Rent or Buy: Either Way You’re Paying A Mortgage

  • By Eddie Yandle
  • 06 Apr, 2016

Find out today what your payment could be

There are some renters that have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains :

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President , Head of Single-Family Sales & Relationship Management  at Freddie Mac,  explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’  that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

The graph below shows the   widening gap   in net worth between a homeowner and a renter:

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.

As a new home builder serving the Columbia, Irmo, Elgin, Fort Jackson, Lexington and surrounding areas in SC, Executive Construction Homes has been building value and distinction since 1989. Specializing in custom homes for homeowner designed homes on their home-site from the 300’s to $3,000,000, Executive Construction Homes also builds in communities from the $120’s-$500,000’s. Bring your plan, ideas or use ours...our in house draftsman and designers are here to help.  

Columbia New Home Blog

By Eddie Yandle 16 May, 2017
Executive Construction Homes is excited about participating in this year’s Tour of Homes hosted by the BIA of Central South Carolina! As Columbia’s largest open house event, we are excited to show new home buyers the sleek style and luxury our homes offer. The Tour features all new homes for sale, and Executive Construction Homes is showcasing four new homes in communities around Columbia, SC.

Columbia's Largest Open House of New Homes for Sale is the 2017 TOUR OF HOMES coming this June 10-11, 17-18 & 24-25. The annual scattered-site showing offers Featured Communities, New Homes, Apartment Communities and Senior Living Communities for your inspection.

The TOUR OF HOMES showcases the best new home communities and homes in every price range. Columbia’s finest builders and developers show you their innovative ideas, special design features, dynamic floor plans and fine craftsmanship. You'll also be able to see some of the areas newest apartment communities and senior living communities.

As you tour their lovely neighborhoods and homes, remember that a new home is still one of the most sound investments you can make. Interest rates are still among the lowest they’ve been in the last 25 years, so now is one of the best times to buy a new home. Perhaps one of the homes or communities you see will be the one that is perfect for your family.

The 2017 Tour of Homes Planbook will soon be available for free on-line and for free in print at the BIA of Central SC office at 625 Taylor St., at homes and communities on the TOUR and at   all Columbia-area Coldwell Banker Residential Brokerage locations   - check back here for details closer to the event. The planbook has descriptions of all the homes and directions. Don't forget to follow us on Facebook , too!

By Eddie Yandle 16 May, 2017

Do You Know the Cost of NOT Owning Your Home?

Owning a home has great financial benefits, yet many continue renting! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

Zillow   recently   reported   that:

“With Rents continuing to climb and interest rates staying low, many renters find themselves gazing over the homeownership fence and wondering if the grass really is greener. Leaving aside, for the moment, the difficulties of saving for a down payment, let’s focus on the monthly expenses of owning a home: it turns out that   renters currently paying the median rent in many markets could afford to buy a higher-quality property   than the typical (read: median-valued) home   without increasing their monthly expenses.”

What proof exists that owning is financially better than renting?

1. The   latest   Rent Vs. Buy Report   from   Trulia   pointed out the top 5 financial benefits of homeownership:

  • Mortgage payments can be fixed while rents go up.
  • Equity in your home can be a financial resource later.
  • You can build wealth without paying capital gain.
  • A mortgage can act as a forced savings account
  • Overall, homeowners can enjoy greater wealth growth than renters.

2. Studies   have shown that a homeowner’s net worth is 45x greater than that of a renter.

3. Just a few months ago, we explained   that a family buying an average priced home at the beginning of 2017 could build more than $42,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the   rent payment  along with a profit margin!!

Bottom Line

Owning a home has always been, and will always be, better from a financial standpoint than renting.

By Eddie Yandle 16 May, 2017

The choice between renting and buying a home is one of the biggest financial decisions you will make. With home prices are rising across the country, people are shying away from buying options. However, buying a home is still 37.7% cheaper than renting on a national level. The decision to rent vs. buy will be dependent on the area you are deciding to live in.


A Peak at the Current Market  

It has only become slightly cheaper to buy vs rent because of the rising home prices. Home prices have increased by 5.9 % since last year compared to an increase of 3.5% for rents. However, mortgage rates have dropped from 3.9% to 3.7% in the past year, which still gives home buying an advantage. By using a mortgage calculator , you can determine the best financial option for you, and if your mortgage rate would be above or below industry average to better.


Living in Columbia

It is more cost effective to rent vs. buy in the top 100 metros across the country, but some cities obviously see higher monetary benefits than the rest. Columbia rounded out the top 10 metros with the largest financial advantage of homeownership. As of 2016, the median home value in Columbia, SC is $124,733.00 and renting averages come to $1,125.00 per month. These prices indicate that it is 50.6% cheaper to buy a home versus renting in Columbia.


The top ten metros with the largest financial advantage of home ownership include:

1.    Miami, FL

2.    West Palm Beach, FL

3.    Houston, TX

4.    Fort Lauderdale, FL

5.    Charleston, SC

6.    Baton Rouge, LA

7.    New Orleans, LA

8.    Syracuse, NY

9.    Philadelphia, PA

10.Columbia, SC


Factors That Influence Price in Columbia

The city continues to see steady growth since the recession, which indicates a slow increase in home prices. When looking at Columbia home buying trends , there are various factors that affect the price in Columbia, some of which include home size and location. Given the demographic of Columbia, single-family homes and condominiums tend to sell the quickest in the city. Additionally, school districts will play a major role in neighborhood popularity, which can also affect home prices.


Don’t Wait to Buy  

Whether you are a first-time buyer or a seasoned vet in the industry, now is the time to buy Columbia real estate . Take advantage of the lower mortgage rates now before they increase, making it harder to purchase a home.  

By Eddie Yandle 16 May, 2017

Coming Soon! New Construction Lakefront in the Desirable Award Winning Lake Carolina neighborhood of Harborside.

  • High End Custom Home to be built by Master Builder, Executive Construction Homes.
  • Designed specifically for this lot, this spacious home incorporates style & design to showcase the builder's talents.
  • Lakefront home boasts beautiful architectural details including coffered ceilings, tray ceilings and cathedral ceilings and extensive moulding.
  • Windows across the back of the house and a covered rear porch take full advantage of the gorgeous view.
  • Designed for the possibility of a separate apartment & 2nd kitchen, if desired (Can be income producing).  Or simply perfect for extended living space.
  • Expansive space, large rooms and a fabulous floor plan with so many possibilities await you!  
  • There is even a space for a wine cellar.  
By Eddie Yandle 01 May, 2017
See more information on this Lexington, SC new home
No need to rent when you can own this amazing 3-story new home instead! Open layout & efficient use of space with signature trim & moldings. 3 bedrooms/2.5 bathrooms/1-car garage w/opener. Craftsman style details, granite, framed mirrors, gas range, tankless hot water, fenced yard w/sprinklers & so much more! Plus Z-wave Home Automation Front & side yard maintenance via HOA. In the heart of Lexington and convenient to everything you want & need plus excellent Lexington One Schools! READY NOW C ALL TODAY!   803-748-1234

By Eddie Yandle 01 May, 2017
More information and pricing-
Beautiful new custom and energy efficient new home built by award winning Builder of the Year, is ready to move into now!! Bosch Stainless Steel Appliances, Designer Lighting Package, Tile Shower,Tile Floors in Wet Areas & Laundry Room. Sodded Yards With Sprinkler and Irrigation Energy Saving Features Tankless Water Heater and more- Call for your private showing.Call for your private showing.

With all the essential shopping and a number of great restaurants nearby, living in a private gated community has never been easier. 
If the best of everything is your way of life, you've just found your new home.
More building opportunities are available in community. Ask for plan options.
By Eddie Yandle 07 Apr, 2017

Some Highlights:

  • “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
  • At 93%, the top reason Millennials choose to buy is to have control over their living space.
  • Many Millennials who rent a home or apartment prior to buying their own homes dream of the day that they will be able to paint the walls whatever color they'd like, or renovate an outdated part of their living space.
By Eddie Yandle 07 Apr, 2017

Buying this Spring? Be Prepared for Bidding Wars

Traditionally, spring is the busiest season for real estate. Buyers come out in force and homeowners list their houses for sale hoping to capitalize on buyer activity. This year will be no different!

Buyers have already been out in force looking for their dream homes and more are on their way, but the challenge is that the inventory of homes for sale has not kept up with demand, which has lead to A LOT of competition for the homes that   are   available.

A recent   Bloomberg   article   touched on the current market conditions:

“It’s the 2017 U.S. spring home-selling season, and listings are scarcer than they’ve ever been. Bidding wars common in perennially hot markets like the San Francisco Bay area, Denver and Boston are now also prevalent in the once slow-and-steady heartland, sending prices higher and sparking desperation among buyers across the country.”

Sam Khater,   Deputy Chief Economist   at   CoreLogic   went on to explain why buyers are flocking to the market in big numbers:

“In today’s market, many buyers think the trough in [interest] rates is over. If you don’t get in now, it’s just going to be worse later. Rates will be higher, prices will be higher, and maybe inventory selection will be lower.”

In some markets,   “thirty-five percent of properties are selling within the first week or two of hitting the market.”   Homes are selling at a rapid clip in places like:

  • Denver, CO
  • Seattle, WA
  • Oakland, CA
  • Grand Rapids, MI
  • Boise, ID
  • Madison, WI
  • Omaha, NE

Bottom Line

Let’s get together to discuss your exact market conditions and help you create a strategy to secure your new home in this competitive atmosphere!

By Eddie Yandle 07 Apr, 2017

f your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared  data  from  Trulia’s Market Mismatch Study  which showed that in today’s premium home market, buyers are in control.

The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer, or can be found at a discount.

Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.

The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.

But not all who are buying luxury properties have a home to sell first.

In a recent Washington post  article , Daryl Judy, an associate broker with Washington Fine Properties, gave some insight into what many millennials are choosing to do:

“Some high-earning millennials save money until they are in their early 30s to buy a place and just skip over that starter-home phase. They’ll stay in an apartment until they can afford to pay for the place they want.”

Bottom Line

The best time to sell anything is when demand is high and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs, and are looking to step into a luxury home… Now’s the time to list your house for sale and make your dreams come true.

By Eddie Yandle 07 Apr, 2017

A   survey   by Ipsos found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. There are two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 40% of consumers think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less.

Many renters may actually be able to enter the housing market sooner  than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO®   Scores  

The survey also revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a   “good credit score”   is over 780. In actuality, the average FICO®   scores  of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in February had a credit score of 752, while FHA mortgages closed with a score of 686. The average across all loans closed in February was 720. The chart below shows the distribution of FICO®   Scores for all loans approved in February.

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