The Lending Coach

Coaching and teaching - many through the mortgage process and others on the field

Homes Are More Affordable Now Than They Have Been in Years

The media is reporting that there is an affordability crisis and discouraging potential home buyers. Unfortunately, this narrative is completely wrong, as homes are more actually affordable now than they have been in some time.

As we all know, home prices are appreciating. When buyers hear that prices are going up, it’s normal to think a home will cost more as the trend continues.

The way the housing market is positioned today, however, low mortgage rates are actually making homes more affordable, even as prices rise.

Understanding Home Affordability

Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.

There are three main factors that go into determining how affordable homes are for buyers:

  • Mortgage Rates
  • Mortgage Payments as a Percentage of Income
  • Home Prices

The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s home buying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home.

With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Bottom Line

If you’re thinking of making a move, now is a great time to take advantage of the affordability that comes with such low mortgage rates.

Whether you’re thinking of purchasing your first home or moving into a new one and securing a significantly lower mortgage rate than you may have on your current house, please do contact me so we can determine your next steps in the process.

To Buy or To Rent?

Deciding between buying or renting your next home?  It’s true that home values have gone up quite a bit, but so have rents.

In fact, the largest landlord in the US, Invitation homes, said that rents have gone up 14% since last year. 

And that’s not all – they forecast that rents will continue to go up about 6% annually

So, while it’s true that initially purchasing a home will be more expensive, your mortgage payment will remain relatively stable into the future.  Whereas your rental payments will likely rise significantly in the years to come.

There are other amazing benefits that come with buying a home, including pride of ownership, more freedom in renovating and design, and of course building equity. 

And because of increasing demand and tight supply, it looks as if home values will be well supported, and many are forecasting home prices to move higher.

I can give you a complete analysis with statistics for your specific zip code so you can make accurate comparisons and see which choice is best for you. Give me a call today to learn more.

Improving Athletic Performance Through Visualization

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Photo by David Cassolato on Pexels.com

Visualization is one of the primary techniques used in sports psychology today – and one of the most underutilized by athletes.  An athlete’s performance is often the result of what’s happening inside his or her head, or more specifically the movies and soundtracks playing inside that head!

Performance visualization is used by virtually all great athletes and research has shown that, when combined with actual practice, improves performance more than practice alone. Imagery also isn’t just a mental experience that occurs in your head, but rather impacts you in every way: psychologically, emotionally, physically, technically, and tactically.

Think of mental imagery as weight-training for the mind

Overriding Factors

There are two keys principles to keep in mind when practicing visualization. The first is, your practice needs to be consistent. 10 minutes a day every day, will always beat an intense hour long session once a week.

It helps to make a commitment to practice your visualization the same time every day.  First thing in the morning as close to waking as possible is ideal. This is because the mind is still slightly lucid at this time, which makes it easier to conjure up images.

The second key principle is you must stay positive in your thinking.  Even if you can’t quite see crystal clear images yet, you will still gain huge benefits from your visualization practice.  Trust me, it still works.  For some people that will be feeling the image, or just getting a sense of what it might look like.  Wherever your current level is, nurture it and allow it to grow.

Accept that you can’t always perform the way that you visualized

Research has also indicated that the act of envisioning a relevant muscle movement can potentially result in electrical activity in the specific muscle, despite the fact that there is the absence of the actual movement of the muscle.

That same electrical activity bears a resemblance to the electrical movement that occurs during the actual movement. In this regard, the relevant muscles are primed for the upcoming physical activity.

Also, you should visualize successful outcomes…

Success Story

Sports psychologist Patrick Cohn recently shared a story from USA volleyball players Alix Klineman and April Ross, who won the gold medal in beach volleyball at the 2020 Tokyo Olympics.

Klineman/Ross became only the second U.S. women’s duo in history to win an Olympic gold medal in beach volleyball.

When asked how she pumps up and prepares for a game, Klineman pointed to visualization as a significant component.

KLINEMAN: “I do some visualization, which has been really powerful. I visualize myself in my body, so instead of looking at myself from another perspective, I see myself on the court, going through different skills and doing them really well. It’s like this positive reinforcement of knowing what it feels like, looks like, and how to execute it at a really high level… There’s a really powerful connection between body and mind, which I think a lot of people don’t realize.”

man sitting on bench near track field while sun is setting
Photo by Martin Péchy on Pexels.com

Visualization or mental rehearsal is a powerful mental tool to raise the level of your game. When you use mental rehearsal with your physical training, you will improve consistency, you mental game, and take your game to a new level.

Per Cohn, if Olympians use visualization to achieve greater results, you can also raise your game by adding visualization to your daily training schedule.

Finally, check out this video  from one of my favorite sports psychologists, Dr. Patric Cohn.  I’m a big fan of the good doctor, as he really values and emphasizes the power of visualization in sports. Although this isn’t the most dynamic video you’ve ever seen, it’s content is extremely powerful.

More Housing Bubble Fears in the Media

clear and blue bubble near green leaves

Home prices have risen over 40% since 2006. This has prompted another round of media fearmongering that a housing bubble is imminent.

As you might have recognized, the media has been talking about a housing bubble for the past several years, only to see home prices continue to be well supported.

Is Today’s Market Like The Bubble of 15 Years Ago?

Comparing today’s housing market to the market in 2006 requires us to understand some key differences to help us see the full picture. Let’s break that down.

The majority of individuals who buy homes do so based upon monthly payment. Therefore, we must consider differences in mortgage interest rates, as well as differences in household income between the market in 2006 and today.

Mortgage rates in 2006 ran about 3% higher than interest rates that are available today. This helps make the monthly payment today much lower, even in some cases where the amount borrowed is higher.

Meanwhile, average hourly earnings have increased by 55% from 2006 to today, according to the Bureau of Labor Statistics.

Homes Are Actually MORE Affordable Today

Because of the rise in income, as well as the drop in interest rates, the cost to purchase a home today appears to be significantly more affordable than it was in 2006.

Additionally, today’s appreciation is due to record low home inventory levels and strong demographic demand, which wasn’t the case in 2006.

Don’t let the media scare you out of all the wonderful benefits of home ownership. Contact me today to find out more!

Owning Investment Property: A Primer For First Timers

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Photo by Jessica Bryant on Pexels.com

Owning investment properties can be a great way to earn extra income. I’m linking today to an article from Peter Warden at The Mortgage Reports on a fantastic article for would be real estate investors. 

Whether it’s a career choice or an extra source of income, becoming a landlord requires hard work, knowledge, and time. The idea of rent collection as a source of passive income attracts many new landlords to this profession.

But experienced landlords know this job requires an active approach. The more you work to maintain properties, find the right tenants, and keep track of all the details, the more successful you can be.

Peter Warden, The Mortgage Reports

This article isn’t a quick read – it’s quite in-depth and I invite you to read the entire thing here.

He breaks down the article into 10 sections:

  • What to know
  • Getting started
  • Financing a property
  • Work involved
  • Planning ahead
  • Hiring help
  • Legal issues
  • Finding tenants
  • Evicting tenants
  • Forms for landlords

Many of my clients have found that owning rental property is one of the best financial moves they ever made.

At the same time, owning rental properties isn’t easy and involves a good deal of effort. However, the financial rewards can make all that worthwhile!

As Warden states, “True, owning a rental property rarely makes people rich quickly. But getting rich slowly is a very attractive alternative.”

What’s the first step? Doing the research on how to make a rental property purchase. Do reach out to me for more, as it would be my pleasure to help on the financing side.

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