House-Buying Power at Near-Historic Levels

We keep hearing that home affordability is approaching crisis levels. While this may be true in a few metros across the country, housing affordability is not a challenge in the clear majority of the country. In their most recent Real House Price Index, First American reported that consumer “house-buying power” is at “near-historic levels.”

Their index is based on three components:

  1. Median Household Income
  2. Mortgage Interest Rates
  3. Home Prices

The report explains:

“Changing incomes and interest rates either increase or decrease consumer house-buying power or affordability. When incomes rise and/or mortgage rates fall, consumer house-buying power increases.”

Combining these three crucial pieces of the home purchasing process, First American created an index delineating the actual home-buying power that consumers have had dating back to 1991.

Here is a graph comparing First American’s consumer house-buying power (blue area) to the actual median home price that year from the National Association of Realtors (yellow line).

House-Buying Power at Near-Historic Levels | MyKCM

Consumer house-buyer power has been greater than the actual price of a home since 1991. And, the spread is larger over the last decade.

Bottom Line

Even though home prices are increasing rapidly and are now close to the values last seen a decade ago, the actual affordability of a home is much better now. As Chief Economist Mark Fleming explains in the report:

“Though unadjusted house prices have risen to record highs, consumer house-buying power stands at near-historic levels, as well, signaling that real house prices are not even close to their historical peak.”

Want to Sell Your House Faster? Don’t Forget to Stage! [INFOGRAPHIC]


Some Highlights:

  • The National Association of Realtors surveyed their members & released the findings of their Profile of Home Staging.
  • 62% of seller’s agents say that staging a home decreases the amount of time a home spends on the market.
  • 50% of staged homes saw a 1-10% increase in dollar-value offers from buyers.
  • 77% of buyer’s agents said staging made it easier for buyers to visualize the home as their own.
  • The top rooms to stage in order to attract more buyers are the living room, master bedroom, kitchen, and dining room.

5 Must’s of Becoming Debt-Free

5 Simple Ways for Homeowners to Become Debt Free

Becoming debt-free is probably one of the top desires of most people; especially first time home buyers. That’s because having too much debt can be a real obstacle for first time buyers. But notice I said top desire not top priority.

That’s because a desire is something that a person wants strongly. However, this differs dramatically from a priority; which is something that’s given special and deliberate attention above other things.

We all have lots of desires – a nicer house, a promotion, to take a vacation, or even to reconnect with a loved one. However, we tend to have very limited priorities.

In regards to becoming debt-free, many people desire to live a debt-free life but very few are willing to take the steps to turn that desire into an actual priority. Thus, getting results.

And if you desire to become a first time home buyer – then you must make lowering or eliminating your debt a real priority.

Turning any desire into a priority requires disciplined action. In order to turn the desire of becoming debt-free into a priority one MUST do 5 specific actions.

You Must Track Your Expenses

Tracking what you spend in detail over a set period of time, say two months, will give you a clear picture of where your money is going each month. We all think we know what we spend money on until we analyze our bank statements.

“Wow! I didn’t know I ate out that much!” That’s the revelation I got when looking at my statements one month. Prior to that day, I wouldn’t have considered myself one who spent too much money eating out.

We all tend to see ourselves in good light, but that perspective isn’t always helpful in making positive progress toward change. So, look at everything you spend money on and let that be your guide in finding any “money leaks” in your budget. If you do find a leak, for instance eating out too much, make a plan to bring a lunch to work and cook dinner at home for a season.

You Must Pay Yourself First

A person without any savings is like a boater going out to sea without a life-jacket. Your savings is your help in times of need. And not having any is not a good idea. Not to mention that having to borrow money from a bank, your credit card, or even friends and family has a price – even if it’s not money.

Start small by making consistent payments each month even if it’s just $25-$50. Any little bit will add up over time.

In addition, if you found any money leaks in your monthly spending; find out the average amount spent each month and apply that amount or a portion of it toward starting your savings fund.

You Must Make Tough Decisions

In order to make progress in any area; tough decisions must be made. It’s all apart of life and it’s no different with getting out of debt. Once you patch up any money leaks and start building your savings; you need to be prepared to go deeper and reach a little further to reach your goal.

Maybe you’re a single person who’s living on your own and feel the pinch at the first of every month. Have you ever thought about getting a roommate? Or what about cutting the cable? Or even getting a part-time job to bring in some extra debt paying money? Some of these decisions are tougher than others, but whatever sacrifices you come up with will be worth it in the end.

You Must Know Your Credit Report

In order to effectively pay off your debt; you have to know what needs to be paid off. All your outstanding credit should be filed with the credit bureau. Therefore, your credit report will let you know where you stand. Understanding your credit and how the credit system works will put you above the vast majority of Americans, and will get you started with a focused plan of action. You can get a free credit report annually at

You Must Pay Off the Small Debts First

Once you have your credit report and you know all your outstanding debt, you need to decide which debts to pay off first. Dave Ramsey of Financial Peace University recommends to pay off your smallest debts first. He calls this the Debt Snowball. It works rather well by creating momentum and excitement after the small debts are paid off more easily. Once you pay off the smallest one first, you then take that money and apply it toward the next one on the list. So on and so forth. Thus, creating a snowball effect.

When you make becoming debt free a priority and follow the above MUST’s; you’re sure to see positive results very soon. And it will surely open the door to your homeownership dream!

How did you pay off your debts? Let us know how you did it. What worked? And what didn’t?

Leave a comment below!

Why Your House Won’t Sell Itself – Even in a Seller’s Market

How to ensure your home sells quickly

Don’t assume that because we’re right in the middle of a seller’s market; your home will simply sell itself. Buyers are smarter today, have more tools to work with, and they’re not going to settle. They’ll happily move on to the next house knocking the dust off their feet along the way! But you have the power to display your home like the showcase it is.

Here are some simple things you can do right now to put your beautiful home at center stage!

List Your Home at the Right Price

Buyers aren’t very forgiving when it comes to homes that are grossly over-priced. Like I said, they’ll laugh and keep it moving. You need to price your home according to the market in your immediate neighborhood.

That means, pricing based on what has already sold recently in your neighborhood. If your home is listed 15k higher than any other home in your neighborhood; then there better be a reason that’s worth 15k more! And in almost every case, there isn’t. If your home does fall into that rare category; we always recommend getting an appraisal done on the front end. This way you can confidently show prospective buyers what your home is worth.

Make Sure Your Home Has Curb Appeal – Not Curb Repel

Just like we appreciate a beautiful presentation on our dinner plate, making us want to dive in fork first – the outside of a home is no different. Good curb appeal draws a potential buyer inside. Overgrown shrubs, dead grass, dull exterior paint on the walls and/or your front door, and a cracked or fading driveway are all indications to buyers that the inside might be worse.

Continue The Appeal Throughout Your Home

Now that you’ve set the bar high with your stellar curb appeal, don’t let your buyers down with the interior. Making simple updates to the interior of your home doesn’t have to be overwhelming or break the bank. Here are 3 simple ways to impress buyers to make an offer:

  1. Make small but impactful updates like refreshing the interior paint and changing any outdated fixtures. These easy changes make a big difference to buyers. Remember, any sign of wear or neglect will give the impression to buyers that there may be more they can’t see.
  2. De-clutter by removing any unnecessary or over-sized pieces of furniture that may hinder the flow of traffic in your home. Also, remove your family’s personal clutter such as mail and paper-work by placing out of sight. Get a jump start on your moving by packing away all unnecessary items (especially up high and down below) in all closets to allow buyers to see there’s more than enough room for all their stuff. And finally, pack away family photos and other memorabilia that keep buyers from seeing themselves in your home.
  3. Stage each room carefully to show buyers how to use each room. For example, if you have an odd room that doesn’t flow with the rest of the house; stage it to visually tell buyers why that room is a great feature to the house. Also, if you currently use a room for an unusual purpose, you may want to stage that room to show the most common use.

Be Flexible with Showings

When you are selling your home, it increases your chances of getting a contract when you are open to showings as they are requested. This doesn’t mean you can’t have a life while you’re selling your home, but being open to last-minute showings whenever possible prevents you from missing out on a possible offer.

To keep the stress down with showings, it helps to keep mess and clutter under control on a daily basis. Keeping mess hidden in nice, covered baskets such as a hamper for dirty clothes keeps the mess in the room but out of sight. This prevents the last minute clean up before showings.

If you’re ready to sell your home, there’s no greater time than a seller’s market! To get more information on how to sell your home and get the listing process started click here.

5 Signs You’re Really Ready to Buy Your First Home

5 Signs You're Ready to Becoming a First Time Home Buyer

Becoming a first time home buyer and walking in the doors of your very own home has always been the American dream. It confirms inside yourself that you’ve reached a level of success in your life. You finally have the keys to open the door to your very first home!

But how do you know if you’re really ready to take the big step to become a first time home buyer? It’s pretty simple to tell if a person is ready to buy a home – or not ready for that matter.

Several years back during the housing crisis, many homeowners lost their homes to foreclosure. In the wake of that horrible season, we learned some valuable lessons. One of which was many of those who did lose their homes, simply weren’t ready to be homeowners in the first place. Sad but true.

Let’s learn from those mistakes and decide today to make better choices. And part of making better choices is self-evaluation. In order to get where you want to go; you need to first know where you are.

If you’re looking at a road map or even getting directions from your phone; you need to have a starting location or else you can’t possibly know which way to go.

The following points will help you identify if you’re ready to take the exciting plunge into homeownership.

#1: You have steady income and employment

In order to be ready for your monthly mortgage payments, taxes, insurance, and other expenses; you must have steady and reliable income. A lender will not have confidence in your ability to pay back their loan if you’re not able to show you’re responsible to get and keep a job for a significant length of time.

In addition to having a steady income, you want to be sure your income is high enough to comfortably pay the mortgage, taxes, and insurance on the house price you want to purchase.We recommend that your housing expenses don’t exceed 35% of your income at most.

#2 You have a low debt-to-income ratio

Decreasing your overall debt is a key factor in getting approved for a mortgage. That’s because if your debt is too high your debt-to-income ratio will be too high. Your debt-to-income ratio or DTI is one of the main factors lenders will use to approve you for a mortgage.

Your DTI is important because it tells lenders how much debt you have in comparison to your income. This gives lenders insight into the possible danger of a borrower having future financial difficulties.

The ideal DTI for mortgage lenders is no more than 36%. Anything higher can be seen as a red flag.

#3: You have an established and favorable credit record

Gone are the days of the low document home loans that don’t require extensive proof of income and credit documents. You must show that you’re a reliable consumer who pays their bills every month and on time. If your credit is or has been an issue for you; it’s not too late to save it.

You need to start by pulling your credit report from all three bureaus. You can order one free tri-bureau report a year through Once you have your credit report in hand, you can see a true picture of not only your scores but the actual credit items on your report. You can begin making a plan to dispute any false or duplicate charges and pay off those legitimate ones. It’s never too late to bring your credit back to life. Little by little, it will make a tremendous difference.

#4: You have at least 3 months of income saved

Savings is essential for keeping a successful home. Dave Ramsey with Financial Peace University calls savings Murphy Repellent. When you have money ready for the unexpected; it seems like the unexpected rarely comes. Not only that but when trouble or annoying issues do show up; you can take a loan from your own savings instead of a bank. Getting loans from the Bank of You is great because you always get approved and all loans are interest-free! Just be sure to act with integrity by paying yourself back just like you would with a bank.

In addition to your savings, having money saved for closing costs and down payment is important. The typical down payment for a non-conventional loan is 5% but can be as low as 3%. For example: for a $150,000 purchase price, you’ll need to bring $4,500 (3%) to closing for your down payment.

Closings costs typically come to about 2-5% of the purchase price. For example: for a $150,000 purchase price, you’ll need to bring $7,500 (5%) to closing for your closing costs

That’s a LOT of savings! But there are programs available to those who qualify for thousands in free closing costs and down payment assistance. We specialize in these programs, so if you’d like more information on how to get qualified, click here.

#5: You live a budgeted life

You don’t need to live off an extremely restrictive budget, but you must have a clear understanding of where your money is going each and every month and are sure you always have enough in store. Having a plan for your money (a budget) means all your money has a place. It’s just like in your home. If everything has a place and it all goes to its place on a fairly regular basis; your home will flow and be more organized – instead of over run by clutter. Budgeting keeps the clutter out of your finances and keeps things flowing.

Are you confident in your readiness to become a homeowner? Do you see some areas you need to work on?

You don’t need to figure it all out on your own. Buying a new home can feel confusing and overwhelming… if you don’t have the right information and help. Let us help you through the process – hassle-free.

Click Here to contact us today! We’re dedicated to helping you get qualified and make your home ownership goal a reality.


5 Simple Ways to Save Money by Winter-Proofing Your Home

5 Easy Ways to Save Money by Winter-Proofing Your Home

It’s winter in Florida so you may think winter-proofing your home is not necessary in our warmer climate. Not so fast! Taking the time to assess your home to be sure it’s ready for the colder weather can keep more of your dollars in your pocket.

5 Easy Ways to Save Money by Winter-Proofing Your Home

Sure, we’re not as cold for as long as our neighbors to the north, but we still need to be ready. Even if it is only for a couple of months. Here are 5 really easy ways to save money by winter-proofing your home.

Money Saver #1: Find the Drafty Holes

On a breezy day, walk around holding a lit incense stick or even a candle and hold it up to windows, outlets, recessed lighting, and door jams. If the smoke or flame starts moving, you know you have a leak.

Patching up your leaks by using door sweeps, caulk, and outlet gaskets will keep cold from creeping into your home. It’ll also help keep out the Florida bugs in the summer. And who doesn’t want that!

Money Saver #2: Check your Insulation Levels

The industry standard is having at least 12 inches of insulation in your attic. Don’t worry about measuring your insulation to check. Just look in your attic and if you see your ceiling joists, you don’t have enough. Ceiling joists are typically at most 10-11 inches. If you do decide to add more insulation, be sure to add the kind that doesn’t have the paper backing which will act as a moisture barrier. This can cause future moisture problems within the existing insulation.

Money Saver#3: Reverse Your Ceiling Fans

This is a tip that’s easily forgotten. When you turn your fan’s switch to the winter function it works to push warm air back down and keep it circulating. This saves on your heating bill. It’s ready for winter when it turns clockwise.

Money Saver#4: Wrap Any Exposed Pipes

A burst pipe is a huge and costly problem. To prevent this, see if you have any pipes that flow through garages, crawlspaces, or basements. If so, wrap them with foam or rubber sleeves to keep them protected. We don’t have too many freezing nights in Florida, but when they do show up – you want to be ready.

Money Saver #5: Check Your Alarms

This may not seem like a winter-proofing item, but with so many fires happening when homes are trying to stay warm on cold nights; it’s essential to be sure that your smoke detectors are working properly in case of an emergency.

These items may or may not cost you any money upfront, but they most certainly will save you money by keeping your heater from running continuously or simply by preventing a devastating and costly disaster from happening in the future.

If you have any winter-proofing tips, leave us a comment below. We’d love to hear what you do!