Monthly Archives: March 2014

7 Benefits of Home Ownership (Especially at Tax Time)

Source: Trulia


The financial benefits of home ownership are evident year round, but particularly around tax time – they seem to jump off the page. Let’s examine how home ownership makes “cents” –  from the tax benefits, to good old fashioned financial stability.

1. Homeownership Builds Wealth Over Time

We were always taught growing up that owning a home is a financially savvy move. Our parents knew it, and their parents knew it. But this past decade of real estate turbulence has shaken everyone’s confidence in home ownership. That is why it’s so important that we discuss this again now that we’re in a ‘new market.’ Home ownership can be a very savvy financial move – but only if people buy homes they can actually afford. In 2014, this idea of sticking to a home you can afford to gradually build wealth is a “rule” that just happens to be new and old at the same time.

2. You Build Equity Every Month

Your equity in your home is the amount of money you can sell it for minus what you still owe on it. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe.  That reduction of your mortgage every month increases your equity. That is especially true now with the elimination of risky mortgages like negative amortized and interest-only loans – thanks to the new “Qualified Mortgage” rules. The way mortgages work is that the principal portion of your payment increases slightly every month year after year. It’s lowest on your first payment and highest on your last payment. Thus, as the months and years go by, your equity grows!

3. You Reap Mortgage Tax Deduction Benefits

  • Mortgage deduction: The tax code allows homeowners to deduct the mortgage interest from their tax obligations. For many people this is a huge deduction, since interest payments can be the largest component of your mortgage payment in the early years of owning a home.
  • Some closing cost deductions: The first year you buy your home, you are able to claim the points (also called origination fees) on your loan, no matter whether they are paid by you or the seller. And because origination fees of 1 percent or more are common, the savings are considerable.
  • Property tax is deductible: Real estate property taxes paid on your primary residence and a vacation home are fully deductible for income tax purposes.

4. Tax Deductions on Home Equity Lines

In addition to your mortgage interest, you can deduct the interest you pay on a home equity loan (or line of credit). This allows you to shift your credit card debts to your home equity loan, pay a lower interest rate than the horrendously exorbitant credit card interest rates, and get a deduction on the interest as well.

5. You Get a Capital Gains Exclusion

If you buy a home to live in as your primary residence for more than two years then you will qualify. When you sell, you can keep profits up to $250,000 if you are single, or $500,000 if you are married, and not owe any capital gains taxes. Now, it may sound ridiculous that your house could be worth more than when you purchased it after these past several years of falling house prices. However, if you purchased your home anytime prior to 2003, chances are it has appreciated in value and this tax benefit will come in very handy.

6. A Mortgage Is Like a Forced Savings Plan

Paying that mortgage every month and reducing the amount of your principal is like a forced savings plan. Each month you are building up more valuable equity in your home. In a sense, you are being forced to save—and that’s a good thing.

7. Long Term, Buying Is Cheaper than Renting

In the first few years, it may be cheaper to rent. But over time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. But more importantly, you are not throwing away all that money on rent. You gotta live someplace, so instead of paying off your landlord’s home or building, pay off your own!

Local Market Index Shows Strength in January

The Local Market Index, compiled by, is a price performance summary of repeat sales
of U.S. properties. The index tracks year-over-year price increases for single-family properties in
each of the top 300 U.S. markets.

The results of this index for January of this year show a continued pace of growth from 2013,
despite the fact that January is typically a slower sales month for weather-related reasons.

The number of largest 100 markets at “full recovery” status remained unchanged in January at 29.
There was progress made at the midsize market level. At the moment, 63 of the markets classified
as midsize are at full recovery, compared to 60 in the previous month.

The West continues to dominate the midsize market strength, with 9 of its top 10 markets increasing.

In summary:

&#149 Year-over-year price increases in all top 300 markets
&#149 Monthly Increases in 83 of the top 100 markets
&#149 Monthly increases in 165 of the 200 mnidsize markets
&#149 Top 5 Western markets: Los Angeles, San Diego, Honolulu, San Francisco, Bakersfield, CA.

Houzz Tour: Breathing Easy in the New York Suburbs (10 photos)

The house was love at first smell? After their second baby was born, a couple decided it was time to leave New York City and head to the suburbs. They bought a prefabricated home in Larchmont, New York, and when it came to furnishing the space, the wife had one major request: that the house not smell….


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New Home Sales Increase 13% from January to February

The latest data from the Mortgage Bankers Association indicate that
sales of new single family homes in February increased 13% from January’s

The MBA estimated that there were 43,000 new home sales in February,
compared to 38,000 in January. In a related statistic, mortgage applications
for new home purchases increased 12% from January to February.

Looking at types of mortgage applications shows that 65.1% of mortgage
applications were conventional, 16.5% were FHA, 13% were VA, and 5.3% were

10 Fun Decorating Projects for Spring (10 photos)

After a long, cold winter, saying that East Coasters are eager for spring would be the understatement of the year. Its time (hopefully) to stop shoveling, salting and chipping away ice, and start gardening, painting and decorating up a storm! So here are 10 ways to spruce up your space


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Nature’s Color Wisdom: Lessons on Lavender From the Great Outdoors (10 photos)

The color of the lavender fields in Provence, France; lilac bushes perfuming the summer night in the southern U.S.; and English gardens bursting with foxgloves lavender is a color that evokes feelings of peace, serenity and even a bit of magic. Lets explore this color through the lens


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Bathroom Workbook: 8 Elements of Contemporary Style (7 photos)

Knowing your style isnt always cut and dried. For example, your homes current style might not be the one you would have given it if youd had the choice. Perhaps you purchased things that were practical and fit your budget, instead of as part of a larger design scheme. So


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Leading Markets Index Shows Strength in 59 Markets

Source: RIS Media


According to the latest data from the National Association
of Homebuilders/First American Leading Markets Index,
Housing markets in 59 out of 350 metro areas nationwide have
returned to or exceeded their last normal levels of economic
and housing activity.

The index’s level is now at .87, which means that based on
current permits, prices, and employment data, the housing and
economic conditions of the average market are currently running
at 87% of what is considered to be normal.

“Despite the cold weather that has constrained economic and
housing activity across much of the nation this winter, markets
are returning to normal levels. As the job and housing markets
continue to mend and the onset of spring releases the pent-up
demand for new homes, this will bode well for the remainder of 2014”,
says NAHB Chairman Kevin Kelly.