Myths About the 2024 Housing Market
Myths About the 2024 Housing Market April 19, 2024 Some Highlights When it comes to the current housing market, there are some myths circling around right now. Some of the more common ones are that it’s better to wait for mortgage rates to fall or prices to crash. But there are others about the supply of homes for sale and down payments. Let’s connect so you have an expert to help separate fact from fiction in today’s housing market.
Read MoreIs It Getting More Affordable To Buy a Home?
Is It Getting More Affordable To Buy a Home? April 18, 2024 Over the past year or so, a lot of people have been talking about how tough it is to buy a home. And while there’s no arguing affordability is still tight, there are signs it’s starting to get a bit better and may improve even more throughout the year. Elijah de la Campa, Senior Economist at Redfin, says: “We’re slowly climbing our way out of an affordability hole, but we have a long way to go. Rates have come down from their peak and are expected to fall again by the end of the year, which should make homebuying a little more affordable and incentivize buyers to come off the sidelines.” Here’s a look at the latest data for the three biggest factors that affect home affordability: mortgage rates, home prices, and wages. 1. Mortgage Rates Mortgage rates have been volatile this year – bouncing around in the upper 6% to low 7% range. That’s still quite a bit higher than where they were a couple of years ago. But there is a sliver of good news. Despite the recent volatility, rates are still lower than they were last fall when they reached nearly 8%. On top of that, most experts still think they’ll come down some over the course of the year. A recent article from Bright MLS explains: “Expect rates to come down in the second half of 2024 but remain above 6% this year. Even a modest drop in rates will bring both more buyers and more sellers into the market.” Any drop in rates can make a difference for you. When rates go down, you can afford the home you really want more easily because your monthly payment would be lower. 2. Home Prices The second big factor to think about is home prices. Most experts project they'll keep going up this year, but at a more normal pace. That’s because there are more homes on the market this year, but still not enough for everyone who wants to buy one. The graph below shows the latest 2024 home price forecasts from seven different organizations: These forecasts are actually good news for you because it means the prices aren't likely to shoot up sky high like they did during the pandemic. That doesn’t mean they’re going to fall – they'll just rise at a slower pace. 3. Wages One factor helping affordability right now is the fact that wages are rising. The graph below uses data from the Federal Reserve to show how wages have been growing over time: Check out the blue dotted line. That shows how wages typically rise. If you look at the right side of the graph, you'll see wages are climbing even faster than normal right now. Here’s how this helps you. If your income has increased, it's easier to afford a home because you don't have to spend as big of a percentage of your paycheck on your monthly mortgage payment. Bottom Line If you stack these factors up, you’ll see mortgage rates are still projected to come down a bit later this year, home prices are going up at a more moderate pace, and wages are growing quicker than normal. Those trends are a good sign for your ability to afford a home.
Read MoreIs It Better To Rent Than Buy a Home Right Now?
Is It Better To Rent Than Buy a Home Right Now? April 17, 2024 You may have seen reports in the news recently saying it’s more affordable to rent right now than it is to buy a home. And while that may be true in some markets if you just look at typical monthly payments, there’s one thing that the numbers aren’t factoring in: and that’s home equity. Here’s a look at how big of an impact equity can have and why it’s worth considering as you make your decision. What the Headlines Are Based on The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, especially if you’re not looking for a lot of space, it can be more affordable on a monthly basis to rent: But if you’re looking for something with 2 bedrooms, the gap between the median rent and the median mortgage payment starts to shrink to a difference that may be more doable. The median monthly mortgage payment is $2,040. The median monthly rent for 2 bedrooms is $1,889. That’s a difference of about $151 a month. But here’s what happens when you factor in equity too. How Equity Changes the Game If you rent, your monthly rental payments only go toward covering your housing costs and your landlord’s expenses. So other than saving a bit more per month and maybe getting your rental deposit back when you move, the money you spent on housing each month is gone – forever. When you buy, your monthly mortgage payment pays for your shelter, but it also acts as an investment. That investment grows in the form of equity as you make your mortgage payment each month and chip away at what you owe on your home loan. Your equity gets an extra boost as home values climb – which they typically do. To give you a clearer idea of how equity can really stack up fast, here’s some data for you. Each quarter, Fannie Mae and Pulsenomics publish the results of the Home Price Expectations Survey (HPES). It asks more than 100 economists, real estate professionals, and investment and market strategists what they think will happen with home prices. In the latest release, those experts say home prices are going to keep going up over the next five years. Here's an example of how equity builds based on the projections from the HPES (see graph below): Imagine you purchased a home for $400,000 at the start of this year. Chances are, since you bought, you plan to stay put for a while. Based on the HPES projections, if you live there for 5 years, you could end up gaining over $83,000 in household wealth as your home grows in value. Here’s how that stacks up compared to renting, using the overall median rent from above: While you may save a bit on your monthly payments if you rent right now, you’ll also miss out on gaining equity. So, what’s the big takeaway? Whether it makes more sense to rent or buy is going to vary based on your personal finances. It’s not a good idea to buy if the numbers truly don’t work for you. But, if you’re ready and able, adding equity as the final puzzle piece may be enough to help you realize buying is a better move in the long run. Bottom Line When it comes down to it, buying a home gives you a benefit renting just can’t provide – and that’s the chance to gain equity. If you want to take advantage of long-term home price appreciation, let’s go over your options.
Read MoreWays To Use Your Tax Refund If You Want To Buy a Home
Have you been saving up to buy a home this year? If so, you know there are a number of expenses involved – from your down payment to closing costs. But did you also know your tax refund can help you pay for some of these expenses? As Credit Karma explains: “If one of your goals is to stop renting and buy a home, you’ll need to save up for closing costs and a down payment on the mortgage. A tax refund can give you a start on the road to homeownership. If you’ve already started to save, your tax refund could move you down the road faster.” While how much money you may get in a tax refund is going to vary, it can be encouraging to have a general idea of what’s possible. Here’s what CNET has to say about the average increase people are seeing this year: “The average refund size is up by 6.1%, from $2,903 for 2023's tax season through March 24, to $3,081 for this season through March 22.” Sounds great, right? Remember, your number is going to be different. But if you do get a refund, here are a few examples of how you can use it when buying a home. According to Freddie Mac: Saving for a down payment – One of the biggest barriers to homeownership is setting aside enough money for a down payment. You could reach your savings goal even faster by using your tax refund to help. Paying for closing costs – Closing costs cover some of the payments you’ll make at closing. They’re generally between 2% and 5% of the total purchase price of the home. You could direct your tax refund toward these closing costs. Lowering your mortgage rate – Your lender might give you the option to buy down your mortgage rate. If affordability is tight for you at today’s rates and home prices, this option may be worth exploring. If you qualify for this option, you could pay upfront to have a lower rate on your mortgage. The best way to get ready to buy a home is to work with a team of trusted real estate professionals who understand the process and what you’ll need to do to be ready to buy. Bottom Line Your tax refund can help you reach your savings goal for buying a home. Connect with a local real estate professional about what you’re looking for, because your home may be more within reach than you think.
Read MoreBuilders Are Building Smaller Homes
Builders Are Building Smaller Homes April 11, 2024 There’s no arguing it, affordability is still tight. And if you’re trying to buy a home, that may mean you need to look at smaller houses to find one that’s still in your budget. But there is a silver lining: builders are focused on building these smaller homes right now and they’re offering incentives. And that can help give you more options that fit the bill. Newly Built Homes Are Trending Smaller During the pandemic, homebuyers wanted (and could afford) larger homes – and builders delivered. They focused on homes that were bigger, so people had more space for things like working from home, having a home gym, bonus rooms for virtual school, and more. But with the affordability challenges buyers are facing today, builders are increasingly shifting their attention to bringing smaller single-family homes to the market. The graph below uses data from the Census to show how this trend has evolved over the last few years: So, why the shift to less square footage? It’s simple. Builders want to build what they know will sell. Basically, they focus on where the demand is strongest. And once mortgage rates started climbing and consumers felt the challenges of affordability creeping in, it became clear there was (and is) a very real need for smaller homes. As the National Association of Home Builders (NAHB) explains: “After a brief increase during the post-covid building boom, home size is trending lower and will likely continue to do so as housing affordability remains constrained.” A recent article in the Real Deal says this about how this helps buyers: “Even a slightly smaller home can be thousands of dollars cheaper — for both builders and buyers. . . In response to affordability challenges, major homebuilders are shifting priorities away from the big ticket homes and towards the cheaper set.” What This Means for You If you’re having a hard time finding something in your budget, it may help to look at smaller homes. And, if you consider new builds specifically, you may find a few other fringe benefits that can help on the affordability front – like price reductions or mortgage rate buy-downs. As NAHB says: “More than one-third of builders cut home prices in 2023. NAHB expects builders to continue offering smaller homes and more affordable designs as housing affordability remains a barrier to homeownership.” As Charlie Bilello, Chief Market Strategist, at Creative Planning, explains: “Homebuilders are adapting to the lowest affordability on record by building smaller homes and offering more incentives/price cuts. The median square footage of a new single-family home in the US has moved down to its lowest level since 2010.” If you explore these options, you’ll also get brand new everything, enjoy a house with fewer maintenance needs, and some of the latest features available. That’s worth looking into, right? Bottom Line Builders building smaller homes can give you more affordable options at a time when you may really need it. If you’re hoping to buy a home soon, let’s connect to look at what’s available in our area.
Read MoreThe Top 5 Reasons You Need a Real Estate Agent when Buying a Home
The Top 5 Reasons You Need a Real Estate Agent when Buying a Home April 9, 2024 You may have heard headlines in the news lately about agents in the real estate industry and discussions about their commissions. And if you’re following along, it can be pretty confusing. But here’s the thing you really need to know – expert advice from a trusted real estate agent is priceless, now more than ever. And here’s why. A real estate agent does a lot more than you may realize. Your agent is the person who will guide you through every step when buying a home and look out for your best interests along the way. They smooth out a complex process and take away the bulk of the stress of what’s likely your largest purchase ever. And that’s exactly what you want and deserve. This is at least a part of the reason why a recent survey from Bright MLS found an overwhelming majority of people agree an agent is a key part of the homebuying process (see visual below): To give you a better idea of just a few of the top ways agents add value, check out this list. 1. Deliver Industry Experience The right agent – the professional – will coach you through everything from start to finish. With professional training and expertise, agents know the ins and outs of the buying process. And in today’s complex market, the way real estate transactions are executed is constantly changing, so having the best advice on your side is essential. 2. Provide Expert Local Knowledge In a world that’s powered by data, a great agent can clarify what it all means, separate fact from fiction, and help you understand how current market trends apply to your unique search. From how quickly homes are selling to the latest listings you don’t want to miss, they can explain what’s happening in your specific local market so you can make a confident decision. 3. Explain Pricing and Market Value Agents help you understand the latest pricing trends in your area. What’s a home valued at in your market? What should you think about when you’re making an offer? Is this a house that might have issues you can’t see on the surface? No one wants to overpay, so having an expert who really gets true market value for individual neighborhoods is priceless. An offer that’s both fair and competitive in today’s housing market is essential, and a local expert knows how to help you hit the mark. 4. Review Contracts and Fine Print In a fast-moving and heavily regulated process, agents help you make sense of the necessary disclosures and documents, so you know what you’re signing. Having a professional that’s trained to explain the details could make or break your transaction, and is certainly something you don’t want to try to figure out on your own. 5. Bring Negotiation Expertise From offer to counteroffer and inspection to closing, there are a lot of stakeholders involved in a real estate transaction. Having someone on your side who knows you and the process makes a world of difference. An agent will advocate for you as they work with each party. It’s a big deal, and you need a partner at every turn to land the best possible outcome. Bottom Line Real estate agents are specialists, educators, and negotiators. They adjust to market changes and keep you informed. And keep in mind, every time you make a big decision in your life, especially a financial one, you need an expert on your side. Expert advice from a trusted professional is priceless. Let’s connect today.
Read MoreDon’t Let Your Student Loans Delay Your Homeownership Plans
Don’t Let Your Student Loans Delay Your Homeownership Plans April 8, 2024 If you have student loans and want to buy a home, you might have questions about how your debt affects your plans. Do you have to wait until you’ve paid off those loans before you can buy your first home? Or is it possible you could still qualify for a home loan even with that debt? Here’s a look at the latest information so you have the answers you need. A Bankrate article explains: “Roughly 60 percent of U.S. adults who have held student loan debt have put off making important financial decisions due to that debt . . . For Gen Z and millennial borrowers alone, that number rises to 70 percent.” This includes one of the biggest financial decisions you’ll ever make, buying a home. But you should know, even with student loans, waiting to buy a home may not be necessary. While everyone’s situation is unique, your goal may be more within your reach than you realize. Here’s why. Can You Qualify for a Home Loan if You Have Student Loans? According to an annual report from the National Association of Realtors (NAR), 38% of first-time buyers had student loan debt and the typical amount was $30,000. That means other people in a similar situation were able to qualify for and buy a home even though they also had student loans. And you may be able to do the same, especially if you have a steady source of income. As an article from Bankrate says: “. . . you can have student loans and a mortgage at the same time. . . . If you have student loans and want a mortgage, there are multiple home loan programs you might qualify for . . .” The key takeaway is, for many people, homeownership is achievable even with student loans. You don’t have to figure this out on your own. The best way to make a decision about your goals and next steps is to talk to the professionals. A trusted lender can walk you through your options based on your situation, and share what’s worked for other buyers. Bottom Line Lots of other people with student loan debt are able to buy their own homes. Talk to a lender to go over your options and see how close you are to reaching your goal.
Read MoreTop 5 Reasons To Hire an Agent When Buying a Home
Top 5 Reasons To Hire an Agent When Buying a Home April 5, 2024 Some Highlights Hiring an agent when buying a home helps you understand the buying process and the local market. They’ll also go over contracts and fine print with you, so you understand what you're agreeing to. Plus, they're good at negotiating, making sure you get the best deal. Expert advice from a trusted real estate professional is priceless. Let’s connect today.
Read MoreNewly Built Homes Could Be a Game Changer This Spring
Newly Built Homes Could Be a Game Changer This Spring April 3, 2024 Buying a home this spring? You’re probably navigating today’s affordability challenges and dealing with the limited number of homes for sale. But, what if there was a solution that could help with both? If you’re having a hard time finding a home you love, and mortgage rates are putting pressure on your budget, it may be time to look at newly built homes. Here’s why. New Home Construction Is an Inventory Bright Spot When looking for a home, you can choose between existing homes (those that are already built and previously owned) and newly constructed ones. While the number of existing homes for sale has increased this year, there are still fewer available than there were in more typical years in the housing market, like back in 2018 or 2019. So, if you’re looking to expand your pool of options even more, turning to newly built homes can help. As Danielle Hale, Chief Economist at Realtor.com, explains: “The shortage of existing homes For Sale has opened up the possibility of new-home construction to more buyers who may not have once considered it.” And the good news is, there are more newly built homes to pick from right now. The graphs below use data from the Census to show how new home construction is ramping up in two key areas (see most recent spike in green): Starts, or homes where builders just broke ground, have seen a big increase lately. And completions, homes that builders just finished, are also up significantly. So, if you want a new, move-in ready home or you want to get in early and customize your build along the way, you have more options right now. Builders Are Offering Incentives To Help with Affordability And to sweeten the pot, builders are offering things like mortgage rate buy-downs and other perks for homebuyers right now. This can help offset today’s affordability challenges while also getting you into your dream home. Mark Fleming, Chief Economist at First American, explains why you may find builders have more wiggle room to offer more for you than the typical homeowner: “Builders aren't rate locked-in. They would love to sell you the home because they're not living in it. It costs money not to sell the home. And many of the public home builders have said in their earnings calls that they are not going to be pulling back on incentives, especially the mortgage rate buydown, so that will help the new-home market continue to perform well in the spring home-buying season.” An article from HousingWire also says this about what builders are offering right now: ". . . the use of sales incentives still shows some momentum as 60% of respondents reported using them, up from 58% in February. " Just remember, buying from a builder is different from buying from a home seller, so it’s important to partner with a local real estate agent. Builder contracts can be complex. A trusted agent will be your advocate throughout the process. They’ll be your go-to resource for advice on construction quality and builder reputation, reviewing and negotiating contracts to get you the best deal, helping you decide on which customizations and upgrades are most worthwhile, and a whole lot more. Bottom Line If you’re struggling to find a home to buy, or with today’s affordability challenges, let’s connect to see if newly built homes could be the solution you’re looking for.
Read MoreIs It Easier To Find a Home To Buy Now?
Is It Easier To Find a Home To Buy Now? March 28, 2024 One of the biggest hurdles buyers have faced over the past few years has been a lack of homes available for sale. But that’s starting to change. The graph below uses the latest data from Realtor.com to show there are more homes on the market in 2024 than there have been in any of the past several years (2021-2023): Does That Mean Finding a Home Is Easier? The answer is yes, and no. As an article from Realtor.com says: “There were nearly 15% more homes for sale in February than a year earlier . . . That alone could jolt the housing market a bit if more “For Sale” signs continue to appear. However, the nation is still suffering from a housing shortage even with all of that new inventory.” Context is important. On the one hand, inventory is up over the past few years. That means you’ll likely have more options to choose from as you search for your next home. But, at the same time, the graph above also shows there are still significantly fewer homes for sale than there would usually be in a more normal, pre-pandemic market. And that deficit isn’t going to be reversed overnight. What Does This Mean for You? You might find a few more choices now than in recent years, but you shouldn’t expect a ton of options. To help you explore the growing list of choices you have now, team up with a local real estate agent you trust. They can really help you understand the inventory situation where you want to buy. That’s because real estate is local. An experienced agent can share some smart tips they’ve used to help other buyers in your area deal with ongoing low housing supply. Bottom Line If you’re thinking about buying a home, let’s team up. That way, you’ll be up to date on everything that could affect your move, including how many homes are for sale right now.
Read MoreSingle Women Are Embracing Homeownership
Single Women Are Embracing Homeownership March 27, 2024 In today's housing market, more and more single women are becoming homeowners. According to data from the National Association of Realtors (NAR), 19% of all homebuyers are single women, while only 10% are single men. If you're a single woman trying to buy your first home, this should be encouraging. It means other people are making their dreams a reality – so you can too. Why Homeownership Matters to So Many Women For many single women, buying a home isn't just about having a place to live—it's also a smart way to invest for the future. Homes usually increase in value over time, so they’re a great way to build equity and overall net worth. Ksenia Potapov, Economist at First American, says: “. . . single women are increasingly pursuing homeownership and reaping its wealth creation benefits.” The financial security and independence homeownership provides can be life-changing. And when you factor in the personal motivations behind buying a home, that impact becomes even clearer. The same report from NAR shares the top reasons single women are buying a home right now, and the reality is, they’re not all financial (see chart below): If any of these reasons resonate with you, maybe it’s time for you to buy too. Work with a Trusted Real Estate Agent If you’re a single woman looking to buy a home, it is possible, even in today’s housing market. You’ll just want to be sure you have a great real estate agent by your side. Talk about what your goals are and why homeownership is so important to you. That way your agent can keep what’s critical for you up front as they guide you through the buying process. They’ll help you find the right home for your needs and advocate for you during negotiations. Together, you can make your dream of homeownership a reality. Bottom Line Homeownership is life-changing no matter who you are. Let's connect today to talk about your goals in the housing market.
Read MoreWhat Every Homebuyer Should Know About Closing Costs
What Every Homebuyer Should Know About Closing Costs March 25, 2024 Before making the decision to buy a home, it's important to plan for all the costs you’ll be responsible for. While you're busy saving for the down payment, don't forget you’ll want to prep for closing costs too. Here’s some helpful information on what those costs are and how much you should budget for them. What Are Closing Costs? A recent article from Bankrate explains: “Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .” Simply put, your closing costs are the additional fees and payments you have to make at closing. According to Freddie Mac, while they can vary by location and situation, closing costs typically include: Government recording costs Appraisal fees Credit report fees Lender origination fees Title services Tax service fees Survey fees Attorney fees Underwriting Fees How Much Are Closing Costs? According to the same Freddie Mac article mentioned above, they’re typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to budget. Let’s say you find a home you want to purchase at today’s median price of $384,500. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,690 and $19,225. But keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower. Make Sure You’re Prepared To Close Freddie Mac provides great advice for homebuyers, saying: “As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.” The best way to do that is by partnering with a team of trusted real estate professionals. That gives you a group of experts to help you understand how much you’ll need to save and what you’ll want to be prepped for. It also means you have go-to resources for any questions that pop up along the way. Bottom Line Planning for the fees and payments you'll need to cover when you're closing on your home is important. Partnering with a local real estate professional can give you the guidance and confidence you need throughout the process.
Read More3 Helpful Tips for First-Time Homebuyers
Some Highlights Trying to buy your first home? If you’re worried about affordability today or the limited number of homes for sale, these tips can help. Look into homebuyer programs, expand your search area, and consider a multi-generational home. Connect with a local real estate agent so you have an expert on your side to help you make your dream a reality.
Read MoreWhat Are Experts Saying About the Spring Housing Market?
What Are Experts Saying About the Spring Housing Market? March 21, 2024 If you’re planning to move soon, you might be wondering if there'll be more homes to choose from, where prices and mortgage rates are headed, and how to navigate today’s market. If so, here's what the professionals are saying about what’s in store for this season. Odeta Kushi, Deputy Chief Economist, First American: “. . . it seems our general expectation for the spring is that we will see a pickup in inventory. In fact, that already seems to be happening. But it won’t necessarily be enough to satiate demand.” Lisa Sturtevant, Chief Economist, Bright MLS: “There is still strong demand, as the large millennial population remains in the prime first-time homebuying range.” Danielle Hale, Chief Economist, Realtor.com: “Where we are right now is the best of both worlds. Price increases are slowing, which is good for buyers, and prices are still relatively high, which is good for sellers.” Skylar Olsen, Chief Economist, Zillow: “There are slightly more homes for sale than this time last year, and there is still plenty of competition for well-priced houses. Buyers should prep their credit scores and sellers should prep their properties now, attractive listings are going pending in less than a month, and time on market will shrink in the weeks ahead.” Jiayi Xu, Economist, Realtor.com: “While mortgage rates remain elevated, home shoppers who are looking to buy this spring could find more affordable homes on the market than they saw at the same time last year. Specifically, there were 20.6% more homes available for sale ranging between $200,000 and $350,000 in February 2024 than a year ago, surpassing growth in other price ranges.” If you’re looking to sell, this spring might be your sweet spot because there just aren’t many homes on the market. Sure, inventory is rising, but it’s nowhere near enough to meet today’s buyer demand. That’s why they’re still selling so quickly. If you’re looking to buy, the growing number of homes for sale this spring means you’ll have more choices than this time last year. But be prepared to move quickly since there’ll be plenty of competition with other buyers. Bottom Line No matter what you're planning, let’s team up to confidently navigate the busy spring housing market.
Read MoreDoes It Make Sense To Buy a Home Right Now?
Does It Make Sense To Buy a Home Right Now? March 20, 2024 Thinking about buying a home? If so, you're probably wondering: should I buy now or wait? Nobody can make that decision for you, but here's some information that can help you decide. What’s Next for Home Prices? Each quarter, Fannie Mae and Pulsenomics publish the results of the Home Price Expectations Survey (HPES). It asks more than 100 experts—economists, real estate professionals, and investment and market strategists—what they think will happen with home prices. In the latest survey, those experts say home prices are going to keep going up for the next five years (see graph below): Here’s what all the green on this chart should tell you. They’re not expecting any price declines. Instead, they’re saying we’ll see a 3-4% rise each year. And even though home prices aren’t expected to climb by as much in 2025 as they are 2024, keep in mind these increases can really add up over time. It works like this. If these experts are right and your home's value goes up by 3.78% this year, it's set to grow another 3.36% next year. And another 3.87% the year after that. What Does This Mean for You? Knowing that prices are forecasted to keep going up should make you feel good about buying a home. That’s because it means your home is an asset that’s projected to grow in value in the years ahead. If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using expert projections from the HPES. Check out the graph below: In this example, imagine you bought a home for $400,000 at the start of this year. Based on these projections, you could end up gaining over $83,000 in household wealth over the next five years as your home grows in value. Of course, you could also wait – but if you do, buying a home is just going to end up costing you more. Bottom Line If you're thinking it's time to get your own place, and you’re ready and able to do so, buying now might make sense. Your home is expected to keep getting more valuable as prices go up. Let’s team up to start looking for your next home today.
Read More4 Tips To Make Your Strongest Offer on a Home
4 Tips To Make Your Strongest Offer on a Home March 18, 2024 Are you thinking about buying a home soon? If so, you should know today’s market is competitive in many areas because the number of homes for sale is still low – and that’s leading to multiple-offer scenarios. And moving into the peak homebuying season this spring, this is only expected to ramp up more. Remember these four tips to make your best offer. 1. Partner with a Real Estate Agent Rely on a real estate agent who can support your goals. As PODS notes: “Making an offer on a home without an agent is certainly possible, but having a pro by your side gives you a massive advantage in figuring out what to offer on a house.” Agents are local market experts. They know what’s worked for other buyers in your area and what sellers may be looking for. That advice can be game changing when you’re deciding what offer to bring to the table. 2. Understand Your Budget Knowing your numbers is even more important right now. The best way to understand your budget is to work with a lender so you can get pre-approved for a home loan. Doing so helps you be more financially confident and shows sellers you’re serious. That gives you a competitive edge. As Investopedia says: “. . . sellers have an advantage because of intense buyer demand and a limited number of homes for sale; they may be less likely to consider offers without pre-approval letters.” 3. Make a Strong, but Fair Offer It’s only natural to want the best deal you can get on a home, especially when affordability is tight. However, submitting an offer that’s too low does have some risks. You don’t want to make an offer that’ll be tossed out as soon as it’s received just to see if it sticks. As Realtor.com explains: “. . . an offer price that’s significantly lower than the listing price, is often rejected by sellers who feel insulted . . . Most listing agents try to get their sellers to at least enter negotiations with buyers, to counteroffer with a number a little closer to the list price. However, if a seller is offended by a buyer or isn’t taking the buyer seriously, there’s not much you, or the real estate agent, can do.” The expertise your agent brings to this part of the process will help you stay competitive and find a price that’s fair to you and the seller. 4. Trust Your Agent During Negotiations After you submit your offer, the seller may decide to counter it. When negotiating, it's smart to understand what matters to the seller. Once you do, being as flexible as you can on things like moving dates or the condition of the house can make your offer more attractive. Your real estate agent is your partner in navigating these details. Trust them to lead you through negotiations and help you figure out the best plan. As an article from the National Association of Realtors (NAR) explains: “There are many factors up for discussion in any real estate transaction—from price to repairs to possession date. A real estate professional who’s representing you will look at the transaction from your perspective, helping you negotiate a purchase agreement that meets your needs . . .” Bottom Line In today's competitive market, let’s work together to find you a home you love and craft a strong offer that stands out.
Read MoreYour Home Is a Powerful Investment
Your Home Is a Powerful Investment March 13, 2024 Going into 2023, there was a lot of talk about a possible recession that would cause the housing market to crash. Some in the media were even forecasting home prices would drop by as much as 10-20%—and that might have made you feel a bit unsure about buying a home. But here’s what actually happened: home prices went up more than usual. Brian D. Luke, Head of Commodities at S&P Dow Jones Indices, explains: “Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years.” To put last year’s growth into context, the graph below uses data from Freddie Mac on how home prices have changed each year going back to 1980. The dotted line shows the long-term average for appreciation: The big takeaway? Home prices almost always go up. As an article from Forbes says: “. . . the U.S. real estate market has a long and reliable history of increasing in value over time.” In fact, since 1980, the only time home prices dropped was during the housing market crash (shown in red in the graph above). Fortunately, the market today isn’t like it was in 2008. For starters, there aren’t enough available homes to meet buyer demand right now. On top of that, homeowners have a tremendous amount of equity, so they’re on much stronger footing than they were back then. That means there won’t be a wave of foreclosures that causes prices to fall. The fact that home values went up every single year except those four in red is why owning a home can be one of the smartest moves you can make. When you’re a homeowner, you own something that typically becomes more valuable over time. And as your home’s value appreciates, your net worth grows. So, if you’re financially stable and prepared for the costs and expenses of homeownership, buying a home might make a lot of sense for you. Bottom Line Home prices almost always go up over time. That makes buying a home a smart move, if you’re ready and able. Let’s connect to talk about your goals and what’s available in our area.
Read MoreWhat Mortgage Rate Do You Need To Move?
What Mortgage Rate Do You Need To Move? March 12, 2024 If you’ve been thinking about buying a home, mortgage rates are probably top of mind for you. They may even be why you’ve put your plans on hold for now. When rates climbed near 8% last year, some buyers found the numbers just didn’t make sense for their budget anymore. That may be the case for you too. Data from Bright MLS shows the top reason buyers delayed their plans to move is due to high mortgage rates (see graph below): David Childers, CEO at Keeping Current Matters, speaks to this statistic in the recent How’s The Market podcast: “Three quarters of buyers said ‘we’re out’ due to mortgage rates. Here’s what I know going forward. That will change in 2024.” That’s because mortgage rates have come down off their peak last October. And while there’s still day-to-day volatility in rates, the longer-term projections show rates should continue to drop this year, as long as inflation gets under control. Experts even say we could see rates below 6% by the end of 2024. And that threshold would be a gamechanger for a lot of buyers. As a recent article from Realtor.com says: “Buying a home is still desired and sought after, but many people are looking for mortgage rates to come down in order to achieve it. Four out of 10 Americans looking to buy a home in the next 12 months would consider it possible if rates drop below 6%.” While mortgage rates are nearly impossible to forecast, the optimism from the experts should give you insight into what’s ahead. If your plans were delayed, there’s light at the end of the tunnel again. That means it may be time to start thinking about your move. The best question you can ask yourself right now, is this: What number do I want to see rates hit before I’m ready to move? The exact percentage where you feel comfortable kicking off your search again is personal. Maybe it’s 6.5%. Maybe it’s 6.25%. Or maybe it’s once they drop below 6%. Once you have that number in mind, here’s what you do. Connect with a local real estate professional. They’ll help you stay informed on what’s happening. And when rates hit your target, they’ll be the first to let you know. Bottom Line If you’ve put your plans to move on hold because of where mortgage rates are, think about the number you want to see rates hit that would make you ready to re-enter the market. Once you have that number in mind, let’s connect so you have someone on your side to let you know when we get there.
Read MoreFinding Your Perfect Home in a Fixer Upper
Finding Your Perfect Home in a Fixer Upper March 11, 2024 If you’re trying to buy a home and are having a hard time finding one you can afford, it may be time to consider a fixer-upper. That’s a house that needs a little elbow grease or some updates, but has good bones. Fixer-uppers can be a really great option if you’re looking to break into the housing market or want to stretch your budget further. According to NerdWallet: “Buying a fixer-upper can provide a path to homeownership for first-time home buyers or a way for repeat buyers to afford a larger home or a better neighborhood. With the relatively low inventory of homes for sale these days, a move-in ready home can be hard to find, especially if you’re on a budget.” Basically, since the number of homes for sale is still so low, if you’re only willing to tour homes that have all your dream features, you may be cutting down your options too much and making it harder on yourself than necessary. It may be time to cast a wider net. Sometimes the perfect home is the one you perfect after buying it. Here’s some information that can help you pinpoint what you truly need so you can be strategic in your home search. First, make a list of all the features you want in a home. From there, work to break those features into categories like this: Must-Haves - If a house doesn’t have these features, it won’t work for you and your lifestyle. Nice-To-Haves - These are features you’d love to have but can live without. Nice-to-haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of these, it’s a contender. Dream State - This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner. Once you’ve sorted your list in a way that works for you, share it with your real estate agent. They’ll help you find homes that deliver on your top needs right now and have the potential to be your dream home with a little bit of sweat equity. Lean on their expertise as you think through what’s possible, what features are easy to change or add, and how to make it happen. According to Progressive: “Many real estate agents specialize in finding fixer-uppers and have a network of inspectors, contractors, electricians, and the like.” Your agent can also offer advice on which upgrades and renovations will set you up to get the greatest return on your investment if you ever decide to sell down the line. Bottom Line If you haven’t found a home you love that’s in your budget, it may be worth thinking through all your options, including fixer-uppers. Sometimes the perfect home for you is the one you perfect after buying it. To see what’s available in our area, let’s connect.
Read MoreThe Benefits of Downsizing When You Retire
The Benefits of Downsizing When You Retire March 7, 2024 If you’re taking a look at your expenses as you retire, saving money where you can has a lot of appeal. One long-standing, popular way to do that is by downsizing to a smaller home. When you think about cutting down on your spending, odds are you think of frequent purchases, like groceries and other goods. But when you downsize your house, you often end up downsizing the bills that come with it, like your mortgage payment, energy costs, and maintenance requirements. Realtor.com shares: “A smaller home typically means lower bills and less upkeep. Then there’s the potential windfall that comes from selling your larger home and buying something smaller.” That windfall is thanks to your home equity. If you’ve been in your house for a while, odds are you’ve built up a considerable amount of equity. And that equity is something you can use to help you buy a home that better fits your needs today. Daniel Hunt, CFA at Morgan Stanley, explains: “Home equity can be a significant source of wealth for retirees, often representing a large portion of their net worth. . . . Retirement planning can be complex, but your home equity shouldn't be overlooked.” And when you’re ready to use that equity to fuel your next move, your real estate agent will be your guide through every step of the process. That includes setting the right price for your current house when you sell, finding the home that best fits your evolving needs, and understanding what you can afford at today’s mortgage rate. What This Means for You If you’re thinking about downsizing, ask yourself these questions: Do the original reasons I bought my current house still stand, or have my needs changed since then? Do I really need and want the space I have right now, or could somewhere smaller be a better fit? What are my housing expenses right now, and how much do I want to try to save by downsizing? Then, meet with a real estate agent to get an answer to this one: What are my options in the market right now? A local real estate agent can walk you through how much equity you have in your house and how it positions you to win when you downsize. Bottom Line Want to save money in retirement? Consider downsizing – it could really help you out. When you’re ready, let’s connect about your goals in the housing market this year.
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