Category Archives: Tips for Austin Home Buyers

Should Military Members Buy a Home in Austin Texas?

Recently Jean Chatzky shared her financial advice for military members on the Today Show: http://www.jeanchatzky.com/category/nbc-todayshow.  I was once again disappointed that home ownership is being discouraged by the media. While I think it’s wonderful that Ms. Chatzky is providing free financial advice to military members and veterans through Operation Money, I do not understand how she can advise young military members to “save for retirement” before saving for a house.

She justifies her advice by saying that active members move every two years. And, I can certainly understand why anyone not planning to stay longer than two years in a city might choose to rent. Still, I would consult a local real estate agent before I listened to non-regional advice about a clearly regional topic.

Depending on the market, it may be far preferable to buy than to rent because the monthly savings could far outweigh any sales costs incurred within two years. Plus, if rents are generally high in an area, a military member could choose to rent out his house instead of selling in two years and possibly even make a monthly profit.

There are so many pluses to buying a home, I fail to understand why the media continues to discourage home ownership. Not only do you often have monthly savings but you can build equity in a real asset as opposed to a retirement asset, which is not only untouchable while you are below retirement age but is most often invested in paper stocks in companies you cannot control. At least you can control a physical asset, such as a house.

Over the years, my family, my parent’s family and my husband’s family have all made plenty of money buying and selling houses as home owners. We have rented out houses in down markets when we couldn’t sell and even when we had to sell in a down market, we never lost money. And, all of our family members have gained wealth over time in real estate.

If you are a military member, please don’t take advice on housing from the national media. Find an experienced, local real estate agent and find out whether or not it’s a good time to buy a home in the area you will be living in.

Should You Buy or Rent in Austin Texas?

Should you buy or rent a home in Austin Texas? It is almost always cheaper to buy a home in Austin than to rent.

Monthly rent is typically higher than your combined monthly payment on a house mortgage (including insurance and property taxes). This is especially true if you want to live in a single family, detached house. If you are willing to live in an apartment, you may save a few hundred per month by compromising on privacy and size.

Buyers can find many homes to choose from in areas close in to Central Austin for $200,000 or less. With good credit and a modest down payment of $7000 or less, your total monthly payment could be well below $1600 per month. It is difficult to find any rental home in the Austin area for less than that amount.

A home purchase in the Austin area can be a great investment and a monthly money saver IF you have an experienced agent to help you buy. Contact me at 512-266-2606. I love guiding home buyers to purchase a residence that is not only a great place to live but also a safe investment.

Even if your monthly payment would be higher than rent, the example below shows how, over time, buying is still better than throwing away money on rent.

Buy vs. Rent Comparison

The chart below shows a cost comparison for a renter and a homeowner over a 7 year period.

The renter starts out paying $800 per month with annual increases of 5% The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000

After 6 years, the homeowner’s payment is lower than the renter’s monthly payment

With the tax savings of home ownership, the homeowner’s payment is less than the rental payment after 3 years

Buy or Rent a Home?
Buy or Rent a Home?

Mortgage Update for Home Buyers

Barton Hills Mortgage
Provided to you Exclusively
By
Ashley Brooke Hall
Ashley Brooke Hall
President
Barton Hills Mortgage
Cell: 512-791-9884
Direct: 512-444-2700
E-Mail: ashley@bartonhillsmortgage.com
Website: www.bartonhillsmortgage.com
Ashley Brooke Hall
For the week of Nov 17, 2014 — Vol. 12, Issue 46
In This Issue…
Last Week in Review: The Bond markets were closed Tuesday in honor of Veterans Day, while the rest of the week was quiet with only a handful of economic reports on the calendar.Forecast for the Week: The Fed minutes could cause volatility. Plus, key housing reports, and is inflation still tame?

View: Check out these five tips that can help yield more productive and meaningful work relationships.

Last Week in Review
“Home of the brave.” The Bond markets were closed on Tuesday in honor of Veterans Day, and the brave men and women who have served and sacrificed to protect and preserve our great nation. The economic calendar was quiet the rest of the week, but there are some key highlights to note.In the labor sector, Weekly Initial Jobless Claims came in at 290,000. Claims have remained below 300,000 for nine straight weeks—a feat that has not occurred since 2000. In addition, claims are 20 percent lower than they were this time one year ago. However, all is not golden as 18.2 million Americans still say they can’t find a full-time job. This is a big number, considering that we’re five years into an economic recovery. While the labor sector is improving, there is still more work needed ahead.

Oil prices continue to drift lower, reaching levels not seen since October 2011. This slide lower has put extra cash in consumers’ pockets just in time for the holiday shopping season, and it helped Retail Sales in October bounce back from the negative numbers seen in September. However, all-time price highs in meat, dairy and produce could tap into these savings at the pump.

Looking ahead, housing data is abundant in the coming week. And while the hot housing numbers from 2013 have cooled a bit this year, recent data suggest that the housing recovery is still intact. Existing Home Sales in September touched their highest level in a year, while New Home Sales hit a six-year high. These will be important numbers to watch as we look ahead to the housing sector, and whether its recovery continues, next year.

The bottom line is that home loan rates remain near some of their best levels of the year, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week
Important manufacturing, inflation and housing reports are ahead. Plus, the minutes from the Fed’s latest meeting will be released.

  • Look for a double dose of manufacturing news, with the Empire State Index on Monday and the Philadelphia Fed Index on Thursday.
  • Two key inflation reports are ahead. The wholesale-measuring Producer Price Index will be delivered on Tuesday, followed by the Consumer Price Index on Thursday.
  • Housing news is abundant this week. The NAHB Housing Market Index comes out on Tuesday, Housing Starts and Building Permits will be released Wednesday, and Existing Home Sales follows on Thursday.
  • As usual, Weekly Initial Jobless Claims will also be announced on Thursday.

In addition, investors will be closely scrutinizing the minutes from the late October Federal Open Market Committee meeting. The minutes, which will be released on Wednesday at 2:00 p.m. EST, will reveal details of the Fed’s decision to end its latest round of Quantitative Easing. They could also give more clues as to the timing of rate hikes, which could lead to volatility in the markets.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse.

To go one step further—a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds continue to trade in a sideways pattern. Home loan rates remain near 18-month lows and I will continue to monitor them closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Nov 14, 2014)
Japanese Candlestick Chart
The Mortgage Market Guide View…

5 Tips for Providing Constructive FeedbackConstructive feedback with colleagues and partners can yield more productive and meaningful work relationships. The next time something isn’t quite working well in a process or on a project, consider these five steps that can help.

1. Tie to a goal
Goals unite teams and provide direction. Whether you have a shared goal with a member of your network or know a colleague’s professional goal, tying feedback to that larger goal situates it in more meaningful context.

2. Ask permission
People get defensive if they are not prepared for feedback. Asking for permission puts individuals in a more open, receptive mindset.

3. Identify specific behavior
Isolating a specific behavior reinforces that constructive feedback is about a behavior and not the character or quality of the individual.

4. Offer concrete action steps
Detailed options to improve a behavior shift the conversation from the past to the future and how to best move forward.

5. Show support
End positively. Reiterate goals and values.

The following example illustrates how all five steps work together:

“Hi, John. I know we want to wrap up this project quickly, but can I mention something that could help us work more effectively?

A lot of interrelated tasks are happening at the same time. I don’t know the status of your tasks unless I leave a voicemail or send an email and wait for a response.

Could we chat on the phone each day for five minutes to keep each other in the loop? Or, could we send each other an email update each day?

I appreciate the partnership we have on this project and want to make sure nothing falls through the cracks.”

On a final note, emails lack non-verbal cues. Give feedback face-to-face or over the phone, so the recipient hears your voice or sees your facial expression to minimize reading into your message.

Sources: forbes.com, smallbusinesschron.com

Economic Calendar for the Week of November 17 – November 21

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. November 17
08:30
Empire State Index
Nov
12.0
10.2
6.2
Moderate
Tue. November 18
08:30
Producer Price Index (PPI)
Oct
-0.2%
0.2%
-0.1%
Moderate
Tue. November 18
08:30
Core Producer Price Index (PPI)
Oct
0.1%
0.4%
0.0%
Moderate
Tue. November 18
10:00
Housing Market Index
Nov
55
58
54
Moderate
Wed. November 19
08:30
Housing Starts
Oct
1025K
1017K
Moderate
Wed. November 19
08:30
Building Permits
Oct
1040K
1031K
Moderate
Wed. November 19
02:00
FOMC Minutes
10/29
NA
NA
HIGH
Thu. November 20
08:30
Jobless Claims (Initial)
11/15
285K
290K
Moderate
Thu. November 20
08:30
Consumer Price Index (CPI)
Oct
-0.1%
0.1%
HIGH
Thu. November 20
08:30
Core Consumer Price Index (CPI)
Oct
0.1%
0.1%
HIGH
Thu. November 20
10:00
Existing Home Sales
Oct
5.17M
5.17M
Moderate
Thu. November 20
10:00
Philadelphia Fed Index
Nov
18.0
20.7
HIGH
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.
As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: ashley@bartonhillsmortgage.com
If you prefer to send your removal request by mail the address is:
Ashley Brooke Hall
Barton Hills Mortgage
1900 Barton Hills Drive
Austin, TX 78704

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