Net Worth of Homeowners 44X Greater than Renters in Hunterdon and Somerset Counties

Net Worth of Homeowners 44X Greater than Renters in Hunterdon and Somerset Counties

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey data, covering 2013-2016 was released two weeks ago.

The study revealed that the 2016 median net worth of homeowners was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

Owning a home is a great way to build family wealth

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

That is why, for the fourth year in a row, Gallup reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, or bonds.

Greater equity in your home gives you options

If you want to find out how you can use the increased equity in your home to move to a home that better fits your current lifestyle, let’s get together to discuss the process.

 

Let me show you how to buy for less than it costs to rent…


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Think you pay too much in taxes? 10 most and least tax-friendly states

Think you pay too much in taxes? 10 most and least tax-friendly states

Reposted from USA Today

When thinking about moving to another city or state most people take the time to research such things as schools, transportation, crime, cultural and recreational activities.

But one of the most important things many people overlook: Taxes.

State and local taxes can vary widely and some are more tax friendly than others, according to personal finance magazine Kiplinger.

“As Congress mulls a new federal tax plan that may cut rates and eliminate deductions, Americans should also keep an eye on state and local taxes,” Kiplinger managing editor Robert Long said in a statement. “Depending on where you’re living, state income taxes and property taxes cost thousands of dollars every year.”

More: Chart shows how Trump’s tax reform plan could affect you

More: Warren Buffett: Eliminating estate tax would be ‘terrible mistake’

Kiplinger examined all 50 states and ranked each state by how tax friendly they are. The study looked at each state’s income taxes, sales taxes, gas taxes, ‘sin’ taxes (tobacco, alcohol) and other tax rules and exemptions

In this year’s list, the magazine crowns Wyoming as the most tax-friendly state for a second straight year. Wyoming has no state income or estate tax and relatively low sales and gas tax, according to the report. Here are Kiplinger’s top 10 most tax-friendly states for 2017 and how they ranked a year ago:

1.    Wyoming (1)
2.    Alaska (2)
3.    South Dakota (8)
4.    Florida (3)
5.    Nevada (4)
6.    North Dakota (unranked)
7.    Delaware (10)
8.    Arizona (5)
9.    Louisiana (6)
10.  Mississippi (9)

More: See how Kiplinger ranks all 50 states

A separate report from 24/7 Wall St. found similar results with these states ranked as having the lowest taxes: 1. Alaska, 2. South Dakota, and 3. Wyoming.

Least-tax friendly states

This year, Maryland jumped to the top of the list to be named the least tax-friendly state in Kiplinger’s state-by-state guide to taxes.

The report cited the state for “some of the highest effective income taxes in the country.”

“Maryland is among a handful of states that allow localities to levy their own income taxes on top of state income taxes. When you include these taxes, the state’s effective income tax rate soars,” the report said.

Kiplinger’s top 10 least tax-friendly states:

1.    Maryland (unranked)
2.    Minnesota (6)
3.    New York (4)
4.    Illinois (9)
5.    Maine (7)
6.    Vermont (8)
7.    Hawaii (2)
8.    California (1)
9.    Connecticut (3)
10.  New Jersey (5)

The 24/7 Wall St. analysis listed these three states as having the highest tax burdens: 1. New York, 2. Connecticut, and 3. New Jersey.


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Millionaire to Millennials: Buy a Home Now!

In a CNBC article, self-made millionaire David Bach explained that “the single biggest mistake millennials are making” is not purchasing a home because buying real estate is “an escalator to wealth.”

Bach went on to explain:

“If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

“As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.


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Tax Overhaul and Housing: The Journey Begins

Tax Overhaul and Housing: The Journey Begins

The NAHB takes a constructive approach to work ahead on the mortgage interest deduction and housing support.

Reposted from Builderonline.com

The tax code overhaul journey has begun.

The President and Republican leaders put a framework on the table last week whose intent is to give economic growth a big boost by reducing taxes for many businesses and individuals.

National Association of Home Builders leadership offered a constructive take on goals mapped out as a broad set of principles, looking at the positives as significant, and regarding potential negatives in the outline as matters its team would take up on an issue by issue basis.

NAHB Chairman Granger MacDonald voiced the association’s view of the tax reform initiative’s key objectives here:

“By lowering the pass-through rate, the plan will reduce the tax bill of thousands of small businesses and help to spur job and economic growth. More importantly, the blueprint maintains the Low Income Housing Tax Credit, the most indispensable tool to help produce affordable rental housing. The plan also retains a business interest deduction for small businesses, which would ensure that our future tax code is truly pro-growth.

“On an issue of such significance, we recognize difficult trade-offs must be made. Although the mortgage interest deduction remains untouched, its effectiveness could be diminished as more families elect to take a higher standard deduction. As the process advances, NAHB looks forward to working with policymakers to mitigate any detrimental effects that this development could have on the housing market. In addition, we will also seek to ensure that tax relief efforts put more money into the pockets of hard-working families and that affordable homeownership and rental housing opportunities remain an accessible goal.”

One of the operable terms in the quote above is “as the process advances.” Legislative reality being what it is these days, the process is going to have to work very hard to advance, as economic belief systems, rule of law, and a backdrop of polarization come into play.

Clearly, the prospect of a tax reform that could kick the economy into higher gear is welcome among business leaders of other sectors as well. This Wall Street Journal piece by Jeffrey Sparshott focused on rising sentiment among manufacturers tied at least in part to expectations around tax reform that could stimulate demand, hiring, hire wages, and a virtuous cycle of economic forces. Sparshott writes:

“There is record-level optimism among manufacturers of all sizes, and it is in no small part because President Trump has delivered on his commitment to put the full weight of the White House behind pro-growth tax reform,” said Jay Timmons, NAM’s president and CEO.

A number of articles focus on dissension in the ranks of real estate, finance, and housing association leaders, suggesting that fissures among them weaken their collective interests. This Politico piece by Lorraine Woellert is an example. Woellert writes:

“The rift is a first for the industry, where real estate agents, builders, bankers and others in the homebuying pipeline typically lock arms to defend the mortgage-interest tax deduction as a building block to homeownership and wealth creation.”

NAHB CEO Jerry Howard welcomes the tax overhaul framework as an opportunity to look afresh at tax policy levers that could unlock support for housing and energize the industry. He’s quoted here in Woellert’s story:

As the nitty-gritty of tax reform gets underway, lawmakers might find new avenues to carve out benefits for homebuyers, Howard said. He raised the prospect of a mortgage tax credit, a benefit that wouldn’t require taxpayers to itemize.

“Thirty years ago, even with the leadership of Ronald Reagan and Tip O’Neill, they never even thought of looking at ways to improve the effectiveness of the mortgage-interest deduction,” Howard said. “This is historic.”

Debate over both the cost and the return in positive effects of the Mortgage Interest Deduction will continue as legislative realities evolve the tax overhaul discussion.

Zillow dives into its data warehouse, and economist Aaron Terrazas spotlights the Zillow view of key impacts here:

Source: Zillow
Source: Zillow
  • Under current law, a homeowner buying a home today would need to purchase a home worth a minimum of $305,000 in order for taking the MID to be worthwhile.
  • Doubling the standard deduction and eliminating the deductibility of state and local taxes means a home buyer purchasing a home today would need to buy a home worth $801,000 or more.
  • Currently, a little less than a third (29 percent) of all U.S. homes are valuable enough to make taking the Mortgage Interest Deduction (MID) worthwhile for tax filers. Under recently proposed tax changes, that number would fall to just 5 percent.

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Which Homes Have Increased in Value the Most in Hunterdon and Somerset Counties?

Which Homes Have Increased in Value the Most in Hunterdon and Somerset Counties?

Home values have risen dramatically over the last twelve months. The latest Existing Home Sales Report from the National Association of Realtors puts the annual increase in the median existing-home price at 5.6%. CoreLogic, in their most recent Home Price Index Report, revealed that national home prices have increased by 6.7% year-over-year.

CoreLogic broke appreciation down ever further into four price ranges which gives a more detailed view than simply looking at the year-over-year increases of the national median home price.

The chart below shows the four tiers and each one’s growth from July 2016 to July 2017 (the latest data available).

Which Homes Have Increased in Value the Most? | MyKCM

It is important to pay attention to how prices are changing in your local market. The location of your home is not the only factor in determining how much it has appreciated over the course of the last year. Lower priced homes have appreciated at greater rates than homes at the upper ends of the spectrum, due to demand from first-time home buyers and baby boomers looking to downsize.

Bottom Line

If you are planning on listing your home for sale in today’s market, let’s get together to go over exactly what’s going on in your area and your price range.

 


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