Let’s review. Not only are buyers highly motivated, more and more sellers have decided that now is not the time to sell. What does that mean for you?
There’s less competition AND more buyers out! You don’t have to wait on the market if you want to sell now.
We offer a wide array of home-selling services, resources, and tools to better assist you in selling your Raleigh area home. With more than 30 years of unparalleled experience in the Raleigh and Greater Triangle real estate market, we know exactly what it takes to sell your unique home for top dollar. Contact us today to learn more.
Every year, the National Association of Realtors® conducts a survey to determine the profile of home buyers and sellers across the country.
The 2018 profile is interesting because the majority of recent homebuyers (a whopping 63%!) are married couples!
The Majority of First-Time Buyers are Married Couples
It’s true! According to the NAR, 54% of first-time buyers in 2018 were married couples.
However, if you’re still single, there’s no need to worry. 18% of first-time home buyers in 2018 were single women, while 10% were single men. In addition, about 16% of these buyers were unmarried couples.
Many homes for sale in Raleigh, and the Greater Triangle area, qualify for loans that don’t require huge down payments. You may be able to use an FHA loan or a USDA loan to purchase a home in one of Raleigh’s orbiting cities—in communities like Angier, Fuquay-Varina, and Apex.
These loans are popular because they only require a down payment that’s 1 – 3% of the home’s overall price. And, if you’re in the military, you have even more options!