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Renters not deterred by rising US home prices and interest rates

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Despite rising home prices and abysmally low inventory levels nationwide, many renters are holding fast to the American Dream of owning their own home, according to the latest Home Price Index by CoreLogic.

“Being a homeowner makes consumers feel safe in their homes, and renters really want something to call their own,” Frank Martell, CEO of CoreLogic, said in a statement.

National home prices increased on both an annual and monthly basis in October, rising 5.4 percent year-over-year and 0.5 percent month-over-month. October marked the fourth consecutive month of annual price growth below 6 percent.

“Rising prices and interest rates have reduced home buyer activity and led to a gradual slowing in appreciation,” Dr. Frank Nothaft, chief economist for CoreLogic, said in a statement.

North Dakota was the only state to show a year-over-year decline in prices this month, with home prices sliding 1.2 percent annually. West Virginia, Nevada, and Idaho posted double-digit growth.

Looking ahead, the HPI Forecast predicts that national home prices will increase by 4.8 percent on a year-over-year basis from October 2018 to October 2019. And on a month-over-month basis, CoreLogic expects prices to decrease by 0.7 percent from October to November 2018.

According to a recent survey conducted by CoreLogic and RTi Research, nearly half of all renters said buying a home was important to them because they wanted to own something that was truly their own — in spite of challenging for-sale market conditions that are not expected to ease up all that much in 2019.

October’s mortgage rates were the highest in over seven years, further eroding buyer affordability.

“Despite higher interest rates, many renters view a home purchase as a way to build wealth through home-equity growth, especially in areas where rents are rising quickly, like Phoenix and Las Vegas, where the rents rose 6 percent or more during the last 12 months,” said Nothaft.

And according to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 35 percent have an “overvalued” housing market (as of October 2018).

Additionally, as of October 2018, 24 percent of the top 100 metropolitan areas were “undervalued,” while 41 percent were “at value.”

The MCI analysis categorizes home prices in individual markets as “undervalued,” “at value” or “overvalued” by comparing home prices to their long-term, sustainable levels, which are supported by local market fundamentals — such as disposable income.

The MCI defines an overvalued housing market as one in which home prices are at least 10 percent above the long-term, sustainable level, and an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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