Metropolitan Indianapolis Board of Realtors just released final numbers for the year 2018. Here’s how home sales fared:
- Sales bucked the national trend and were positive. Up 1% over 2017
- New listings were slower in December, but still up 3% on the year
- Prices ended the year up 7% over the previous New Year, with the median house selling for $176,000
- And available inventory continued to tighten, down 4%
Want to hear how your county is doing specifically, give Indy’s Choice a call. Be in the know!
A recent headline from CNBC’s real estate correspondent, Diane Olick, stated: “Rents are rising at the fastest pace in almost two years.” And she’s not alone in letting everyone know the rental market is getting more expensive. A quick Google search brings a flurry of similar headlines. I’m going to skip what’s causing the recent acceleration in rental increases and instead, suggest a long-term solution to that problem. Yes, buying.
It is NOT surprising that rents rise due to supply and demand, and also to increases in interest rates and operating costs (Like insurance, property taxes, maintenance, and repairs). Whether you’re a renter or a homeowner, you know that operating costs can not be controlled. But, you can control increases in costs arising from interest rates and supply and demand. And that’s where the FINANCIAL STRATEGY to buy comes into play. When you buy, you lock in an interest rate and 75% of your monthly payment will be guaranteed for as long as you own your home. For example, if you start with a $1,000 monthly payment, $750 of it is never going to change. That’s opposed to a rental arrangement where the landlord can raise the rent every year if they want.
Another bonus to owning that renters miss out on is EQUITY BUILD-UP. This can occur in two ways. The most often discussed is the equity one gains when the value of one’s real estate increases due to inflation or supply/demand factors. That’s the one we hear about on the nightly news when they talk about “House prices rose X% in the past year”. That’s great, but there’s another way that homeowners increase their equity. With each monthly payment that gets made, a portion goes to pay the interest and the rest goes to pay down the principal owed. Eventually, that process pays off the mortgage loan and the homeowner then owns their home “FREE AND CLEAR”. Now, that’s cause for celebration 🙌 🎉. And that is what is implied when you hear people say “I’m sick and tired of paying someone else’s mortgage” or “I’m tired of throwing money away each month”. Now to stop that feeling, simply buy rather than rent. Give me a call at 317-625-0655 and I will show you what’s available.
HUD announced in December that FHA mortgage loan limits will increase for all Indiana counties. In 2018 the loan limits ranged from $294,515-322,000. Corresponding limits in the new year will run from $314,827-343,850. FHA mortgage loans are insured by the federal government. In most cases, they require a minimum cash down payment of 3.5% of the purchase price (ie. A house selling for $100,000 would require a cash down payment of $3500). The urban rumor mill has it that these are for first time home buyers only. That would be wrong! They are available to most anyone, regardless of income or whether you’re a first time buyer or it’s your seventh house. However, generally you can have only one outstanding FHA loan at a time, and they are for primary residence only. You cannot buy a rental property with a FHA loan— (drum roll) you can buy a 2-4 unit property with a FHA loan if you are going to live in one of the units! And even in that case, the down payment is only 3.5%! Talk about a way to get started in real estate!! Want to know the loan limit in your area? Call the experts at Indy’s Choice today.