Whether you are selling your home, just purchased your first home or are a homeowner planning to stay put for a while, there is value in knowing which home improvement projects will net you the most Return On Investment (ROI).
Minor bathroom renovations can go a long way toward improving the quality of your everyday life and/or impressing potential buyers.
Upgrading your landscaping or curb appeal helps get buyers in the door. These upgrades rank as the 2nd and 4th renovations for returns on investment.
With home values appreciating at record rates, some are concerned that we may be heading for another housing bubble like the one we experienced a decade ago. One of the major culprits of that housing boom and bust was the loosening of standards for mortgage credit.
In a study done at the University of North Carolina immediately after the crisis, it was revealed that:
“Lenders began originating large numbers of high risk mortgages from around 2004 to 2007, and loans from those vintage years exhibited higher default rates than loans made either before or after.”
A study by John V Duca, John Muellbauer, and Anthony Murphy concluded that those risky mortgages caused the housing crisis:
“Our findings indicate that swings in credit standards played a major, if not the major, role in driving the recent boom and bust in US house prices.”
How do today’s mortgage standards compare to those from 2004 to 2007?
The Mortgage Bankers’ Association tracts mortgage standards in their Mortgage Credit Availability Index (MCAI). A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. While the chart below shows the index going back to that period between 2004 and 2007 when loose standards caused the housing bubble, we can see that, though the index has risen slightly over the last several years, we are nowhere near the standards that precipitated the housing crisis.
If anything, standards today are too tight and are preventing some qualified buyers from getting the mortgage credit they deserve.
A recent survey conducted by Harris Poll and released by SunTrust Mortgage found that “55% of homeowners with a child under the age of 18 at the time when they purchased their home said that the opinion of their offspring played a major role in their home buying decision.”
When the results were broken down by the parent’s age, millennials (those 18-36) led the way with 74% of homeowners saying that their child’s opinion was a factor in choosing which home to buy. Eighty-three percent of renters believe that their child’s opinion would be a deciding factor when looking to purchase a home.
So what features in a home are most important to kids?
Coming in at 57%, it should come as no surprise that gaining their own bedrooms was the top most-desirable feature of any home for kids, followed by a large back yard to play in at 34%.
Todd Chamberlain, Head of Mortgage Banking at SunTrust explained the reasoning behind the survey,
“As a parent of two kids, I know from experience that including children in the home buying process is not only fun for the whole family, but also educational for our homebuyers of tomorrow.”
If you’re thinking about selling your home this year, make sure to highlight all the kid-friendly features your home has to offer so that you can sway the real decision makers.
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