Betting on Real Estate.

The Case-Shiller Home Price Index report came in yesterday morning and Detroit showed a whopping 7.9 percent gain in the value of residential Real Estate. That’s larger than the reported 6.5 percent annual gain shown for the National Index. While this means larger loan amounts will be needed to purchase that same house from a year ago, “getting a mortgage [still] remains incredibly affordable compared to paying rent each month.” Home prices might be on the rise but house-buying power has also increased by 14.3 percent since the end of 2011, when the rise in unadjusted house prices began. Household income has increased 19 percent. Let’s also not forget about the value of cash-out refinances to pay off debt by using that positive equity in the home. Housing remains to be a great investment.

During the first quarter of this year, 81 percent of first-time homebuyers used low-downpayment mortgages, a 1 percent decline from a year prior. However, despite the popularity of low-down options, the quarter showed the first pullback in housing demand among first-time homebuyers since 2014. A product of home prices rising at a fast pace. However, this pullback is short-lived and also a product of mortgage rates slightly rising—millennials are used to hearing about 3.5 percent rates and unfamiliar with any uptick still being considered very low, lending them to pause. Notice we said pause not stop. 

Despite home prices being up and inventory remaining tight, investors are betting on real estate, with 6.2 percent of home sales in the first quarter appearing to be house flips. 

Veterans and Active Military members don’t get enough recognition or benefits but one thing available is the 100 percent financing for purchasing a home. How many take advantage of these zero down mortgages? Fifty-six percent of active duty members and 41 percent of veterans who purchased a home. Find out more about buying a home with a VA loan by listening to this week’s Live on Real Estate.