4 Interior Design Apps

4 Interior Design Apps

We can’t always visualize how furniture and wall colors will look or remember room dimensions once they get to the hardware store. Here are some excellent apps that can help with both design and decorating:

Photo Measures allows you to take a photo of any room then draw in the exact measurements over each wall, door or window, so you never have to keep paper measurements again. You can zoom in and out of photos, edit measurements in case you make a mistake, and even add notes and comments to remember unusual details or angles. Keep everything organized in folders by room or project. For iOS and Android.

Home Design 3D is a highly rated app (and noted by the New York Times) that helps you draw rooms and floor plans, visually record dimensions, and test furniture configurations. For iOS, Android, Mac, PC.

TapPainter helps visualize paint colors on interior spaces. Take a photo of the room, then select a new color in three ways. You can use the built-in color wheel, which assigns the correct color number to take to your paint store. Virtual paint chips from major brands like Benjamin Moore and Sherwin Williams are also available. Or you can input a paint chip code you already have to verify it looks just how you imagined! For iOS only.

Houzz lets users browse over 10 million high-resolution interior and exterior decor photos categorized by style, room or location, then virtually “try on” products in their own home. Users can add products, notes and collaborators, or find local professionals to help when it’s time to put those ideas into action. For iOS and Android.

6 Stellar Reasons to Buy a Home in 2016

Is it really 2016 already?  For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a whole lot to celebrate. Why? A variety of financial vectors have dovetailed to make this the perfect storm for home buyers to get out there and make an (winning) offer. Here are six home-buying reasons to be thankful while ringing in the new year:

Reason No. 1: Interest rates are still at record lows

Even though they may creep up at any moment, it’s nonetheless a fact that interest rates on home loans are at historic lows, with a 30-year fixed-rate home loan still hovering around 4%.

“Remember 18.5% in the ’80s?” asks Tom Postilio, a real estate broker with Douglas Elliman Real Estate and a star of HGTV’s “Selling New York.”“It is likely that we’ll never see interest rates this low again. So while prices are high in some markets, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.”

Reason No. 2: Rents have skyrocketed

Another reason home buyers are lucky is that rents are going up, up, up! (This, on the other hand, is a reason not to be thankful if you’re a renter.) In fact, rents outpaced home values in 20 of the 35 biggest housing markets in 2015. What’s more, according to the2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016.

“In most metropolitan cities, monthly rent is comparable to that of a monthly mortgage payment, sometimes more,” says Heather Garriock, mortgage agent for The Mortgage Group. “Doesn’t it make more sense to put those monthly chunks of money into your own appreciating asset rather than handing it over to your landlord and saying goodbye to it forever?”

Reason No. 3: Home prices are stabilizing

For the first time in years, prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, even in heated markets.

“Local markets vary, but generally we are experiencing a cooling period,” says Postilio. “At this moment, buyers have the opportunity to capitalize on this.”

Reason No. 4: Down payments don’t need to break the bank

Probably the biggest obstacle that prevents renters from becoming homeowners is pulling together a down payment. But today, that chunk of change can be smaller, thanks to a variety of programs to help home buyers. For instance, the new Fannie Mae and Freddie Mac Home Possible Advantage Program allows for a 3% down payment for credit scores as low as 620.

Reason No. 5: Mortgage insurance is a deal, too

If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). A workaround to handle this, however, is to take out a loan from the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580. The fees are way down from 1.35% to 0.85% of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way. In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them?

Reason No. 6: You’ll reap major tax breaks

Tax laws continue to favor homeowners, so you’re not just buying a place to live—you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.

Buyers’ Closing Costs Breakdown

At closing you will be given a stack of paperwork that shows line-by-line the cost of completing your real estate transaction. (These costs are in addition to your down payment, minus escrow money, that you also bring to closing.) It will be a staggering amount — totaling 3 to 5 percent of your purchase price.

Called “closing costs” or “settlement costs,” these fees mean you need to bring a certified check or personal check to your closing ceremony whether it takes place at a title company, a bank, or an attorney’s office. The final costs to you may be quite different from your lender’s original “good faith estimate,” especially in the categories involving attorney or title fees.

The fees below are what is generally required, but every buyer will not pay every fee listed  Maybe you worked a deal with the seller to pick up part of the closing costs. And there are many geographic differences. Finally, all lenders do not charge every fee shown.

 

Commissions

How much: Traditionally 6% split between buyer and seller agents; usually 3% to buyer’s agent, 3% to seller’s agent
Description: Payment for the work agents have done. All real estate agent/broker sales commissions are paid at closing.
Who pays: Seller pays unless local custom dictates otherwise, or a deal to split commissions was negotiated and written into the sales and purchase contract.
Note: These costs are not included in your lender’s “good faith estimate.”

 

General Loan Fees

Loan Origination Fee
How much:
 Usually at least 1 percent of the total loan amount. This fee is also called “point” or “points.” One point equals 1 percent of the loan.
Description: Lenders cover their administrative costs by taking this fee up front.
Who pays: Buyer
Note: In some areas seller pays half. Also, there are loans with no origination fee.

Loan Discount
How much: Discount on interest
Description: This fee refers to a one-time charge imposed by the lender or mortgage broker to lower the interest rate and therefore the monthly mortgage payment. The more points paid up front, the lower the interest rate. The loan discount is also called “point” or “discount point.” Note that the interest rate does not drop by one percent per point.
Who pays: The buyer pays unless the seller agreed to help in some way.

Application Fee
How much: Average is under $300, though some experts report charges up to $500.
Description: Most lenders charge an application or “lender’s processing” fee.
Who pays: Buyer

Appraisal Fee
How much: Expect about $300. It can be higher or lower, depending on the size of the property and appraisal fees in your area.
Description: The bank hires an independent appraiser to determine whether the property is worth the sales price you’ve offered for it.
Who pays: Buyer

Credit Report Fee
How much: This fee, also called a “credit check fee,” averages about $25 per credit report checked, although some borrowers have paid three times more.
Description: This fee, also called a “credit check fee,” averages about $25 per credit report checked, although some borrowers have paid three times more. The lender analyzes your credit history by scrutinizing credit scores and reports — a critical step toward deciding whether to loan you money and how much.
Who pays: Buyer

Lender’s Inspection Fee
How much: Under $100
Description: If you are building a new home or buying a home that’s under construction, the lender may charge an inspection fee.
Who pays: Buyer

Mortgage Insurance Application Fee
How much: Varies
Description: When the down payment is less than 20 percent of the purchase price, you are required to carry Private Mortgage Insurance, PMI, to protect the lender should you default on your loan.
Who pays: The buyer pays monthly payments for PMI until equity reaches 20 percent.
Note: Some lenders charge a fee for processing the application paperwork.

Assumption Fee
How much:
 Varies
Description: Buyers sometimes take over (assume) the seller’s existing mortgage. If so, the lender may charge a fee.
Who pays: Buyer

Lender’s Attorney Fee
How much: About $400
Description: If the lender involves an attorney in the loan transaction, the buyer can expect to be charged.
Who pays: Some buyers have balked successfully. Their lenders have dropped this fee.

Advance Loan Fees
How much: Varies
Description: The buyer may be required to make these payments at closing.

Interest
How much: Can range from one to 30 days’ worth of interest
Description: Most lenders require the buyer to pay the interest that will accrue on their loan from the date of settlement to the first monthly mortgage payment due date.
Who pays: Buyer

Mortgage Insurance Premium
How much: Varies
Description: Some lenders require borrowers to pay their first year’s mortgage insurance premium up front. Other lenders ask for a lump sum insurance premium payment at closing that covers the life of the loan.
Who pays: Buyer

Hazard Insurance Premium
How much: A full-year hazard (homeowner’s) insurance policy premium payment
Description: This policy protects the lender against loss from fire, wind, or other natural disasters.
Who pays: Buyer

Flood Insurance Premium
How much: Varies
Description: Lenders may require flood insurance, depending on the property location.
Who pays: Buyer

Earthquake Insurance
How much: Varies
Description: Depending on the property location, it is possible the lender will require earthquake insurance.
Who pays: Buyer

Reserve Account Funds
Description: Your monthly mortgage payments are likely to include a pro-rated amount to cover payments for property taxes and homeowner’s insurance, also called “hazard” insurance. This money is held in a “reserve” or  “escrow” account by the lender who makes the payments for you. At closing, your lender may require you to pony up advance payments just to be sure the reserve fund has enough money to pay the bills.

Homeowner’s Insurance
How much: Two months’ worth
Who pays: Buyer

Mortgage Insurance
How much: Two months’ worth
Who pays: Buyer

City Property Taxes
How much: Two months’ worth
Who pays: Buyer

County Property Taxes  
How much: Two months’ worth
Who pays: Buyer

Annual Assessments
How much: Two months’ worth
Description: Annual assessments made by your condominium or homeowners association also may be included in your monthly mortgage payments.
Who pays: Buyer

 

Title Charges

Title Search
How much: About $200
Description: A title search is done to make sure there aren’t any unpaid mortgages or tax liens on the property.
Who pays: Negotiable

Title Insurance Fees
How much: This fee averages about $350 but can be as high as one percent of the loan, depending on your state of residence.
Description: Title insurance is a policy that protects the owner by guaranteeing the title to the property is clear.
Who pays: Buyer
Note: There may be a second fee listed on the closing document to cover a separate policy that protects the lender.

Documentation Preparation Fee
How much: Average about $200
Description: Lenders and title companies sometimes charge this fee, saying it covers the cost of preparing final legal papers.
Who pays: Buyer
Note: Experts call this a “junk fee.”  you can negotiate this away from title insurance or lender.

Notary Fees
How much: Varies
Description: This fee buys sworn testimony from a licensed notary public who has witnessed that the people named in the documents really are the people who signed them.
Who pays: Buyer

Attorney Fees
How much: The fees could be under $500 or more than $1,000, depending on the situation.    Description: In some parts of the country an attorney, not a title company, handles closing, and sometimes an attorney is hired by the lender to review certain documents.
Who pays: Buyer

 

Government Recording and Transfer Charges

There are great differences in the practices of state and local governments. Who pays which of these fees also varies, according to the terms negotiated in the sales contract.

Recording Fees
How much: Average about $100
Description: Covers getting the sale recorded in the public record.
Who pays: Usually paid by the buyer

Transfer Taxes
How much: Varies
Description: These can be significant in places where they are collected. Some governments also require the purchase of tax stamps.
Who pays: Buyer, but I am paying 1/2 of the transfer fee as stated above

 

Miscellaneous Settlement Charges

Whether buyer or seller pays the following fees depends on what sort of deal was negotiated in the sales contract.

Survey
How much: About $1,000
Description: Sometimes a lender requires a survey of the property.
Who pays: Buyer , I may have the old survey, most lenders will accept this and not charge you.

Pest Inspection
How much: Varies
Description: Depending on location, a termite or other pest inspection may be required.
Who pays: Usually seller

Lead-Based Paint Inspection
How much: Varies
Description: Covers the cost of evaluating lead-based paint risk.
Who pays: Usually buyer, but I agree to pay 1/2 this cost to get apartments inspected.

Courier Fee
How much: Varies
Description: Charged if a courier picks up and delivers documents.
Who pays: Buyer

Source: http://www.zillow.com/wikipages/Buyers’-Closing-Costs-Breakdown/

Home Buying Path A to Z

Every state requires slightly different steps to buying a home, although they are basically very similar. Since I am most familiar with the way California does it, here is the path to home ownership in California, broken down into simple steps:

1) Hire a Buyer’s Agent

  • A buyer’s agent will represent only you and have a fiduciary responsibility to look out for your best interests.
  • Buyer’s agents may ask you to sign a buyer’s broker agreement, but it is the seller who pays the commission.
  • Interview agents until you find an agent you trust and with whom you feel comfortable.
  • Once you have settled on an area, try to hire a neighborhood specialist.

2) Get PreQualified / Preapproved

  • Order a free credit report online and fix mistakes, if any.
  • Ask your agent for a referral to a mortgage broker, but also compare rates offered by your own bank and / or credit union.
  • Ask the lender to give you a loan preapproval letter, which means it will verify your income and pull a credit report.
  • Determine your maximum loan amount, but choose only a mortgage type that you understand and a payment level with which you feel comfortable, which may very well be less than the maximum for which you are approved.

3) Look at Homes for Sale

  • Ask your agent to look at homes for you before showing them to you.
  • Narrow your search to those homes that fit your exact parameters to find that perfect home.
  • Ask your agent to give you MLS print-outs of comparable sales in your targeted neighborhood.
  • Consider all homes on the market, including fixer-uppers, REOs, foreclosures, short sales and those overpriced homes with longer DOM.
  • Observe open house etiquette.
  • Tell your agent which online home listings you are interested in previewing and ask for additional input.

4) Write a Purchase Offer

  • Consider writing seller’s market offers in sellers markets and buyer’s market offers in buyer’s markets.
  • Select a home offer price based on the amount you feel a seller will accept or counter.
  • If you are considering a lowball offer, ask your agent to substantiate this price for you.
  • Prepare for multiple offers if the home is considered desirable in a hot location.
  • If your offer is rejected, ask your agent to explain why and don’t repeat that mistake with your next offer.

5) Negotiate and Write Counter Offers

  • Expect the seller to issue a counter offer.
  • If the seller counters at full price, continue to negotiate.
  • During offer negotiation, share personal information about your family to give the seller a reason to care about you.

6) Make an Earnest Money Deposit

  • When your offer is accepted, deposit your earnest money check with the appropriate party.
  • Do not ever make your check payable to the seller.
  • Your offer should contain contingencies that will return your earnest money deposit to you if you cancel the contract.

7) Open Escrow / Order Title

  • Your agent or transaction coordinator will open escrow and title, if the listing agent hasn’t already done so.
  • Ask for the escrow officer’s name, phone and escrow file number.
  • Give this information to your lender and your insurance agent.

8) Order Appraisal

  • Your lender will require an advance payment for the appraisal.
  • If you receive a low appraisal, discuss options with your agent.
  • Ask for a copy of the appraisal.

9) Comply With Lender Requirements

  • Lenders may ask for additional information.
  • Do not make home buying mistakes such as altering your financial situation while in escrow.
  • When the file is complete, the lender will submit it for final underwriter approval.

10) Approve Seller Disclosures

  • Read and question items you do not understand on the TDS, Seller Property Questionnaire, natural hazard report, pest inspection / completion and other documents such as a preliminary title policy.
  • Realize you have 10 days to cancel if lead paint is a health hazard.
  • Read every document in its entirety; ask questions about all seller disclosures.

11) Order Homeowner’s Insurance Policy

  • Order your homeowner’s insurance early.
  • Sometimes previous claims by a home owner can make it difficult to get insurance.
  • Get replacement coverage.

12) Conduct Home Inspection

  • Hire a reputable home inspector.
  • Bring a home inspection checklist with you.
  • Attend the home inspection.

13) Issue Request for Repair

  • If the home inspection turns up health and safety issues, issue a request for repair by asking the seller to address those issues or give you a credit for them.
  • Realize no home is perfect, and the inspector will find faults.
  • Be reasonable.

14) Remove Contingencies

  • By default, California C.A.R. contracts give you 17 days to remove contingencies.
  • Make sure your loan is firm and the appraisal is acceptable before removing your loan contingency.
  • If you do not remove contingencies, the seller can issue a request to perform and then cancel the contract, on top of demanding your deposit.

15) Do Final Walk-Through

  • Do not pass up doing a final walk-through.
  • Inspect the property to make sure it’s in the same condition as when you agreed to buy it.
  • If you find a serious issue, address it now before you close.

16) Sign Loan / Escrow Documents

  • In southern California, you will sign escrow documents shortly after opening escrow.
  • In northern California, you will sign escrow documents along with your loan documentsnear closing.
  • Bring a valid picture ID.

17) Deposit Funds

  • Bring a certified check payable to escrow.
  • Expect escrow to pad the amount, so you will receive a refund after closing.
  • Consider asking your bank to wire the funds to escrow, saving you the hassle of waiting in line at the bank.

18) Close Escrow

  • Your property deed, seller’s reconveyance and deed of trust will record in the public records.
  • Title will notify you and your agent when it records.
  • After recordation, unless your contract specifies otherwise, the property is yours — change the locks immediately.

Source: http://homebuying.about.com/od/buyingahome/qt/121907_buy-path.htm

Closing on a House for the Seller

The good news is that you now have an impartial third party working for you. Escrow will order the preliminary title report, the payoff balances from your lenders, the property tax balance due either to you or the county, and whatever other paperwork is essential for you to complete this deal.

Escrow also is gatekeeper for all the buyer has to do. They will see that the buyer’s loan documents arrive on time for the closing. Mean while, your realtor is working to remove the financing and inspection contingencies after you and the buyer agree that everything is in order.

When all the terms of your sales contract are met and all the loan documents have been prepared, Escrow will prepare the HUD-1 settlement statement, which itemizes the money coming in and being paid out on your closing date. You and the buyer will have a chance to review the statement ahead of the meeting where you sign the final paperwork. The documents come from Escrow – and in California – you do not need to attend a Closing meeting.  Your agent will contact you to congratulate you on the transfer and Close of your escrow.  But it should be a day when everyone can celebrate.

 

Seller Responsibilities

Your tasks as seller during the closing period are to:

  • Maintain the house in good condition
  • Negotiate and perhaps repair something the buyer’s inspector finds
  • Notify your utility companies of a final service date
  • Prepare to move

Seller’s Tip: Don’t cancel your homeowner’s insurance policy until the transfer of ownership has been recorded.

Buyer Responsibilities

The buyer’s duties are more burdensome. They include:

  • Hiring a general home inspector and perhaps specialty inspectors
  • Negotiating with you to have repairs made, or not
  • Completing the loan package
  • Buying homeowner’s insurance
  • Setting up accounts with utilities

Prior to Closing Day

If your buyer’s lender required a survey of the property, you need to review the document. Question the boundaries if you think something is wrong. Surveys are particularly important in rural areas. Experts advise close scrutiny if your boundary is adjacent to a stream or river that has changed course. Also, a final walk through may be requested. This gives the buyer one last chance to view the property and make sure that agreed upon repairs are completed.

 

Closing Day

The day your home transaction closes is the day your deed is sent to be filed at the county courthouse. You and the buyer will sign a stack of closing documents. All bills will be paid such as agent commissions, mortgage payoffs, down payments, etc. You will receive a proceeds check if one is due to you. The buyer receives the keys, remotes for the garage doors, and possibly reciepts from any work agreed to be done .

What to get to Escrow

  • The deed to your home, if the home is paid off and has no mortgage or leins
  • Photo ID ? a driver’s license or passport
  • A certified check if required in the amount told to you by Escrow
  • The keys and security codes for the house

Don’t forget to gather warranty and instruction books for heating, cooling, and plumbing systems and for appliances that will stay with the house. Leave them for the buyer when you move out.

 

What the Seller Pays

What the seller pays at closing depends partly on local law and practice and on the terms negotiated in the sales contract. Just remember that the contract rules. You can’t decide you don’t want to pay something that was already agreed to by both parties and written in your contract – unless you can get your buyer to agree. Of course, that means amending the paperwork, which could mean delaying the closing.

Typical seller expenses

  • The outstanding mortgage
  • Real estate commissions
  • Property taxes, utility bills, homeowner’s insurance, and condominium dues, if any are due (most of this is prorated at closing)
  • Escrow, Title and/or Attorney fees

If you live in an area where home warranties are popular, this could be another expense. Warranties are a kind of insurance policy that guarantee for a year the mechanical systems and appliances.

Because whatever you agreed to pay at closing is deducted from your selling price or proceeds. That is, unless your sales price doesn’t cover the total cost of paying off your loan and the other costs of sale.

Source:  http://www.zillow.com/wikipages/Closing-on-a-House-for-the-Seller/

The 7-Step Guide to Selling your Home

  1. Prepare to sell your house
    Home selling has become more complex than it used to be. New seller disclosure statements, longer and more mysterious form agreements, and a range of environmental concerns have all emerged in the past decade.
  2. Contact Nate and Shane
    In the maze of forms, financing, inspections, marketing, pricing, and negotiating, it makes sense to work with professionals who know the community and much more.
  3. Set the list price of your home
    Several factors, including market conditions and interest rates, will determine how much you can get for your home. In other words, home selling is part art, part science, part marketing, and part negotiation.
  4. Market your house for maximum exposure
    Your Realtor should share a marketing plan with you, but the more you know about the process of selling your home the easier it is to support your Realtor’s efforts. Make your home sell fast with these tips.
  5. Negotiate a real estate offer
    Perhaps the most complex moment in the sales process comes when you get an offer for your home. Whether you have one offer or several to consider, these tips will help you navigate the negotiation.
  6. The art of settling
    When you have a signed contract with the buyer for your home, you may feel as if you can breathe a sigh of relief. But before you can completely relax you need to get to the settlement table.
  7. Plan your move
    Some of the activities required to sell your home can actually help with the moving process. For example, by cleaning out closets, the basement, and the attic, you will have less to do once the home is under contract.

Source: Realtor.com

Fast Curb Appeal Tricks

Fast Curb Appeal TricksSprucing up the exterior of your home can add significant value to it. Curb appeal ranks high on the list for many potential buyers. Most people make the mistake of thinking that adding curb appeal requires a major investment. Here are some curb appeal tricks that are both easy and inexpensive.

General Cleanup
Give your home a facelift with some good cleaning. It’s easy to forget the basics of outdoor house maintenance. General cleanup measures can make your home shine. Cleaning the windows, for instance, can give your home a fresh new look. Clean windows also help to improve the interior appearance. Window cleaning professionals can be hired for areas that are difficult to reach.

Remove Rotting Trim
Rotting trim can give the entire home a shabby and unkempt appearance. Even small areas of rot can be extremely unappealing. Rot can occur quickly in the right weather conditions. Fortunately, you can fix small areas of rot with epoxy. Larger areas of decay can be fixed with a wood patch.

Small Touches
If you want your home to stand out, you will need to pay extra attention to blank and dull spaces. One area that often looks bare is the slab foundation. You can easily improve the appearance of this space by adding panels. Panels come in a variety of materials such as brick, wood and stone. Choose from different styles and colors that will match the unique look of your home.

Fix Walkways and Paths
Walkways are an important aspect of the exterior of any home. The path that leads to your house is often the first thing that people take note of when they visit. These areas can become dirty and overgrown with weeds. Over time, walkways will wear and crack. Power washing is the best option for dirty walkways. You can rent a power washer to do the project yourself. Use a cleaning solution to get the best results. A bleach cleaning solution will help to kill algae and mold. Depending on the level of damage, cracked walkways can be patched and repaired.

A Pop of Color
Draw attention to your home with a pop of color. Many people use brightly colored pieces to enliven the appearance of the house. Adding a front yard seating area offers a good opportunity to introduce new colors. Update old furniture with a new coat of paint. Porches can be made over by adding fresh accent pieces.

Makeover the Front Door
Painting your front door in a fresh new color can give your home an entirely new look. Choose colors that are consistent with your overall paint scheme. Don’t be afraid to try something new. Adding new fixtures to the door will also make it look polished. Matching the door to your shutters will tie the look together. The front door is a great way to make a strong impression with your home. Small changes can make a vast difference to the appearance of your home.

Rising Rents and Short Supply

Rising Rents and Short Supply
Most financial institutions agree that the amount one pays for housing shouldn’t exceed around one-third of an individual’s pay. However, this isn’t the reality for many in the U.S. Read on to learn more about how rising rents and short supply are impacting citizens across the country.

A Problem for All
The rising cost of rent is an issue that is affecting multiple generations; it isn’t only the millennials that are feeling the pinch. There is clear evidence that rising rents are affecting even the Gen X and Boomers generations. Moreover, it isn’t only those in the poorest income bracket that are feeling the pressure to make rent. Median earners are also seeing their incomes diminished by a larger portion of rent.

The Numbers
According to a recent report by the Joint Center for Housing at Harvard, the issue is growing. The numbers reveal that half of all renters in the U.S. are using over 30 percent of their income to cover housing costs. A total of 25 percent of renters pay more than 50 percent of their monthly income towards rent.

Why Now?
The main reason behind the problem is that fewer households are transitioning from being renters to owners. While some renters have difficulty finding homes in their price range, others have difficulty qualifying for a mortgage in the post-recession period. With less number of people entering the housing market, the supply of rental properties is going down, and short supply translates to higher prices.

Location
Higher rental costs have a major impact on people across the nation. However, location plays a huge role in this problem. According to a Census Bureau report, New York has the lowest homeownership rate in the country. Only 53 percent of New Yorkers live in homes that they (or their families) own. California is in a close second at just 54 percent, and the national rate is 65 percent.

The True Cost
The effect of this problem on the overall economy is staggering. Renters paying a higher percentage of their incomes on housing costs are forced to sit out on other purchases. High rent reduces the amount of money that is spent on basic items, such as food and clothing, as well as on entertainment and other goods. This has an impact on the economy at large.

Changing Times
The forces that are currently driving people to continue to rent are changing. The housing market is growing stronger. More people are able to qualify for loans. In the past, lenders had tightened the requirements which made it difficult for some potential buyers to secure a loan. A new Mortgage Lender Sentiment survey shows that the number of lenders who have recently tightened standards has significantly dropped. Additionally, conventional loans are now available with only a 3 percent down payment. Greater flexibility in lending requirements may help renters move into the housing market. This progression would also ease the current rental shortage.