MY BLOG

There’s no doubt buying a home today is different than it was over the past couple of years, and the shift in the market has led to advantages for buyers today. Right now, there are specific reasons that make this housing market attractive for those who’ve thought about buying but have sidelined their search due to rising mortgage rates.

Buying a home in any market is a personal decision, and the best way to make that decision is to educate yourself on the facts, not following sensationalized headlines in the news today.  The reality is, headlines do more to terrify people thinking about buying a home than they do to clarify what’s actually going on with real estate.

Here are three reasons potential homebuyers should consider buying a home today.

1. More Homes Are for Sale Right Now

According to data from the National Association of Realtors (NAR), this year, the supply of homes for sale has grown significantly compared to where we started the year (see graph below):

This growth has happened for two reasons: homeowners listing their homes for sale and homes staying on the market a bit longer as buyer demand has moderated in response to higher mortgage rates.

The good news for you is that more inventory means more homes to choose from. And when there are more homes on the market, you could also see less competition from other buyers because the peak frenzy of competing over the same home has eased too.

2. Home Prices Are Not Projected To Crash

Experts don’t believe home prices will crash like they did in 2008. Instead, home prices will moderate at various levels depending on the local market and the factors, like supply and demand, at play in that area. That’s why some experts are calling for slight appreciation and others are calling for slight depreciation (see graph below):

If you consider the big picture and average the expert forecasts for 2023 together, the expectation is for relatively flat or neutral price appreciation next year. So, if you’re worried about buying a home because you’re afraid home prices will crash like they did in 2008, rest assured that’s not what expert projections tell us.

3. Mortgage Rates Have Risen, but They Will Come Down

While mortgage rates have risen dramatically this year, the rapid increases we’ve seen have moderated in recent weeks as early signs hint that inflation may be easing slightly. Where they’ll go from here largely depends on what happens next with inflation. If inflation does truly begin to cool, mortgage rates may come down as a result.

When that happens, expect more buyers to jump back into the market. For you, that means you’ll once again face more competition. Buying your house now before more buyers reenter the market could help you get one step ahead. As Lawrence Yun, Chief Economist for NAR, says:

“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

When mortgage rates come down, those waiting on the sidelines will jump back in. Your advantage is getting in before they do.

Bottom Line

If you’re thinking about buying a home, you should seriously consider the advantages today’s market offers. Let’s connect so you can make the dream of homeownership a reality. 

Content previously posted on Keeping Current Matters

There’s no denying mortgage rates are higher now than they were last year. And if you’re thinking about buying a home, this may be top of mind for you. That’s because those higher rates impact how much it costs to borrow money for your home loan. As you set out to make a purchase this winter, you’ll need to be strategic so you can find a home that meets your needs and budget.

Danielle Hale, Chief Economist at realtor.com, explains:

“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, . . . Another key point is to avoid stretching your budget, as tempting as it may be given the diminished purchasing power.”

In other words, it’s important to be mindful of what’s a necessity and what’s a nice-to-have when searching for a home. And the best way to understand this is to put together a list of desired features for your home search.

The first step? Get pre-approved for a mortgage. Pre-approval helps you better understand what you can borrow for your home loan, and that plays an important role in how you’ll craft your list. After all, you don’t want to fall in love with a home that’s out of reach. Once you have a good grasp of your budget, you can begin to list (and prioritize) all the features of a home you would like.

Here’s a great way to think about them before you begin:

• Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).
• Nice-To-Haves – These are features that you’d love to have but can live without. Nice-To-Haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of the these, it’s a contender (examples: a second home office, a garage, etc.).
• Dream State – This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).

Finally, once you’ve created your list and categorized it in a way that works for you, discuss it with your real estate advisor. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your needs.

Bottom Line

Putting together your list of necessary features for your next home might seem like a small task, but it’s a crucial first step on your homebuying journey today. If you’re ready to find a home that fits your needs, let’s connect.

Content previously posted on Keeping Current Matters

If you’re a young adult, you may be thinking about your goals and priorities for the months and years ahead. And if homeownership ranks high on your goal sheet, you’re in good company. Many of your peers are also pursuing their dream of owning a home. The 2022 Millennial & Gen Z Borrower Sentiment Report from Maxwell says:

“Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.”

Let’s take a look at why homeownership makes the top of so many young buyers’ to-do list and what you need to consider to achieve your goals if you’re one of them.

Top Motivators To Buy a Home

Before you start the homebuying process, it’s helpful to know why homeownership is so important to you. The survey mentioned above sheds light on some of the top reasons why younger generations are looking to buy a home. It finds:

• 95% believe the cost of renting is too high
• 35% think owing a home is an important wealth building tool
• 16% seek the sense of security owning a home provides
• 37% plan to use it as an investment property

No matter which of these resonates the most with you, know there are many financial and non-financial reasons why you may want to buy a home. While your top motivator may be different than that of your friends, they’re all equally valid and worthwhile.

Key Obstacles and How To Overcome Them

Whether your homeownership goals come from the heart or are driven by financial aspirations (or both), it can still be hard to know where to start when you’re looking to buy a home. From understanding the homebuying process, to getting pre-approved, and exploring down payment options, it’s a lot to wrap your head around.

The same Maxwell survey also reveals key challenges for potential buyers. Thankfully, the knowledge and guidance of a trusted real estate professional can help you overcome both. Here’s a look at two of the hurdles potential homebuyers say they face:

1. The Mortgage Process Can Be Intimidating

In the Maxwell study, 33.37% said one of their obstacles was that the mortgage process is confusing or difficult to understand.

An article by OwnUp helps explain why the mortgage process is so challenging for buyers:

“There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.”

While you may be tempted to do a quick search online to find instant answers to your questions, it may not get you the information you need to understand the full picture. Especially when it comes to financial advice, you want to lean on a true expert. Having trusted professionals on your side can help you to learn what it takes to achieve your dream of homeownership. Not to mention, an expert can give you advice specific to your situation, not generic advice like you’ll find online.

2. It’s Hard To Know How Much You Need To Save

In the Maxwell study, 45.75% believe they don’t have enough saved to cover their down payment or closing cost expenses.

What you may not realize is that, today, there’s a growing number of down payment assistance programs available nationwide to help relieve this pressure. A report from Down Payment Resource says:

“Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.”

Additionally, as the housing market cools, buyers are regaining some negotiation power and more sellers are willing to work with buyers to help with closing costs.  Understanding what’s out there and the options available may help you achieve your dream of homeownership faster than you thought possible.

Bottom Line

If you’re serious about becoming a homeowner, know it may be more in reach than you think. Lean on trusted professionals to help you overcome challenges and prioritize your next steps.

Content previously posted on Keeping Current Matters

If you’re a homeowner, odds are your equity has grown significantly over the last few years as home prices skyrocketed and you made your monthly mortgage payments. Home equity builds over time and can help you achieve certain goals. According to the latest Equity Insights Report 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 recession, 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 down payment 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 Point, 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 report 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.

Content previously posted on Keeping Current Matters

Some Highlights

• While there are many financial perks to owning a home, there are also powerful non-financial benefits to consider if you’re thinking about making a move.
• Homeownership allows you to express yourself, gives you greater privacy and comfort, enhances your connection to your community and loved ones, and is an achievement to feel proud of.
• Let’s connect today to discuss all that homeownership has to offer.

Content previously posted on Keeping Current Matters