2022 U.S. Property Taxes Rose Twice as Fast as 2021
siraanamwong / Getty Images APRIL 7, 2023 2022 U.S. Property Taxes Rose Twice as Fast as 2021 Southern state homeowners generally pay less, though. N.J. homeowners, for example, pay double the average amount Fla. homeowners pay ($4,100). NEW YORK – Property taxes increased twice as fast last year than in 2021 in the U.S., with many areas in the South and West increasing by more than the national average. Even after the gains, though, single-family-home property taxes remain much lower in the Sun Belt than in the Northeast, according to a report released by real estate data firm Attom on Thursday. On average, people in Florida paid less than $4,100 a year on property taxes in 2022 – not even half the bill for a typical New Jersey resident. In that state’s Essex and Bergen counties, the charge per homeowner exceeded $13,000 – more than $1,000 a month. Property taxes continued their never-ending climb last year, with wide disparities continuing from one area of the country to another, connected to varying costs, services, and tax bases,” Rob Barber, chief executive officer at Attom, said in the report. Although states in the South have traditionally been lower-cost, property taxes have surged in recent years. Many people flocked there – a trend accelerated by the pandemic – creating more need to improve infrastructure and services. But property taxes remain comparatively low, even in some of the most expensive parts of the region. In Palm Beach County, Florida, for instance, taxes jumped almost $2,000 in 3 years and averaged $7,525 for single-family homes last year, according to Attom. Nationwide, the average tax on single-family homes increased 3% in 2022, to $3,901, after rising 1.8% the previous year. The effective tax rate is the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area. Among metropolitan areas with a population of at least 200,000 in 2022, 19 of the 20 cities with the highest effective tax rates were in the Northeast and Midwest. © Copyright 2023 The Daily Mail, all rights reserved
Mortgage rates fall, but low inventory haunts would be homebuyers
The 30-year fixed-rate mortgage (FRM) averaged 6.28% as of April 6, down from 6.32% recorded last week. One year ago, the 30-year FRM averaged 4.72%. Meanwhile, the 15-year fixed-rate mortgage averaged 5.64%, up from last week when it averaged 5.56%. At the same time in 2022, the 15-year FRM averaged 3.91%. Homes on Hollywood Beach and Channel Islands Harbor May 15, 2018 Channel Islands, Oxnard, Calif. | Getty Images "Mortgage rates continue to trend down entering the traditional spring homebuying season," said Sam Khater, Freddie Mac’s Chief Economist. "Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers." A cooling job market marked by tech layoffs, including those at Amazon and Apple, as well as Disney, along with fewer job openings has convinced the market the Federal Reserve will be able to pause rates soon. Jobless claims came in higher than expected Thursday, reinforcing the idea within the market that the Fed will relax with rate hikes before unemployment gets too bad. In an aerial view, homes sit on lots in a neighborhood on January 26, 2023 in Boca Raton, Florida. South Florida is currently one of the hottest real estate markets in America. (Joe Raedle/Getty Images / Getty Images) Among other factors, lenders rely on the current interest rates and also on the expected interest rate over the mortgage's lifetime when choosing what mortgage rates to offer. As the expected future interest rate falls it takes pressure off mortgage rates, allowing lenders to offer lower rates while still making a profit. 'Mansion Global' host Katrina Campins tells homebuyers it's not the right time to buy in the current market.
The Not-So-Secret Way to Build Equity?
Phawat Topaisan / EyeEm / Getty Images APRIL 4, 2023 The Not-So-Secret Way to Build Equity? By Charity Ohlund Rather than paying a mortgage monthly, make a half payment every two weeks, equaling one extra payment per year. It can shave about 6 years off a 30-year loan. every year? No, not the one where you make a full extra payment at the end of the year. That’s not a secret and coming up with an additional full mortgage payment, especially in December, is not that cool. By default, mortgage payments are made once per month, equating to 12 full mortgage payments in a year. But what would happen if you were to make biweekly payments? Under this strategy, either you or your lender would split your monthly payment in half and submit a payment every two weeks. This is where a quirk in our calendar allows you to get ahead. There aren’t a uniform number of days in each month, and so by making biweekly mortgage payments, you’ll make 26 “half-payments,” or 13 “full” payments per year instead of the normal 12 payments. In other words, you make one extra full payment per year, and you won’t even feel it because you’ve budgeted for it. It’s important to distinguish here that we are talking about equal payments every two weeks – not two equal payments per month. That would equal 24 half payments, or 12 full payments. That’s fine if you just want to avoid a large withdrawal around the first of the month. But it’s the 26 half payments that really begin to offer some additional benefits. Such as … Pay less interest over timeWhen you make a mortgage payment, the bank actually splits up the money and divvies it out into various things. During the first few years after you take out your mortgage, most of the money will be going toward interest and very little will be going to reducing the balance of your loan (sadly). This process is called amortization, and anyone who’s ever had a loan literally had to pay their dues, especially during those first few years.But here’s where making biweekly mortgage payments can really help you. Since you’ll be making an extra payment each year, you’ll pay down the principal even faster. This means that each interest payment thereafter will be smaller than if you hadn’t made that extra payment. Over the course of your loan, this can save you a significant amount of money. Build equity fasterContinuing that thought, one of the biggest benefits of making biweekly mortgage payments is that you build home equity faster. When you make biweekly payments and manage to squeeze in that extra payment each year, you’ll be making extra payments toward reducing the balance of your loan. And that extra payment will give you a small push toward building equity.There are a lot of advantages to having as much home equity as possible. For example, if you have enough home equity, you can take out a home equity loan to finance things like home repairs or remodels, or you can increase your proceeds when and if you sell your home. Drop your PMI soonerIn 2021, the average homebuyer bought their home with a 10% down payment. That’s not bad, but for most conventional loans (not including FHA, VA and USDA loans), you’ll need a down payment of at least 20% to avoid paying for private mortgage insurance (PMI) each month. Once you reach 20% equity in your home, you can ask your conventional lender to cancel your PMI payments. If you make biweekly payments, you can actually get there a lot faster because you’ll be paying down the balance of your loan quicker than normal. Paying off your mortgage soonerBy now, you get the idea so I won’t belabor the point. But when you make an extra payment, you’ll pay off your loan quicker. Let’s look at a quick example. This scenario assumes a $300,000 loan with a 30-year fixed term at 5.750% APR: Payment Amount: $1,751 Number of payments per year: 12 Total paid per year: $21,012 Number of years to pay off: 30 Total interest paid: $330,258 Total Cost: $630,360 Biweekly payment Payment amount: $875.50 Number of payments per year: 26 Total paid per year: $22,763 Number of years to pay off: 24 years 10 months Total interest paid: $263,000 Total cost: $563,822 © Copyright 2023 Shawnee Mission Post, All rights reserved.
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