Seattle, Washington (PRWEB) March 31, 2014
Every choice that government makes regarding the structuring of the home finance system can impact the economy, communities, and households. Experience and research by Washington State Kitchen and Bath, a provider of bath and kitchen remodeling in Washington, confirms the direct correlation between economic markets and real estate opportunities. From the importance of affordable housing to the benefits of homeownership, legislation influences the housing market and its societal vitality.
The Importance of Housing Finance Reform
Founder of Washington State Kitchen and Bath, Erin Belmore, comments. "With the absence of reform, homeowners in the next generation will continue being sidelined." He continues. "Young buyers, first-time home buyers and repeat buyers are essential to increasing American homeownership."
The Federal Housing Administration (FHA), has previously backed financing for over two-fifths of first time buyers, as well as about half of housing purchases acquired by homebuyers of certain demographics. This approach proved unsustainable and drove up costs for borrowers. Due to the unsustainability, rates of homeownership have since decined.
Housing Finance and Home Value Stabilization
Any inclination of a housing recovery currently underway is actually propelled by refinancing and investors, not from traditional homeownership. It has been reported that as much as two-thirds of mortgages in the second quarter of fiscal year 2013 were refinances rather than home purchases. From the purchases that are currently at play, estimates suggest that upwards of 40% may actually be investor purchases, far beyond past norms of 8 to 12%. This amount of investments could be vital in supporting housing prices, as well as even inflating them. It could also be necessary in stabilizing neighborhoods and enabling creditworthy local borrowers in obtaining mortgages.
Housing Finance Reform and Rental Price Spikes
Rental costs could possibly skyrocket if housing finance reform is not implemented. Rental property demand would increase as homeownership decreases. Ironically, while rental demand increases, the creation of multifamily apartment buildings has fallen behind.
Mr. Belmore remarks. "With the shift of supply and demand, there has been a big rise of rents due to increased demand and shorter supply."
With effective finance reform, excessive rental rate increases can be minimized and the chance of better homeownership opportunities increases. Erin adds that existing homeowners can make the most of their properties too. He comments. "For those deciding to remodel their homes to reinforce its value, there are several options available."
Available options to fund remodels would first include personal lines of credit. This is often preferred by many when it comes to long-terms renovations. It enables access to funds at just about any time and repayments are instantly attached to monthly statements, which allows easier tracking methods for renovation expenses. Homeowners can also explore home equity loans. This funding source allows homeowners to borrow funds against the equity of their home.
Erin Belmore emphasizes that planning with a reliable contractor is a necessity. He remarks. "Contractors know the ins and outs of balancing remodel demands with preferred budgets. Whatever costs the contractor themselves add to the expense are usually made up, and then some, by the value and knowledge the provide." He continues. "By going through a reliable contractor customers know that their investment should pay itself back in long-term quality and peace of mind. Knowing that the remodel was done properly means avoiding having to correct 'cut corners' in the future."
As America awaits to see how legislation unfolds, existing homeowners have resources to protect their investment. To learn more about Washington State Kitchen and Bath's research into legislation, or to inquire about contractor services, visit washingtonstatekitchenbath.com or call 1-800-935-5524.