TRI Crown Blog

The nation's home-ownership rate increased in the third quarter of 2011, suggesting a three-year decline in home-ownership may be starting to bottom out. The rental vacancy rate also rose - a sign that rising rents could be reducing demand.

The Census Bureau reported that the nation's seasonally adjusted home-ownership rate stood at 66.1% in the third quarter, up slightly from 66% in the previous quarter, though down from 66.7% a year earlier. The rental vacancy rate was 9.8%, up from 9.2% in the second quarter, and down from 10.3% a year earlier.

Industry watchers warn against reading too much into results from a single quarter. The increase is small and the number could begin declining again in the fourth quarter, when colder weather means fewer Americans buy homes.

Paul Dales, a senior U.S. economist with Capital Economics, said he was initially surprised by the increase. "I don't think this alters the long term trends that have been going on," he said. "The overall housing market will remain weak and the rental market will remain strong."

The California housing market conditions make a strong and compelling case for homeownership. With prices still well below the historic highs of just a few years ago, and attractive mortgage rates, qualified buyers have a unique opportunity to own their own home at a huge cost savings. In addition, existing tax laws allow homeowners to itemize and deduct the mortgage interest and property taxes from their taxable income. For example, compare the tax implications for two households both earning $63,430 a year, the minimum income required to purchase the statewide median-priced home of $301,430. The household that purchases the home with a 20% down payment and finances the mortgage at the current rate of 4.62% will receive a tax deduction of over $14,000 in the first year of ownership. The renter household will most likely utilize the IRS Standard deduction of $11,400, $2,600 less than their homeowner counterparts. The homebuyer reduces their total tax liability by $400 compared to the renter in the first year of ownership. Accounting for the out-of-pocket savings as well as the tax savings, the homebuyer saves over $3,000 in their first year of ownership.

One of the most common complaints from buyers and sellers is about the agent’s lack of communication. Make sure you’re on the same page from the get-go. Discuss how the agent will keep you informed and how often you expect to hear from them. If you prefer email but the agent is most responsive to phone calls, you may not be a good fit for each other. Or, if you know you’re going to have lots of questions about the process and expect quick responses, but the agent’s MO is bi-weekly updates, you may want to find another agent.

Get the Right Real Estate Agent for You. The decision to buy or sell a home is one of the most important financial decisions most people make, yet many give little thought to finding the real estate agent best suited to their needs.

The average foreclosure takes more than 30 days to process and the time and work that goes into the process now costs banks more profit than a short sale – wherein a bank approves the sale by the homeowner for less than the loan amount, losing the difference between the sale price and the loan. Banks dealing with lengthy, complicated, and frequently messy foreclosures are starting to see "short sales" as a quicker, cheaper way of getting bad loans off their books.

The Federal loan limits that define conforming and non-conforming loans (by county) can be very confusing for homeowners and buyers, but these limits are relevant and important for consumers to know since the distinction between what constitutes a conforming loan versus a non-conforming loan is what ultimately distinguishes a conventional loan from a super jumbo loan.

Real Estate can be complicated, but it can also be a wonderful and rewarding experience. A great deal of it depends on the Agent you choose. It’s good to be sure both you and your agent are compatible, that you ask a lot of questions, stay involved, and you should hear from your agent on a regular basis. Whether or not you’re a seller or buyer, you should always know everything that is going on with your transaction.