Tall Tales - Atlanta Real Estate BlogRecently posted or modified blog postshttps://www.realtallrealestate.com/blog/Copyright RealTallRealEstate.com2024-03-14T08:59:38-07:00tag:realtallrealestate.com,2012-09-20:6302Your Home Is a Powerful Investment
Your Home Is a Powerful Investment
<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240311/20240313-Your-Home-Is-a-Powerful-Investment.png" alt="" class="img-thumbnail mx-auto d-block" />
Going into 2023, there was a lot of talk about a possible <a href="https://www.mykcm.com/2024/03/05/why-there-wont-be-a-recession-that-tanks-the-housing-market/" rel="noopener noreferrer" target="_blank">recession</a> 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 <a href="https://www.mykcm.com/2024/02/16/achieve-your-dream-of-homeownership-with-condos-and-townhomes-infographic/" rel="noopener noreferrer" target="_blank">buying a home</a>.
But here’s what actually happened: <a href="https://www.mykcm.com/2024/02/15/dont-let-the-latest-home-price-headlines-confuse-you/" rel="noopener noreferrer" target="_blank">home prices</a> went up more than usual. Brian D. Luke, Head of Commodities at S&P Dow Jones Indices, <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20240227-1470765/1470765_cshomeprice-release-0227.pdf" rel="noopener noreferrer" target="_blank">explains</a>:
“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 <a href="https://www.freddiemac.com/research/indices/house-price-index" rel="noopener noreferrer" target="_blank">data</a> 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:
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240311/20240313-Percent-of-Annual-Home-Appreciation.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240311/20240313-Percent-of-Annual-Home-Appreciation.png" alt="a graph showing the average of a home appreciation" /></a>
The big takeaway? Home prices almost always go up.
As an article from Forbes <a href="https://www.forbes.com/sites/jimwang/2023/06/21/is-buying-a-home-really-a-good-investment/?sh=68dae57a4aab" rel="noopener noreferrer" target="_blank">says</a>:
“. . . 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 <a href="https://www.mykcm.com/2024/02/29/why-we-arent-headed-for-a-housing-crash/" rel="noopener noreferrer" target="_blank">market today</a> 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 <a href="https://www.mykcm.com/2024/02/08/home-equity-can-be-a-game-changer-when-you-sell/" rel="noopener noreferrer" target="_blank">equity</a>, so they’re on much stronger footing than they were back then. That means there won’t be a wave of <a href="https://www.mykcm.com/2024/02/02/theres-no-foreclosure-wave-in-sight-infographic/" rel="noopener noreferrer" target="_blank">foreclosures</a> 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 <a href="https://www.mykcm.com/2024/01/11/the-dramatic-impact-of-homeownership-on-net-worth/" rel="noopener noreferrer" target="_blank">net worth grows</a>.
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 <a href="https://www.mykcm.com/2024/02/20/strategic-tips-for-buying-your-first-home/" rel="noopener noreferrer" target="_blank">buying a home</a> a smart move, if you’re ready and able. <a href="https://www.mykcm.com/2024/02/28/why-you-want-an-agents-advice-for-your-move/" rel="noopener noreferrer" target="_blank">Let’s connect</a> to talk about your goals and what’s available in our area.
2024-03-14T08:57:41-07:002024-03-14T08:59:38-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:6280What To Know About Credit Scores Before Buying a Home<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240229/20240304-What-To-Know-About-Credit-Scores-Before-Buying-a-Home.png" alt="" class="img-thumbnail mx-auto d-block" />
If you want to <a href="https://www.mykcm.com/2024/02/20/strategic-tips-for-buying-your-first-home/" rel="noopener noreferrer" target="_blank">buy a home</a>, you should know your credit score is a critical piece of the puzzle when it comes to <a href="https://www.mykcm.com/2024/02/07/why-pre-approval-is-even-more-important-this-year/" rel="noopener noreferrer" target="_blank">qualifying for a mortgage</a>. Lenders review your credit to see if you typically make payments on time, pay back debts, and more. Your credit score can also help determine your mortgage rate. An article from US Bank <a href="https://www.usbank.com/home-loans/mortgage/first-time-home-buyers/credit-score-for-mortgage.html" rel="noopener noreferrer" target="_blank">explains</a>:
“A credit score isn’t the only deciding factor on your mortgage application, but it’s a significant one. So, when you’re house shopping, it’s important to know where your credit stands and how to use it to get the best mortgage rate possible.”
That means your credit score may feel even more important to your <a href="https://www.mykcm.com/2024/02/16/achieve-your-dream-of-homeownership-with-condos-and-townhomes-infographic/" rel="noopener noreferrer" target="_blank">homebuying plans</a> right now since <a href="https://www.mykcm.com/2024/01/30/2-of-the-factors-that-impact-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a> are a key factor in <a href="https://www.mykcm.com/2024/01/26/why-its-more-affordable-to-buy-a-home-this-year-infographic/" rel="noopener noreferrer" target="_blank">affordability</a>. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is <a href="https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2023Q4" rel="noopener noreferrer" target="_blank">770</a>. But that doesn’t mean your credit score has to be perfect. The same article from US Bank <a href="https://www.usbank.com/home-loans/mortgage/first-time-home-buyers/credit-score-for-mortgage.html" rel="noopener noreferrer" target="_blank">explains</a>:
“Your credit score (commonly called a FICO Score) can range from 300 at the low end to 850 at the high end. A score of 740 or above is generally considered very good, but you don’t need that score or above to buy a home.”
Working with a trusted lender is the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you’re able to get. As FICO <a href="https://www.myfico.com/credit-education/credit-scores" rel="noopener noreferrer" target="_blank">says</a>:
“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”
If you’re looking for ways to improve your score, Experian <a href="https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/" rel="noopener noreferrer" target="_blank">highlights</a> some things you may want to focus on:
Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.
Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.
Credit Applications: If you’re looking to buy something, don’t apply for additional credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.
Bottom Line
Finding ways to make your credit score better could help you get a lower <a href="https://www.mykcm.com/2024/02/12/whats-really-happening-with-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rate</a>. If you want to learn more, talk to a <a href="https://www.mykcm.com/2024/02/09/winning-plays-for-buying-a-home-in-todays-market-infographic/" rel="noopener noreferrer" target="_blank">trusted lender</a>.
2024-03-06T14:17:52-07:002024-03-07T09:34:10-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:6253Why You Want an Agent’s Advice for Your Move
Why You Want an Agent’s Advice for Your Move
<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240220/20240228-Why-You-Want-an-Agent-s-Advice-for-Your-Move.png" alt="" class="img-thumbnail mx-auto d-block" />
No matter how you slice it, <a href="https://www.mykcm.com/2024/02/14/why-so-many-people-fall-in-love-with-homeownership/" rel="noopener noreferrer" target="_blank">buying</a> or <a href="https://www.mykcm.com/2024/01/22/3-must-dos-when-selling-your-house-in-2024/" rel="noopener noreferrer" target="_blank">selling</a> a home is a big decision. And when you’re going through any change in your life and you need some guidance, what do you do? You get advice from people who know what they’re talking about.
Moving is no exception. You need insights from the pros to help you feel confident in your decision. Freddie Mac <a href="https://myhome.freddiemac.com/buying/finding-your-team" rel="noopener noreferrer" target="_blank">explains</a> it like this:
“As you set out to find the right home for your family, be sure to select experienced, trusted professionals who will help you make informed decisions and avoid pitfalls.”
And while perfect advice isn’t possible – not even from the experts, what you can get is the very best advice out there.
The Power of Expert Advice
For example, let’s say you need an attorney. You start off by finding an expert in the type of law required for your case. Once you do, they won’t immediately tell you how the case is going to end, or how the judge or jury will rule. But what a good attorney can do is walk you through the most effective strategies based on their experience and help you put a plan together. They’ll even use their knowledge to adjust that plan as new information becomes available.
The job of a real estate agent is similar. Just like you can’t find a lawyer to give you perfect advice, you won’t find a real estate professional who can either. That’s because it’s impossible to know everything that’s going to happen throughout your transaction. Their role is to give you the best advice they can.
To do that, an agent will draw on their experience, <a href="https://www.mykcm.com/2024/01/19/key-terms-every-homebuyer-should-learn-infographic/" rel="noopener noreferrer" target="_blank">industry knowledge</a>, and market data. They know the latest trends, the ins and outs of the <a href="https://www.mykcm.com/2024/02/09/winning-plays-for-buying-a-home-in-todays-market-infographic/" rel="noopener noreferrer" target="_blank">homebuying</a> and <a href="https://www.mykcm.com/2024/01/17/2-reasons-why-todays-mortgage-rate-trend-is-good-for-sellers/" rel="noopener noreferrer" target="_blank">selling</a> processes, and what’s worked for other people in the same situation as you.
With that expertise, a real estate advisor can anticipate what could happen next and work with you to put together a <a href="https://www.mykcm.com/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/" rel="noopener noreferrer" target="_blank">solid plan</a>. Then, they’ll guide you through the process, helping you make decisions along the way. That’s the very definition of getting the best – not perfect – advice. And that’s the power of working with a real estate advisor.
Bottom Line
If you’re looking to buy or sell a home, you want an expert on your side to help you each step of the way. Let’s connect so you have advice you can count on.
2024-02-28T10:39:38-07:002024-02-28T10:43:37-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:6234Some Experts Say Mortgage Rates May Fall Below 6% Later This Year
Some Experts Say Mortgage Rates May Fall Below 6% Later This Year
<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240220/20240221-Some-Experts-Say-Mortgage-Rates-May-Fall-Below-6-Later-This-Year.png" alt="" class="img-thumbnail mx-auto d-block" />
There’s a lot of confusion in the market about what’s happening with day-to-day movement in mortgage rates right now, but here’s what you really need to know: compared to the near 8% peak last fall, <a href="https://www.mykcm.com/2024/01/26/why-its-more-affordable-to-buy-a-home-this-year-infographic/" rel="noopener noreferrer" target="_blank">mortgage rates</a> have trended down overall.
And if you’re looking to <a href="https://www.mykcm.com/2024/01/24/are-more-homeowners-selling-as-mortgage-rates-come-down/" rel="noopener noreferrer" target="_blank">buy</a> or <a href="https://www.mykcm.com/2024/01/17/2-reasons-why-todays-mortgage-rate-trend-is-good-for-sellers/" rel="noopener noreferrer" target="_blank">sell a home</a>, this is a big deal. While they’re going to continue to bounce around a bit based on various economic drivers (like inflation and reactions to the consumer price index, or CPI), don’t let the <a href="https://www.mykcm.com/2024/02/12/whats-really-happening-with-mortgage-rates/" rel="noopener noreferrer" target="_blank">short-term volatility</a> distract you. The experts agree the overarching downward trend <a href="https://www.mykcm.com/2023/12/20/why-mortgage-rates-could-continue-to-decline/" rel="noopener noreferrer" target="_blank">should continue</a> this year.
While we won’t see the record-low rates homebuyers got during the pandemic, some experts think we should see rates dip below 6% later this year. As Dean Baker, Senior Economist, Center for Economic Research, <a href="https://cepr.net/contrary-to-what-the-washington-post-tells-you-homeownership-rates-for-young-people-are-above-the-pre-pandemic-level/" rel="noopener noreferrer" target="_blank">says</a>:
“They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”
And Baker isn’t the only one saying this is a possibility. The latest Fannie Mae projections also indicate we may see a rate below 6% by the end of this year (see the green box in the chart below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240221/20240221-Mortgage-Rate-Projections.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240221/20240221-Mortgage-Rate-Projections.png" alt="a screenshot of a graph" /></a>
The chart shows mortgage rate projections for 2024 from Fannie Mae. It includes the one that came out in <a href="https://www.fanniemae.com/media/49866/display" rel="noopener noreferrer" target="_blank">December</a>, and compares it to the updated 2024 forecast they released just <a href="https://www.fanniemae.com/media/50096/display" rel="noopener noreferrer" target="_blank">one month</a> later. And if you look closely, you’ll notice the projections are on the way down.
It’s normal for experts to re-forecast as they watch current market trends and the broader economy, but what this shows is experts are feeling confident rates should continue to decline, if inflation cools.
What This Means for You
But remember, no one can say for sure what will happen (and by when) – and short-term volatility is to be expected. So, don’t let small fluctuations scare you. Focus on the bigger picture.
If you’ve found a home you love in today’s market – especially where finding a home that meets your budget and your needs can be a challenge – it’s probably not a good idea to try to time the market and wait until rates drop below 6%.
With rates already lower than they were last fall, you have an opportunity in front of you right now. That’s because even a small quarter point dip in rates gives your <a href="https://www.mykcm.com/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/" rel="noopener noreferrer" target="_blank">purchasing power</a> a boost.
Bottom Line
If you wanted to move last year but were holding off hoping rates would fall, now may be the time to act. Let’s connect to get the ball rolling.
2024-02-21T07:47:45-07:002024-02-21T07:51:12-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:6210Bridging the Gaps on the Road to Homeownership
Bridging the Gaps on the Road to Homeownership
<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240212/20240213-Bridging-the-Gaps-on-the-Road-to-Homeownership.png" alt="" class="img-thumbnail mx-auto d-block" />
Homeownership is a major part of the <a href="https://www.mykcm.com/2024/01/15/homeownership-is-still-at-the-heart-of-the-american-dream/" rel="noopener noreferrer" target="_blank">American Dream</a>. But, the <a href="https://www.mykcm.com/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/" rel="noopener noreferrer" target="_blank">path</a> to achieving this dream can be quite difficult. While progress has been made to improve fair housing access, households of color still face unique challenges on the road to owning a home. Working with the right real estate experts can make all the difference for diverse buyers.
It's clear that achieving homeownership is more challenging for certain groups because there’s still a measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, Black households continue to have the lowest <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">homeownership rate</a> nationally (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240212/20240213-Homeownership-Rate.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240212/20240213-Homeownership-Rate.png" /></a>
Homeownership is an important part of building household <a href="https://www.mykcm.com/2023/11/07/homeowner-net-worth-has-skyrocketed/" rel="noopener noreferrer" target="_blank">wealth</a> that can be passed down to future generations. <a href="https://www.nar.realtor/sites/default/files/documents/2023-snapshot-of-race-and-home-buying-in-the-us-03-02-2023.pdf" rel="noopener noreferrer" target="_blank">According</a> to a report by the National Association of Realtors (NAR), almost half of Black homebuyers in 2023 were first-time buyers. That means many didn’t have <a href="https://www.mykcm.com/2024/01/09/ways-your-home-equity-can-help-you-reach-your-goals/" rel="noopener noreferrer" target="_blank">home equity</a> they could use toward their home purchase.
That financial hurdle alone makes buying a home more challenging, especially at a time when affordability is a major concern for first-time buyers. Jessica Lautz, Deputy Chief Economist at NAR <a href="https://www.bloomberg.com/news/articles/2024-01-29/housing-affordability-crisis-hits-us-black-buyers-particularly-hard?embedded-checkout=true" rel="noopener noreferrer" target="_blank">says</a>:
“It’s an incredibly difficult market for all home buyers right now, especially first-time home buyers and especially first-time home buyers of color.”
Because of these challenges, there are several <a href="https://www.mykcm.com/2023/12/12/down-payment-assistance-programs-can-help-pave-the-way-to-homeownership/" rel="noopener noreferrer" target="_blank">down payment</a> assistance programs specifically aimed at helping minority buyers fulfill their homeownership dreams:
The <a href="https://3by30.org/homeownership-101/get-help-buying-a-home/" rel="noopener noreferrer" target="_blank">3By30</a> program offers valuable resources for Black buyers, making it easier for them to secure a down payment and buy a home.
For Native Americans, <a href="https://downpaymentresource.com/homebuyer-resource/highlighting-42-native-american-homebuyer-assistance-programs-in-honor-of-native-american-heritage-month/" rel="noopener noreferrer" target="_blank">Down Payment Resource</a> highlights 42 U.S. homebuyer assistance programs across 14 states that make homeownership more attainable by providing support with down payments and other costs.
<a href="https://www.fanniemae.com/casa" rel="noopener noreferrer" target="_blank">Fannie Mae</a> provides down payment assistance to eligible first-time homebuyers living in Latino communities.
Even if you don’t qualify for these programs, there are many other federal, state, and local options available to look into. And a <a href="https://www.mykcm.com/2023/12/07/why-you-need-to-use-a-real-estate-agent-when-you-buy-a-home/" rel="noopener noreferrer" target="_blank">real estate professional</a> can help you find the ones that best meet your needs.
For minority homebuyers, the challenges that remain can be a point of pain and frustration. That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process. These professionals aren’t only experienced advisors who understand the market and give the best advice, they’re also compassionate educators who will advocate for your best interests every step of the way.
Bottom Line
Let’s connect to make sure you have <a href="https://www.mykcm.com/2023/10/30/a-real-estate-agent-helps-take-the-fear-out-of-the-market/" rel="noopener noreferrer" target="_blank">the information</a> and support you need as you walk the path to <a href="https://www.mykcm.com/2023/12/08/your-homebuying-adventure-infographic/" rel="noopener noreferrer" target="_blank">homeownership</a>.
2024-02-14T08:22:17-07:002024-02-14T08:28:36-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:61782 of the Factors That Impact Mortgage Rates
2 of the Factors That Impact Mortgage Rates
<img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240129/20240130-2-of-the-factors-that-impact-mortgage-rates.png" alt="" class="img-thumbnail mx-auto d-block" />
If you’re looking to <a href="https://www.mykcm.com/2024/01/18/3-key-factors-affecting-home-affordability/" rel="noopener noreferrer" target="_blank">buy a home</a>, you’ve probably been paying close attention to <a href="https://www.mykcm.com/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/" rel="noopener noreferrer" target="_blank">mortgage rates</a>. Over the last couple of years, they hit record lows, rose dramatically, and are now dropping back down a bit. Ever wonder why?
The answer is complicated because there’s a lot that can influence mortgage rates. Here are just a few of the most impactful factors at play.
Inflation and the Federal Reserve
The Federal Reserve (Fed) doesn’t directly determine mortgage rates. But the Fed does move the Federal Funds Rate up or down in response to what’s happening with inflation, the economy, employment rates, and more. As that happens, mortgage rates tend to respond. Business Insider <a href="https://www.businessinsider.com/personal-finance/how-does-fed-impact-mortgage-rates" rel="noopener noreferrer" target="_blank">explains</a>:
“The Federal Reserve slows inflation by raising the federal funds rate, which can indirectly impact mortgages. High inflation and investor expectations of more Fed rate hikes can push mortgage rates up. If investors believe the Fed may cut rates and inflation is decelerating, mortgage rates will typically trend down.”
Over the last couple of years, the Fed raised the Federal Fund Rate to try to fight inflation and, as that happened, mortgage rates jumped up, too. Fortunately, the expert outlook for inflation and mortgage rates is that both should become more favorable over the course of the year. As Danielle Hale, Chief Economist at Realtor.com, <a href="https://www.forbes.com/advisor/mortgages/mortgage-interest-rates-forecast/" rel="noopener noreferrer" target="_blank">says</a>:
“[M]ortgage rates will continue to ease in 2024 as inflation improves . . .”
There’s even talk the Fed may actually cut the Fed Funds Rate this year because inflation is cooling, even though it’s not yet back to their ideal target.
The 10-Year Treasury Yield
Additionally, mortgage companies look at the 10-Year Treasury Yield to decide how much interest to charge on home loans. If the <a href="https://www.mykcm.com/2023/07/19/explaining-todays-mortgage-rates/" rel="noopener noreferrer" target="_blank">yield goes up</a>, mortgage rates usually go up, too. The opposite is also true. <a href="https://www.investopedia.com/mortgage/mortgage-rates/factors-affect-mortgage-rates/" rel="noopener noreferrer" target="_blank">According</a> to Investopedia:
“One frequently used government bond benchmark to which mortgage lenders often peg their interest rates is the 10-year Treasury bond yield.”
Historically, the spread between the 10-Year Treasury Yield and the 30-year fixed mortgage rate has been fairly consistent, but that’s not the case recently. That means, there’s room for mortgage rates to come down. So, keeping an eye on which way the treasury yield is trending can give experts an idea of where mortgage rates may head next.
Bottom Line
With the Fed meeting later this week, experts in the industry will be keeping a close watch to see what they decide and what impact it’ll have on the economy. To navigate any mortgage rate changes and their impact on your <a href="https://www.mykcm.com/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/" rel="noopener noreferrer" target="_blank">moving plans</a>, it’s best to have a team of professionals on your side.
2024-01-31T10:06:50-07:002024-01-31T10:09:41-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:6136Experts Project Home Prices Will Increase in 2024
Even though home prices are going up nationally, some people are still worried they might come down. In fact, a recent <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey/national-housing-survey-archive" rel="noopener noreferrer" target="_blank">survey</a> from Fannie Mae found that 24% of people think home prices will actually decline over the next 12 months. That means almost one out of every four people are dealing with that fear, and you might be, too.
To help ease that concern, here's what experts forecast will happen with prices this year.
Experts Project a Modest Increase
Check out the latest <a href="https://www.mykcm.com/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/" rel="noopener noreferrer" target="_blank">home price</a> forecasts from eight different sources (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240122/20240123-2024-Home-Price-Forecasts.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240122/20240123-2024-Home-Price-Forecasts.png" /></a>
The blue bar on the left means, on average, <a href="https://img03.en25.com/Web/MortgageBankersAssociation/%7Ba8f4bf3d-95ec-42be-9c8d-3eb49e52f553%7D_Mortgage_Finance_Forecast_Jan_2024.pdf" rel="noopener noreferrer" target="_blank">experts</a> think <a href="https://www.zillow.com/research/2024-housing-predictions-33447/" rel="noopener noreferrer" target="_blank">home prices</a> will go up over 2% by the end of this year – not down.
<a href="https://www.freddiemac.com/research/forecast/20231220-us-economy-expanded-in-2023" rel="noopener noreferrer" target="_blank">Prices</a> aren’t likely to depreciate in 2024 because <a href="https://www.mykcm.com/2024/01/16/why-you-may-want-to-seriously-consider-a-newly-built-home/" rel="noopener noreferrer" target="_blank">inventory</a> is still tight and lower <a href="https://www.mykcm.com/2024/01/08/what-lower-mortgage-rates-mean-for-your-purchasing-power/" rel="noopener noreferrer" target="_blank">mortgage rates</a> are leading to strong <a href="https://www.mykcm.com/2024/01/17/2-reasons-why-todays-mortgage-rate-trend-is-good-for-sellers/" rel="noopener noreferrer" target="_blank">buyer demand</a>. Those two factors will keep pushing <a href="https://www.fanniemae.com/newsroom/fannie-mae-news/q4-2023-home-price-expectations-survey" rel="noopener noreferrer" target="_blank">prices</a> up as the year goes on. As Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.cnn.com/2023/12/26/business/us-home-prices-record-high-october/index.html" rel="noopener noreferrer" target="_blank">explains</a>:
“With mortgage rates dropping, demand for homes in early 2024 is likely to be strong and will again put pressure on prices, similar to trends observed in early 2023 . . . Most markets will continue to reach new home price highs over the course of 2024.”
What Does This Mean for You?
Experts are saying <a href="https://twitter.com/NewsLambert/status/1730642488346472787" rel="noopener noreferrer" target="_blank">home prices</a> will go up this year, and that's good news if you're <a href="https://www.mykcm.com/2024/01/03/thinking-about-buying-a-home-ask-yourself-these-questions/" rel="noopener noreferrer" target="_blank">thinking</a> about <a href="https://www.mykcm.com/2024/01/16/why-you-may-want-to-seriously-consider-a-newly-built-home/" rel="noopener noreferrer" target="_blank">buying a home</a>. When you become a <a href="https://www.mykcm.com/2024/01/15/homeownership-is-still-at-the-heart-of-the-american-dream/" rel="noopener noreferrer" target="_blank">homeowner</a>, you want the <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-q4-2023-us-economic-outlook-10-26-2023.pdf" rel="noopener noreferrer" target="_blank">value</a> of your house to <a href="https://www.mykcm.com/2024/01/11/the-dramatic-impact-of-homeownership-on-net-worth/" rel="noopener noreferrer" target="_blank">go up</a>. That appreciation is what builds <a href="https://www.mykcm.com/2024/01/09/ways-your-home-equity-can-help-you-reach-your-goals/" rel="noopener noreferrer" target="_blank">equity</a> and makes homeownership such a good investment over time.
Beyond that, expected home price appreciation also means if you’re ready, willing, and able to <a href="https://www.mykcm.com/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/" rel="noopener noreferrer" target="_blank">buy</a>, waiting just means it will cost more later.
Bottom Line
If you're worried home prices will come down, don’t be. Many experts believe they’ll actually go up this year. If you have questions or worries about what’s happening with prices in our area, let’s connect.
2024-01-25T08:02:14-07:002024-01-25T08:09:26-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5677The Value of an Agent When Buying Your New Construction Home
Buying a <a href="https://www.simplifyingthemarket.com/en/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">new construction</a> home can be an exciting experience. From being the very first owner, to customizing your home’s features, there are a lot of benefits. But navigating the complexities of buying a home that’s under construction can also be a bit overwhelming. This is where a skilled real estate agent can make all the difference.
An article from The Mortgage Reports <a href="https://themortgagereports.com/91925/guide-to-buying-a-new-construction-home" rel="noopener noreferrer" target="_blank">sums</a> it up like this:
“Your Realtor or real estate agent will be key to helping you navigate this process. . . . they can guide you through construction and help anticipate and solve for any possible snags along the way.”
Here’s how your agent is an invaluable resource in your search to find and buy your new home.
Agents Know the Local Area and Market
Your agent is well-versed in the emerging communities and upcoming developments that could influence your decision. For example, you'll want to be aware if there were any plans to construct a highway through the woods behind your prospective backyard. It’s important to consider how the neighborhood and the surrounding area might evolve before making your home purchase. Your agent can help you find a community that perfectly aligns with your preferences, lifestyle, and future needs.
Knowledge of Construction Quality and Builder Reputation
An agent also has the expertise to evaluate the construction quality and <a href="https://www.nahb.org/other/consumer-resources/how-to-choose-a-home-builder" rel="noopener noreferrer" target="_blank">reputation</a> of different builders. Their knowledge and experiences with local builders allow them to offer insights into each one’s track record, customer satisfaction, and construction practices. This information can help you avoid any potential risks and help you confidently select a builder known for delivering quality homes.
Assistance with Customization and Upgrades
The most obvious benefit of opting for new home construction is the opportunity to customize your home to suit your preferences. Your agent will guide you through that process and share advice on the upgrades that are most likely to add long-term value to your home. Their expertise ensures you focus your budget on areas that will give you the greatest return on your investment later on.
Understanding Builder Contracts and Negotiations
Builder <a href="https://www.realtor.com/advice/buy/steps-to-buy-a-new-construction-home/" rel="noopener noreferrer" target="_blank">contracts</a> can be complex and differ from traditional home purchase agreements. Your agent can help you navigate these contracts to make sure you fully understand the terms and conditions. They’re also skilled negotiators who can advocate on your behalf, potentially securing better deals, upgrades, or incentives for you throughout the process.
Bottom Line
The guidance and expertise of a local real estate agent can make all the difference in turning your vision of the perfect home into a reality. Let’s connect so you can feel confident about purchasing your new construction home.2023-08-09T12:02:01-07:002023-08-09T12:11:50-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5654Sellers: Don’t Let These Two Things Hold You Back
Many homeowners thinking about <a href="https://www.simplifyingthemarket.com/en/2023/07/07/the-benefits-of-downsizing-for-homeowners-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">selling</a> have two key things holding them back. That’s feeling locked in by today’s higher mortgage rates and worrying they won’t be able to find something to buy while supply is so low. Let’s dive into each challenge and give you some helpful advice on how to overcome these obstacles.
Challenge #1: The Reluctance to Take on a Higher Mortgage Rate
According to the Federal Housing Finance Agency (FHFA), the <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">average interest rate</a> for current homeowners with mortgages is less than 4% (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230731/20230801-Average-Mortgage-Rate-Is-Less-Than-4-.png?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230801-Average-Mortgage-Rate-Is-Less-Than-4-.png" /></a>But today, the typical 30-year fixed <a href="https://www.simplifyingthemarket.com/en/2023/07/19/explaining-todays-mortgage-rates/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rate</a> offered to buyers is closer to <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">7%</a>. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as the mortgage rate lock-in effect.
The Advice: Waiting May Not Pay Off
While experts project <a href="https://www.simplifyingthemarket.com/en/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rates</a> will gradually fall this year as <a href="https://www.simplifyingthemarket.com/en/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">inflation</a> cools, that doesn’t necessarily mean you should wait to sell. Mortgage rates are notoriously hard to predict. And, right now <a href="https://www.simplifyingthemarket.com/en/2023/07/17/home-prices-are-rebounding/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home prices</a> are back on the rise. If you move now, you’ll at least beat rising home prices when you buy your next home. And, if experts are right and rates fall, you can always refinance later if that happens.
Challenge #2: The Fear of Not Finding Something to Buy
When so many homeowners are reluctant to take on a higher rate, fewer homes are going to come onto the market. That’s going to keep <a href="https://www.simplifyingthemarket.com/en/2023/07/14/low-housing-inventory-is-a-sweet-spot-for-sellers-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">inventory</a> low. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://themortgagereports.com/104622/homeowners-become-landlords" rel="noopener noreferrer" target="_blank">explains</a>:
“Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years.”
Even though you know this <a href="https://www.simplifyingthemarket.com/en/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">limited housing supply</a> helps your house stand out to eager buyers, it may also make you feel hesitant <a href="https://www.simplifyingthemarket.com/en/2023/06/26/the-true-cost-of-selling-your-house-on-your-own/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">to sell</a> because you don’t want to struggle to find something to purchase.
The Advice: Broaden Your Search
If fear you won’t be able to find your next home is the primary thing holding you back, remember to consider all your options. Looking at all housing types including condos, townhouses, and even <a href="https://www.simplifyingthemarket.com/en/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">newly built homes</a> can help give you more to choose from. Plus, if you’re able to work fully <a href="https://www.simplifyingthemarket.com/en/2023/07/13/how-remote-work-expands-your-homebuying-horizons/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">remote</a> or hybrid, you may be able to consider areas you hadn’t previously searched. If you can look further from your place of work, you may have more affordable options.
Bottom Line
Instead of focusing on the challenges, focus on what you can control. Let’s connect so you’re working with a professional who has the experience to navigate these waters and find the perfect home for you.2023-08-01T08:45:00-07:002023-08-01T08:35:41-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5525Why the Median Home Price Is Meaningless in Today’s MarketWhy the Median Home Price Is Meaningless in Today’s Market
The National Association of Realtors (NAR) will release its latest Existing Home Sales (EHS) report later this week. This monthly report provides information on the sales volume and price trend for previously owned homes. In the upcoming release, it’ll likely say <a href="https://www.simplifyingthemarket.com/en/2023/06/12/are-home-prices-going-up-or-down-that-depends/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home prices</a> are down. This may feel a bit confusing, especially if you’ve been following along and seeing the blogs saying that home prices have bottomed out and <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">turned a corner</a>.
So, why will this likely say <a href="https://www.simplifyingthemarket.com/en/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home prices</a> are falling when so many other price reports say they’re going back up? It all depends on the methodology of each report. NAR reports on the median sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.
The Center for Real Estate Studies at Wichita State University <a href="https://realestate.wichita.edu/question/hpi-vs-median-price/#:~:text=The%20median%20sale%20price%20measures,and%20half%20sold%20for%20less" rel="noopener noreferrer" target="_blank">explains</a> median prices like this:
“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”
Investopedia helps define what a repeat sales approach <a href="https://www.investopedia.com/terms/r/repeatsales-method.asp" rel="noopener noreferrer" target="_blank">means</a>:
“Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.”
The Challenge with the Median Sales Price Today
As the quotes above say, the approaches can tell different stories. That’s why median price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are <a href="https://www.simplifyingthemarket.com/en/2023/05/12/the-worst-home-price-declines-are-behind-us-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">appreciating again</a>.
Bill McBride, Author of the Calculated Risk blog, <a href="https://calculatedrisk.substack.com/p/case-shiller-national-house-price-747" rel="noopener noreferrer" target="_blank">sums</a> the difference up like this:
“Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.”
To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.
<a href="https://files.keepingcurrentmatters.com/content/images/20230616/20230620-how-median-price-works.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230616/20230620-how-median-price-works.png" /></a>
In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.
That’s why using the median home price as a gauge of what’s happening with home values isn’t worthwhile right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But, most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When <a href="https://www.simplifyingthemarket.com/en/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rates</a> are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable. A greater number of ‘less-expensive’ houses are selling right now for this exact reason, and that’s causing the median price to decline. But that doesn’t mean any single house lost value.
When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by <a href="https://www.simplifyingthemarket.com/en/2023/04/26/the-three-factors-affecting-home-affordability-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">affordability</a> and current <a href="https://www.simplifyingthemarket.com/en/2023/05/19/the-impact-of-changing-mortgage-rates-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rates</a>.
Bottom Line
For a more in-depth understanding of home price trends and reports, let’s connect.2023-06-20T05:30:45-07:002023-08-01T08:32:57-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5522Saving for a Down Payment? Here’s What You Need To Know.Saving for a Down Payment? Here’s What You Need To Know.
If you're planning to buy your <a href="https://www.simplifyingthemarket.com/en/2023/05/31/keys-to-success-for-first-time-homebuyers/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">first home</a>, then you're probably focused on saving for all the costs involved in such a big purchase. One of the expenses that may be at the top of your mind is your down payment. If you’re intimidated by how much you need to save for that, it may be because you believe you must put 20% down. That doesn’t necessarily have to be the case. As the National Association of Realtors (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/tackling-home-financing-and-down-payment-misconceptions" rel="noopener noreferrer" target="_blank">notes</a>:
“One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership.”
And a recent Freddie Mac survey <a href="https://myhome.freddiemac.com/buying/down-payments-and-pmi" rel="noopener noreferrer" target="_blank">finds</a>:
“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Here’s the good news. Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize.
According to NAR, the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">median down payment</a> hasn’t been over 20% since 2005. In fact, the median down payment for all homebuyers today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230615/20230619-todays-median-down-payment-is-less-than-20-percent.png?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230615/20230619-todays-median-down-payment-is-less-than-20-percent.png" /></a>
What does this mean for you? It means you may not need to save as much as you originally thought.
Learn About Options That Can Help You Toward Your Goal
And it’s not just how much you need for your down payment that isn’t clear. There are also 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 <a href="https://downpaymentresource.com/" rel="noopener noreferrer" target="_blank">Down Payment Resource</a>, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments. That same resource goes on to say:
“You don’t have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last 3 years.”
Plus, there are even loan types, like <a href="https://www.hud.gov/buying/loans" rel="noopener noreferrer" target="_blank">FHA loans</a> with down payments as low as <a href="https://www.benefits.gov/benefit/504" rel="noopener noreferrer" target="_blank">3.5%</a> as well as options like <a href="https://www.va.gov/housing-assistance/home-loans/loan-types/" rel="noopener noreferrer" target="_blank">VA loans</a> and <a href="https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program" rel="noopener noreferrer" target="_blank">USDA loans</a> with no down payment requirements for qualified applicants.
If you’re interested in learning more about down payment assistance programs, information is available through sites like <a href="https://downpaymentresource.com/" rel="noopener noreferrer" target="_blank">Down Payment Resource</a>. Then, partner with a trusted lender to learn what you qualify for on your <a href="https://www.simplifyingthemarket.com/en/2023/06/01/the-true-value-of-homeownership/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">homebuying</a> journey.
Bottom Line
Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect to start the conversation about your homebuying goals.2023-06-19T06:20:27-07:002023-06-19T06:27:27-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5520How Owning a Home Grows Your Wealth with Time [INFOGRAPHIC]How Owning a Home Grows Your Wealth with Time [INFOGRAPHIC]
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230615/How-Owning-a-Home-Grows-Your-Wealth-with-Time-KCM-Share.png" width="600" /><br /><br />
<a href="https://files.keepingcurrentmatters.com/content/images/20230615/How-Owning-a-Home-Grows-Your-Wealth-with-Time-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230615/How-Owning-a-Home-Grows-Your-Wealth-with-Time-MEM.png" /></a>
Some Highlights
If you’re thinking of <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">buying</a> a home this year, be sure to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">factor</a> in the long-term <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">benefits</a> of homeownership.
Over time, <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">homeownership</a> allows you to build equity. On average, nationwide <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">home prices</a> appreciated by <a href="https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx" rel="noopener noreferrer" target="_blank">290.2%</a> over the last 32 years.
That means your net worth can <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">grow</a> significantly in the long term when you own a home. Let’s <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">connect</a> so you can start your homebuying journey today.
2023-06-16T07:10:27-07:002023-06-16T07:30:24-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5514Why Buying or Selling a Home Helps the Economy and Your CommunityWhy Buying or Selling a Home Helps the Economy and Your Community
If you're thinking about <a href="https://www.simplifyingthemarket.com/en/2023/06/06/real-estate-is-still-considered-the-best-long-term-investment-1/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">buying</a> or <a href="https://www.simplifyingthemarket.com/en/2023/05/26/moving-now-can-give-your-house-its-day-in-the-sun-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">selling</a> a house, it's important to know that it doesn't just affect your life, but also your community.
The National Association of Realtors (NAR) releases a <a href="https://cdn.nar.realtor/sites/default/files/documents/2023-state-by-state-economic-impact-of-real-estate-activity-report-us-05-01-2023.pdf?_gl=1*13hskvj*_gcl_au*NTQ4NDc1ODEzLjE2Nzg5MTgyNzk" rel="noopener noreferrer" target="_blank">report</a> every year to show how much economic activity is generated by <a href="https://www.simplifyingthemarket.com/en/2023/05/25/the-benefits-of-selling-now-according-to-experts/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home sales</a>. The chart below illustrates that impact:
<a href="https://www.simplifyingthemarket.com/en/content/images/20230614/20230615-economic-impact-of-a-typical-home-sale.png?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230614/20230615-economic-impact-of-a-typical-home-sale.png" /></a>
As the visual shows, when a house is sold, it can make a big difference in the local economy. The impact comes largely from the workers required to build, update, and buy and sell homes. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), <a href="https://chicagoagentmagazine.com/2023/01/02/nahb-robert-dietz-new-construction/" rel="noopener noreferrer" target="_blank">explains</a> how the housing industry <a href="https://www.simplifyingthemarket.com/en/2023/05/18/powerful-job-market-fuels-homebuyer-demand/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">adds jobs</a> to a community:
“The economic impact means housing is a significant job creator. In fact, for every single-family home built, enough economic activity is generated to sustain three full-time jobs for a year, per NAHB research. . . . And one job for every $100,000 in remodeling spending.”
Housing being a major job creator makes sense when you consider there are many different industries involved in the process. A recent article from Fortune <a href="https://fortune.com/2022/08/09/real-estate-housing-market-falling-prices-economic-risk/" rel="noopener noreferrer" target="_blank">notes</a> housing activity could have a more robust impact than you think due to the many ways it’s tied to the economy:
“Housing has three direct linkages to economic activity (GDP): the construction of new homes, the remodeling of existing homes, and that of housing transactions. . . . consider the activity associated with home sales – think broker fees, lawyers, etc. – which are a sizable contributor to housing’s GDP footprint.”
When you <a href="https://www.simplifyingthemarket.com/en/2023/05/24/owning-a-home-helps-protect-against-inflation/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">buy</a> or sell a home, you work with a <a href="https://www.simplifyingthemarket.com/en/2023/05/22/why-buyers-need-an-expert-agent-by-their-side/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">team of professionals</a>, including contractors, specialists, lawyers, and city officials. Each person plays a role in making the transaction happen.
So, when you <a href="https://www.simplifyingthemarket.com/en/2023/06/13/your-needs-matter-more-than-todays-mortgage-rates/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">make a move</a> in the housing market, you're not just <a href="https://www.simplifyingthemarket.com/en/2023/05/23/why-buying-a-vacation-home-beats-renting-one-this-summer/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">meeting</a> your own needs, you're also making a positive impact on the community. Knowing this can give you a sense of empowerment as you make your decision this year.
Bottom Line
Each and every home sale is important for the local economy. If you’re ready to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">move</a>, let’s connect. It won’t just change your life – it’ll also have a strong positive effect on the whole community.2023-06-15T06:39:53-07:002023-06-15T06:42:10-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5509A Drop in Equity Doesn’t Mean Low EquityA Drop in Equity Doesn’t Mean Low Equity
You may see media coverage talking about a drop in homeowner equity. What’s important to understand is that equity is tied closely to home values. So, when home prices appreciate, you can expect equity to grow. And when home prices decline, equity does too. Here’s how this has played out recently.
Home prices rose rapidly during the <a href="https://www.simplifyingthemarket.com/en/2023/06/09/why-you-cant-compare-now-to-the-unicorn-years-of-the-housing-market-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a>. That gave homeowners a considerable equity boost. But those ‘unicorn’ years couldn’t last forever. The market had to moderate at some point, and that’s what we saw last fall and winter.
As home prices dropped slightly in the back half of 2022, equity was impacted. Based on the most recent <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q1-2023/" rel="noopener noreferrer" target="_blank">report</a> from CoreLogic, there was a 0.7% dip in homeowner equity over the last year. However, the headlines reporting on that change aren’t painting the whole picture. The reality is, while <a href="https://www.simplifyingthemarket.com/en/2023/06/12/are-home-prices-going-up-or-down-that-depends/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home price depreciation</a> during the second half of last year caused equity to drop, the data shows homeowners still have near record amounts of equity.
The graph below helps <a href="https://www.blackknightinc.com/wp-content/uploads/2023/04/BKI_MM_FEB2023_Report.pdf" rel="noopener noreferrer" target="_blank">illustrate</a> this point by looking at the total amount of tappable equity in this country going all the way back to 2005. Tappable equity is the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio (LTV). As the data shows, there was a significant equity boost during the <a href="https://www.simplifyingthemarket.com/en/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a> as home prices rapidly appreciated (see the pink in the graph below).
But here’s what’s key to realize – even though there’s been a small dip, total homeowner equity is still much higher than it was before the ‘unicorn’ years.
<a href="https://www.simplifyingthemarket.com/en/content/images/20230613/20230614-tappable-equity-still-near-all-time-highs.png?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230613/20230614-tappable-equity-still-near-all-time-highs.png" /></a>
And there’s more good news. Recent home price reports show the <a href="https://www.simplifyingthemarket.com/en/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">worst home price declines</a> are behind us, and prices have started to <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">go up</a> again. As Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q1-2023/" rel="noopener noreferrer" target="_blank">explains</a>:
“Home equity trends closely follow home price changes. As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.”
The last part of that quote is particularly important and is the piece of the puzzle the news is leaving out. To further emphasize the positive turn we’re already seeing, experts say home prices are forecast to appreciate at a more normal rate over the next year. In the same report, Hepp puts it this way:
“The average U.S. homeowner now has more than $274,000 in equity – up significantly from $182,000 before the pandemic. Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.”
And even though Odeta Kushi, Deputy Chief Economist at First American, references a slightly different number, Kushi further <a href="https://twitter.com/odetakushi/status/1667305612298842115" rel="noopener noreferrer" target="_blank">validates</a> the fact that homeowners have a lot of equity right now:
“Homeowners today have an average of $302,000 in equity in their homes.”
That means if you’ve owned your home for a few years, you likely still have way more <a href="https://www.simplifyingthemarket.com/en/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">equity</a> than you did before the ‘unicorn’ years. And if you’ve owned your home for a year or less, the forecast for more typical price appreciation over the next year should mean your equity is already on the way back up.
Bottom Line
Context is everything when looking at headlines. While homeowner equity dropped some from last year, it’s still near <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">all-time highs</a>. Let’s <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">connect</a> so you can get the answers you deserve from an expert who’s here to help as you plan your <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">move</a> this year.2023-06-14T07:45:51-07:002023-06-14T07:48:49-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5492Your Needs Matter More Than Today’s Mortgage RatesYour Needs Matter More Than Today’s Mortgage Rates
If you’re thinking about <a href="https://www.simplifyingthemarket.com/en/2023/05/25/the-benefits-of-selling-now-according-to-experts/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">selling your house</a> right now, chances are it’s because something in your life has changed. And, while things like <a href="https://www.simplifyingthemarket.com/en/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rates</a> are a key part of your decision on what you’ll buy next, it’s important to not lose sight of the reason you want to make a change in the first place.
It’s true <a href="https://www.simplifyingthemarket.com/en/2023/05/19/the-impact-of-changing-mortgage-rates-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rates</a> have climbed from the record lows we saw in recent years, and that has an impact on <a href="https://www.simplifyingthemarket.com/en/2023/04/26/the-three-factors-affecting-home-affordability-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">affordability</a>. With rates where they are right now, some homeowners are deciding they’ll wait to sell because they don’t want to move and have a higher mortgage rate on their next home. As Danielle Hale, Chief Economist at Realtor.com, <a href="https://news.move.com/2023-04-17-Realtor-com-R-Survey-82-of-Those-Looking-to-Buy-and-Sell-a-Home-Feel-Locked-In-by-Low-Mortgage-Rate" rel="noopener noreferrer" target="_blank">explains</a>:
“. . . homeowners who locked in a 30-year fixed rate in the 2-3% range don't necessarily want to give that up in exchange for a rate in the 6-7% range.”
But your lifestyle and your changing needs should matter more. Here are a few of the most common reasons people <a href="https://www.simplifyingthemarket.com/en/2023/04/04/two-reasons-you-should-sell-your-house/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">choose to sell</a> today. Any one of these may be more important than keeping your current mortgage rate.
As Ali Wolf, Chief Economist at Zonda, says in a <a href="https://twitter.com/AliWolfEcon/status/1664356987683893248?cxt=HHwWgMCz5Zb3_ZguAAAA" rel="noopener noreferrer" target="_blank">recent tweet</a>:
“First-time and move-up buyers are both active . . . the latter driven by life changes. Divorce, marriage, new higher paid job, and existing home unsuitable all referenced.”
Relocation
Some of the things that can motivate a move to a new area include changing jobs, a desire to be closer to friends and loved ones, wanting to live in a dream location, or just looking for a change in scenery.
For example, if you live in suburbia and just landed your dream job in NYC, you may be thinking about selling your current home and moving to the city for work.
Upgrading
Many homeowners decide to sell to move into a larger home. This is especially common when there’s a need for more room to entertain, a home office or gym, or additional bedrooms to accommodate a growing number of loved ones.
For example, if you’re living in a condo and decide it’s time to seek out a home with more space, or if your household is growing, it may be time to find a home that better fits those needs.
Downsizing
With <a href="https://www.simplifyingthemarket.com/en/2023/05/24/owning-a-home-helps-protect-against-inflation/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">inflation</a> driving up everyday expenses, homeowners may also decide to sell to reduce maintenance and costs. Or, they may sell because someone’s moved out of the home recently and there’s now more space than needed. It could also be that they’ve recently retired or are ready for a change.
For example, you’ve just kicked off your retirement and you want to move to somewhere you can enjoy the warm weather and have less house to maintain. Your new lifestyle may be better suited for a different home.
Change in Relationship Status
Divorce, separation, or marriage are other common reasons individuals sell to buy different homes.
For example, if you’ve recently separated, it may be difficult to still live under one roof. Selling and downsizing may be better options.
Health Concerns
If a homeowner faces mobility challenges or health issues that require specific living arrangements or modifications, they might sell their current home to find one that works better for them.
For example, you may be looking to sell your home and use the proceeds to help pay for a unit in an assisted-living facility.
With higher mortgage rates, there are some affordability challenges right now – but your needs and your lifestyle matter too. As a recent article from Bankrate <a href="https://www.bankrate.com/real-estate/should-i-sell-my-house-now-or-wait/#sell-now" rel="noopener noreferrer" target="_blank">says</a>:
“Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. . . . Your future plans and goals should be a significant part of the equation . . .”
Bottom Line
If you’re ready to sell your house so you can make a move, let’s connect so you have an expert on your side to help you navigate the process and find a home that can deliver on what you’re looking for.2023-06-13T07:33:06-07:002023-06-13T07:38:17-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5483Are Home Prices Going Up or Down? That Depends …Are Home Prices Going Up or Down? That Depends…
Media coverage about what’s happening with home prices can be confusing. A large part of that is due to the type of data being used and what they’re choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here's an explanation of each.
Year-over-Year (Y-O-Y):
This comparison measures the change in home prices from the same month or quarter in the previous year. For example, if you're comparing Y-O-Y home prices for April 2023, you would compare them to the home prices for April 2022.
Y-O-Y comparisons focus on changes over a one-year period, providing a more comprehensive view of long-term trends. They are usually useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating.
Month-over-Month (M-O-M):
This comparison measures the change in home prices from one month to the next. For instance, if you're comparing M-O-M home prices for April 2023, you would compare them to the home prices for March 2023.
Meanwhile, M-O-M comparisons analyze changes within a single month, giving a more immediate snapshot of short-term movements and price fluctuations. They are often used to track immediate shifts in demand and supply, seasonal trends, or the impact of specific events on the housing market.
The key difference between Y-O-Y and M-O-M comparisons lies in the time frame being assessed. Both approaches have their own merits and serve different purposes depending on the specific analysis required.
Why Is This Distinction So Important Right Now?
We’re about to enter a few months when <a href="https://www.simplifyingthemarket.com/en/2023/05/12/the-worst-home-price-declines-are-behind-us-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home prices</a> could possibly be lower than they were the same month last year. April, May, and June of 2022 were three of the best months for home prices in the history of the American housing market. Those same months this year might not measure up. That means, the Y-O-Y comparison will probably show values are depreciating. The <a href="https://cdn.nar.realtor/sites/default/files/documents/ehs-04-2023-breakouts-of-single-family-condo-and-co-op-2023-05-18.pdf" rel="noopener noreferrer" target="_blank">numbers</a> for April seem to suggest that’s what we’ll see in the months ahead (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-comparing-now-to-last-years-record-numbers.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-comparing-now-to-last-years-record-numbers.png" /></a>
That’ll generate troubling headlines that say home <a href="https://www.simplifyingthemarket.com/en/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">values are falling</a>. That’ll be accurate on a Y-O-Y basis. And, those headlines will lead many consumers to believe that home values are currently cascading downward.
However, on a closer look at M-O-M home prices, we can see prices have actually been appreciating for the last several months. Those M-O-M numbers more accurately reflect what’s truly happening with home values: after several months of depreciation, it appears we’ve hit bottom and are bouncing back.
Here’s an example of M-O-M home price movements for the last 16 months from the CoreLogic Home Price Insights <a href="https://www.corelogic.com/tag/home-price-index/" rel="noopener noreferrer" target="_blank">report</a> (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-home-prices-appear-to-have-bottomed-out.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-home-prices-appear-to-have-bottomed-out.png" /></a>
Why Does This Matter to You?
So, if you’re hearing negative headlines about home prices, remember they may not be painting the full picture. For the next few months, we’ll be comparing prices to last year’s record peak, and that may make the Y-O-Y comparison feel more negative. But, if we look at the more immediate, M-O-M trends, we can see home prices are actually on the way <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">back up</a>.
There’s an advantage to buying a home now. You’ll buy at a discount from last year’s price and before prices start to pick up even more momentum. It’s called “buying at the bottom,” and that’s a good thing.
Bottom Line
If you have questions about what’s happening with home prices, or if you’re ready to buy before prices climb higher, let’s connect.2023-06-12T07:03:01-07:002023-06-12T07:05:47-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5479This Real Estate Market Is the Strongest of Our LifetimeThis Real Estate Market Is the Strongest of Our Lifetime
When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point.
1. The Current Mortgage Rate on Existing Mortgages
First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (<a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">FHFA</a>), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" /></a>
Now, there’s a lot of talk in the media about a potential <a href="https://www.simplifyingthemarket.com/en/2023/04/27/why-todays-foreclosure-numbers-are-nothing-like-2008/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">foreclosure</a> crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they <a href="https://www.simplifyingthemarket.com/en/2023/05/04/how-homeowners-win-when-they-downsize/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">downsize</a>, with today’s higher mortgage rates, it could cost more.
Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.
2. The Amount of Homeowner Equity
Second, Americans are sitting on tremendous equity right now. According to the <a href="https://data.census.gov/cedsci/all?q=mortgage" rel="noopener noreferrer" target="_blank">Census</a> and <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q1-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank">ATTOM</a>, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" /></a>
In the industry, the term for this is <a href="https://www.simplifyingthemarket.com/en/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">equity</a> rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.
But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.
Bottom Line
We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.2023-06-08T06:51:11-07:002023-06-08T06:52:58-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5472The Main Reason Mortgage Rates Are So HighThe Main Reason Mortgage Rates Are So High
Today’s mortgage rates are top-of-mind for many <a href="https://www.simplifyingthemarket.com/en/2023/06/01/the-true-value-of-homeownership/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">homebuyers</a> right now. As a result, if you’re thinking about buying for the first time or selling your current house to move into a home that better fits your needs, you may be asking yourself these two questions:
Why Are Mortgage Rates So High?
When Will Rates Go Back Down?
Here’s context you need to help answer those questions.
1. Why Are Mortgage Rates So High?
The 30-year fixed-rate mortgage is largely influenced by the supply and demand for mortgage-backed securities (MBS). According to <a href="https://www.investopedia.com/terms/m/mbs.asp" rel="noopener noreferrer" target="_blank">Investopedia</a>:
“Mortgage-backed securities (MBS) are investment products similar to bonds. Each MBS consists of a bundle of home loans and other real estate debt bought from the banks that issued them . . . The investor who buys a mortgage-backed security is essentially lending money to home buyers.”
Demand for MBS helps determine the spread between the <a href="https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart" rel="noopener noreferrer" target="_blank">10-Year Treasury Yield</a> and the 30-year fixed <a href="https://www.freddiemac.com/pmms/pmms_archives" rel="noopener noreferrer" target="_blank">mortgage rate</a>. Historically, the average spread between the two is 1.72 (see chart below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230606/20230607-for-50-years-the-30-year-mortgage-rate-has-moved-in-unison-with-the-10-year-treasury-yield.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230606/20230607-for-50-years-the-30-year-mortgage-rate-has-moved-in-unison-with-the-10-year-treasury-yield.png" /></a>
Last Friday morning, the <a href="https://www.mortgagenewsdaily.com/" rel="noopener noreferrer" target="_blank">mortgage rate</a> was 6.85%. That means the spread was 3.2%, which is almost 1.5% over the norm. If the spread was at its historical average, mortgage rates would be 5.37% (3.65% 10-Year <a href="https://www.cnbc.com/quotes/US10Y" rel="noopener noreferrer" target="_blank">Treasury Yield</a> + 1.72 spread).
<a href="https://files.keepingcurrentmatters.com/content/images/20230606/20230607-why-are-mortgage-rates-so-high.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230606/20230607-why-are-mortgage-rates-so-high.png" /></a>
This large spread is very unusual. As George Ratiu, Chief Economist at Keeping Current Matters (KCM), <a href="https://twitter.com/GeorgeRatiu/status/1661766282465669124" rel="noopener noreferrer" target="_blank">explains</a>:
“The only times the spread approached or exceeded 300 basis points were during periods of high inflation or economic volatility, like those seen in the early 1980s or the Great Financial Crisis of 2008-09."
The graph below uses <a href="https://fred.stlouisfed.org/" rel="noopener noreferrer" target="_blank">historical data</a> to help illustrate this point by showing the few times the spread has increased to 300 basis points or more:
<a href="https://files.keepingcurrentmatters.com/content/images/20230606/20230607-spread-between-the-10-year-treasury-and-the-30-year-fixed-mortgage-rate.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230606/20230607-spread-between-the-10-year-treasury-and-the-30-year-fixed-mortgage-rate.png" /></a>
The graph shows how the spread has come down after each peak. The good news is, that means there’s room for mortgage rates to improve today.
So, what’s causing the larger spread and making mortgage rates so high today?
The demand for MBS is heavily influenced by the risks associated with investing in them. Today, that risk is impacted by broader market conditions like <a href="https://www.simplifyingthemarket.com/en/2023/05/24/owning-a-home-helps-protect-against-inflation/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">inflation</a> and fear of a potential <a href="https://www.simplifyingthemarket.com/en/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">recession</a>, the Fed’s interest rate hikes to try to bring down <a href="https://www.simplifyingthemarket.com/en/2023/05/10/the-impact-of-inflation-on-mortgage-rates/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">inflation</a>, headlines that create unnecessarily negative narratives about <a href="https://www.simplifyingthemarket.com/en/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home prices</a>, and more.
Simply put: when there’s less risk, demand for MBS is high, so mortgage rates will be lower. On the other hand, if there’s more risk with MBS, demand for MBS will be low, and we’ll see higher mortgage rates as a result. Currently, demand for MBS is low, so mortgage rates are high.
2. When Will Rates Go Back Down?
Odeta Kushi, Deputy Chief Economist at First American, answers that question in a <a href="https://blog.firstam.com/economics/mind-the-gap-between-mortgage-rates-and-the-10-year-treasury-yield" rel="noopener noreferrer" target="_blank">recent blog</a>:
“It’s reasonable to assume that the spread and, therefore, mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal and provides investors with more certainty. However, it’s unlikely that the spread will return to its historical average of 170 basis points, as some risks are here to stay.”
Bottom Line
The spread will shrink when the fear investors feel is eased. That’ll mean we should see mortgage rates moderate as the year goes on. However, when it comes to forecasting mortgage rates, no one can know for sure exactly what will happen.2023-06-07T08:55:10-07:002023-06-07T08:57:51-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5466Real Estate Is Still Considered the Best Long-Term InvestmentReal Estate Is Still Considered the Best Long-Term Investment
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With all the headlines circulating about <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home prices</a> and rising <a href="https://www.simplifyingthemarket.com/en/2023/05/19/the-impact-of-changing-mortgage-rates-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rates</a>, you may wonder if it still makes sense to invest in homeownership right now. A <a href="https://news.gallup.com/poll/505592/real-estate-lead-best-investment-shrinks-gold-rises.aspx" rel="noopener noreferrer" target="_blank">recent poll</a> from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11th consecutive year, consistently beating other investment types like gold, stocks, and bonds (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230605/20230606-americas-opinion-of-best-long-term-investment-in-2023.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230605/20230606-americas-opinion-of-best-long-term-investment-in-2023.png" /></a>
If you’re thinking about <a href="https://www.simplifyingthemarket.com/en/2023/05/24/owning-a-home-helps-protect-against-inflation/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">purchasing a home</a>, let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision.
Why Do Americans Still Feel So Positive About the Value of Investing in a Home?
Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/magazine/real-estate-news/study-homeowner-wealth-is-40-times-higher-than-renters" rel="noopener noreferrer" target="_blank">notes</a>:
“. . . homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”
That’s because owning a home grows your <a href="https://www.simplifyingthemarket.com/en/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">net worth</a> over time as your home appreciates in value and as you pay down your mortgage. And, since building that wealth takes time, it may make sense to start as soon as you can. If you wait to buy and keep <a href="https://www.simplifyingthemarket.com/en/2023/05/01/why-buying-a-home-makes-more-sense-than-renting-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">renting</a>, you’ll miss out on those monthly housing payments going toward your home equity.
Bottom Line
Buying a home is a powerful decision. So, it’s no wonder so many people view real estate as the best long-term investment. If you’re ready to start on your own journey toward homeownership, let’s connect today.2023-06-06T07:03:24-07:002023-06-06T07:06:02-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5436Why Buying a Vacation Home Beats Renting One This Summer
<img src="https://files.keepingcurrentmatters.com/content/images/20230522/20230523-why-buying-a-vacation-home-beats-renting-one-this-summer.jpg" width="600" /><br /><br />
For many of us, visiting the same vacation spot every year is a summer tradition that’s fun, relaxing, and restful. If that sounds like you, now’s the time to think about your plans and determine if <a href="https://www.simplifyingthemarket.com/en/2023/05/01/why-buying-a-home-makes-more-sense-than-renting-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">buying</a> a vacation home this year makes more sense than renting one again. <a href="https://www.forbes.com/home-improvement/home/buying-a-vacation-home/" rel="noopener noreferrer" target="_blank">According</a> to Forbes:
“. . . if the idea of vacationing at the same place every year makes you feel instantaneously relaxed, buying a vacation home might be a wise move.”
To help you decide if making a move like this is right for you, let’s explore why you may want to consider purchasing a vacation home today.
Benefits of Owning Your Vacation Home
You don’t have to worry about finding a place to stay. It can be a challenge to find a rental where you want, when you want. Some summer vacation destinations are more popular than others, meaning your favorite place may be booked up in advance. Bankrate <a href="https://www.bankrate.com/mortgages/things-to-know-before-you-buy-a-second-home/" rel="noopener noreferrer" target="_blank">explains</a> why owning your vacation home means you don’t have to worry about that sort of inconvenience:
“. . . a second home can offer a place to have quality time with your family and ensures that you always have a vacation destination.”
It’s an investment. Home values typically <a href="https://www.simplifyingthemarket.com/en/2023/04/06/trying-to-buy-a-home-hang-in-there/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">appreciate</a> over the long haul. That holds true for your vacation home as well, especially if it’s in an area with growing market demand. This can help grow your net worth with time.
Vacation homes may provide tax benefits. If you own a vacation home, you may be eligible for <a href="https://www.investopedia.com/articles/personal-finance/013014/tax-breaks-secondhome-owners.asp" rel="noopener noreferrer" target="_blank">tax deductions</a> based on where it is. However, before buying, you’ll want to consult with a tax professional to discuss first as taxes can vary by location.
It could potentially turn into a retirement location. If you love the location of your vacation home, you could potentially sell your primary residence and <a href="https://www.simplifyingthemarket.com/en/2023/05/04/how-homeowners-win-when-they-downsize/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">retire</a> there in the future.
How a Pro Can Help You Find Your Perfect Match
As you’re preparing for summer vacation, remember, you could potentially visit your second home instead of another rental unit or hotel. If that sounds appealing to you, a
local <a href="https://www.simplifyingthemarket.com/en/2023/05/22/why-buyers-need-an-expert-agent-by-their-side/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">real estate agent</a> is your best resource. They have the knowledge and resources to help you understand the area and what vacation homes are available in your budget. Plus, these agents can explain the perks of how owning a second home can benefit you.
Bottom Line
If any of these reasons for owning a vacation home resonate with you, let’s connect. You still have time to enjoy spending the summer in your vacation home.2023-05-23T07:47:39-07:002023-05-23T07:49:49-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5417A Recession Doesn’t Equal a Housing Crisis<img src="https://files.keepingcurrentmatters.com/content/images/20230505/a-recession-doesnt-equal-a-housing-crisis.jpeg" width="600" style="font-size: 17px;" />
Everywhere you look, people are talking about a potential recession. And if you’re planning to buy or sell a house, this may leave you wondering if your plans are still a wise move. To help ease your mind, experts are saying that if we do officially enter a recession, it’ll be mild and short. As the Federal Reserve <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20230322.pdf" rel="noopener noreferrer" target="_blank">explained</a> in their March meeting:
“. . . the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”
While a recession may be on the horizon, it won’t be one for the housing market record books like the crash in 2008. What we have to remember is that a recession doesn’t always lead to a housing crisis.
To prove it, let’s look at the historical data of what happened in real estate during previous recessions. That way you know why you shouldn’t be afraid of what a recession could mean for the housing market today.
A Recession Doesn’t Mean Falling Home Prices
To show that home prices don’t fall every time there’s a recession, it helps to turn to <a href="https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011" rel="noopener noreferrer" target="_blank">historical data</a>. As the graph below illustrates, looking at recessions going all the way back to 1980, home prices appreciated in four of the last six of them. So historically, when the economy slows down, it doesn’t mean home values will always fall.
<a href="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-does-not-mean-falling-prices.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-does-not-mean-falling-prices.png" /></a>
Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession will be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. Back then, one of the big reasons why prices fell was because there was a surplus of homes for sale at the same time distressed properties flooded the market. Today, the number of homes for sale is low, so while home prices may see slight declines in some areas and slight gains in others, a crash simply isn’t in the cards.
A Recession Means Falling Mortgage Rates
What a recession really means for the housing market is falling mortgage rates. As the graph below shows, <a href="https://mtg-specialists.com/recession-interest-rates-and-real-estate/" rel="noopener noreferrer" target="_blank">historically</a>, each time the economy slowed down, mortgage rates decreased.
<a href="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-means-falling-mortgage-rates.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-means-falling-mortgage-rates.png" /></a>
Bankrate <a href="https://www.bankrate.com/real-estate/buying-home-during-recession/" rel="noopener noreferrer" target="_blank">explains</a> mortgage rates typically fall during an economic slowdown:
“During a traditional recession, the Fed will usually lower interest rates. This creates an incentive for people to spend money and stimulate the economy. It also typically leads to more affordable mortgage rates, which leads to more opportunity for homebuyers.”
This year, <a href="https://www.simplifyingthemarket.com/en/2023/04/03/how-changing-mortgage-rates-can-affect-you/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">mortgage rates</a> have been quite volatile as they’ve responded to high inflation. The 30-year <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">fixed mortgage rate</a> has hovered between roughly 6-7%, and that’s impacted <a href="https://www.simplifyingthemarket.com/en/2023/04/26/the-three-factors-affecting-home-affordability-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">affordability</a> for many potential homebuyers.
But, if there is a recession, history tells us mortgage rates may fall below that threshold, even though the days of 3% are behind us.
Bottom Line
You don’t need to fear what a recession means for the housing market. If we do have a recession, experts say it will be mild and short, and history shows it also means mortgage rates go down.2023-05-17T09:31:36-07:002023-05-17T09:34:29-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5393Why Today's Foreclosure Numbers Are Nothing Like 2008
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You’ve likely seen headlines about the number of foreclosures climbing in today’s housing market. That may leave you with a few questions, especially if you’re thinking about buying a house. Understanding what they really mean is mission-critical if you want to know the truth about what’s happening today.
According to a <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-q1-2023-u-s-foreclosure-market-report/" rel="noopener noreferrer" target="_blank">recent report</a> from ATTOM, a property data provider, foreclosure filings are up 6% compared to the previous quarter and 22% since one year ago. As media headlines call attention to this increase, reporting on just the number could actually generate worry and may even make you think twice about buying a home for fear that prices could crash. The reality is, while increasing, the data shows a foreclosure crisis is not where the market is headed.
Let’s look at the latest information with context so we can see how this compares to previous years.
It Isn’t the Dramatic Increase Headlines Would Have You Believe
In recent years, the number of foreclosures has been down to record lows. That’s because, in 2020 and 2021, the forbearance program and other relief options for homeowners helped millions of homeowners stay in their homes, allowing them to get back on their feet during a very challenging period. And with home values rising at the same time, many homeowners who may have found themselves facing foreclosure under other circumstances were able to leverage their equity and <a href="https://www.simplifyingthemarket.com/en/2023/04/11/the-big-advantage-if-you-sell-this-spring/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">sell their houses</a> rather than face foreclosure. Moving forward, equity will continue to be a factor that can help keep people from going into foreclosure.
As the government’s moratorium came to an end, there was an expected rise in foreclosures. But just because foreclosures are up doesn’t mean the housing market is in trouble. As Clare Trapasso, Executive News Editor at Realtor.com, <a href="https://www.realtor.com/news/trends/foreclosures-jump-is-another-wave-about-to-flood-the-housing-market/" rel="noopener noreferrer" target="_blank">says</a>:
“There’s no reason to panic, at least not yet. Foreclosure filings began ticking up . . . after the federal foreclosure moratorium ended. The moratorium was enacted in the early days of COVID-19, when millions of Americans lost their jobs, to prevent a tsunami of homeowners losing their properties. So some of these proceedings would have taken place during the pandemic but got delayed due to the moratorium. This is a bit of a catch-up.”
Basically, there’s not a sudden flood of foreclosures coming. Instead, some of the increase is due to the delayed activity explained above while more is from economic conditions. As Rob Barber, CEO of ATTOM, <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-q1-2023-u-s-foreclosure-market-report/" rel="noopener noreferrer" target="_blank">explains</a>:
“This unfortunate trend can be attributed to a variety of factors, such as rising unemployment rates, foreclosure filings making their way through the pipeline after two years of government intervention, and other ongoing economic challenges. However, with many homeowners still having significant home equity, that may help in keeping increased levels of foreclosure activity at bay.”
To further paint the picture of just how different the situation is now compared to the housing crash, take a look at the graph below. It shows foreclosure activity has been lower since the crash by looking at properties with a foreclosure filing going all the way back to 2005.
<a href="https://files.keepingcurrentmatters.com/content/images/20230426/20230427-US-foreclosure-activity-grows-but-still-below-pre-pandemic-levels.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230426/20230427-US-foreclosure-activity-grows-but-still-below-pre-pandemic-levels.png" /></a>
While foreclosures are climbing, it’s clear foreclosure activity now is nothing like it was during the housing crisis. In addition to all of the factors mentioned above, that’s also largely because buyers today are more qualified and less likely to default on their loans.
Today, foreclosures are far below the record-high number that was reported when the housing market crashed.
Bottom Line
Right now, putting the data into context is more important than ever. While the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst, and that won’t lead to a crash in home prices.2023-05-10T07:23:07-07:002023-05-10T07:25:20-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5355The Three Factors Affecting Home Affordability Today<img src="https://files.keepingcurrentmatters.com/content/images/20230425/20230426-the-three-factors-affecting-home-affordability-today.jpg" width="600" style="font-size: 17px;" />
There’s been a lot of focus on higher mortgage rates and how they’re creating affordability challenges for today’s homebuyers. It’s true that <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">rates climbed</a> dramatically since the record-low we saw during the pandemic. But home affordability is based on more than just mortgage rates – it’s determined by a combination of mortgage rates, home prices, and wages.
Considering how each one of these factors is changing gives you the full picture of home affordability today. Here’s the latest.
1. Mortgage Rates
While mortgage rates are higher than they were a year ago, they’ve hovered primarily between 6% and 7% for nearly eight months now (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230425/20230426-mortgage-rates-hover-between-6-7.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230425/20230426-mortgage-rates-hover-between-6-7.png" /></a>
As the graph shows, mortgage rates have experienced some volatility during that time. And even a <a href="https://www.simplifyingthemarket.com/en/2023/04/03/how-changing-mortgage-rates-can-affect-you/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">small change</a> in mortgage rates impacts your purchasing power. That’s why it’s so important to lean on your team of real estate professionals for expert advice to stay up to date on what’s happening in the market. While it’s hard to project where mortgage rates will go from here, many experts <a href="https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional" rel="noopener noreferrer" target="_blank">agree</a> they’ll likely continue to remain around 6%-7% in the immediate future.
2. Home Prices
Over the past few years, <a href="https://www.simplifyingthemarket.com/en/2023/04/05/why-arent-home-prices-crashing/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home prices</a> appreciated rapidly as the record-low mortgage rates we saw during the pandemic led to a surge in buyer demand. The heightened buyer demand happened while the supply of homes for sale was at record lows, and that imbalance put upward pressure on home prices. However, today’s higher mortgage rates have slowed down price appreciation.
And, the truth is, <a href="https://www.simplifyingthemarket.com/en/2023/04/17/think-twice-before-waiting-for-lower-home-prices/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">home price appreciation</a> varies by market. Some areas are seeing slight declines while others have prices that are climbing. As Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/us-home-price-insights-april-2023/" rel="noopener noreferrer" target="_blank">explains</a>:
“The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.”
To find out what’s happening with prices in your local market, reach out to a trusted real estate agent.
3. Wages
The most positive factor in affordability right now is rising income. The graph below uses <a href="https://www.bls.gov/" rel="noopener noreferrer" target="_blank">data</a> from the Bureau of Labor Statistics (BLS) to show how wages have grown over time:
<a href="https://files.keepingcurrentmatters.com/content/images/20230425/20230426-average-hourly-earnings-of-all-employees.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230425/20230426-average-hourly-earnings-of-all-employees.png" /></a>
Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage since you don’t have to put as much of your paycheck toward your monthly housing cost.
Home affordability comes down to a combination of rates, prices, and wages. If you have questions or want to learn more, reach out to a real estate professional who can explain what’s happening locally and how these factors work together.
Bottom Line
If you’re planning to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">buy</a> a home, knowing the key factors that impact affordability is important so you can make an informed decision. To stay up to date on the latest on each, let’s connect today.2023-05-03T06:08:40-07:002023-05-03T06:13:39-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:53255 Reasons Millennials Are Buying Homes<img src="https://files.keepingcurrentmatters.com/content/images/20230417/20230418-5-reasons-millennials-are-buying-homes.jpg" width="600" style="font-size: 17px;" />
In the United States, there are over <a href="https://www.statista.com/statistics/797321/us-population-by-generation/" rel="noopener noreferrer" target="_blank">72 million</a> millennials. If you’re part of that generation and have thought about buying a home, you aren’t alone. <a href="https://www.builderonline.com/data-analysis/what-is-the-millennial-mindset-on-owning-vs-renting_o" rel="noopener noreferrer" target="_blank">According</a> to Zonda, 98% of millennials want to become a homeowner at some point if they aren’t already. But why? There are plenty of reasons you may choose to become a homeowner. Here’s why other millennials have made that decision (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230417/20230418-why-did-millennials-decide-to-buy.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230417/20230418-why-did-millennials-decide-to-buy.png" /></a>
This graph shows why millennials are buying homes <a href="https://www.builderonline.com/data-analysis/what-is-the-millennial-mindset-on-owning-vs-renting_o" rel="noopener noreferrer" target="_blank">according</a> to Zonda’s 6th annual millennial survey. The top reasons include building equity, a change in life stage, wanting stability, rising home values, and wanting to make somewhere truly their own. Here’s a look at each in more detail.
Building equity – Homeownership is a long-term investment that allows you to build wealth, increase your net worth, and become more financially stable. Beyond that, the alternative to owning a home is typically renting. With the way rents have risen so dramatically over time, it may make sense to build your own equity instead of the equity of the person you’re renting from.
A change in life stage – As a millennial, you’re reaching your prime homebuying years. That means you may be at the point where you need more space or a different location.
Stability or settling down – This could mean establishing your career or just generally deciding more concretely what you want your life to look and feel like. As that idea becomes clearer, you may want to establish that lifestyle in a particular place and put down roots.
Rising home values – By purchasing a home, you own an asset that traditionally increases in value over time. That can mean your home will have a higher resale value if you decide to move again.
Wanting to make somewhere “mine” – Owning a home gives a sense of freedom because you can customize it however you want, make updates as you see fit, and be yourself in a place that’s solely your own.
Bottom Line
There are plenty of great reasons why millennials are buying homes today. If you’ve thought about becoming a homeowner and any of these reasons resonate with you too, let’s connect to explore your options.2023-04-25T09:10:40-07:002023-04-25T09:13:57-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5295Your Tax Refund Can Help You Achieve Your Homebuying Goals<img src="https://files.keepingcurrentmatters.com/content/images/20230411/20230411-your-tax-refund-can-help-you-reach-your-homebuying-goals-KCM.jpg" width="600" style="font-size: 17px;" />
Have you been saving up to <a href="https://www.simplifyingthemarket.com/en/2023/04/07/the-key-advantage-of-investing-in-a-home-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">buy</a> a home this year? If so, you know there are a variety of expenses involved – from your down payment to closing costs. But there’s good news – your tax refund can help you <a href="https://www.simplifyingthemarket.com/en/2023/03/23/why-buying-a-home-is-a-sound-decision/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">achieve</a> your goals by paying for some of these expenses.
SmartAsset <a href="https://smartasset.com/data-studies/states-with-the-largest-tax-refunds-2023" rel="noopener noreferrer" target="_blank">estimates</a> the average American will receive a $1,798 tax refund this year. The map below provides a more detailed estimate by state:
<a href="https://files.keepingcurrentmatters.com/content/images/20230411/20230412-average-tax-refund-in-2023-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230411/20230412-average-tax-refund-in-2023-MEM.png" /></a>
According to <a href="https://myhome.freddiemac.com/blog/homeownership/how-use-your-tax-refund-buy-home" rel="noopener noreferrer" target="_blank">Freddie Mac</a>, there are multiple ways your refund check can help you as a homebuyer. If you’re getting a refund this year and thinking about buying a home, here are a few tips to keep:
Saving for a down payment – One of the largest barriers to homeownership is saving for a <a href="https://www.simplifyingthemarket.com/en/2023/02/03/you-may-not-need-as-much-as-you-think-for-your-down-payment-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">down payment</a>. You could reach your savings goal more quickly than expected by using your tax refund to help with your down payment.
Paying for closing costs – You have to pay fees to your lender, real estate agent, and other parties involved in the homebuying transaction before you can officially take ownership of your home. You could direct your tax refund toward these <a href="https://www.simplifyingthemarket.com/en/2023/03/31/facts-about-closing-costs-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">closing costs</a>.
Lowering your interest rate – Your lender might give you the option to <a href="https://myhome.freddiemac.com/buying/mortgage-rates" rel="noopener noreferrer" target="_blank">buy down</a> your mortgage interest rate during the homebuying process. That means, you could pay upfront to have a lower interest rate on your fixed-rate mortgage.
The best way to <a href="https://www.simplifyingthemarket.com/en/2023/03/15/balancing-your-wants-and-needs-as-a-homebuyer-this-spring/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">prepare</a> to buy a home is to work with a trusted real estate professional who understands the process. They’ll help you navigate the costs you may encounter as you <a href="https://www.simplifyingthemarket.com/en/2023/03/22/reasons-to-consider-condos-in-your-home-search/?a=473398-e76dce837073aef62b5a6cfe655c49a9" rel="noopener noreferrer" target="_blank">begin</a> your homebuying journey.
Bottom Line
Your tax refund can help you reach your goals of <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">homeownership</a>. Let’s <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">connect</a> to discuss how you can start your journey today.2023-04-18T09:42:20-07:002023-04-18T09:45:16-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5269Two Reasons You Should Sell Your House<img src="https://files.keepingcurrentmatters.com/content/images/20230403/20230404-2-reasons-you-should-sell-your-house-KCM.jpg" width="600" style="font-size: 17px;" />
Wondering if you should sell your house this year? As you make your decision, think about what’s motivating you to consider moving. A recent <a href="https://www.realtor.com/research/2023-q1-sellers-survey/" rel="noopener noreferrer" target="_blank">survey</a> from realtor.com asked why homeowners are thinking about selling their houses this year. Here are the top two reasons (see graphic below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230403/20230404-why-are-you-considering-selling-your-home-in-2023-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230403/20230404-why-are-you-considering-selling-your-home-in-2023-MEM.png" /></a>
Let’s break those reasons down and explore how they might resonate with you.
1. I Want To Take Advantage of the Current Market and Make a Profit
When you decide to sell your house, how much you’ll make from the sale will likely be top of mind. So, here’s some good news: according to the latest data, the average seller can expect a strong return on their investment when they make a move. ATTOM <a href="https://www.attomdata.com/hnr/us-home-seller-profits-top-50-percent-in-2022-despite-market-slowdown/" rel="noopener noreferrer" target="_blank">explains</a>:
“The $112,000 profit on median-priced home sales in 2022 represented a 51.4% return on investment compared to the original purchase price, up from 44.6% last year and from 32.8% in 2020.”
Even though home prices have declined slightly in some markets, they’re still much higher overall than they were just a few years ago. To understand what’s happening with home prices in your area and the current value of your house, work with a local real estate professional. They can give you the best advice on how much you could gain if you sell this year.
2. My Home No Longer Meets My Needs
The average person has been in their house for <a href="https://www.nar.realtor/blogs/economists-outlook/eleven-takeaways-from-the-2022-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">ten years</a>. That’s a long time when you think about how much may have changed in your life since you moved in. And typically, those changes have a direct impact on what you need in a home. Whether it’s more (or less) space, different features, or a location closer to your work or loved ones, your current house may no longer check all the boxes of what feels like home to you. If that’s the case, it could be time to work with a real estate agent to find a better fit.
Bottom Line
If you’re thinking about selling your house, there’s probably a good reason for it. Let’s connect so you can make a move that’ll help you accomplish your goals this year.2023-04-11T06:27:22-07:002023-04-11T06:34:46-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5252Get Ready: The Best Time To List Your House Is Almost Here<img src="https://files.keepingcurrentmatters.com/content/images/20230323/20230327-get-ready-the-best-time-to-list-your-house-is-almost-here-KCM.jpg" width="600" style="font-size: 17px;" />
If you’re <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">thinking</a> about selling this spring, it’s time to get moving – the best week to list your house is fast approaching.
Experts at <a href="https://www.realtor.com/research/best-time-to-sell-2023/" rel="noopener noreferrer" target="_blank">realtor.com</a> looked at seasonal trends from recent years (excluding 2020 as an uncharacteristic year due to the onset of the pandemic) and determined the ideal week to list a house this year:
“Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2023 is approaching quickly. The week of April 16-22 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.”
If you’ve been waiting for the best time to sell, this is your chance. But remember, before you put your house on the market, you’ve got to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">get it ready</a>. And if you haven’t started that process yet, you’ll need to move quickly. Here’s what you should <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">keep</a> in mind.
Work with an Agent To Determine Which Updates To Make
Start by prioritizing which updates you’ll make. In February, realtor.com <a href="https://www.realtor.com/research/2023-q1-sellers-survey/" rel="noopener noreferrer" target="_blank">asked</a> more than 1,200 recent or potential home sellers what updates they ended up making to their house before listing it (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230323/20230329-which-updates-did-you-make-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230323/20230329-which-updates-did-you-make-MEM.png" /></a>
As you can see, the most common answers included landscaping and painting. <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">Work</a> with a trusted real estate agent to determine what projects make the most sense for your goals and local market.
If Possible, Plan To Have Your House Staged
Once you’ve made any necessary repairs and updates to your house, consider having it staged. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/profile-of-home-staging" rel="noopener noreferrer" target="_blank">National Association of Realtors</a> (NAR), 82% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home. Additionally, almost half of buyers’ agents said home staging had an effect on most buyers’ view of the home in general. Homes that are staged typically sell faster and for a higher price because they help <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">potential buyers</a> more easily picture their new life in the house.
Bottom Line
Are you ready to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">sell</a> this spring? <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">Let’s connect</a> to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">plan</a> your next steps. You can start by making a checklist of what you think your house needs to get ready. Then, we can work together to prioritize your list and move forward <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">together</a>.2023-04-04T07:25:32-07:002023-04-04T07:29:58-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5238The Role of Access in Selling Your House<img src="https://files.keepingcurrentmatters.com/content/images/20230320/20230321-the-role-of-access-in-selling-your-house-KCM.jpg" width="600" style="font-size: 17px;" />
Once you’ve made the decision to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">sell</a> your house and have <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">hired</a> a real estate agent to help, they’ll ask how much access to your home you want to give potential buyers. Your answer matters more now than it did in recent years. Here’s why.
At the height of the buying <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">frenzy</a> seen during the pandemic, there was a rise in the number of homebuyers who put offers on houses sight unseen. That happened for three reasons:
Extremely low housing inventory
A lot of competition from other buyers wanting to take advantage of historically low mortgage rates
And general wariness of in-person home tours during a pandemic
Today, the market’s changing, and buyers can usually be more selective and take more time to explore their <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">options</a>.
So, in order to show your house and <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">sell</a> it efficiently, you’ll want to provide buyers with as much access as you can. Before letting your agent know what works for you, consider these five levels of access you can provide. They’re ordered from most convenient for a buyer to least convenient. Remember, your agent will be better able to sell your house if you provide as much access to buyers as possible.
Lockbox on the Door – This allows buyers the ability to see the home as soon as they are aware of the listing or at their convenience.
Providing a Key to the Home – This would require an agent to stop by an office to pick up the key, which is still pretty convenient for a buyer.
Open Access with a Phone Call – This means you allow a showing with just a phone call’s notice.
By Appointment Only – For example, you might want your agent to set up a showing at a particular time and give you advance notice. That way you can prepare the house and be sure you have somewhere else you can go in the meantime.
Limited Access – This might mean you’re only willing to have your house available on certain days or at certain times of day. In general, this is the most difficult and least flexible way to show your house to potential buyers.
As today’s housing market <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">changes</a>, be sure to work with your local agent to give buyers as much access as you can to your house when you sell.
Bottom Line
Access can have a big impact on the sale of your house. Let’s <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">connect</a> today if you’re ready to <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">make</a> a <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">move</a> this spring.2023-03-28T11:48:23-07:002023-03-28T11:56:24-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5210What’s Ahead for Home Prices in 2023Over the past year, home prices have been a widely debated topic. Some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">which hasn’t happened</a>. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.
Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/us-home-price-insights-march-2023/" rel="noopener noreferrer" target="_blank">says</a>:
“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”
Additionally, every quarter, Pulsenomics <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">surveys</a> a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:
<a href="https://files.keepingcurrentmatters.com/content/images/20230316/20230320-estimated-home-price-performance-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230316/20230320-estimated-home-price-performance-MEM.png" /></a>
So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">making a move</a>:
Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">risen consistently</a>. The bottom line is, rent is <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">going up</a>.
Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a <a href="https://www.realtallrealestate.com/" rel="noopener noreferrer" target="_blank">renter</a>.
Experts are projecting slight price depreciation in the housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.2023-03-21T11:12:04-07:002023-03-21T11:19:38-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5193Leverage Your Equity When You Sell Your House<img width="750" height="410" src="https://files.mykcm.com/2023/03/10100317/leverage-your-equity-when-you-sell-your-house-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Leverage Your Equity When You Sell Your House | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/03/10100317/leverage-your-equity-when-you-sell-your-house-KCM.jpg 750w, https://files.mykcm.com/2023/03/10100317/leverage-your-equity-when-you-sell-your-house-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/03/10100317/leverage-your-equity-when-you-sell-your-house-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
One of the benefits of being a homeowner is that you build equity over time. By <a href="https://www.simplifyingthemarket.com/2023/02/06/the-top-reasons-for-selling-your-house/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="selling" target="_blank" rel="noopener noreferrer">selling</a> your house, that equity can be used toward purchasing your next home. But before you can put it to use, you should understand exactly what equity is and how it grows. Bankrate <a href="https://www.bankrate.com/home-equity/what-is-home-equity/" title="explains" target="_blank" rel="noopener noreferrer">explains</a> it like this:
“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”
Majority of Americans Have a Large Amount of Equity
If you’ve owned your home for a while, you’ve likely built up some equity – and you may not even realize how much. Based on data from the <a href="https://data.census.gov/cedsci/all?q=mortgage" title="U.S. Census Bureau" target="_blank" rel="noopener noreferrer">U.S. Census Bureau</a> and <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2022-u-s-home-equity-and-underwater-report/" title="ATTOM" target="_blank" rel="noopener noreferrer">ATTOM</a>, the majority of Americans have a substantial amount of equity right now (see graph below):
<a href="https://files.mykcm.com/2023/03/10100319/americans-sitting-on-tremendous-equity-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107831" src="https://files.mykcm.com/2023/03/10100319/americans-sitting-on-tremendous-equity-MEM.png" alt="Leverage Your Equity When You Sell Your House | MyKCM" width="600" height="450" /></a>
And having such large amounts of equity is a benefit to homeowners in more ways than one. Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, <a href="https://www.housingwire.com/articles/almost-45-of-homeowners-are-now-equity-rich/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008.”
Over time, your home equity grows. In addition to providing financial stability while you own your house, when you’re ready to sell it, that money could go a long way toward <a href="https://www.simplifyingthemarket.com/2023/02/13/what-you-should-know-about-closing-costs/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="paying" target="_blank" rel="noopener noreferrer">paying</a> for your next home.
Bottom Line
By <a href="https://www.simplifyingthemarket.com/2023/01/30/where-will-you-go-if-you-sell-you-have-options/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="selling" target="_blank" rel="noopener noreferrer">selling</a> your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect today so you can find out how much home equity you have and start <a href="https://www.simplifyingthemarket.com/2023/02/15/should-you-consider-buying-a-newly-built-home/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="planning" target="_blank" rel="noopener noreferrer">planning</a> your next move.
2023-03-14T07:56:32-07:002023-03-14T07:58:35-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5174One Major Benefit of Investing in a HomeOne of the many reasons to buy a home is that it’s a major way to <a href="https://www.simplifyingthemarket.com/2023/01/27/homeownership-builds-your-wealth-over-time-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="build wealth" target="_blank" rel="noopener noreferrer" style="font-size: 17px;">build wealth</a> and gain financial stability. According to <a href="https://myhome.freddiemac.com/owning/equity-and-appreciation.html" title="Freddie Mac" target="_blank" rel="noopener noreferrer" style="font-size: 17px;">Freddie Mac</a>:
“Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”
With spring approaching, now’s a great time to consider if <a href="https://www.simplifyingthemarket.com/2023/02/23/how-to-make-your-dream-of-homeownership-a-reality/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="buying a home" target="_blank" rel="noopener noreferrer">buying a home</a> makes sense for you. The best way to figure that out is to talk with a trusted real estate professional.
The Largest Part of Most Homeowners’ Net Worth Is Their Equity
You may be surprised to learn just how much of a homeowner’s net worth actually comes from owning their home. The National Association of Realtors (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about ten times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”
In other words, home equity does more to build the average household’s wealth than anything else. And according to data from <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building" title="First American" target="_blank" rel="noopener noreferrer">First American</a>, this holds true across different income levels (see graph below):
<a href="https://files.mykcm.com/2023/02/23151142/housing-piece-of-net-worth-is-crucial-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107614" src="https://files.mykcm.com/2023/02/23151142/housing-piece-of-net-worth-is-crucial-MEM.png" /></a>
Bottom Line
One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. Let’s connect today so you can start investing in homeownership.
2023-03-08T06:31:22-07:002023-03-08T06:41:04-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5145A Smaller Home Could Be Your Best OptionA Smaller Home Could Be Your Best Option
<img width="750" height="410" src="https://files.mykcm.com/2023/02/21124855/a-smaller-home-could-be-your-best-option-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="A Smaller Home Could Be Your Best Option | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/02/21124855/a-smaller-home-could-be-your-best-option-KCM.jpg 750w, https://files.mykcm.com/2023/02/21124855/a-smaller-home-could-be-your-best-option-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/02/21124855/a-smaller-home-could-be-your-best-option-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Many people are reaching the point in their lives when they need to decide where they want to live when they retire. If you’re a homeowner approaching this stage, you have several options to explore. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/blogs/economists-outlook/all-in-the-family-multi-generational-home-buying" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“As we see the transition of the large Baby Boomer generation age into retirement, it will be interesting to see if they move in with their Millennial and Gen Z children or if they stay put in their own homes.”
Lautz lists two options: move into a <a href="https://www.simplifyingthemarket.com/2022/04/15/what-is-multigenerational-housing-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="multigenerational" target="_blank" rel="noopener noreferrer">multigenerational</a> home with loved ones, or stay in your current house. Multigenerational living is rising in popularity, but it isn’t an option for everyone. And staying put may fit fewer and fewer of your needs. There’s a third option though, and for some, it’s the best one: downsizing.
When you <a href="https://www.simplifyingthemarket.com/2023/02/17/the-spring-housing-market-could-be-a-sweet-spot-for-sellers-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a> and <a href="https://www.simplifyingthemarket.com/2023/02/15/should-you-consider-buying-a-newly-built-home/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="purchase" target="_blank" rel="noopener noreferrer">purchase</a> a smaller one, it’s known as downsizing. Sometimes smaller homes are more suited to your changing needs, and moving means you can also land in your ideal location.
In addition to the personal benefits, downsizing might be more cost effective, too. The New York Times (NYT) <a href="https://www.nytimes.com/2022/09/09/business/retirement/retirement-downsizing-real-estate.html" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“Many downsizers expect to improve their retirement income stream if their new home costs less than what their old house sells for. Lower utility costs, insurance and property taxes — as well as investment returns on the proceeds — can also improve the bottom line.”
Being in a strong financial position is one of the most important parts of retirement, and downsizing can make a big difference.
A key part of why downsizing is still cost effective today, even when mortgage rates are higher than they were a year ago, is the <a href="https://themreport.com/news/data/01-18-2023/senior-home-equity-11t" title="record-high" target="_blank" rel="noopener noreferrer">record-high</a> level of equity homeowners have. Leveraging your equity when you downsize can lower or maybe even eliminate the mortgage payment on your next home.
So, not only is the upkeep of a smaller home likely more affordable, but leveraging your home equity could make a big difference too. Your local real estate advisor is the best resource to help you understand how much equity you may have in your current home and what options it can provide for your next move.
Bottom Line
If you’re a homeowner getting ready for retirement, part of that transition likely includes deciding where you’ll live. Let’s connect so you can understand your options and explore your downsizing opportunities.
2023-02-28T14:11:59-07:002023-03-01T07:47:00-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5128 Should You Consider Buying a Newly Built Home?<img width="750" height="410" src="https://files.mykcm.com/2023/02/14110909/should-you-consider-buying-a-newly-built-home-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Should You Consider Buying a Newly Built Home? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/02/14110909/should-you-consider-buying-a-newly-built-home-KCM.jpg 750w, https://files.mykcm.com/2023/02/14110909/should-you-consider-buying-a-newly-built-home-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/02/14110909/should-you-consider-buying-a-newly-built-home-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
If you’re thinking about buying a home, you might be focusing on previously owned ones. But with so few houses for sale <a href="https://www.simplifyingthemarket.com/2023/02/09/why-todays-housing-market-isnt-headed-for-a-crash/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="today" target="_blank" rel="noopener noreferrer">today</a>, it makes sense to consider all your options, and that includes a home that’s newly built.
The Number of Newly Built Homes Is on the Rise
While there are more houses for sale right now than there were at this time last year, there’s still a historically low number of <a href="https://www.simplifyingthemarket.com/2023/02/08/number-of-homes-for-sale-up-from-last-year-but-below-pre-pandemic-years/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="homes available" target="_blank" rel="noopener noreferrer">homes available</a> on the market. One reason for that is years of underbuilding—meaning there haven’t been enough new homes built to keep up with demand.
<a href="https://files.mykcm.com/2023/02/14110907/single-family-housing-units-completed-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107444" src="https://files.mykcm.com/2023/02/14110907/single-family-housing-units-completed-MEM.png" /></a>
The graph above shows how low the production of newly constructed homes has been over the <a href="https://www.census.gov/construction/nrc/data/series.html" title="past 14 years" target="_blank" rel="noopener noreferrer">past 14 years</a>. But it also shows another important trend: the number of new homes being built each year is on the rise. As Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/why-housing-market-potential-increased-for-the-second-straight-month" title="shares" target="_blank" rel="noopener noreferrer">shares</a>, that’s good news for buyers:
“While existing-home inventory remains limited, the silver lining for home buyers is that new-home inventory is on the rise, and a new home at the right price is a pretty good substitute.”
Builder Incentives Can Provide a Boost
While there a growing number of new homes for sale, builders are slowing that pace until they sell more of their current inventory. According to Logan Mohtashami, Lead Analyst at <a href="https://www.housingwire.com/articles/homebuilders-still-need-lower-mortgage-rates/" title="HousingWire" target="_blank" rel="noopener noreferrer">HousingWire</a>:
“The builders have to work off the backlog of homes, but instead of 3%-4% mortgage rates, they’re dealing with 6% plus mortgage rates, which means they have to provide many incentives to make sure those homes sell.”
Many builders are now offering incentives to help buyers purchase these homes. Fleming also explains:
“The National Association of Home Builders reported that nearly two-thirds of builders were offering incentives, including mortgage rate buydowns, paying points for buyers and price reductions, which could entice potential home buyers.”
A builder who’s willing to pay to reduce your mortgage rate could be a game changer. Ksenia Potapov, Economist at First American, <a href="https://blog.firstam.com/economics/why-mortgage-rates-hold-the-key-to-improved-affordability-in-2023" title="puts it" target="_blank" rel="noopener noreferrer">puts it</a> this way:
“A one percentage-point decline in mortgage rates has the same impact on affordability as an 11 percent decline in house prices.”
Should You Buy a Brand-New Home?
The best way to decide what type of home to buy is to work with a trusted real estate professional who can help you weigh the pros and cons of each option. They know which homes are available in your local market, and which builders might be offering incentives that make sense for you.
Bottom Line
Even though there aren’t a lot of homes for sale today, new home inventory is on the rise, and many builders are offering incentives. Let’s connect so I can help you weigh the pros and cons of shopping for a new home versus an existing one.
2023-02-21T10:57:10-07:002023-02-21T11:00:10-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:50823 Best Practices for Selling Your House This Year<img width="750" height="410" src="https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="3 Best Practices for Selling Your House This Year | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM.jpg 750w, https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
A new year brings with it the opportunity for <a href="https://www.simplifyingthemarket.com/2022/12/15/planning-to-retire-it-could-be-time-to-make-a-move/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="new experiences" target="_blank" rel="noopener noreferrer">new experiences</a>. If that resonates with you because you’re considering making a move, you’re likely juggling a mix of excitement over your next home and a sense of attachment to your current one.
A great way to ease some of those emotions and ensure you’re feeling confident in your decision is to keep these three best practices in mind.
1. Price Your Home Right
The housing market shifted in 2022 as <a href="https://www.simplifyingthemarket.com/2022/12/21/what-to-expect-from-the-housing-market-in-2023/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> rose, buyer demand eased, and the number of <a href="https://www.simplifyingthemarket.com/2022/12/13/ready-to-sell-todays-housing-supply-gives-you-two-opportunities/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="homes for sale" target="_blank" rel="noopener noreferrer">homes for sale</a> grew. As a seller, you’ll want to recognize things are different now and <a href="https://www.simplifyingthemarket.com/2022/12/12/what-every-seller-should-know-about-home-prices/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="price your house" target="_blank" rel="noopener noreferrer">price your house</a> appropriately based on where the market is today. Greg McBride, Chief Financial Analyst at Bankrate, <a href="https://www.bankrate.com/real-estate/housing-trends/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Price your home realistically. This isn’t the housing market of April or May, so buyer traffic will be substantially slower, but appropriately priced homes are still selling quickly.”
If you price your house too high, you run the risk of deterring buyers. And if you go too low, you’re leaving money on the table. An experienced real estate agent can help determine what your ideal asking price should be.
2. Keep Your Emotions in Check
Today, homeowners are living in their houses longer. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR), since 1985, the average time a homeowner has owned their home has increased from 5 to 10 years (see graph below):
<a href="https://files.mykcm.com/2022/12/23115341/todays-homeowners-are-staying-in-their-houses-for-an-average-of-10-years-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106615" src="https://files.mykcm.com/2022/12/23115341/todays-homeowners-are-staying-in-their-houses-for-an-average-of-10-years-MEM.png" alt="3 Best Practices for Selling Your House This Year | MyKCM" width="600" height="450" /></a>
This is several years longer than what used to be the historical norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you bought or the house where your loved ones grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from the sentimental value.
For some homeowners, that makes it even harder to negotiate and separate the emotional value of the house from fair market price. That’s why you need a real estate professional to help you with the <a href="https://www.simplifyingthemarket.com/2022/12/14/you-may-have-more-negotiation-power-when-you-buy-a-home-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="negotiations" target="_blank" rel="noopener noreferrer">negotiations</a> along the way.
3. Stage Your Home Properly
While you may love your decor and how you’ve customized your home over the years, not all buyers will feel the same way about your design. That’s why it’s so important to make sure you focus on your home’s first impression so it appeals to as many buyers as possible. As NAR <a href="https://www.nar.realtor/blogs/styled-staged-sold/why-home-staging-inspires-the-best-prices-in-any-housing-market" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. The right arrangements can move you into a higher price-point and help buyers fall in love the moment they walk through the door.”
Buyers want to envision themselves in the space so it truly feels like it could be their own. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. A real estate professional can help you with tips to get your house <a href="https://www.simplifyingthemarket.com/2022/12/02/winter-home-selling-checklist-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="ready to sell" target="_blank" rel="noopener noreferrer">ready to sell</a>.
Bottom Line
If you’re considering selling your house, let’s connect so you have the help you need to navigate through the process while prioritizing these best practices.
2023-02-07T10:27:00-07:002023-02-07T10:29:37-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5057Applying For a Mortgage? Here’s What You Should Avoid Once You Do.<img width="750" height="410" src="https://files.mykcm.com/2022/12/20165229/applying-for-a-mortgage-heres-what-you-should-avoid-once-you-do-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Applying For a Mortgage? Here’s What You Should Avoid Once You Do. | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/20165229/applying-for-a-mortgage-heres-what-you-should-avoid-once-you-do-KCM.jpg 750w, https://files.mykcm.com/2022/12/20165229/applying-for-a-mortgage-heres-what-you-should-avoid-once-you-do-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/20165229/applying-for-a-mortgage-heres-what-you-should-avoid-once-you-do-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
While it’s exciting to start thinking about <a href="https://www.simplifyingthemarket.com/2022/12/05/prioritizing-your-wants-and-needs-as-a-homebuyer-in-todays-market/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="moving in" target="_blank" rel="noopener noreferrer">moving in</a> and <a href="https://www.simplifyingthemarket.com/2022/11/25/home-sweet-home-the-emotional-benefits-of-homeownership-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="decorating" target="_blank" rel="noopener noreferrer">decorating</a> after you’ve <a href="https://www.simplifyingthemarket.com/2022/10/28/applying-for-a-mortgage-doesnt-have-to-be-scary-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="applied for your mortgage" target="_blank" rel="noopener noreferrer">applied for your mortgage</a>, there are some key things to keep in mind before you close. Here’s a list of 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 Cosign Loans for Anyone
When you cosign 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 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.
Do Discuss Changes with Your Lender
Be upfront about any changes that occur or you’re expecting to occur 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 major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.
2023-01-31T13:12:24-07:002023-01-31T13:13:45-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5030Avoid the Rental Trap in 2023<img width="750" height="410" src="https://files.mykcm.com/2022/12/22154034/avoid-the-rental-trap-in-2023-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Avoid the Rental Trap in 2023 | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/22154034/avoid-the-rental-trap-in-2023-KCM.jpg 750w, https://files.mykcm.com/2022/12/22154034/avoid-the-rental-trap-in-2023-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/22154034/avoid-the-rental-trap-in-2023-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
If you’re a renter, you likely face an important decision every year: renew your current lease, start a new one, or buy a home. This year is no different. But before you dive too deeply into your options, it helps to understand the true costs of renting moving forward.
In the past year, both current renters and new renters have seen their rent go up based on information from <a href="https://www.realtor.com/research/october-2022-rent/" title="realtor.com" target="_blank" rel="noopener noreferrer">realtor.com</a>:
“Three out of four renters (74.2%) who have moved in the past 12 months reported seeing their rent increase. The strain from recent rent hikes isn’t exclusive to renters who have recently moved. Nearly two-thirds of renters (63.2%) who have lived in their current rental between 12 and 24 months, and likely renewed their lease, have also reported increases in their rent.”
And if you look back at historical data, that shouldn’t come as surprise. That’s because, according to the <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" title="Census" target="_blank" rel="noopener noreferrer">Census</a>, rents have been rising fairly consistently since 1988 (see graph below):
<a href="https://files.mykcm.com/2022/12/22154035/median-asking-rent-since-1988-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106563" src="https://files.mykcm.com/2022/12/22154035/median-asking-rent-since-1988-MEM.png" alt="Avoid the Rental Trap in 2023 | MyKCM" width="600" height="450" /></a>
So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. The 2023 <a href="https://www.realtor.com/research/2023-national-housing-forecast/" title="Housing Forecast" target="_blank" rel="noopener noreferrer">Housing Forecast</a> from realtor.com expects rents will keep climbing (see graph below):
<a href="https://files.mykcm.com/2022/12/22154037/rent-growth-is-expected-to-continue-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106564" src="https://files.mykcm.com/2022/12/22154037/rent-growth-is-expected-to-continue-MEM.png" alt="Avoid the Rental Trap in 2023 | MyKCM" width="600" height="450" /></a>
That forecast projects rents will increase by 6.3% in the year ahead (shown in green). When compared to the blue bars in the graph, it’s clear that the 2023 projection doesn’t call for an increase as drastic as the ones renters have seen over the past two years, but it’s still above the historical average for rent hikes between 2013-2019.
That means, if you’re planning to rent again this year and you’ve not yet renewed your lease, you may pay more when you do.
Homeownership Provides an Alternative to Rising Rents
These rising costs may make you reconsider what other alternatives you have. If you're looking for more stability, it could be time to prioritize homeownership. One of the many benefits of owning your own home is it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac <a href="https://myhome.freddiemac.com/blog/homeownership/4-benefits-owning-home" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you're paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.”
If you’re planning to make a move this year, locking in your monthly housing costs for the duration of your loan can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases like you would if you left your housing payment up to your landlord and their renewal cycle.
Homeowners also enjoy the added benefit of <a href="https://www.simplifyingthemarket.com/2022/12/20/homeowners-still-have-positive-equity-gains-over-the-past-12-months/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="home equity" target="_blank" rel="noopener noreferrer">home equity</a>, which has grown substantially. In fact, the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q3-2022/" title="Homeowner Equity Insight" target="_blank" rel="noopener noreferrer">Homeowner Equity Insight</a> report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage on a house, you grow your <a href="https://www.simplifyingthemarket.com/2022/12/08/homeownership-is-an-investment-in-your-future/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="wealth" target="_blank" rel="noopener noreferrer">wealth</a> through the forced savings that is your home equity.
Bottom Line
If you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Let’s chat to see how you can begin your journey to homeownership today.
2023-01-24T09:46:20-07:002023-01-24T09:50:58-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:5010 Wondering How Much You Need To Save for a Down Payment?Wondering How Much You Need To Save for a Down Payment?
If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. One cost that’s likely top of mind is your down payment. But don't let a common misconception about how much you need to save make the process harder than it could be.
Understand 20% Isn’t Always the Typical Down Payment
Freddie Mac <a href="https://myhome.freddiemac.com/buying/down-payments-and-pmi" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):
<a href="https://files.mykcm.com/2022/12/22134044/todays-median-down-payment-is-less-than-20-percent-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106555" src="https://files.mykcm.com/2022/12/22134044/todays-median-down-payment-is-less-than-20-percent-MEM.png" alt="Wondering How Much You Need To Save for a Down Payment? | MyKCM" width="600" height="450" /></a>
Learn About Options That Can Help You Toward Your Goal
If saving for a down payment still feels like a challenge, know that there’s help available. A real estate professional and trusted lender can show you options that could help you get closer to your down payment goal. According to latest <a href="https://downpaymentresource.com/professional-resource/homebuyer-assistance-programs-proliferate-in-q3-as-median-u-s-down-payment-skyrockets/" title="Homeownership Program Index" target="_blank" rel="noopener noreferrer">Homeownership Program Index</a> from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.
Plus there are even loan types, like <a href="https://www.hud.gov/buying/loans" title="FHA loans" target="_blank" rel="noopener noreferrer">FHA loans</a>, with down payments as low as 3.5%, as well as options like <a href="https://www.simplifyingthemarket.com/2022/11/10/va-loans-can-help-veterans-achieve-their-dream-of-homeownership/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="VA loans" target="_blank" rel="noopener noreferrer">VA loans</a> and USDA loans with no down payment requirements for qualified applicants.
To understand your options, be sure to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like <a href="http://www.downpaymentresource.com/" title="Down Payment Resource" target="_blank" rel="noopener noreferrer">Down Payment Resource</a>. Then, partner with a trusted lender to learn what you qualify for on your homebuying journey.
Bottom Line
Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your down payment options.
2023-01-17T07:21:46-07:002023-01-17T07:32:35-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4982What Are Your Goals in the Housing Market This Year?
<img width="750" height="410" src="https://files.mykcm.com/2022/12/22121014/what-are-your-goals-in-the-housing-market-this-year-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="What Are Your Goals in the Housing Market This Year? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/22121014/what-are-your-goals-in-the-housing-market-this-year-KCM.jpg 750w, https://files.mykcm.com/2022/12/22121014/what-are-your-goals-in-the-housing-market-this-year-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/22121014/what-are-your-goals-in-the-housing-market-this-year-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If buying or selling a home is part of your dreams for 2023, it’s essential for you to understand today’s housing market, define your goals, and work with industry experts to bring your homeownership vision for the new year into focus.
In the last year, <a href="https://www.simplifyingthemarket.com/2022/12/21/what-to-expect-from-the-housing-market-in-2023/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="high inflation" target="_blank" rel="noopener noreferrer">high inflation</a> had a big impact on the economy, the housing market, and likely on your wallet too. That’s why it’s critical to have a clear understanding of not just the market today, but also what you want out of it when you buy or sell a home. Danielle Hale, Chief Economist at realtor.com, <a href="https://twitter.com/RDC_Economics/status/1590722818639269889" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, so that you can stay in your home long enough that buying is a sound financial decision.”
Here are a few questions you can start thinking through as you fine tune your goals for 2023.
1. What’s Motivating You?
You’re dreaming about making a move for a reason – what is it? No matter what’s happening in the market, there are still many <a href="https://www.simplifyingthemarket.com/2022/11/25/home-sweet-home-the-emotional-benefits-of-homeownership-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="compelling reasons" target="_blank" rel="noopener noreferrer">compelling reasons</a> to buy a home today. Your needs may have changed in a way your current house can’t address, or you could be ready to step into homeownership for the first time and have a space that’s truly your own. Use what’s motivating you as a guidepost in partnership with an expert advisor to help make sure your move will give you a lasting sense of accomplishment.
2. What Does Your Next Home Look Like?
You know you want to move, but how would you describe your dream home? The available supply of <a href="https://www.simplifyingthemarket.com/2022/12/07/key-advantages-of-buying-a-home-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="homes for sale" target="_blank" rel="noopener noreferrer">homes for sale</a> has grown, and that could mean more options to choose from when you buy. Just be sure to keep your budget in mind and work with a trusted real estate professional to balance your <a href="https://www.simplifyingthemarket.com/2022/12/05/prioritizing-your-wants-and-needs-as-a-homebuyer-in-todays-market/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="wants and needs" target="_blank" rel="noopener noreferrer">wants and needs</a>. The better you understand what’s essential and where you can be flexible, the easier it can be to find the home that’s right for you.
3. How Ready Are You To Buy?
Getting clear on your budget and <a href="https://www.simplifyingthemarket.com/2022/12/26/financial-fundamentals-for-first-time-homebuyers/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="savings" target="_blank" rel="noopener noreferrer">savings</a> is essential before you get too far into the process. Working with a local agent and a lender early is the best way to make sure you’re in a good position to buy. This could include planning how much to save for a down payment, getting <a href="https://www.simplifyingthemarket.com/2022/10/24/pre-approval-is-a-critical-first-step-on-your-homebuying-journey/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="pre-approved" target="_blank" rel="noopener noreferrer">pre-approved</a> for a home loan, and assessing your current <a href="https://www.simplifyingthemarket.com/2022/11/29/3-ways-you-can-use-your-home-equity/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="home equity" target="_blank" rel="noopener noreferrer">home equity</a> if your move involves selling your existing house.
A Professional Will Guide You Through Every Step of the Process
Buying or selling a home is a big process that takes expertise to navigate. If that feels a bit overwhelming, you aren’t alone. According to a recent Harris Poll <a href="https://theharrispoll.com/wp-content/uploads/2022/12/State-of-Real-Estate-December-2022.pdf" title="survey" target="_blank" rel="noopener noreferrer">survey</a>, one in five respondents see a lack of information or knowledge about the homebuying process as a barrier from owning a home. Don’t let uncertainty hold you back from your goals this year. A trusted expert can bridge that gap and give you the best advice and information about today’s market.
Bottom Line
Let’s connect to plan how your dreams for 2023 can become a reality.
2023-01-10T07:43:51-07:002023-01-10T08:03:58-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4940What Makes a House a Home?
There’s no denying the long-term <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="financial benefits" target="_blank" rel="noopener noreferrer">financial benefits</a> of owning a home, but today’s housing market may have you wondering if now’s still the time to buy. While the financial aspects of <a href="https://www.simplifyingthemarket.com/2022/11/08/the-majority-of-americans-still-view-homeownership-as-the-american-dream/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="buying a home" target="_blank" rel="noopener noreferrer">buying a home</a> are important, the non-financial and emotional reasons are too.
Home means something different to all of us. Whether it’s sharing memories with loved ones at the kitchen table or settling in to read a book in a favorite chair, the emotional connections to our homes can be just as important as the financial ones. Here are some of the things that make a house a home.
1. You Can Be Proud of Your Accomplishment
Buying a home is a major life milestone. Whether you’re setting out to buy your first home or your fifth, congratulations will be in order when you’ve achieved your goal. The sense of accomplishment you’ll feel at the end of your journey will truly make your home feel like a special place.
2. You Have Your Own Designated Happy Place
Owning your own home offers not only safety and security, but also a comfortable place where you can relax and unwind after a long day. Sometimes that’s just what you need to feel recharged and content.
3. You Can Find the Space To Meet Your Needs
Whether you want more room for your changing lifestyle (like retirement, dedicated space for a hobby, or a personal gym) or you simply prefer to have a large backyard for entertaining, you can invest in a home that truly works for your evolving needs.
4. You Can Customize Your Surroundings
Looking to try one of those decorative wall treatments you saw online? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to create an in-home yoga studio. You can do all these things in your own home.
Bottom Line
Whether you’re <a href="https://www.simplifyingthemarket.com/2022/10/31/taking-the-fear-out-of-saving-for-a-home/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="planning to purchase" target="_blank" rel="noopener noreferrer">planning to purchase</a> your first home or you’re ready to buy a different home to meet your needs, consider the emotional benefits that can turn a house into a happy home. When you’re ready to make a move, let’s connect.
2022-12-27T08:42:22-07:002022-12-27T09:54:02-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:49245 Reasons To Sell Your House This Winter
There’s good reason to make your move right now if you’re ready to sell. Let’s connect to talk about the benefits of selling your house this season.2022-12-20T08:14:13-07:002022-12-27T09:01:25-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4882What Every Seller Should Know About Home Prices<img width="750" height="410" src="https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="What Every Seller Should Know About Home Prices | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM.jpg 750w, https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
If you’re trying to decide whether or not to <a href="https://www.simplifyingthemarket.com/2022/11/28/your-house-could-be-the-1-item-on-a-homebuyers-wish-list-during-the-holidays/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a>, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.
What’s Really Happening with Home Prices?
It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.
While home prices are down slightly month-over-month in some markets, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses the latest <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-20-city-composite-home-price-nsa-index/#news-research" title="data" target="_blank" rel="noopener noreferrer">data</a> from S&P Case-Shiller to help tell the story of what’s actually happening in the <a href="https://www.spglobal.com/spdji/en/index-announcements/article/sp-corelogic-case-shiller-index-continued-to-decline-in-september/" title="housing market" target="_blank" rel="noopener noreferrer">housing market</a> today:
<a href="https://files.mykcm.com/2022/12/09102647/home-price-growth-since-january-2019-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106293" src="https://files.mykcm.com/2022/12/09102647/home-price-growth-since-january-2019-MEM.png" alt="What Every Seller Should Know About Home Prices | MyKCM" width="600" height="450" /></a>
As the graph shows, it’s true <a href="https://www.simplifyingthemarket.com/2022/11/09/whats-ahead-for-mortgage-rates-and-home-prices/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="home price" target="_blank" rel="noopener noreferrer">home price</a> growth has moderated in recent months (shown in green) as buyer demand has pulled back in response to higher <a href="https://www.simplifyingthemarket.com/2022/11/21/mortgage-rates-will-come-down-its-just-a-matter-of-time/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a>. This is what the headlines are drawing attention to today.
But what’s important to notice is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market.
The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a year was more typical (see bars for January 2019 through mid-2020). But even the latest data for this year shows prices have still climbed by roughly 10% over last year.
What Does This Mean for Your Home’s Equity?
While you may not be able to capitalize on the 20% appreciation we saw in early 2022, in most markets your home’s value, on average, is up 10% over last year – and a 10% gain is still dramatic compared to a more normal level of appreciation (3-4%).
The big takeaway? Don’t let the headlines get in the way of your <a href="https://www.simplifyingthemarket.com/2022/11/16/top-questions-about-selling-your-home-this-winter/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="plans to sell" target="_blank" rel="noopener noreferrer">plans to sell</a>. Over the past two years alone, you’ve likely gained a substantial amount of <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="equity" target="_blank" rel="noopener noreferrer">equity</a> in your home as home prices climbed. Even though <a href="https://www.simplifyingthemarket.com/2022/12/06/whats-going-on-with-home-prices-ask-a-professional/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="home price moderation" target="_blank" rel="noopener noreferrer">home price moderation</a> will vary by market moving forward, you can still use the boost your <a href="https://www.simplifyingthemarket.com/2022/11/14/home-equity-a-source-of-strength-for-homeowners-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="equity" target="_blank" rel="noopener noreferrer">equity</a> got to help power your move.
As Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/house-prices-decline-but-equity-buffers-remain-robust" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”
Bottom Line
If you have questions about home prices or how much equity you have in your current home, let’s connect so you have an expert’s advice.
2022-12-13T11:57:07-07:002022-12-20T08:29:18-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:48593 Ways You Can Use Your Home Equity
<img width="750" height="410" src="https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="3 Ways You Can Use Your Home Equity | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM.jpg 750w, https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re a homeowner, odds are your <a href="https://www.simplifyingthemarket.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/'?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="equity" target="_blank" rel="noopener noreferrer">equity</a> has grown significantly over the last few years as home prices skyrocketed and you made your monthly mortgage payments. <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="Home&nbsp;equity" target="_blank" rel="noopener noreferrer">Home equity</a> builds over time and can help you achieve certain goals. According to the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="Equity Insights Report" target="_blank" rel="noopener noreferrer">Equity Insights Report</a> from CoreLogic, the average borrower with a home loan has almost $300,000 in equity right now.
As you weigh your options, especially in the face of inflation and talk of a <a href="https://www.simplifyingthemarket.com/2022/10/25/what-happens-to-housing-when-theres-a-recession/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="recession" target="_blank" rel="noopener noreferrer">recession</a>, it’s important to understand your assets and how you can leverage them. A real estate professional is the best resource to help you understand how much home equity you have and advise you on some of the ways you can use it. Here are a few examples.
1. Buy a Home That Fits Your Needs
If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle.
If you want to upgrade your house, you can put your equity toward a <a href="https://www.simplifyingthemarket.com/2022/10/10/saving-for-a-down-payment-heres-what-you-should-know/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="down payment" target="_blank" rel="noopener noreferrer">down payment</a> on the home of your dreams. And if you’re planning to downsize, you may be surprised that your equity may cover some, if not all, of the cost of your next home. A real estate advisor can help you figure out how much equity you have and how you can use it toward the purchase of your next home.
2. Reinvest in Your Current House
According to a recent survey from <a href="https://hello.point.com/hubfs/PR/fall2022-homeowner-survey.pdf" title="Point" target="_blank" rel="noopener noreferrer">Point</a>, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space but you aren’t ready to make a move just yet.
Home improvement projects allow you to customize your home to suit your needs and sense of style. Just remember to think ahead with any updates you make, as some renovations add more value to your home and are more likely to appeal to future buyers than others. For example, a <a href="https://www.nar.realtor/sites/default/files/documents/2022-remodeling-impact-report-04-19-2022.pdf" title="report" target="_blank" rel="noopener noreferrer">report</a> from the National Association of Realtors (NAR) shows refinishing or replacing wood flooring has a high cost recovery. Lean on a local professional for the best advice on which projects to invest in to get the greatest return on your investment when you sell.
3. Pursue Your Personal Goals
In addition to making a move or updating your house, home equity can also help you achieve the life goals you’ve dreamed of. That could mean investing in a new business venture, retiring or downsizing, or funding an education. While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other lifelong goals.
Bottom Line
Your equity can be a game changer. If you’re unsure how much equity you have in your home, let’s connect so you can start planning your next move.
2022-12-07T07:25:50-07:002022-12-07T07:32:24-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4831Your House Could Be the #1 Item on a Homebuyer’s Wish List During the Holidays<img width="750" height="410" src="https://files.mykcm.com/2022/11/22093516/your-house-could-be-the-number-one-item-on-a-homebuyers-wishlist-during-the-holidays-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Your House Could Be the #1 Item on a Homebuyer’s Wish List During the Holidays | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/11/22093516/your-house-could-be-the-number-one-item-on-a-homebuyers-wishlist-during-the-holidays-KCM.jpg 750w, https://files.mykcm.com/2022/11/22093516/your-house-could-be-the-number-one-item-on-a-homebuyers-wishlist-during-the-holidays-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/11/22093516/your-house-could-be-the-number-one-item-on-a-homebuyers-wishlist-during-the-holidays-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
Each year, homeowners planning to make a move are faced with a decision: sell their house <a href="https://www.simplifyingthemarket.com/2022/11/02/sell-your-house-before-the-holidays/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="during the holidays" target="_blank" rel="noopener noreferrer">during the holidays</a> or wait. And others who have already listed their homes may think about removing their listings and waiting until the new year to go back on the market.
The truth is many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. Here are five great reasons you shouldn’t wait to sell your house.
1. While the <a href="https://www.simplifyingthemarket.com/2022/10/18/the-latest-on-supply-and-demand-in-housing/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="supply of homes" target="_blank" rel="noopener noreferrer">supply of homes</a> for sale has increased this year, there still aren’t enough homes on the market to keep up with buyer demand. As Nadia Evangelou, Senior Economist & Director of Forecasting at the National Association of Realtors (NAR), <a href="https://www.msn.com/en-us/money/realestate/soaring-mortgage-rates-get-all-the-attention-but-a-decade-of-underinvestment-in-housing-is-the-big-culprit-behind-the-country-s-affordability-crisis/ar-AA13H2ze" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“There’s still this gap between demand and supply because we were underbuilding for many years. . . . So now we see demand is slowing, but it still outpaces supply.”
2. Serious homebuyers are out looking right now. Millennials are driving homebuying demand today, and many are eager to make a purchase. Mark Fleming, Chief Economist at First American, <a href="https://www.thestreet.com/investing/housing-market-slump-forecast-continues-into-late-2023" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
"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.”
3. The desire to <a href="https://www.simplifyingthemarket.com/2022/11/08/the-majority-of-americans-still-view-homeownership-as-the-american-dream/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="own a home" target="_blank" rel="noopener noreferrer">own a home</a> doesn’t stop during the holidays. In fact, homes decorated for the holidays appeal to many buyers. Plus, purchasers who look for homes during the holidays are ready to buy.
4. You can restrict the showings in your house to days and times that are most convenient for you. That can help you minimize disruptions, which is especially important this time of year.
5. Rents have <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" title="skyrocketed" target="_blank" rel="noopener noreferrer">skyrocketed</a> in recent years. And, many buyers are looking to escape <a href="https://www.simplifyingthemarket.com/2022/09/30/why-buying-a-home-may-make-more-sense-than-renting-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="rising rents" target="_blank" rel="noopener noreferrer">rising rents</a> and avoid falling into the rental trap for another year. As an article from <a href="https://zillow.mediaroom.com/2022-09-29-Expert-panel-Expect-a-buyers-market-before-the-end-of-2023" title="Zillow" target="_blank" rel="noopener noreferrer">Zillow</a> says:
“Over the next 12 months, rents are expected to grow more than inflation, the stock market and home values."
Your home could be their ticket to leaving renting behind for good.
Bottom Line
There are still many reasons it makes sense to list your house during the holiday season. Let’s connect to determine if selling now is your best move.
2022-11-29T07:27:58-07:002022-11-29T08:22:38-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4811Top Questions About Selling Your Home This Winter<img width="750" height="410" src="https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Top Questions About Selling Your Home This Winter | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM.jpg 750w, https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
There’s no denying the housing market is undergoing a shift this season, and that may leave you with some questions about whether it still makes sense to <a href="https://www.simplifyingthemarket.com/2022/10/13/perspective-matters-when-selling-your-house-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a>. Here are three of the top questions you may be asking – and the data that helps answer them – so you can make a confident decision.
1. Should I Wait To Sell?
Even though the supply of homes for sale has increased in 2022, inventory is still low overall. That means it’s still a sellers’ market. The graph below helps put the inventory growth into perspective. Using <a href="https://www.nar.realtor/topics/existing-home-sales" title="data" target="_blank" rel="noopener noreferrer">data</a> from the National Association of Realtors (NAR), it shows just how far off we are from flipping to a buyers’ market:
<a href="https://files.mykcm.com/2022/11/15092129/as-supply-grows-its-still-a-sellers-market-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105808" src="https://files.mykcm.com/2022/11/15092129/as-supply-grows-its-still-a-sellers-market-MEM.png" alt="Top Questions About Selling Your Home This Winter | MyKCM" width="600" height="450" /></a>
While buyers have regained some <a href="https://www.simplifyingthemarket.com/2022/09/15/buyers-are-regaining-some-of-their-negotiation-power-in-todays-housing-market/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="negotiation power" target="_blank" rel="noopener noreferrer">negotiation power</a> as inventory has grown, you haven’t missed your window to sell. Your house could still stand out since inventory is low, especially if you list now while <a href="https://www.simplifyingthemarket.com/2022/11/02/sell-your-house-before-the-holidays/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="other sellers" target="_blank" rel="noopener noreferrer">other sellers</a> hold off until after the holiday rush and the start of the new year.
2. Are Buyers Still Out There?
If you’re thinking of selling your house but are hesitant because you’re worried buyer demand has disappeared in the face of higher mortgage rates, know that isn’t the case for everyone. While demand has eased this year, <a href="https://www.simplifyingthemarket.com/2022/10/27/millennials-are-still-a-driving-force-of-todays-buyer-demand/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="millennials" target="_blank" rel="noopener noreferrer">millennials</a> are still looking for homes. As an article in Forbes <a href="https://www.forbes.com/sites/forbesbusinesscouncil/2022/05/25/the-power-to-drive-change-how-millennials-are-affecting-the-housing-market/?sh=6d09dd06716c" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the ‘rent generation,’ millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.”
While the millennial generation has been dubbed the renter generation, that namesake may not be appropriate anymore. <a href="https://www.simplifyingthemarket.com/2022/11/03/do-you-believe-homeownership-is-out-of-reach-maybe-it-doesnt-have-to-be/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="Millennials" target="_blank" rel="noopener noreferrer">Millennials</a>, the largest generation, are actually a significant driving force for buyer demand in the housing market today. If you’re wondering if buyers are still out there, know that there are still people who are searching for a home to buy today. And your house may be exactly what they’re looking for.
3. Can I Afford To Buy My Next Home?
If current market conditions have you worried about how you’ll afford your next move, consider this: you may have more <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="equity" target="_blank" rel="noopener noreferrer">equity</a> in your current home than you realize.
Homeowners have gained <a href="https://www.simplifyingthemarket.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="significant equity" target="_blank" rel="noopener noreferrer">significant equity</a> over the past few years and that equity can make a big difference in the <a href="https://www.simplifyingthemarket.com/2022/11/07/key-factors-affecting-home-affordability-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="affordability" target="_blank" rel="noopener noreferrer">affordability</a> equation, especially with mortgage rates higher now than they were last year. <a href="https://blog.firstam.com/economics/whats-the-outlook-for-housing-market-potential-for-the-rest-of-2022" title="According" target="_blank" rel="noopener noreferrer">According</a> to Mark Fleming, Chief Economist at First American:
“. . . homeowners, in aggregate, have historically high levels of home equity. For some of those equity-rich homeowners, that means moving and taking on a higher mortgage rate isn’t a huge deal—especially if they are moving to a more affordable city.”
Bottom Line
If you’re thinking about selling your house this season, let’s connect so you have the expert insights you need to make the best possible move today.
2022-11-22T07:11:21-07:002022-11-22T07:35:07-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4784What’s Ahead for Mortgage Rates and Home Prices?<img width="750" height="410" src="https://files.mykcm.com/2022/11/08144742/whats-ahead-for-mortgage-rates-and-home-prices-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="What’s Ahead for Mortgage Rates and Home Prices? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/11/08144742/whats-ahead-for-mortgage-rates-and-home-prices-KCM.jpg 750w, https://files.mykcm.com/2022/11/08144742/whats-ahead-for-mortgage-rates-and-home-prices-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/11/08144742/whats-ahead-for-mortgage-rates-and-home-prices-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
Now that the end of 2022 is within sight, you may be wondering what’s going to happen in the housing market next year and what that may mean if you’re thinking about <a href="https://www.simplifyingthemarket.com/2022/10/17/the-emotional-and-non-financial-benefits-of-homeownership/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="buying a home" target="_blank" rel="noopener noreferrer">buying a home</a>. Here’s a look at the latest expert insights on both mortgage rates and home prices so you can make your best move possible.
Mortgage Rates Will Continue To Respond to Inflation
There’s no doubt <a href="https://www.simplifyingthemarket.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> have skyrocketed this year as the market responded to high inflation. The <a href="https://www.freddiemac.com/pmms/archive" title="increases" target="_blank" rel="noopener noreferrer">increases</a> we’ve seen were fast and dramatic, and the average 30-year fixed mortgage rate even surpassed <a href="https://freddiemac.gcs-web.com/node/26166/pdf" title="7%" target="_blank" rel="noopener noreferrer">7%</a> at the end of last month. In fact, it’s the first time they’ve risen this high in over 20 years (see graph below):
<a href="https://files.mykcm.com/2022/11/08144740/mortgage-rates-rising-this-year-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105632" src="https://files.mykcm.com/2022/11/08144740/mortgage-rates-rising-this-year-MEM.png" alt="What’s Ahead for Mortgage Rates and Home Prices? | MyKCM" width="600" height="450" /></a>
In their latest quarterly report, Freddie Mac <a href="https://www.freddiemac.com/research/forecast/20221021-quarterly-forecast-rapidly-rising-rates-declining-demand-driving-housing-market" title="explains" target="_blank" rel="noopener noreferrer">explains</a> just how fast the climb in rates has been:
“Just one year ago, rates were under 3%. This means that while mortgage rates are not as high as they were in the 80’s, they have more than doubled in the past year. Mortgage rates have never doubled in a year before.”
Because we’re in unprecedented territory, it’s hard to say with certainty where mortgage rates will go from here. Projecting the future of mortgage rates is far from an exact science, but experts do agree that, moving forward, mortgage rates will continue to respond to inflation. If inflation stays high, mortgage rates likely will too.
Home Price Changes Will Vary by Market
As <a href="https://www.simplifyingthemarket.com/2022/10/18/the-latest-on-supply-and-demand-in-housing/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="buyer demand" target="_blank" rel="noopener noreferrer">buyer demand</a> has eased this year in response to those higher mortgage rates, home prices have moderated in many markets too. In terms of the forecast for next year, expert projections are mixed. The general consensus is home price appreciation will vary by local market, with more significant changes happening in overheated areas. As Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/pandemic-boom-markets-cooling-the-fastest" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.”
Basically, some areas may still see slight price growth while others may see slight price declines. It all depends on other factors at play in that local market, like the balance between supply and demand. This may be why experts are divided on their latest national forecasts (see graph below):
<a href="https://files.mykcm.com/2022/11/08144736/home-price-forecasts-for-2023-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105631" src="https://files.mykcm.com/2022/11/08144736/home-price-forecasts-for-2023-MEM.png" alt="What’s Ahead for Mortgage Rates and Home Prices? | MyKCM" width="600" height="450" /></a>
Bottom Line
If you want to know what’s happening with home prices or mortgage rates, let’s connect so you have the latest on what experts are saying and what that means for our area.
2022-11-15T08:09:34-07:002022-11-15T08:19:19-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4761 3 Trends That Are Good News for Today’s Homebuyers<img width="750" height="410" src="https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="3 Trends That Are Good News for Today’s Homebuyers | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM.jpg 750w, https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
While higher <a href="https://www.simplifyingthemarket.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> are creating affordability challenges for <a href="https://www.simplifyingthemarket.com/2022/10/19/should-you-still-buy-a-home-with-the-latest-news-about-inflation/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="homebuyers" target="_blank" rel="noopener noreferrer">homebuyers</a> 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 <a href="https://www.calculatedriskblog.com/2022/10/housing-october-31st-weekly-update.html" title="39.5%" target="_blank" rel="noopener noreferrer">39.5%</a> 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 <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-09-realtors-confidence-index-10-20-2022.pdf" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (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 <a href="https://www.simplifyingthemarket.com/2022/08/19/why-a-home-inspection-is-important-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="inspection" target="_blank" rel="noopener noreferrer">inspection</a>, to try to win a bidding war. But the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-09-realtors-confidence-index-10-20-2022.pdf" title="latest data" target="_blank" rel="noopener noreferrer">latest data</a> 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 <a href="https://www.realtor.com/research/2022-summer-sellers-survey/" title="survey" target="_blank" rel="noopener noreferrer">survey</a> 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.
2022-11-08T12:06:10-07:002022-11-08T12:23:03-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4735Millennials Are Still a Driving Force of Today’s Buyer Demand<img width="750" height="410" src="https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Millennials Are Still a Driving Force of Today’s Buyer Demand | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM.jpg 750w, https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
If you’re thinking about <a href="https://www.simplifyingthemarket.com/2022/10/13/perspective-matters-when-selling-your-house-today/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="selling your house" target="_blank" rel="noopener noreferrer">selling your house</a> but wondering if buyers are still out there, know that there are still people who are searching for a home to buy today. And your house may be exactly what they’re looking for.
While the millennial generation has been dubbed the <a href="https://www.simplifyingthemarket.com/2022/09/30/why-buying-a-home-may-make-more-sense-than-renting-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="renter" target="_blank" rel="noopener noreferrer">renter</a> generation, that namesake may not be appropriate anymore. Millennials, the largest generation, are actually a significant driving force for buyer demand in the housing market today. Here’s why.
Millennial Homebuying Power
While there’s no denying higher <a href="https://www.simplifyingthemarket.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> are making it more challenging to afford a home today, many millennials are still eager and able to buy homes – whether it’s their first or they’re moving up. That’s in large part because of the value they place on education.
A <a href="https://blog.firstam.com/economics/why-educated-millennials-still-hold-the-key-to-future-homeownership-demand" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> from First American says millennials may be the most educated generation in our nation’s history. Because of that, they tend to earn higher wages, and that translates to greater homebuying power. Odeta Kushi, Deputy Chief Economist at First American, <a href="https://blog.firstam.com/economics/why-educated-millennials-still-hold-the-key-to-future-homeownership-demand" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“In 2020, millennials with a bachelor’s degree had a median household income of over $100,000, while those with at least a graduate degree had a median household income of over $120,000. Compare those income levels with the median household income of millennials with just a high school degree (or some college) of $60,000 and the earning power benefits of higher education are undeniable. . . . Millennials’ pursuit of higher education is good news for the housing market. . . because education is the key to unlock both greater earning power and, in turn, homeownership.”
And since wages are one of the key things that factor into affordability when it comes to buying a home, these higher earnings can help millennials achieve their homeownership goals.
Millennials Continue To Be a Driving Force of Demand
A number of studies have looked into how the millennial generation views homeownership and how they’re uniquely positioned to define the housing market moving forward. As the largest generation, the volume of potential millennial homebuyers will have an impact on the market for years to come. As an article in Forbes <a href="https://www.forbes.com/sites/forbesbusinesscouncil/2022/05/25/the-power-to-drive-change-how-millennials-are-affecting-the-housing-market/?sh=3c55ec63716c" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the ‘rent generation,’ millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.”
If you’re thinking of selling your house but are hesitant because you’re worried that <a href="https://www.simplifyingthemarket.com/2022/10/18/the-latest-on-supply-and-demand-in-housing/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="buyer demand" target="_blank" rel="noopener noreferrer">buyer demand</a> has disappeared in the face of higher mortgage rates, know that isn’t the case for everyone. While demand has eased this year, millennials are still looking for homes. As Mark Fleming, Chief Economist at First American, <a href="https://www.thestreet.com/investing/housing-market-slump-forecast-continues-into-late-2023" title="says" target="_blank" rel="noopener noreferrer">says</a> in an article:
"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.”
Bottom Line
Millennials are interested in and well-positioned to achieve their homeownership dreams. If you’re ready to sell your house, know that it may be just what they’re looking for.
2022-11-01T12:23:41-07:002022-11-01T12:27:12-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4720Pre-Approval Is a Critical First Step on Your Homebuying Journey
<img width="750" height="410" src="https://files.mykcm.com/2022/10/20111034/pre-approval-is-a-critical-first-step-on-your-homebuying-journey-share-KCM.png" class="attachment-entry size-entry wp-post-image" alt="Pre-Approval Is a Critical First Step on Your Homebuying Journey | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/20111034/pre-approval-is-a-critical-first-step-on-your-homebuying-journey-share-KCM.png 750w, https://files.mykcm.com/2022/10/20111034/pre-approval-is-a-critical-first-step-on-your-homebuying-journey-share-KCM-600x328.png 600w, https://files.mykcm.com/2022/10/20111034/pre-approval-is-a-critical-first-step-on-your-homebuying-journey-share-KCM-100x55.png 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re planning to <a href="https://www.simplifyingthemarket.com/2022/10/06/two-questions-every-homebuyer-should-ask-themselves-right-now/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="buy a home" target="_blank" rel="noopener noreferrer">buy a home</a> this year, one of the first steps on your <a href="https://www.simplifyingthemarket.com/2022/10/07/the-journey-to-buy-a-home-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="journey" target="_blank" rel="noopener noreferrer">journey</a> is getting pre-approved. Especially in today’s market when <a href="https://www.simplifyingthemarket.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> are higher than they were just a few months ago, getting a <a href="https://www.simplifyingthemarket.com/2022/09/16/a-crucial-first-step-mortgage-pre-approval-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage pre-approval" target="_blank" rel="noopener noreferrer">mortgage pre-approval</a> can be a game changer. Here’s why.
What Is Pre-Approval?
To better understand why pre-approval is key, it’s important to know what pre-approval is. The Mortgage Reports <a href="https://themortgagereports.com/62952/how-to-get-mortgage-preapproval-in-3-steps" title="explains" target="_blank" rel="noopener noreferrer">explains</a> it like this:
“When you’re ready to take the leap into homeownership, your first step is mortgage preapproval. . . . A mortgage preapproval is when a lender determines you’re qualified for a home loan. Your preapproval letter shows the maximum loan amount you’re approved for (your home buying budget), as well as the specific interest rate and loan term you can expect.”
As part of the pre-approval process, a lender will look at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand your true price range and how much money you can borrow. That can make it easier when you set out to search for homes because you’ll know your overall numbers. And with <a href="https://www.simplifyingthemarket.com/2022/10/12/four-things-that-help-determine-your-mortgage-rate/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> rising and impacting affordability, a solid understanding of your numbers is even more important.
Pre-Approval Can Signal You’re a Serious Buyer
Another added benefit is that pre-approval lets the seller know you’re qualified to buy their house. A recent article from realtor.com <a href="https://www.realtor.com/advice/finance/do-i-need-a-pre-approval-letter-to-make-an-offer/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
". . . getting pre-approved can actually improve your chances of falling into the sellers’ good graces, and you’ll want to get it done as early as you possibly can in the home-buying process."
Even though <a href="https://www.simplifyingthemarket.com/2022/08/31/buyers-you-may-face-less-competition-as-bidding-wars-ease/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="bidding wars" target="_blank" rel="noopener noreferrer">bidding wars</a> are easing this year as the market shifts, preapproval is still an important part of making a strong offer. It can help a seller feel more confident because it shows you’re serious about their home and that you’re a qualified buyer.
Bottom Line
Getting pre-approved for a mortgage is critical. It helps you better understand what you can borrow and shows sellers you’re serious about purchasing their home. Connect with a local real estate professional and a trusted lender so you have the tools you need to succeed as a homebuyer in today’s market.
2022-10-25T12:44:02-07:002022-10-25T12:57:11-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4695Four Things That Help Determine Your Mortgage Rate
<img width="750" height="410" src="https://files.mykcm.com/2022/10/11132136/20221012-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Four Things That Help Determine Your Mortgage Rate | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/11132136/20221012-KCM-Share.jpg 750w, https://files.mykcm.com/2022/10/11132136/20221012-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/10/11132136/20221012-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re looking to buy a home, you probably want to secure the lowest <a href="https://www.simplifyingthemarket.com/2022/09/27/how-an-expert-can-help-you-understand-inflation-mortgage-rates/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="interest rate" target="_blank" rel="noopener noreferrer">interest rate</a> possible for your home loan. Over the last couple of years, that was easier to do as the housing market saw record-low mortgage rates, but this year rates have <a href="https://www.freddiemac.com/pmms/archive" title="risen dramatically" target="_blank" rel="noopener noreferrer">risen dramatically</a>.
If you’re looking for ways to combat today’s <a href="https://www.simplifyingthemarket.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="higher rates" target="_blank" rel="noopener noreferrer">higher rates</a> and lock in the lowest one you can, here are a few factors to focus on. Since approval opportunities can vary, connect with a trusted lender for customized advice.
Your Credit Score
Credit scores can play a big role in your mortgage rate. Freddie Mac <a href="https://myhome.freddiemac.com/buying/understanding-your-credit" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”
That’s why it’s important to maintain a good credit score. If you want to focus on improving your score, your trusted advisor can give you expert advice to help.
Your Loan Type
There are many types of loans, each offering different terms for qualified buyers. The Consumer Financial Protection Bureau (CFPB) <a href="https://www.consumerfinance.gov/about-us/blog/7-factors-determine-your-mortgage-interest-rate/" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose.”
When working with your real estate advisor, make sure you find out what’s available in your area and which types of loans you may qualify for.
Your Loan Term
Another factor to consider is the term of your loan. Just like with location and loan types, you have options. Freddie Mac <a href="https://myhome.freddiemac.com/blog/homeownership/beginners-guide-home-loans" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“When choosing the right home loan for you, it’s important to consider the loan term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”
Depending on your situation, the length of your loan can also change your mortgage rate.
Your Down Payment
If you’re a current homeowner looking to sell and make a move, you can use the <a href="https://www.simplifyingthemarket.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="home equity" target="_blank" rel="noopener noreferrer">home equity</a> you’ve built over time toward the <a href="https://www.simplifyingthemarket.com/2022/10/10/saving-for-a-down-payment-heres-what-you-should-know/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="down payment" target="_blank" rel="noopener noreferrer">down payment</a> on your next home. The CFPB <a href="https://www.consumerfinance.gov/about-us/blog/7-factors-determine-your-mortgage-interest-rate/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”
To learn more, connect with a lender to find out the difference a higher down payment can make for your new mortgage.
Bottom Line
These are just few factors that can help determine your mortgage rate if you’re buying a home. The best thing you can do is have a team of professionals on your side. Connect with a local real estate professional and a trusted lender so you have the expert advice you need in each step of the process.
2022-10-18T12:33:45-07:002022-10-18T13:11:22-07:00Brian Olivardtag:realtallrealestate.com,2012-09-20:4675The Cost of Waiting for Mortgage Rates To Go Down<img width="750" height="410" src="https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The Cost of Waiting for Mortgage Rates To Go Down | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share.jpg 750w, https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" style="font-size: 17px;" />
Mortgage rates have <a href="https://www.freddiemac.com/pmms/archive" title="increased significantly" target="_blank" rel="noopener noreferrer">increased significantly</a> in recent weeks. And that may mean you have questions about what this means for you if you’re planning to buy a home. Here’s some information that can help you make an informed decision when you set your homebuying plans.
The Impact of Rising Mortgage Rates
As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.
Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is <a href="https://www.nar.realtor/newsroom/existing-home-sales-slipped-0-4-in-august" title="$389,500" target="_blank" rel="noopener noreferrer">$389,500</a>). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.
<a href="https://files.mykcm.com/2022/10/03144304/20221004-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105012" src="https://files.mykcm.com/2022/10/03144304/20221004-MEM-Eng-1.png" alt="The Cost of Waiting for Mortgage Rates To Go Down | MyKCM" width="600" height="450" /></a>
As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a <a href="https://www.simplifyingthemarket.com/2022/09/09/why-its-so-important-to-hire-a-pro-infographic/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="real estate advisor" target="_blank" rel="noopener noreferrer">real estate advisor</a> to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.
Are Mortgage Rates Going To Go Down?
The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. Realtor.com <a href="https://www.realtor.com/news/trends/column-homebuyers-have-hard-the-bad-news-heres-the-good/" title="says" target="_blank" rel="noopener noreferrer">says</a> this about where rates could go from here:
“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.”
So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get <a href="https://www.simplifyingthemarket.com/2022/09/27/how-an-expert-can-help-you-understand-inflation-mortgage-rates/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="inflation" target="_blank" rel="noopener noreferrer">inflation</a> under control.
And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-september-15-2022" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”
Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining <a href="https://www.simplifyingthemarket.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="equity" target="_blank" rel="noopener noreferrer">equity</a> over time which will help grow your <a href="https://www.simplifyingthemarket.com/2022/09/06/how-owning-a-home-builds-your-net-worth/?a=473398-e76dce837073aef62b5a6cfe655c49a9" title="net worth" target="_blank" rel="noopener noreferrer">net worth</a>. The question now becomes: what makes more sense for you?
Bottom Line
Each person’s situation is unique. To make the best decision for you, let's connect to explore your options.
2022-10-11T11:27:00-07:002022-10-11T11:36:23-07:00Brian Olivard