The Majority of Americans Still View Homeownership as the American Dream
Buying a home is a powerful decision, and it remains a key part of the American Dream. In fact, the 2022 Consumer Insights Report from Mynd found the majority of people polled still view homeownership as a key life achievement. Let’s explore just a few of the reasons why so many Americans continue to value homeownership. The Financial Benefits of Owning a Home One possible reason homeownership is viewed so highly is because owning a home is a significant wealth-building tool, and it provides meaningful financial stability over renting by locking in your monthly housing payments for the length of your home loan. An article from Forbes explains: “Understanding the potential benefits of homeownership helps individuals see the value of owning property instead of renting. . . . household wealth among homeowners is a whopping 1,469% higher on average compared to renters, excluding home equity, making the allure of homeownership even more enticing.” Over time, owning a home not only helps boost your own net worth, but it also sets future generations up for success as you pass that wealth down. That may be why the Mynd report also says: “Most Americans (78%) still associate homeownership with the ‘American dream.’ And nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.” The Non-Financial Benefits of Homeownership While the financial benefits of owning a home are important, becoming a homeowner impacts you on a social and emotional level, too. As Mark Fleming, Chief Economist for First American, says: “. . . buying a home is not just a financial decision. It’s also a lifestyle decision.” Your home provides feelings of achievement, responsibility, and more. 3by30 highlights the top 10 benefits homeowners enjoy. A few non-financial advantages include: Providing you with more freedom and control over your living space Giving you a greater sense of pride Helps with community engagement What Does That Mean for You? If your definition of the American Dream involves greater freedom and prosperity, then homeownership could play a major role in helping you achieve that dream. While it may feel challenging to buy a home today as mortgage rates and home prices rise, if the time is right for you, know that there are incredible benefits waiting for you at the end of your journey. You’ll have a place you can grow your wealth, call your own, and feel most comfortable. Like the National Association of Realtors (NAR) says: “. . . research has consistently shown that homeownership is also associated with multiple economic and social benefits to individual homeowners. Homeownership has always been an important way to build wealth.” Bottom Line Buying a home is a powerful decision and a key part of the long-term dream for many Americans. And if homeownership is part of your dreams this year, let’s connect to start the process today. Content previously posted on Keeping Current Matters
Read MoreWhy Growing Home Equity Is Great News if You Plan To Move
Why Growing Home Equity Is Great News if You Plan To Move Some Highlights According to the latest data from CoreLogic, the average homeowner gained $64,000 in home equity over the past 12 months. That much equity can be a game-changer when you move. When you sell, it could be some (if not all) of what you need for a down payment on your next home. To find out how much equity you have in your home and how you can use it, let’s connect today.
Read MoreWhat Does an Economic Slowdown Mean for the Housing Market?
What Does an Economic Slowdown Mean for the Housing Market? According to a recent survey, more and more Americans are concerned about a possible recession. Those concerns were validated when the Federal Reserve met and confirmed they were strongly committed to bringing down inflation. And, in order to do so, they’d use their tools and influence to slow down the economy. All of this brings up many fears and questions around how it might affect our lives, our jobs, and business overall. And one concern many Americans have is: how will this affect the housing market? We know how economic slowdowns have impacted home prices in the past, but how could this next slowdown affect real estate and the cost of financing a home? According to Mortgage Specialists: “Throughout history, during a recessionary period, interest rates go up at the beginning of the recession. But in order to come out of a recession, interest rates are lowered to stimulate the economy moving forward.” Here’s the data to back that up. If you look back at each recession going all the way to the early 1980s, here’s what happened to mortgage rates during those times (see chart below): As the chart shows, historically, each time the economy slowed down, mortgage rates decreased. Fortune.com helps explain the trend like this: “Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.” And while history doesn’t always repeat itself, we can learn from it. While an economic slowdown needs to happen to help taper inflation, it hasn’t always been a bad thing for the housing market. Typically, it has meant that the cost to finance a home has gone down, and that’s a good thing. Bottom Line Concerns of a recession are rising. As the economy slows down, history tells us this would likely mean lower mortgage rates for those looking to refinance or buy a home. While no one knows exactly what the future holds, you can make the right decision for you by working with a trusted real estate professional to get expert advice on what’s happening in the housing market and what that means for your homeownership goals.
Read MoreHow Your Equity Can Grow over Time
How Your Equity Can Grow over Time It’s true that record levels of home price appreciation have spurred significant equity gains for homeowners over the past few years. As Diana Olick, Real Estate Correspondent at CNBC, says: “The stunning jump in home values over the course of the Covid-19 pandemic has given U.S. homeowners record amounts of housing wealth.” That’s great for your home’s value over the last couple of years, but what if you’ve lived in your home for longer than that? You may be wondering how much equity you truly have. The National Association of Realtors (NAR) has done a study to calculate the typical equity gains over longer spans of time. The data they compiled could be enough to motivate you to move. Just remember, to find out how much equity you have in your specific home, you’ll want to get a professional equity assessment from a trusted real estate advisor. How Your Equity Grows Let’s start by establishing how you build equity in your home. While price appreciation is clearly a factor that can help boost your equity, you also build equity over time as you pay down your home loan. NAR explains: “Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.” Average Equity Growth over Time The study from NAR breaks down the typical equity gain over time (see graph below). It calculates the equity a homeowner potentially gained if they purchased the median-priced home 5, 10, or 30 years ago and still own it today. These six-figure numbers are impressive and certainly enough to help you fuel a move into your next home, but they’re not a promised amount. Remember, your own equity gain will be different. It depends on how long you’ve been in the house, your home’s condition, any upgrades you’ve made, your area, and much more. If you want to find out how much equity you have, partner with a trusted real estate professional for an equity assessment on your home. They can provide an expert opinion on what your house is worth today and how the equity you’ve gained over time can help you when you purchase your next home. It may be some (if not all) of what you need for your next down payment. Bottom Line If you’re thinking about selling your house and making a move, home equity can be a real game-changer, especially if you’ve been in your current home for a while. If you’re ready to find out how much equity you have, let’s connect.
Read MoreIs Homeownership Still the American Dream?
Is Homeownership Still the American Dream? Defining the American dream is personal, and no one individual will have the same definition as another. But the feelings it brings about – success, freedom, and a sense of prosperity – are universal. That’s why, for many people, homeownership remains a key part of the American dream. Your home is your stake in the community, a strong financial investment, and an achievement to be proud of. A recent survey from Bankrate asked respondents to rank achievements as indicators of financial success, and the responses prove that owning a home is still important to so many Americans today (see graph below): As the graph shows, homeownership ranks above other significant milestones, including retirement, having a successful career, and earning a college degree. That could be because owning a home is a significant wealth-building tool and provides meaningful financial stability. The National Association of Realtors (NAR) explains: “Homeownership builds financial security. With 65.5% of Americans owning homes, the net worth of a typical homeowner is nearly 40 times the net worth of a non-owner.” There are other ways your home acts as more than just a roof over your head, too. The Mortgage Reports highlights a few of the many benefits homeowners enjoy, including: Your equity (and wealth) grows through home price appreciation. Your housing costs are fixed – and that can help combat rising costs from inflation. You’ll have greater privacy and the opportunity to customize your living space. Plus, homeowners tend to be more active in their community. Like NAR says: “Living in one place for a longer amount of time creates and [sic] obvious sense of community pride, which may lead to more investment in said community.” What Does That Mean for You? If your definition of the American Dream involves greater freedom and prosperity, then homeownership could play a major role in helping you achieve that dream. When you set out to buy, know there are incredible benefits waiting for you at the end of your journey. You’ll have a place you can call your own, feel most comfortable, and grow your wealth. First American puts it best, saying: “Homeownership remains central to the pursuit of the American Dream. It is a critical driver of economic mobility, delivering financial and social advantages. . . .” Bottom Line Buying a home is a powerful decision and a key part of the American Dream. And if homeownership is part of your personal dreams this year, let’s connect and start the process today.
Read MoreReal Estate Consistently Voted Best Investment
Real Estate Consistently Voted Best Investment Some Highlights Based on a recent Gallup poll, real estate has been rated the best long-term investment for nine years in a row. Owning real estate is more than just a place to call home. It’s also an investment in your future. That’s because it’s typically a stable and secure asset that can grow in value over time. If you’re ready to buy a home and invest in your future, let’s connect.
Read MoreIf You’re Selling Your House This Summer, Hiring a Pro Is Critical
If You’re Selling Your House This Summer, Hiring a Pro Is Critical It can be tempting, especially with how hot the housing market has been over the past two years, to consider selling your home on your own. But today’s market is at a turning point, making it more essential than ever to work with a real estate professional. Not only will a trusted real estate advisor keep you updated and help you make the best decisions based on current market trends, but they’re also experts in managing the many aspects of selling your house. Here are five key reasons why working with a real estate professional makes sense today. 1. A Professional Follows the Latest Market Trends With higher mortgage rates, rising home prices, and a growing number of homes for sale, today’s housing market is showing signs of a shift back toward more pre-pandemic levels. When conditions change, following the trends and staying on top of new information is crucial when you sell. That makes working with an expert real estate advisor critical today. They know your local area and follow national trends too. More importantly, they’ll know what this data means for you, and as the market shifts, they’ll be able to help you navigate it and make your best decision. 2. A Professional Helps Maximize Your Pool of Buyers Your agent’s role in bringing in buyers is important. Real estate professionals have a large variety of tools at their disposal, such as social media followers, agency resources, and the Multiple Listing Service (MLS) to ensure your house is viewed by the most buyers. Investopedia explains why it’s risky to sell on your own without the network an agent provides: “You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home. A smaller pool of potential buyers means less demand for your property, which can translate into waiting longer to sell your home and possibly not getting as much money as your house is worth.” 3. A Professional Understands the Fine Print Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. The National Association of Realtors (NAR) explains it best, saying: “Selling a home typically requires a variety of forms, reports, disclosures, and other legal and financial documents. . . . Also, there’s a lot of jargon involved in a real estate transaction; you want to work with a professional who can speak the language.” A real estate professional knows exactly what needs to happen, what all the paperwork means, and how to work through it efficiently. They’ll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own. 4. A Professional Is a Trained Negotiator If you sell without a professional, you’ll also be solely responsible for all the negotiations. That means you’ll have to coordinate with: The buyer, who wants the best deal possible The buyer’s agent, who will use their expertise to advocate for the buyer The inspection company, which works for the buyer and will almost always find concerns with the house The appraiser, who assesses the property’s value to protect the lender Instead of going toe-to-toe with all these parties alone, lean on an expert. They’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion. 5. A Professional Knows How To Set the Right Price for Your House If you sell your house on your own, you may over or undershoot your asking price. That could mean you’ll leave money on the table because you priced it too low or your house will sit on the market because you priced it too high. Pricing a house requires expertise. NAR explains it like this: “A great real estate agent will look at your home with an unbiased eye, providing you with the information you need to enhance marketability and maximize price.” Real estate professionals know the ins and outs of how to price your house accurately and competitively. To do so, they compare your house to recently sold homes in your area and factor in the current condition of your home. These steps are key to making sure it’s set to move quickly while still getting you the highest possible final sale price. Bottom Line Whether it’s following local and national trends and guiding you through a shifting market or pricing your house right, a real estate agent has essential insights you'll want to rely on throughout the transaction. Don’t go at it alone. If you plan to sell, let’s connect so you have an expert on your side.
Read MoreHomeownership Could Be in Reach with Down Payment Assistance Programs
Homeownership Could Be in Reach with Down Payment Assistance Programs A recent survey from Bankrate asks prospective buyers to identify the biggest obstacles in their homebuying journey. It found that 36% of those polled said saving for a down payment is one of their primary hurdles to buying a home. If you feel the same way, the good news is there are many down payment assistance programs available that can help you achieve your homeownership goals. The key is understanding where to look and learning what options are available. Here’s some information that can help you. You Can Qualify Even if You’ve Purchased a Home Before There are several misconceptions about down payment assistance programs. For starters, many people believe there’s only assistance available for first-time homebuyers. While first-time buyers have many options to explore, repeat buyers have some, too. According to the latest Homeownership Program Index from downpaymentresource.com: “It is a common misconception that homebuyer assistance is only available to first-time homebuyers, however, 38% of homebuyer assistance programs in Q1 2022 did not have a first-time homebuyer requirement.” That means repeat buyers could qualify for over one-third of the assistance programs available. And if you’re a repeat buyer, you may still be able to take advantage of some first-time homebuyer programs, depending on your personal situation. That’s because downpaymentresource.com also notes many of the first-time homebuyer programs use the U.S. Department of Housing and Urban Development's definition of a first-time homebuyer. Under their definition, you could qualify as a first-time buyer if you’re: Someone who hasn’t owned a primary residence in 3 years. A single parent who’s only ever owned a home with a former spouse. That means no matter where you are in your homeownership journey, there could be an option available for you. You May Be Eligible for Programs Based on Your Location or Profession In addition to broader options available for repeat and first-time homebuyers, there are other types of down payment assistance programs that you could qualify for based on your location. According to the National Association of Realtors (NAR): “Many local governments and non-profit organizations offer down-payment assistance grants and loans, targeted to area borrowers and often with specific borrower requirements.” Plus, there are programs and special benefits for individuals working in certain professions or with unique statuses, including teachers, doctors and nurses, and veterans. Ultimately, that means there are many federal, state, and local programs available for you to explore. The best way to do that is to connect with a local real estate professional and your lender to learn more about what’s available in your area. Bottom Line Down payment assistance programs have helped many homebuyers achieve their dreams, and if you qualify, they could help you too. Let’s connect today so you can begin exploring your options.
Read MoreA Key Opportunity for Homebuyers
A Key Opportunity for Homebuyers There’s no denying the housing market has delivered a fair share of challenges to homebuyers over the past two years. Two of the biggest hurdles homebuyers faced during the pandemic were the limited number of homes for sale and the intensity and frequency of bidding wars. But those two things have reached a turning point. As you may have already heard, the number of homes for sale has increased this year, and even more so this spring. As Danielle Hale, Chief Economist for realtor.com, explains: “New listings–a measure of sellers putting homes up for sale–were up 6% above one year ago. Home sellers in many markets across the country continue to benefit from rising home prices and fast-selling homes. That’s prompted a growing number of homeowners to sell homes this year compared to last, giving home shoppers much needed options.” This is encouraging news. More homes coming onto the market give you a greater chance of finding one that checks all your boxes. Buyer Competition Moderating Helps Inventory Grow Even More Mark Fleming, Chief Economist at First American, says inventory growth is happening not just because there’s an increase in the number of listings coming onto the market, but also because buyer demand has moderated some in light of higher mortgage rates and other economic factors: “There has been a pickup in the inventory that we've seen recently, but it's not from a big increase in new listings . . . but rather a slowdown in the pace of sales. And remember that months’ supply measures the inventory of sale relative to the pace of sales. Same inventory, fewer sales, means more months’ supply.” Basically, the market is shifting away from the frenzy of buyer competition seen during the pandemic, and that’s helping available inventory grow. In their latest forecast, realtor.com also mentions the moderation of demand as a key factor and projects the inventory growth should continue: “As rising inflation and mortgage rates bring U.S. housing demand back from the 2021 frenzy, . . . inventory will grow double-digits over 2021 and offer buyers a better-than-expected chance to find a home.” How This Impacts You The combination of more homes coming onto the market and a slower pace of home sales means you’ll have more options to choose from as you search for your next home. That’s great news if you’ve been searching for a while with little to no luck. Just remember, there isn’t a sudden surplus of inventory, just more homes to choose from than even a few months ago. So, you’ll still want to be decisive and move fast when you find the right home for you. And when you do, you may be faced with less competition from other buyers too. If you’ve been waiting to jump into the market because the intensity of the bidding wars was intimidating or if you’ve been outbid on several homes, this moderation could help make the homebuying process a bit smoother. It’s not that it’ll be easy or that bidding wars are a thing of the past – that’s not the case. But it won’t feel nearly as impossible. Bottom Line As the housing market begins its shift back toward pre-pandemic levels, you could have a unique opportunity in front of you. With moderating levels of buyer competition and more homes actively for sale, your home search may have gotten a bit less challenging. Let’s connect to begin the process today.
Read MoreTwo Reasons Why Today’s Housing Market Isn’t a Bubble
Two Reasons Why Today’s Housing Market Isn’t a Bubble You may be reading headlines and hearing talk about a potential housing bubble or a crash, but it’s important to understand that the data and expert opinions tell a different story. A recent survey from Pulsenomics asked over one hundred housing market experts and real estate economists if they believe the housing market is in a bubble. The results indicate most experts don’t think that’s the case (see graph below): As the graph shows, a strong majority (60%) said the real estate market is not currently in a bubble. In the same survey, experts give the following reasons why this isn’t like 2008: The recent growth in home prices is because of demographics and low inventory Credit risks are low because underwriting and lending standards are sound If you’re concerned a crash may be coming, here’s a deep dive into those two key factors that should help ease your concerns. 1. Low Housing Inventory Is Causing Home Prices To Rise The supply of homes available for sale needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation. As the graph below shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s still a shortage of inventory, which is causing ongoing home price appreciation (see graph below): Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a limited supply of homes for sale. Odeta Kushi, Deputy Chief Economist at First American, explains: “The fundamentals driving house price growth in the U.S. remain intact. . . . The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.” 2. Mortgage Lending Standards Today Are Nothing Like the Last Time During the housing bubble, it was much easier to get a mortgage than it is today. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the years after: This graph helps show one element of why mortgage standards are nothing like they were the last time. Purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash. Realtor.com notes: “. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.” Bottom Line A majority of experts agree we’re not in a housing bubble. That’s because home price growth is backed by strong housing market fundamentals and lending standards are much tighter today. If you have questions, let’s connect to discuss why today’s housing market is nothing like 2008.
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Why an Agent Is Essential When Pricing Your House [INFOGRAPHIC] Some Highlights When it comes to pricing your house, there’s a lot to consider. The only way to ensure you price it right is by partnering with a local real estate professional. To find the best price, your agent balances current market demand, the values of homes in your neighborhood, where prices are headed, and your home’s condition. Don’t pick just any price for your house. If you’re ready to sell, let’s connect to find the perfect price for your house.
Read More Key Factors Affecting Home Affordability Today
Every time there’s a news segment about the housing market, we hear about the affordability challenges buyers are facing today. Those headlines are focused on how much mortgage rates have climbed this year. And while it’s true rates have risen dramatically, it’s important to remember they aren’t the only factor in the affordability equation. Here are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let’s look closely at each one. 1. Mortgage Rates This is the factor most people are focused on when they talk about homebuying conditions today. So far, current rates are almost four full percentage points higher than they were at the beginning of the year. As Len Kiefer, Deputy Chief Economist at Freddie Mac, explains: “U.S. 30-year fixed mortgage rates have increased 3.83 percentage points since the end of last year. That’s the biggest year-to-date increase in rates in over 50 years.” That increase in mortgage rates is impacting how much it costs to finance a home purchase, creating a challenge for many buyers that’s pricing some out of the market. While the current global uncertainty makes it difficult to project where mortgage rates will go in the future, experts do say that rates will likely remain high as long as inflation does. 2. Home Prices The second factor at play is home prices. Home prices have made headlines over the past few years because they skyrocketed during the pandemic. Now, the most recent Home Price Index from S&P Case-Shiller shows home values continued to decelerate for a fifth consecutive month (shown in green in the graph below): This deceleration is happening because higher mortgage rates are moderating demand, and as a result, easing the buyer competition and bidding wars that previously drove prices up. What’s worth noting though, is how much higher home prices still are than they were before the pandemic (shown in blue in the graph above). Even now, we have a long way to go to get to more normal levels of home price appreciation, which is historically closer to 4%. When both mortgage rates and home prices are high, affordability and your purchasing power become a greater challenge. But while prices are still elevated in many markets, some areas are seeing slight declines. It all depends on your local market. For insight into what’s happening in your area, reach out to a trusted real estate professional. 3. Wages The one big, positive component in the affordability equation is the increase in American wages. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have grown over time. This year is no exception. As the Bureau of Labor Statistics (BLS) reports: “Median weekly earnings of the nation’s 120.2 million full-time wage and salary workers were $1,070 in the third quarter of 2022 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported…This was 6.9 percent higher than a year earlier…” So, when you think about affordability, remember the full picture includes more than just mortgage rates. Home prices and wages need to be factored in as well. Because wages have been rising, they’re a big reason why serious buyers are still purchasing homes this year. If you have questions or want to learn more, reach out to a trusted advisor who can explain how all of these variables work together and what’s happening in your area. As Leslie Rouda Smith, President of the National Association of Realtors (NAR), says: “Buying or selling a home involves a series of requirements and variables, and it’s important to have someone in your corner from start to finish to make the process as smooth as possible… and objectivity to deliver trusted expertise to consumers in every U.S. ZIP code.” Bottom Line To learn more, let’s connect today and make sure you have a trusted lender so you’re able to make an informed decision if you’re planning to buy or sell a home right now. Content previously posted on Keeping Current Matters
Read MoreHomeownership Is a Great Hedge Against the Impact of Rising Inflation
Homeownership Is a Great Hedge Against the Impact of Rising Inflation If you’re following along with the news today, you’ve heard about rising inflation. Today, inflation is at a 40-year high. According to the National Association of Home Builders (NAHB): “Consumer prices accelerated again in May as shelter, energy and food prices continued to surge at the fastest pace in decades. This marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981.” With inflation rising, you’re likely feeling it impact your day-to-day life as prices go up for gas, groceries, and more. These climbing consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile. If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation. Homeownership Helps You Stabilize One of Your Biggest Monthly Expenses Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership. Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. When you have a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate, says: “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same. That’s certainly not the case if you’re renting.” So even if other prices increase, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs. Investing in an Asset That Historically Outperforms Inflation While it’s true rising home prices and higher mortgage rates mean that buying a house today costs more than it did even a few months ago, you still have an opportunity to set yourself up for a long-term win. That’s because, in inflationary times, you want to be invested in an asset that outperforms inflation and typically holds or grows in value. The graph below shows how the average home price appreciation outperformed the average inflation rate in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below): So, what does that mean for you? Today, experts forecast home prices will only go up from here thanks to the ongoing imbalance of supply and demand. Once you buy a house, any home price appreciation that does occur will grow your equity and your net worth. And since homes are typically assets that grow in value, you have peace of mind that history shows your investment is a strong one. That means, if you’re ready and able, it makes sense to buy today before prices rise further. Bottom Line If you’ve been thinking about buying a home this year, it makes sense to act soon, even with inflation rising. That way you can stabilize your monthly housing cost and invest in an asset that historically outperforms inflation. If you’re ready to get started, let’s connect so you have expert advice on your specific situation when you’re ready to buy a home.
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Some HighlightsIf you’re questioning whether or not to buy a home this year due to today’s cooling market, consider the long-term financial benefits of homeownership.As a homeowner, equity increases your wealth. On average, nationwide, home prices appreciated by 290.2% since 1991.Homeownership wins in the long run. If you’re ready to buy a home, let’s connect today.Content previously posted on Keeping Current Matters
Read More Things To Avoid After Applying for a Home Loan
Things To Avoid After Applying for a Home Loan Once you’ve applied for a mortgage to buy a home, there are some key things to keep in mind. While it’s exciting to start thinking about moving in and decorating, be careful when it comes to making any big purchases. Here are a few things you may not realize you need to avoid after applying for your home loan. Don’t Deposit Large Sums of Cash Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer. Don’t Make Any Large Purchases It’s not just home-related purchases that could disqualify you from your loan. Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income). Since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgage. Resist the temptation to make any large purchases, even for furniture or appliances. Don’t Co-Sign Loans for Anyone When you co-sign for a loan, you’re making yourself accountable for that loan’s success and repayment. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you. Don’t Switch Bank Accounts Lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer. Don’t Apply for New Credit It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will have an impact on your FICO® score. Lower credit scores can determine your mortgage interest rate and possibly even your eligibility for approval. Don’t Close Any Accounts Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those aspects of your score. In Short, Consult an Expert To sum it up, be upfront about any changes when talking with your lender. Blips in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. Ultimately, it’s best to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature. Bottom Line You want your home purchase to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.
Read MoreDo You Believe Homeownership Is Out of Reach? Maybe It Doesn’t Have To Be.
It turns out, millennials aren’t the renter generation after all. The 2022 Consumer Insights Report from Mynd says there’s a portion of millennial and Gen Z buyers who are pursuing homeownership as a way to build their wealth, but it may not be exactly the way previous generations have done it. The study explains how they’re breaking into the market: “. . . younger generations of Americans are not buying into that dream in the same way that older generations have. A growing number of Americans are choosing to make their first real estate purchase as an investment property.” Instead of buying a home and moving into it themselves, some young buyers are purchasing a home so they can use it as a rental. This tactic may be gaining popularity, at least in part, because of the affordability challenges brought about by today’s higher mortgage rates. The report above mentions how many people in this group are considering this approach. It says: “Almost half of Millennials and Gen Z (43%) are considering buying an investment property compared to only 9% of Baby Boomers and 27% of Gen X.” Why Younger Buyers Are Buying a Home To Use as a Rental This strategy allows buyers to continue living in their current location, like the bustle of a city apartment or a neighborhood that they know and love, where they couldn’t afford to buy. But instead of giving up on the idea of owning a home, they buy a home in a more affordable area with the intention of renting it out. In a way, they’re getting the best of both worlds. They live where they want, and they still own a home where they can afford it. Their goal is to generate passive income and diversify their assets. It works like this: in addition to having a rental stream of income, the equity they build in their house will also help grow their net worth over time. Bottom Line If you’re thinking about buying a home as an investment strategy to build your wealth, let’s connect to explore your options and nearby areas that may have homes that fit what you’re looking for. Content previously posted on Keeping Current Matters
Read MoreSell Your House Before the Holidays
As you look ahead to the winter season, you’re likely making plans and thinking about what you want to achieve before the year ends. One of those key decision points could be whether or not you want to move this year. If the location or size of your current home no longer meets your needs, finding a house that better suits your lifestyle may be a top priority for you. But with today’s cooling housing market, is it really a good time to sell your house, or should you wait? If you’re ready to make your decision, here are three reasons you may want to consider selling before the holidays. 1. Get One Step Ahead of Other Sellers Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and deprioritize selling their house until the start of the new year when their schedules and social calendars calm down. Selling now, while other homeowners may hold off until after the holidays, can help your house stand out. Start the process with a real estate professional today so you can get your house on the market and get ahead of your competition. 2. Get in Front of Serious Buyers This Season Even though housing supply has increased this year as buyer demand has moderated, it’s still low overall. That means there aren’t enough homes on the market today, especially as the millennial generation reaches their peak homebuying years. As Mark Fleming, Chief Economist at First American, says: “While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.” Serious buyers will still be looking this winter and your house may be exactly what they’re searching for. If you work with an agent to list your house now, you’ll be able to get in front of the eager buyers who are hoping to make a move before the year ends. 3. Seize a Great Chance To Move Up Don’t forget, today’s homeowners have record amounts of equity. According to CoreLogic, the average amount of equity per mortgage holder has climbed to almost $300,000. That’s an all-time high. That means the equity you have in your house right now could cover some, if not all, of a down payment on the home of your dreams. And as you weigh the reasons to sell before winter, don’t lose sight of why you’re thinking about moving in the first place. Maybe it’s time to buy a house that’s in a better location for you, has the space you and your loved ones have been craving, or simply gives you that sense of home. A trusted real estate advisor can help you determine how much home equity you have and how you can use it to achieve your goal of making a move. Bottom Line If you’re thinking about selling your house so you can find a home that better suits your needs, don’t delay your plans. Let’s connect so you can accomplish your goals before winter. Content previously posted on Keeping Current Matters
Read More3 Trends That Are Good News for Today’s Homebuyers
While higher mortgage rates are creating affordability challenges for homebuyers this year, there is some good news for those people still looking to buy a home. As the market has cooled this year, some of the intensity buyers faced during the peak frenzy of the pandemic has cooled too. Here are just a few trends that may benefit you when you go to buy a home today. 1. More Homes To Choose from During the pandemic, housing supply hit a record low at the same time buyer demand skyrocketed. This combination made it difficult to find a home because there just weren’t enough to meet buyer demand. According to Calculated Risk, the supply of homes for sale increased by 39.5% for the week ending October 28 compared to the same week last year. Even though it’s still a sellers’ market and supply is still lower than more normal levels, you have more to choose from in your home search. That makes finding your dream home a bit less difficult. 2. Bidding Wars Have Eased One of the top stories in real estate over the past two years was the intensity and frequency of bidding wars. But today, things are different. With more options, you’ll likely see less competition from other buyers looking for homes. According to the National Association of Realtors (NAR), the average number of offers on recently sold homes has declined. This September, the average was 2.5 offers per sale. In contrast, last September, the average was 3.7 offers per sale. If you tried to buy a house over the past two years, you probably experienced the bidding war frenzy firsthand and may have been outbid on several homes along the way. Now you have a chance to jump back into the market and enjoy searching for a home with less competition. 3. More Negotiation Power And when you have less competition, you also have more negotiating power as a buyer. Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But the latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving those contingencies is going down. As a buyer, this is good news. The appraisal and the inspection give you important information about the value and condition of the home you’re buying. And if something turns up in the inspection, you have more power today to renegotiate with the seller. A survey from realtor.com confirms more sellers are accepting offers that include contingencies today. According to that report, 95% of sellers said buyers requested a home inspection, and 67% negotiated with buyers on repairs as a result of the inspection findings. Bottom Line While buyers still face challenges today, they’re not necessarily the same ones you may have been up against just a year or so ago. If you were outbid or had trouble finding a home in the past, now may be the moment you’ve been waiting for. Let’s connect to start the homebuying process today. Content previously posted on Keeping Current Matters
Read MoreTaking the Fear out of Saving for a Home
If you’re planning to buy a home, knowing what to budget for and how to save may sound scary at first. But it doesn’t have to be. One way to take the fear out of budgeting is understanding some of the costs you might encounter. And to do that, turn to trusted real estate professionals. They can help you plan your finances and prepare your budget. Here are just a few costs experts say you can expect. 1. Down Payment Saving for your down payment is likely top of mind as you set out to buy a home. But do you know how much you’ll need to save? While each situation is different, there’s a common misconception that putting 20% down toward your purchase is required. An article from the Mortgage Reports explains why that’s not always the case: “The idea that you have to put 20% down on a house is a myth. . . . The right amount depends on your current savings and your home buying goals.” To understand your options, partner with a trusted real estate professional to go over the various loan types, down payment assistance programs, and what each one requires. 2. Closing Costs Make sure you also budget for closing costs, which are a collection of fees and payments made to the various people involved in your transaction. Bankrate explains: “Closing costs are the fees you pay when finalizing a real estate transaction, whether you’re refinancing a mortgage or buying a new home. These costs can amount to 2 to 5 percent of the mortgage so it’s important to be financially prepared for this expense.” The best way to understand what you’ll need at the closing table is to work with a trusted lender. They can provide you with answers to the questions you might have. 3. Earnest Money Deposit If you want to cover all your bases, you can also consider saving for an earnest money deposit (EMD). An EMD is money you pay as a show of good faith when you make an offer on a house. According to realtor.com, it’s usually between 1% and 2% of the total home price. This deposit works like a credit. It’s not an added expense – it’s paying a portion of your costs upfront. You’re using some of the money you already saved for your purchase to show the seller you’re committed and serious about their house. Realtor.com describes how it works as part of your sale: “It tells the real estate seller you’re in earnest as a buyer, . . . . Assuming that all goes well and the buyer’s good-faith offer is accepted by the seller, the earnest money funds go toward the down payment and closing costs. In effect, earnest money is just paying more of the down payment and closing costs upfront.” Keep in mind, an EMD isn’t required, and it doesn’t guarantee your offer will be accepted. It’s important to work with a real estate advisor to understand what’s best for your situation and any specific requirements in your area. They’ll help you determine what moves you should make in the homebuying process to have the greatest success. Bottom Line Budgeting for your home purchase doesn’t have to be scary. Let’s connect so you’ll have an expert on your side to answer any questions you have along the way. Content previously posted on Keeping Current Matters
Read MoreApplying for a Mortgage Doesn’t Have To Be Scary
Some HighlightsEven with higher mortgage rates, the mortgage process doesn’t need to be something you fear. Here are some steps to help as you set out to buy a home.Know your credit score and work to build strong credit. When you’re ready, lean on the pros and connect with a lender so you can get pre-approved and begin your home search.Any major life change can be scary, and buying a home is no different. Let’s connect so you have an advisor by your side to take fear out of the equation.Content previously posted on Keeping Current Matters
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