Patch’s Homeowner Weekly Update | March 27, 2017

Every week, we curate news articles on topics such as home finance, mortgage rates, trends in consumer lending along with the latest developments across the real estate industry. Here is a brief summary of the top 5 stories from last week that impact you the most as a homeowner.

1. IRS Changes to the 1098 Mortgage Interest Statement

Among the many advantages of purchasing is home, is that you can deduct the total amount you pay in mortgage interest every year when filing your taxes. This year the IRS has made some changes and those of you who’ve looked at your form this year should have seen three new boxes:
- One for the unpaid principal balance as of Jan. 1, 2017
- One for the date the mortgage was originated (closed)
- One with the property address
This additional information shouldn’t change your ability to qualify, but gives the IRS some additional data points for verification. Quicken Loans has more details in their article here.

2. Wealthiest Zip Codes in Every State

We all want to live in gated communities, good school districts and and big, beautiful homes — but living in those desirable neighborhoods also means valuable properties. The team at GOBankingRates used median home values from Zillow to find out the most valuable homes and properties in each state across the US. Click here to see if your zip code is among the wealthiest in your state. Some of the ones that surprised us were Paradise Valley (AZ), Honululu (HI), Ladue (MI).

3. W-2 employees and contractors need to customize their mortgage applications

The current system for determining who qualifies for a home mortgage is not perfect. The key issue is that not all borrowers are alike. Although many mortgage applicants today are still traditional W-2 employees who work directly for an employer, the number of “gig economy” contract workers has been increasingly steadily for years, and this trend is very likely to continue. This article by the Income& team talks about how applicants can take steps to make themselves a more attractive borrower, independent of their income profile.

4. Mortgage applications fall as borrowers move to riskier loans

As rates rise, demand for traditional home loans is shrinking and mortgage applications are down almost 12% since last year. Further, borrowers are turning to short-term, adjustable-rate loans (ARMs), which offer lower interest rates. ARMs share of total applications has doubled to 9% since the election and highest since October 2104. For those looking to buy, the average interest rate for 30-year fixed-rate mortgage is 4.46% with an additional 0.41 points for origination fees etc. CNBC breaks down the numbers even more.

5. America is becoming a Renter’s nation

Fifty-two of the 100 largest U.S. cities were majority-renter in 2015, according to U.S. Census Bureau data compiled for Bloomberg by real estate brokerage Redfin. Twenty-one of those cities have shifted to renter-domination since 2009 including markets like Denver, San Diego and even Detroit and Baltimore. Yahoo Finance shares more details on what’s causing the shift, including demographic trends that include aging baby boomers who downsize into rentals. For homeowners with an extra room or in-law unit, this is good news!

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