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Celebrating 50 Years of Earth Day!

Did you know that April 22nd marks the 50th Anniversary of Earth Day?  As we adapt to the restrictions of social distancing, one thing we can celebrate is our shrinking carbon footprint. During this newfound journey, we are here to serve our clients today and tomorrow building energy-efficient homes designed to soak in natural light and ventilation. Modular construction maximizes the use of building materials and utilizes waste to energy practices which means far less waste in landfills.  A tighter building envelope combined with the insulation package we include in each home means greater energy efficiency and savings for the homeowner. Our homes are better for the families living in them and for our environment. What are some easy ways to reduce that carbon footprint even more?  Continue to reduce and consolidate trips to the store. Pick up needed items for neighbors and alternate trips to the store with friends. Wash and carry your own reusable shopping bags a
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Buying a Home in 2014 - Is this the Right Move?

Last week we weighed the question of buying now or later. Focusing on both increased interest rates and cost to buy, we came to the conclusion that this heavily relies on the market in which you wish to reside.  While some markets anticipate substantial cost increases other's anticipate less drastic effects.

This week, we are digging a little deeper. Is 2014 the year to buy a first home or new home? Well, there are two variables to consider:

Interest Rates
Affordability   

Interest rates are on the rise. This year's average interest rate is 4.5 percent whereas last year's average was 3.5 percent. Of course, we expect interest rates to continue to  rise as the housing market improves. 

With that said, what is the actual impact homeowners face when interest rates increase? Let's break it down simply. Take a look at this table that breaks down the total cost of a $250,000 home after interest (provided by The Motley Fool): 


The results are astonishing! Buying now, and putting down 20%, a homeowner would save a little over $200,000 compared to paying the average historical rate. In essence, the homeowner could invest in another home with that savings.

Now, what exactly do we mean by affordability? This index value is calculated by using variables such as mortgage rates, housing values and income data. Basically, the higher the value the more able a family is to afford a median priced home. For example, a reading of 145 means that a family with a median income has 45% more earnings than necessary to afford a median priced home. On the other hand, a reading of 70 would suggest that a family makes 30% less than what's needed to afford a median priced home.

Where is affordability headed? Unfortunately for the buyer, affordability is headed downward. Like we discussed last week, mortgage rates are expected to increase and so are housing prices. Again, this means higher cost and less flex room in a family budget.

All in all, what it comes down to is that rising interest rates and rising home prices will lead to less affordability for families. We are not telling you that you must go out and purchase a home right now. However, if you found a home and you are unsure of whether or not to proceed perhaps you should take this into consideration.


Sources: USA Today 

Ready to explore the possibilities of building your first home or a new home? Contact Connecticut Valley Homes today. Also, check out our portfolios on Facebook and Houzz. 
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