Tampa Bay Area Real Estate BlogRecently posted or modified blog postshttps://www.waterfrontgulfhomes.com/blog/Copyright WaterfrontGulfHomes.com2023-10-19T00:22:53-07:00tag:waterfrontgulfhomes.com,2012-09-20:39842What Are the Real Reasons You Want To Move Right Now?
<img src="https://files.keepingcurrentmatters.com/content/images/20231017/20231018-What-are-the-real-reasons-you-want-to-move-right-now.png" />
If you're considering selling your house right now, it's likely because something in your life has changed. And while things like mortgage rates play a big role in your decision, you don’t want that to overshadow why you thought about making a move in the first place.
It’s true mortgage rates are higher right now, and that has an impact on affordability. As a result, 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.
But your lifestyle and your changing needs matter, too. As a recent article from Realtor.com <a href="https://www.realtor.com/advice/sell/should-i-sell-my-house-now-reasons-to-list-times-to-wait/" rel="noopener noreferrer" target="_blank">says</a>:
“No matter what interest rates and home prices do next, sometimes homeowners just have to move—due to a new job, new baby, divorce, death, or some other major life change.”
Here are a few of the most common reasons people choose to sell today. You may find any one of these resonates with you and may be reason enough to move, even today.
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 your ideal location, or just looking for a change in scenery.
For example, if you just landed your dream job in another state, you may be thinking about selling your current home and moving 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 your household is growing, it may be time to find a home that better fits those needs.
Downsizing
Homeowners may also decide to 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 somewhere warmer with less house to maintain. A different home may be better suited for your new lifestyle.
Change in Relationship Status
Divorce, separation, or marriage are other common reasons individuals sell.
For example, if you’ve recently separated, it may be difficult to still live under one roof. Selling and getting a place of your own may be a better option.
Health Concerns
If a homeowner faces mobility challenges or health issues that require specific living arrangements or modifications, they might sell their house to find one that works better for them.
For example, you may be looking to sell your house and use the proceeds to help pay for a unit in an assisted-living facility.
With higher mortgage rates and rising prices, 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 choice. 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 want to sell your house and find a new one that better fits your needs, let’s connect. That way, you’ll have someone to guide you through the process and help you find a home that works for you.
2023-10-18T06:00:00-07:002023-10-19T00:13:44-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39840How Buying a Multi-Generational Home Helps with Affordability Today
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In today's world of rising housing costs, many buyers are looking for ways to still be able to buy a home. Some of them have found a solution in multi-generational living.
Multi-generational living is when two or more adult generations live together under one roof. This includes siblings, parents, or even grandparents. Here’s an in-depth look at why more buyers are choosing this option today, so you can see if it may be right for you too.
Reasons To Buy a Multi-Generational Home
According to a recent study by the National Association of Realtors (NAR), the top two reasons people are opting for multi-generational homes today have to do with affordability (see graph below):
<a href="https://www.mykcm.com/content/images/20231013/20231017-Reasons-to-Purchase-a-MultiGen-Home.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231013/20231017-Reasons-to-Purchase-a-MultiGen-Home.png" /></a>
Cost Savings: About 28% of first-time buyers and 11% of repeat buyers are deciding on a multi-generational home to save on costs. By pooling their resources, households can share the financial responsibilities like mortgage payments, utilities, property taxes, and maintenance, to make <a href="https://www.mykcm.com/2023/10/02/unpacking-the-long-term-benefits-of-homeownership/" rel="noopener noreferrer" target="_blank">homeownership</a> more affordable. This is especially helpful for first-time homebuyers who may be finding it tough to afford a home on their own in today's market.
More Space: Another 28% of first-time buyers and 18% of repeat buyers are doing it because they want a larger home they couldn’t afford on their own. For some of the repeat buyers who listed this as a main motivator, it could be because they find themselves taking care of older parents while also welcoming back young adults who've returned to the nest. With everyone chipping in and combining their incomes, suddenly, that big <a href="https://www.mykcm.com/2023/09/21/the-many-non-financial-benefits-of-homeownership/" rel="noopener noreferrer" target="_blank">dream home</a> with more space is within reach. As the Triangle Business Journal <a href="https://www.bizjournals.com/triangle/news/2023/04/01/why-choose-multigenerational-living-in-the-triangl.html" rel="noopener noreferrer" target="_blank">explains</a>:
“Choosing multi-gen living allows people to purchase a home much larger than they could afford on their own by leveraging the combined income, credit and a down payment of those that they will be occupying the home with.”
Lean on an Expert
If you’re interested in this too, partner with a local real estate agent. Finding the perfect multi-generational home isn't as simple as shopping for a regular house. That’s because there are more people with even more opinions and needs that should be considered.
You've got to make sure everyone has their own space, find room for shared household time, and possibly even create adaptable areas for older relatives. It's a puzzle, and the pieces need to fit just right. Your real estate agent has the expertise and local knowledge to help you find that home where everyone can be comfortable without breaking the bank. As MoneyGeek.com <a href="https://www.moneygeek.com/mortgage/resources/multigenerational-family-finances/" rel="noopener noreferrer" target="_blank">puts</a> it:
"Having a good multigenerational property can improve the prospects of success when living with loved ones. A multigenerational home should fit the specific needs of most family members regardless of age or health. Speaking to a real-estate agent can help you gain clarity and locate a fit."
Bottom Line
Buying a multi-generational home can be a smart way to tackle some of today’s affordability challenges. When you team up to share expenses, you can make your dream of homeownership more attainable. If this sounds like an option for you and your loved ones, let’s connect to help you find a home that’s the perfect fit.
2023-10-17T06:00:00-07:002023-10-19T00:22:53-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39839Are Higher Mortgage Rates Here To Stay?
<a href="https://www.mykcm.com/2023/09/06/mortgage-rates-past-present-and-possible-future/" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231012/20231016-Are-Higher-Mortgage-Rates-Here-To-Stay.png" /></a>
Mortgage rates have been back on the rise recently and that’s getting a lot of attention from the press. If you’ve been following the headlines, you may have even seen rates recently reached their highest level in over two decades (see graph below):
<a href="https://www.mykcm.com/content/images/20231012/20231016-Mortgage-Rates-Reach-Highest-Level-In-Almost-23-Years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231012/20231016-Mortgage-Rates-Reach-Highest-Level-In-Almost-23-Years.png" /></a>
That can feel like a little bit of a gut punch if you’re thinking about <a href="https://www.mykcm.com/2023/08/14/where-are-people-moving-today-and-why/" rel="noopener noreferrer" target="_blank">making a move</a>. If you’re wondering whether or not you should delay your plans, here’s what you really need to know.
How Higher Mortgage Rates Impact You
There’s no denying mortgage rates are higher right now than they were in recent years. And, when rates are up, that affects overall home affordability. It works like this. The higher the rate, the more expensive it is to borrow money when you buy a home. That’s because, as rates trend up, your monthly mortgage payment for your future home loan also increases.
Urban Institute <a href="https://www.urban.org/urban-wire/rising-interest-rates-put-brakes-mortgage-market-borrowers-low-incomes" rel="noopener noreferrer" target="_blank">explains</a> how this is impacting buyers and sellers right now:
“When mortgage rates go up, monthly housing payments on new purchases also increase. For potential buyers, increased monthly payments can reduce the share of available affordable homes . . . Additionally, higher interest rates mean fewer homes on the market, as existing homeowners have an incentive to hold on to their home to keep their low interest rate.”
Basically, some people are deciding to put their plans on hold because of where mortgage rates are right now. But what you want to know is: is that a good <a href="https://www.mykcm.com/2023/07/03/evaluating-your-wants-and-needs-as-a-homebuyer-matters-more-today/" rel="noopener noreferrer" target="_blank">strategy</a>?
Where Will Mortgage Rates Go from Here?
If you’re eager for mortgage rates to drop, you’re not alone. A lot of people are waiting for that to happen. But here’s the thing. No one knows when it will. Even the experts can’t say with certainty what’s going to happen next.
Forecasts project rates will fall in the months ahead, but what the latest <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">data</a> says is that rates have been climbing lately. This disconnect shows just how tricky mortgage rates are to project.
The best advice for your move is this: don’t try to control what you can’t control. This includes trying to time the market or guess what the future holds for mortgage rates. As CBS News <a href="https://www.cbsnews.com/news/dont-wait-for-mortgage-rates-to-drop-do-this-instead/" rel="noopener noreferrer" target="_blank">states</a>:
“If you're in the market for a new home, experts typically recommend focusing your search on the right home purchase — not the interest rate environment.”
Instead, work on building a team of skilled professionals, including a trusted lender and real estate agent, who can explain what’s happening in the market and what it means for you. If you need to move because you’re changing jobs, want to be closer to family, or are in the middle of another big life change, the right team can help you achieve your goal, even now.
Bottom Line
The best advice for your move is: don’t try to control what you can’t control – especially mortgage rates. Even the experts can’t say for certain where they’ll go from here. Instead, focus on building a team of trusted professionals who can keep you informed. When you’re ready to get the process started, let’s connect.
2023-10-16T06:00:00-07:002023-10-19T00:05:23-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39837Growing Your Net Worth with Homeownership
<img src="https://files.keepingcurrentmatters.com/content/images/20231011/20231012-Growing-Your-Net-Worth-with-Homeownership.png" />
Take a moment to imagine where you want to be in a few years. You might be thinking about your job, money, wanting more stability, or goals you want to reach soon. Is homeownership a part of that vision? If it is, you should know owning a home has a whole lot of financial benefits.
One of the many reasons to buy a home is that it’s a great way to build wealth and gain financial stability. That’s because the value of most homes increases over time, which in turn grows your net worth. Here’s how home values are rising right now. <a href="https://zillow.mediaroom.com/2023-09-26-U-S-housing-value-has-surged,-gaining-more-than-2-6-trillion-in-the-past-year" rel="noopener noreferrer" target="_blank">According</a> to Zillow:
“The total value of the U.S. housing market – the sum of Zillow’s estimated value for every U.S. home – is now slightly less than $52 trillion, which is $1.1 trillion higher than the previous peak reached last June.”
Basically, homeownership is a tremendous wealth-building tool. And with home values back <a href="https://www.mykcm.com/2023/10/03/home-prices-are-not-falling/" rel="noopener noreferrer" target="_blank">on the rise</a> across the nation, now might be a good time to consider if owning a home is something you want to reach for.
Here’s a look at some data to see how much owning a home can really make a difference in your life.
Household Net Worth Is Rising
<a href="https://twitter.com/DianeSwonk/status/1706663509331718197" rel="noopener noreferrer" target="_blank">Data</a> shows that while those in the top 1% saw the most dramatic net worth increase, people from every single tax bracket have seen their wealth grow over the past few years (see graph below):
<a href="https://www.mykcm.com/content/images/20231011/20231012-Household-Net-Worth-Up-Dramatically.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231011/20231012-Household-Net-Worth-Up-Dramatically.png" /></a>
For many of those people, the <a href="https://www.mykcm.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">rising value</a> of their home plays a big part in that.
Owning a Home Helps You Achieve Financial Success
You can tell homeownership had a lot to do with that growth because there’s a significant net worth gap between homeowners and renters. 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">says</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.”
The big reason why? Homeowner’s <a href="https://www.mykcm.com/2023/09/08/home-price-forecasts-revised-for-2023-infographic/" rel="noopener noreferrer" target="_blank">build equity</a>. Home equity is the value of your home minus the amount you owe on your mortgage. And for most homeowners, that’s the largest contributor to their net worth. Here’s the <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building" rel="noopener noreferrer" target="_blank">data</a> from First American to prove it (see graph below):
<a href="https://www.mykcm.com/content/images/20231011/20231012-Housing-Piece-of-Net-Worth-Is-Crucial-.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231011/20231012-Housing-Piece-of-Net-Worth-Is-Crucial-.png" /></a>
The blue portion of each bar represents housing as a portion of net worth – and it’s clearly a bigger contributor than other investments like stocks, gold, and cryptocurrencies. As you can see, across different income levels, homeownership does more to build the average household’s wealth than anything else.
Bottom Line
One of the biggest benefits of owning a home is that it can provide an avenue to grow your net worth. Let’s connect so you can start investing in homeownership.
2023-10-13T06:00:00-07:002023-10-19T00:01:23-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39836The Latest Expert Forecasts for Home Prices in 2023
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Are you thinking about making a move? If so, all the speculation that home prices would crash this year may have you feeling a bit on edge about your decision. Let the data and the experts reassure you. Prices aren’t in a downward spiral and will actually finish the year strong.
Even though you may have heard talk that prices would drop 5, 10, or even 20% this year, that hasn’t happened. The big reason why is the supply of homes for sale is too low. There are just more buyers looking to buy than homes available, and that’s kept prices from falling.
To prove this year wasn’t a bust for home prices, let’s look at the latest 2023 forecast from a number of experts.
Most Experts Project Home Prices Will Net Positive this Year
The general consensus from industry experts is that home price appreciation will actually be positive for 2023. The graph below shows the latest 2023 year-end forecasts from six different organizations:
<a href="https://www.mykcm.com/content/images/20231005/20231011-2023-Year-End-Home-Price-Forecasts.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231011-2023-Year-End-Home-Price-Forecasts.png" /></a>
As you can see, all but one project nationally prices will net positive this year. That’s significant because it shows the majority are optimistic about home price growth.
If you’re still worried about the one red bar that shows an overall price drop for the year, think about this. The <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-q3-2023-us-economic-outlook-07-27-2023.pdf" rel="noopener noreferrer" target="_blank">projection</a> from the National Association of Realtors (NAR) is for only a slight decline. It’s not the big crash all the headlines called for. Plus, if you average all six forecasts together, the expectation is that prices will net somewhere around 3.3% positive growth for the year.
If these 6 organizations aren’t enough to convince you that prices won’t come tumbling down, here’s something else to consider. One of the six forecasts represented in the graph is the <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">Home Price Expectation Survey</a> (HPES) from Pulsenomics. It combines survey results from over 100 economists, investment strategists, and housing market analysts. The HPES found that the average from all 100 of those experts is 3.3% price growth for the year.
If you look back at the graph above, you’ll notice the blue average for the forecasts in this graph is also 3.3%. While individual forecasts may vary, both the HPES survey and the average of these forecasts provide the same projection. And 3.3% appreciation is a completely different story than prices falling.
Bottom Line
If you’re worried about home prices falling this year, let the experts reassure you. Based on the average of the latest forecasts, home prices will actually show positive growth this year. If you have questions about what’s happening with home prices in our local area, let’s connect.
2023-10-12T06:00:00-07:002023-10-18T23:57:10-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39696Are Grandparents Moving To Be Closer to Their Grandkids?
<img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231010-Are-Grandparents-Moving-To-Be-Closer-to-Their-Grandkids.png" />
During the pandemic, many people distanced themselves from their loved ones for health reasons. Grandparents were told to stay away from their grandkids, especially as schools started to open. That’s because it would have been risky to visit with their grandchildren who may have gotten sick from school.
Now that the pandemic has passed, many grandparents want more than ever to be near their grandchildren again to make up for that lost time. But how are they getting that “Grandparent Wish?” The data tells us many are moving to make sure they’re getting more quality time.
Grandparents Are Moving To Be Near Loved Ones
Recent <a href="https://store.realtor/2022-nar-profile-of-home-buyers-and-sellers-download/" rel="noopener noreferrer" target="_blank">data</a> from the National Association of Realtors (NAR) shows people between the ages of 55 and 74 are moving farther (more than 100 miles) than any other age group (see graph below):
<a href="https://www.mykcm.com/content/images/20231005/20231010-Grandparents-are-moving-farther-away.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231010-Grandparents-are-moving-farther-away.png" /></a>
The average age of grandparents in the U.S. is 67 years. The logical leap is that at least some of the people who are moving the furthest are grandparents. But what’s causing them to move so far?
The same report from NAR shows the top reason people move is to be closer to loved ones (see graph below):
<a href="https://www.mykcm.com/content/images/20231005/20231010-Sellers-Want-to-be-near-loved-ones.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231010-Sellers-Want-to-be-near-loved-ones.png" /></a>
Based on this data, it’s fair to say many grandparents are getting their wish of more quality time with their grandchildren by moving to be closer to them. And after experiencing isolation and loneliness during the COVID pandemic, that’s an especially good thing.
If you’re a grandparent, you know how important your grandchildren are. And you may be willing to sell and move just to be closer by. As Vance Cariaga, a journalist at Go Bank Rates, <a href="https://www.gobankingrates.com/retirement/planning/boomers-moving-further-from-home-close-to-grandbabies-is-it-good-financial-move/" rel="noopener noreferrer" target="_blank">explains</a>:
“Never underestimate the power of grandchildren – especially when it comes to lifestyle and financial decisions. Recent data shows that many baby boomers are relocating further away from home than they used to so they can be closer to their grandbabies.”
Bottom Line
The data shows grandparents are moving further to be near their grandchildren. If you have grandchildren of your own, maybe you can relate. When you decide it’s time to be closer to your loved ones, let's <a href="https://www.mykcm.com/2023/08/23/why-you-need-a-true-expert-in-todays-housing-market/" rel="noopener noreferrer" target="_blank">connect</a>.
2023-10-11T06:00:00-07:002023-10-11T00:20:09-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39695Key Skills You Need Your Listing Agent To Have
<img src="https://files.keepingcurrentmatters.com/content/images/20231005/20231009-Key-skills-you-need-your-listing-agent-to-have.png" />
Selling your house is a big decision. And that can make it feel both exciting and a little bit nerve-wracking. But the key to a successful sale is finding the perfect listing agent to work with you throughout the process. A listing agent, also known as a seller's agent, helps market and sell your house while advocating for you every step of the way.
But, how do you know you've found the perfect match in an agent? Here are three key skills you’ll want your listing agent to have.
They Price Your House Based on the Latest Data
While it may be tempting to pick the agent who suggests the highest asking price for your house, that strategy may cost you. It’s easy to get caught up in the excitement when you see a bigger number, but overpricing your house can have consequences. It could mean it’ll sit on the market longer because the higher price is actually deterring buyers.
Instead, you want to pick an agent who’s going to have an open conversation about how they think you should price your house and why. A great agent will base their pricing strategy on solid data. They won't throw out a number just to win your listing. Instead, they'll show you the facts, explain their pricing strategy, and make sure you're on the same page. As NerdWallet <a href="https://www.nerdwallet.com/article/mortgages/are-all-real-estate-agents-the-same-which-realtor-is-right-for-you" rel="noopener noreferrer" target="_blank">explains</a>:
“An agent who recommends the highest price isn't always the best choice. Choose an agent who backs up the recommendation with market knowledge.”
They’re a Great Negotiator
The home-selling process can be emotional, especially if you’ve been in your house for a long time. You’re connected to it and have a lot of memories there. This can make the negotiation process harder. That’s where a trusted professional comes in.
A skilled listing agent will be calm under pressure and will be your point-person in all of those conversations. Their experience in handling the back-and-forth gives you with the peace of mind that you've got someone on your side who’s got your best interests in mind throughout this journey.
They’re a Skilled Problem Solver
At the heart of it all, a listing agent's main priority is to get your house sold. A great agent never loses sight of that goal and will help you prioritize your needs above all else. If they identify any necessary steps you need to take, they’ll be open with you about it. Their commitment to your success means they'll work with you to address any potential roadblocks and find creative solutions to anything that pops up along the way.
BankRate <a href="https://www.bankrate.com/real-estate/finding-best-real-estate-agent/#go-with-your-gut" rel="noopener noreferrer" target="_blank">explains</a> it like this:
“Just as important as the knowledge and experience agents bring is their ability to guide you smoothly through the process. Above all, go with an agent you trust and will feel comfortable with. . .”
Bottom Line
Whether you're a first-time seller or you’ve been through selling a house before, a great listing agent is the key to success. Let’s connect so you have a skilled local expert by your side to guide you through every step of the process.
2023-10-10T06:00:00-07:002023-10-11T00:17:22-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39694Are You a Homebuyer Worried About Climate Risks?
<img src="https://files.keepingcurrentmatters.com/content/images/20231003/20231005-are-you-a-homebuyer-worried-about-climate-risks.jpg" />
The increasing effects of natural disasters are leading to new obstacles in residential real estate. As a recent article from CoreLogic <a href="https://www.corelogic.com/intelligence/case-studies/climate-risk-modeling-future-for-real-estate-portfolios/" rel="noopener noreferrer" target="_blank">explains</a>:
“As the specter of climate change looms large, the world braces for unprecedented challenges. In the world of real estate, one of those challenges will be the effects of natural catastrophes on property portfolios, homeowners, and communities.”
That may be why, <a href="https://zillow.mediaroom.com/2023-09-05-More-than-80-of-home-shoppers-consider-climate-risks-when-looking-for-a-new-home" rel="noopener noreferrer" target="_blank">according</a> to Zillow, more and more Americans now consider how climate risks and natural disasters can impact their homeownership plans (see below):
<a href="https://www.mykcm.com/content/images/20231003/20231005-4-out-of-5-prospective-homebuyers.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231003/20231005-4-out-of-5-prospective-homebuyers.png" /></a>
This study goes on to explain that climate risks affect where many people look for a home. That’s because homebuyers are interested in finding out if the house they want will be exposed to things like floods, extreme heat, and wildfires.
If you’re in the same situation and are thinking about what to do next, here’s some important information to consider as you start looking for a home.
Expert Advice for Homebuyers To Reduce Climate Risks
The first thing to do is understand how to go about buying a home while thinking about climate risks. With the right help and resources, you can simplify the process.
The Mortgage Reports provides these tips for buying your next home:
Evaluate climate risks: Before buying a home, it's important to check if it's in a flood-prone area using the <a href="https://msc.fema.gov/portal/home" rel="noopener noreferrer" target="_blank">FEMA website</a>, review the seller's property disclosure for any past damage, and get an inspection for issues like cracks and mold to make sure it's a safe investment.
Consider future preventative maintenance costs: For areas that get tropical storms, you may need to purchase hurricane shutters and sandbags to protect the home. In wildfire-prone areas, you may want to clear plants five feet from the house, consider rooftop sprinklers, or possibly buy gutter guards to prevent fire hazards. Factor these future expenses in when touring homes that may need them.
Take steps to avoid losing your assets: Getting the right insurance for a home in a high-risk climate area is crucial. You should shop around and talk to multiple insurance agents to compare prices and options before deciding to bid on a home.
Above all else, your most valuable resource during this process is a trusted real estate expert. They'll always focus on your goals while keeping your concerns top of mind. Even if they don't have all the answers about how your home can handle natural disasters, they can connect you with the right experts and information.
Bottom Line
If you want to buy a home, but you're also thinking about climate risks, you're not alone. Your home is a big investment, and if anything can impact that, you want to know. Let’s connect so you have someone you can trust to guide you as you find your next home.
2023-10-09T06:00:00-07:002023-10-11T00:14:47-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39693Understanding the Benefits of Owning Your First Home
<img src="https://files.keepingcurrentmatters.com/content/images/20231003/20231004-Understanding-the-benefits-of-owning-your-first-home.png" />
Are you considering buying your first <a href="https://www.mykcm.com/2023/09/21/the-many-non-financial-benefits-of-homeownership/" rel="noopener noreferrer" target="_blank">home</a>? If so, it can be helpful to know what led other people to make that decision. According to a <a href="https://s22.q4cdn.com/957797852/files/doc_news/2023/09/9-14-23-first-time-homebuyers-undeterred-by-rising-mortgage-interest-rates.pdf" rel="noopener noreferrer" target="_blank">recent survey</a> of first-time homebuyers by PulteGroup:
“When asked why they purchased their first home recently, the answer was simple: because they wanted to. Either the desire to stop renting or recognition that homeownership is a smart financial investment was the main motivator for 72% of respondents.”
While that survey looked specifically at first-time homebuyers buying newly built homes, the same sentiment is true for just about anyone buying their first home. Here’s a bit more information to help you think about those two benefits of homeownership to see if they’re a key factor for you too.
When You Buy a Home, You Have More Stability than When You Rent
You might want to stop renting because rents keep <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">going up</a>. If you’re a renter, that means there’s a chance your payment will increase each time you sign a new rental agreement or renew your current one.
On the other hand, when you buy your home with a fixed-rate mortgage, your monthly housing payment is predictable over the length of that loan. This stability can give you a peace of mind that renting just can’t provide. Jeff Ostrowski, real estate journalist, <a href="https://www.moneygeek.com/mortgage/resources/rent-vs-buy-guide/" rel="noopener noreferrer" target="_blank">breaks it down</a>:
“With a fixed-rate mortgage, your monthly principal and interest payment is set for as long as you keep the loan. Sign a rental lease, however, and you could see your rent rise the following year, the year after that and so on.”
When You Buy a Home, You Grow Your Wealth as Home Values Climb
Beyond that, owning a home can also be a great long-term investment. While renting may be the more affordable option right now, it doesn’t provide an avenue for you to grow your wealth over time. Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/the-reconomy-podcast-should-you-rent-or-buy-a-home-right-now" rel="noopener noreferrer" target="_blank">explains</a> that’s an important distinction to consider:
“Given current dynamics, more young households may choose to rent in the near term as the cost to own, excluding house price appreciation, has unequivocally increased. Yet, accounting for house price appreciation in that cost of homeownership, whether to rent or buy will depend on where, and if, a home is likely to cost more or less in the near future.”
Basically, renting doesn’t allow you to build equity. In contrast, homeownership can help you grow your net worth as your home’s value <a href="https://www.mykcm.com/2023/09/08/home-price-forecasts-revised-for-2023-infographic/" rel="noopener noreferrer" target="_blank">appreciates</a>. That’s a significant perk you can’t get if you keep renting.
When you take that into account, it may make better financial sense to buy. Most experts project home prices will <a href="https://www.mykcm.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">continue to appreciate</a> over the next few years at a pace that’s more normal for the market. That means when you buy a home, not only are you investing in a place to live, but you’re also investing in your financial future.
Bottom Line
If you're ready, it can be a smart move to buy your first <a href="https://www.mykcm.com/2023/09/07/get-ready-for-smaller-more-affordable-homes/" rel="noopener noreferrer" target="_blank">home</a> instead of renting. Let’s connect so you can stabilize your housing payment and start building wealth for your future.
2023-10-05T06:00:00-07:002023-10-10T23:39:20-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39692Home Prices Are Not Falling
<img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003-Home-Prices-Are-Not-Falling.png" />
During the fourth quarter of last year, some housing experts projected home prices were going to crash in 2023. The media ran with those forecasts and put out headlines calling for doom and gloom in the housing market. All of this negative news coverage made a lot of people have doubts about the strength of the residential real estate market.
If it made you question if you should delay your own plans to move, here’s what you really need to know.
Home Prices Never Crashed
Disregard what you saw in the headlines. The actual data shows home prices were remarkably resilient and performed far better than the media would have you believe (see graph below):
<a href="https://www.mykcm.com/content/images/20230929/20231003-Percent-Change-In-Home-Values.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003-Percent-Change-In-Home-Values.png" /></a>
This graph uses <a href="https://www.blackknightinc.com/data-reports/" rel="noopener noreferrer" target="_blank">reports</a> from three trusted <a href="https://www.freddiemac.com/research/indices/house-price-index" rel="noopener noreferrer" target="_blank">sources</a> to clearly illustrate prices have already rebounded after experiencing only slight declines nationally. That’s a far cry from the crash so many articles called for.
The declines that did happen (shown in red), weren’t drastic but were short-lived. As Nicole Friedman, a reporter at the Wall Street Journal (WSJ), <a href="https://www.wsj.com/economy/housing/the-fall-in-home-prices-may-already-be-over-3496d6bb" rel="noopener noreferrer" target="_blank">says</a>:
“Home prices aren’t falling anymore. . . The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”
Even though some media coverage made a big deal about home prices pulling back, the slight correction that happened is already in the rearview mirror. Basically, this data shows you home prices aren’t falling anymore – they’re actually going back up.
What’s Next for Home Prices?
The consensus from experts is that home price growth will continue in the years ahead and is returning to normal levels for the market. That means we’ll still see home prices appreciating, just at a slower pace than the last few years – and that’s a good thing.
Some news sources will see home price growth slowing and put out stories that make you think prices are falling again. The return of misleading headlines like those is already having an impact on how homebuyers are feeling again. You can see how this affects general opinion in the <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey/national-housing-survey-archive" rel="noopener noreferrer" target="_blank">Consumer Confidence Survey</a> from Fannie Mae (see graph below):
<a href="https://www.mykcm.com/content/images/20230929/20231003---of-Americans-Who-Think-Home-Prices-Will-Go-Down-over-the-Next-12-Months.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003---of-Americans-Who-Think-Home-Prices-Will-Go-Down-over-the-Next-12-Months.png" /></a>
While the percentage of Americans who think prices will fall has been slowly declining this year, the latest Consumer Confidence data indicates that’s ticked back up recently (shown in red). This change is surprising especially since the home price data shows prices are going up, not down. It tells you the impact the media still has on public opinion.
Don’t fall for the negative headlines and become part of this statistic. Remember, data from a number of sources shows home prices aren’t falling anymore.
Bottom Line
Even though the media may make things sound doom and gloom, the data shows home prices aren’t falling anymore. So, don’t let the headlines scare you or delay your plans. Let's connect so you have a trusted resource to cut through the noise and tell you what’s really happening in our area.
2023-10-04T06:00:00-07:002023-10-10T23:36:43-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39691Unpacking the Long-Term Benefits of Homeownership
<img src="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Unpacking-the-long-term-benefits-of-homeownership.png" />
If you’re thinking about buying a home soon, higher mortgage rates, rising home prices, and ongoing affordability concerns may make you wonder if it still makes sense to buy a home right now. While those market factors are important, there's more to consider. You should think about the long-term benefits of homeownership too.
Think about this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how home values grow with time and how, by extension, that grows your own wealth. That may be why, in a recent Fannie Mae <a href="https://www.fanniemae.com/research-and-insights/perspectives/consumers-homeownership-aspirations-remain-high-despite-higher-home-prices-and-interest-rates" rel="noopener noreferrer" target="_blank">survey</a>, 76% of respondents say they believe buying a home is a safe investment.
Here’s a look at how just the home price appreciation piece can really add up over the years.
Home Price Growth over Time
The map below uses <a href="https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx" rel="noopener noreferrer" target="_blank">data</a> from the Federal Housing Finance Agency (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends:
<a href="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-over-5-years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-over-5-years.png" /></a>
If you look at the percent change in home prices, you can see home prices grew on average by just over 57% nationwide over a five-year period.
Some regions are slightly above or below that average, but overall, home prices gained solid ground in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer (see map below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-since-91.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-since-91.png" /></a>
The second map shows, nationwide, home prices appreciated by an average of over 297% over a roughly 30-year span.
This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost triple in value over that time. That’s a key factor in why so many homeowners who bought their homes years ago are still happy with their decision.
And while you may have heard talk throughout the year that home prices would crash, it hasn’t happened. In fact, experts project home prices will continue to rise for years to come.
Bottom Line
If you’re wondering if it still makes sense to buy a home today, it's important to focus on the long-term advantages that come with homeownership. When you’re ready to start your homebuying journey, let’s chat.
2023-10-03T06:00:00-07:002023-10-10T23:11:53-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39690Why Your House Didn’t Sell
<img src="https://files.keepingcurrentmatters.com/content/images/20230927/20230928-Why-your-house-didn-t-sell.png" />
If your listing expired and your house didn’t sell, you’re likely feeling a little frustrated. Not to mention, you're also probably wondering what went wrong. Here are three questions to think about as you figure out what to do next.
Did You Limit Access to Your House?
One of the biggest mistakes you can make when selling your house is restricting the days and times when potential buyers can tour it. Being flexible with your schedule is important when you're selling your house, even though it might feel a bit stressful to drop everything and leave when buyers want to see it. After all, minimal access means minimal exposure to buyers. ShowingTime <a href="https://www.showingtime.com/blog/6-reasons-your-house-isnt-getting-showings-and-how-to-fix-it/" rel="noopener noreferrer" target="_blank">advises</a>:
“. . . do your best to be as flexible as possible when granting access to your house for showings.”
Sometimes, the most determined <a href="https://www.mykcm.com/2023/09/20/remote-work-is-changing-how-some-buyers-search-for-their-dream-homes/" rel="noopener noreferrer" target="_blank">buyers</a> might come from far away. Since they're traveling to see your house, they may not be able to change their plans easily if you only offer limited times for showings. So, try to make your house available as much as you can to accommodate them. It’s simple. If no one’s able to look at it, how’s it going to sell?
Did You Make Your House Stand Out?
When selling your house, the old saying matters: you never get a second chance to make a first impression. Putting in the work to make the exterior of your home look nice is just as important as how you stage it inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from U.S. News <a href="https://realestate.usnews.com/real-estate/articles/how-to-sell-your-home-while-living-in-it" rel="noopener noreferrer" target="_blank">says</a>:
“After all, if people drive by, but aren’t interested enough to walk through the front door, you’ll never sell your house.”
But don’t let that impact stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.
Did You Price Your House Compellingly?
Setting the right price is extremely important when you're selling your house. Even though it might feel tempting to push the price higher to maximize your profit, overpricing can scare away buyers and make it hard to sell quickly. Business Insider <a href="https://www.businessinsider.com/mistakes-people-make-trying-to-sell-home-real-estate-agents-tips-2019-5" rel="noopener noreferrer" target="_blank">notes</a>:
“. . . the biggest mistake sellers make is overpricing their home.”
If your house is priced higher than others like it, it could make buyers lose interest. Pay attention to the feedback people give your agent during open houses and showings. If lots of people are saying the same thing, it might be a good idea to think about lowering the price.
For all these insights and more, rely on a trusted real estate agent. A great agent will offer expert advice on relisting your house with effective strategies to get it <a href="https://www.mykcm.com/2023/08/24/more-jobs-and-better-pay-leads-to-more-buyer-demand/" rel="noopener noreferrer" target="_blank">sold</a>.
Bottom Line
It’s natural to feel disappointed when your listing has expired and your house didn’t <a href="https://www.mykcm.com/2023/08/29/why-you-may-still-want-to-sell-your-house-after-all/" rel="noopener noreferrer" target="_blank">sell</a>. Let’s connect to figure out what happened and what to reconsider or change if you want to get your house back on the market.
2023-10-02T06:00:00-07:002023-10-10T23:08:33-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39617Why Today’s Housing Inventory Shows a Crash Isn’t on the Horizon
<img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-Why-Today-s-Housing-Inventory-Shows-a-Crash-Isn-t-on-the-Horizon-KCM.png" />
You might remember the housing crash in 2008, even if you didn't <a href="https://www.mykcm.com/2023/09/21/the-many-non-financial-benefits-of-homeownership/" rel="noopener noreferrer" target="_blank">own a home</a> at the time. If you’re worried there’s going to be a repeat of what happened back then, there's good news – the housing market now is different from 2008.
One important reason is there aren't enough <a href="https://www.mykcm.com/2023/09/18/are-more-homes-coming-onto-the-market/" rel="noopener noreferrer" target="_blank">homes for sale</a>. That means there’s an undersupply, not an oversupply like the last time. For the market to crash, there would have to be too many houses for sale, but the data doesn't show that happening.
Housing supply comes from three main sources:
Homeowners deciding to sell their houses
Newly built homes
Distressed properties (foreclosures or short sales)
Here’s a closer look at today's <a href="https://www.mykcm.com/2023/09/14/why-is-housing-inventory-so-low/" rel="noopener noreferrer" target="_blank">housing inventory</a> to understand why this isn’t like 2008.
Homeowners Deciding To Sell Their Houses
Although housing supply did grow compared to last year, it’s still low. The current months’ supply is below the norm. The graph below shows this more clearly. If you look at the latest <a href="https://www.nar.realtor/topics/existing-home-sales" rel="noopener noreferrer" target="_blank">data</a> (shown in green), compared to 2008 (shown in red), there’s only about a third of that available <a href="https://www.nar.realtor/newsroom/existing-home-sales-slipped-2-2-in-july" rel="noopener noreferrer" target="_blank">inventory</a> today.<a href="https://www.mykcm.com/content/images/20230926/20230927-Average-Annual-Inventory-Of-Homes-for-sale.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-Average-Annual-Inventory-Of-Homes-for-sale.png" /></a>
So, what does this mean? There just aren't enough homes available to make home values drop. To have a repeat of 2008, there’d need to be a lot more people selling their houses with very few buyers, and that's not happening right now.
Newly Built Homes
People are also talking a lot about what's going on with <a href="https://www.mykcm.com/2023/09/07/get-ready-for-smaller-more-affordable-homes/" rel="noopener noreferrer" target="_blank">newly built</a> houses these days, and that might make you wonder if homebuilders are overdoing it. The graph below <a href="http://www.census.gov/construction/nrc/xls/co_cust.xls" rel="noopener noreferrer" target="_blank">shows</a> the number of new houses built over the last 52 years:<a href="https://www.mykcm.com/content/images/20230926/20230927-Single-Family-Housing-Units-Completed.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-Single-Family-Housing-Units-Completed.png" /></a>
The 14 years of underbuilding (shown in red) is a big part of the reason why inventory is so low today. Basically, builders haven’t been building enough homes for years now and that’s created a significant deficit in supply.
While the final blue bar on the graph shows that’s ramping up and is on pace to hit the long-term average again, it won’t suddenly create an oversupply. That’s because there’s too much of a gap to make up. Plus, builders are being intentional about not overbuilding homes like they did during the bubble.
Distressed Properties (Foreclosures and Short Sales)
The last place <a href="https://www.mykcm.com/2023/08/25/todays-housing-market-has-only-half-the-usual-inventory-infographic/" rel="noopener noreferrer" target="_blank">inventory</a> can come from is distressed properties, including short sales and foreclosures. Back during the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to get a home loan they couldn’t truly afford.
Today, lending standards are much tighter, resulting in more qualified buyers and far fewer foreclosures. The graph below uses <a href="https://www.newyorkfed.org/microeconomics/hhdc.html" rel="noopener noreferrer" target="_blank">data</a> from the Federal Reserve to show how things have changed since the housing crash:<a href="https://www.mykcm.com/content/images/20230926/20230927-The-Number-of-foreclosure-filings-is-near-all-time-lows.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230926/20230927-The-Number-of-foreclosure-filings-is-near-all-time-lows.png" /></a>
This graph illustrates, as lending standards got tighter and buyers were more qualified, the number of foreclosures started to go down. And in 2020 and 2021, the combination of a moratorium on foreclosures and the forbearance program helped prevent a repeat of the wave of foreclosures we saw back around 2008.
The forbearance program was a game changer, giving homeowners options for things like loan deferrals and modifications they didn’t have before. And <a href="https://www.mba.org/news-and-research/newsroom/news/2022/08/15/share-of-mortgage-loans-in-forbearance-decreases-to-0.74-in-july" rel="noopener noreferrer" target="_blank">data</a> on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won’t be a wave of foreclosures coming to the market.
What This Means for You
Inventory levels aren’t anywhere near where they’d need to be for prices to drop significantly and the housing market to crash. <a href="https://www.bankrate.com/real-estate/is-the-housing-market-about-to-crash/#fall" rel="noopener noreferrer" target="_blank">According</a> to Bankrate, that isn’t going to change anytime soon, especially considering buyer demand is still strong:
“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”
Bottom Line
The market doesn’t have enough available homes for a repeat of the 2008 housing crisis – and there’s nothing that suggests that will change anytime soon. That’s why housing inventory tells us there’s no crash on the horizon.
2023-09-29T05:00:00-07:002023-10-09T10:34:17-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39616The Return of Normal Seasonality for Home Price Appreciation
<img src="https://files.keepingcurrentmatters.com/content/images/20230921/20230926-The-Return-of-Normal-Seasonality-for-Home-Price-Appreciation.png" />
If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.
In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.
That’s why there’s a reliable long-term home price trend. The graph below uses data from <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#overview" rel="noopener noreferrer" target="_blank">Case-Shiller</a> to show typical monthly home price movement from 1973 through 2022 (not <a href="https://www.census.gov/construction/nrs/faqs/faqs_seas.html#quest2" rel="noopener noreferrer" target="_blank">adjusted</a>, so you can see the seasonality):
<a href="https://www.mykcm.com/content/images/20230921/20230926-49-Year-Average-Monthly-Price-Movement.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230921/20230926-49-Year-Average-Monthly-Price-Movement.png" /></a>
As the data shows, at the beginning of the year, home prices grow, but not as much as they do in the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.
After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/us-home-price-insights-september-2023/" rel="noopener noreferrer" target="_blank">explains</a>:
“High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”
Why This Is So Important to Understand
In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:
Appreciation: when prices increase.
Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
Depreciation: when prices decrease.
Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation.
Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.
Bottom Line
While the headlines are generating fear and confusion on what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in our local area, let’s connect.
2023-09-28T05:00:00-07:002023-10-09T09:54:56-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39615Beginning with Pre-Approval
<img src="https://files.keepingcurrentmatters.com/content/images/20230921/20230925-The-Benefit-Of-Beginning-With-Pre-Approval.png" />
If you’re looking to buy a home this fall, there are a few things you need to know. Affordability is tight with today’s mortgage rates and rising home prices. At the same time, there’s a limited number of homes on the market right now and that’s creating some competition among buyers. But, if you’re strategic, there are ways to navigate these waters. The first thing you’ll want to do is get pre-approved for a mortgage. That way you’ll know your numbers and can set yourself up for success from the start of your home search.
What Pre-Approval Does for You
To understand why it’s such an important step, you need to know what pre-approval is. As part of the homebuying process, a lender looks 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 know how much money you can borrow. Freddie Mac <a href="https://myhome.freddiemac.com/blog/homebuying/how-do-i-get-pre-approved-mortgage" rel="noopener noreferrer" target="_blank">explains</a> it like this:
“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”
Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow. Why does this help you, especially today? With higher <a href="https://www.mykcm.com/2023/09/06/mortgage-rates-past-present-and-possible-future/" rel="noopener noreferrer" target="_blank">mortgage rates</a> and <a href="https://www.mykcm.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/" rel="noopener noreferrer" target="_blank">home prices</a> impacting affordability for many buyers right now, a solid understanding of your numbers is even more important so you can truly wrap your head around your options.
Pre-Approval Helps Show Sellers You’re a Serious Buyer
Let’s face it, there are more buyers looking to buy than there are homes available for sale and that imbalance is creating some competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you make an offer on a home. But getting pre-approved for a mortgage can help you stand out from other hopeful buyers.
As an article from Wall Street Journal (WSJ) <a href="https://www.wsj.com/buyside/personal-finance/mortgage-pre-approval-25dd076c" rel="noopener noreferrer" target="_blank">says</a>:
“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”
Pre-approval shows the seller you’re a serious buyer that’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or financial issues.
Bottom Line
Getting pre-approved is an important first step when you’re buying a home. The more prepared you are, the better chance you have of getting the home you want. Connect with a trusted lender so you have the tools you need to purchase a home in today’s market.
2023-09-27T05:00:00-07:002023-10-09T09:51:15-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39614The Many Non-Financial Benefits of Homeownership
<img src="https://files.keepingcurrentmatters.com/content/images/20230914/20230921-The-Many-Non-Financial-benefits-of-Homeownership.png" />
Buying and owning your own home can have a big impact on your life. While there are <a href="https://www.mykcm.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">financial reasons</a> to become a homeowner, it's essential to think about the non-financial benefits that make a home more than just a place to live.
Here are some of the top non-financial reasons to buy a home.
According to <a href="https://www.fanniemae.com/media/47726/display" rel="noopener noreferrer" target="_blank">Fannie Mae</a>, 94% of survey respondents say “Having Control Over What You Do with Your Living Space” is a top reason to own.
Your home is truly your own space. If you own a home, unless there are specific homeowner association requirements, you can decorate and change it the way you like. That means you can make small changes or even do big renovations to make your home perfect for you. Your home is uniquely yours and by buying, you give yourself the freedom to tailor it to your individual style. Investopedia <a href="https://www.investopedia.com/articles/mortgages-real-estate/08/home-ownership.asp" rel="noopener noreferrer" target="_blank">explains</a>:
“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.”
When you rent, you might not be able to make your place really feel like it’s yours. And if you do make any modifications, you might have to change them back before you leave. But if you own your home, you can make it just the way you want it. That level of customization can give you a sense of pride in where you live and make you feel more connected to it.
Fannie Mae also finds 90% say “Having a Good Place for Your Family To Raise Your Children” tops their list of why it’s better to buy a home.
Another important factor to think about is what stage of life you’re in. U.S. News <a href="https://realestate.usnews.com/real-estate/articles/should-you-rent-or-buy-a-home" rel="noopener noreferrer" target="_blank">breaks it down</a>:
“For those with young children, buying a home and putting down roots is a major driver. . . . You don’t want the upheaval of a massive rent increase or a non-renewed lease to impact your sense of stability.”
No matter which of life’s milestones you’re in, stability and predictability are important. That’s because the one constant in life is that things will change. And, as life changes around you, having a familiar home and not worrying about moving regularly helps you and those who matter most feel more secure and more comfortable.
Lastly, Fannie Mae says 82% list “Feeling Engaged in Your Community” as another key motivator to own.
Owning your home also helps you feel even more connected to your neighborhood. People who own homes usually live in them for an average of nine years, according to the National Association of Realtors (NAR). As that time passes, it’s natural to make friends and build strong ties in the community. As Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), <a href="https://www.housingwire.com/articles/opinion-why-we-all-have-a-stake-in-closing-the-homeownership-gap/" rel="noopener noreferrer" target="_blank">points</a> out:
“Homeowners also tend to be more active in their local communities . . .”
When you care deeply about the people you live near, you’ll do what you can to contribute to your local area.
Bottom Line
Owning your home can make your life better by giving you a sense of accomplishment, pride, stability, and connectedness. If you're thinking about becoming a homeowner and want to learn more, let’s connect.
2023-09-26T05:00:00-07:002023-10-09T09:47:35-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39251Remote Work Is Changing How Some Buyers Search for Their Dream Homes
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The way Americans work has changed in recent years, and remote work is at the forefront of this shift. Experts say it’ll continue to be popular for years to come and <a href="https://www.zippia.com/advice/remote-work-statistics/" rel="noopener noreferrer" target="_blank">project</a> that 36.2 million Americans will be working remotely by 2025. To give you some perspective, that's a <a href="https://www.zippia.com/advice/remote-work-statistics/" rel="noopener noreferrer" target="_blank">417%</a> increase compared to the pre-pandemic years when there were just 7 million remote workers.
If you’re in the market to <a href="https://www.mykcm.com/2023/09/07/get-ready-for-smaller-more-affordable-homes/" rel="noopener noreferrer" target="_blank">buy a home</a> and you work remotely either full or part-time, this trend is a game-changer. It can help you overcome some of today’s <a href="https://www.mykcm.com/2023/09/06/mortgage-rates-past-present-and-possible-future/" rel="noopener noreferrer" target="_blank">affordability</a> and housing <a href="https://www.mykcm.com/2023/08/25/todays-housing-market-has-only-half-the-usual-inventory-infographic/" rel="noopener noreferrer" target="_blank">inventory challenges</a>.
How Remote Work Helps with Affordability
Remote or hybrid work allows you to change how you approach your home search. Since you’re no longer commuting every day, you may not feel it’s as essential to live near your office. If you’re willing to move a bit further out in the suburbs instead of the city, you could open up your pool of affordable options. In a recent study, Fannie Mae <a href="https://www.fanniemae.com/research-and-insights/perspectives/workplace-flexibility-may-help-address-affordability-concerns" rel="noopener noreferrer" target="_blank">explains</a>:
“Home affordability may also be a reason why we saw an increase in remote workers’ willingness to relocate or live farther away from their workplace . . .”
If you're thinking about moving, having this kind of location flexibility can boost your chances of finding a home that fits your budget. Work with your agent to cast a wider net that includes additional areas with a lower cost of living.
More Work Flexibility Means More Home Options
And as you broaden your search to include more affordable options, you may also find you have the chance to get more features for your money too. Given the low supply of <a href="https://www.mykcm.com/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/" rel="noopener noreferrer" target="_blank">homes for sale</a>, finding a home that fits all your wants and needs can be challenging.
By opening up your search, you’ll give yourself a bigger pool of options to choose from, and that makes it easier to find a home that truly fits your lifestyle. This could include homes with more square footage, diverse home styles, and a wider range of neighborhood amenities that were previously out of reach.
Historically, living close to work was a sought-after perk, often coming with a hefty price tag. But now, the dynamics have changed. If you work from home, you have the freedom to choose where you want to live without the burden of long daily commutes. This shift allows you to focus more on finding a home that is affordable and delivers on your dream home features.
Bottom Line
Remote work goes beyond job flexibility. It's a chance to broaden your horizons in your home search. Without being bound to a fixed location, you have the freedom to explore all of your options. Let’s connect to find out how this freedom can lead you to your ideal home.
2023-09-25T06:00:00-07:002023-09-20T21:05:43-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39250Your Home Equity Can Offset Affordability Challenges
<img src="https://files.keepingcurrentmatters.com/content/images/20230914/20230919-Your-Home-Equity-Can-Offset-Affordability-Challenges.png" />
Are you thinking about selling your house? If so, today’s mortgage rates may be making you wonder if that’s the right decision. Some homeowners are reluctant to sell and take on a higher mortgage rate on their next home. If you’re worried about this too, know that even though rates are high right now, so is home equity. Here’s what you need to know.
Bankrate <a href="https://www.bankrate.com/home-equity/reasons-to-use-home-equity/" rel="noopener noreferrer" target="_blank">explains</a> exactly what equity is and how it grows:
“Home equity is the portion of your home that you’ve paid off and own outright. It’s the difference between what the home is worth and how much is still owed on your mortgage. As your home’s value increases over the long term and you pay down the principal on the mortgage, your equity stake grows.”
In other words, equity is how much your home is worth now, minus what you still owe on your home loan.
How Much Equity Do Homeowners Have Now?
Recently, your equity has been growing faster than you might think. To help contextualize just how much the average homeowner has, CoreLogic <a href="https://www.corelogic.com/press-releases/home-equity-increases-winter-spring-reducing-underwater-properties-q2/" rel="noopener noreferrer" target="_blank">says</a>:
“. . . the average U.S. homeowner now has about $290,000 in equity.”
That’s because, over the past few years, home prices went up significantly – and those rising prices helped your equity to accumulate faster than usual. While the market has started to normalize, there are still more people wanting to buy homes than there are homes available for sale. This high demand is causing home prices to go up again.
According to the <a href="https://www.fhfa.gov/Media/Blog/Pages/Homeowners-Equity-Remains-High.aspx" rel="noopener noreferrer" target="_blank">Federal Housing Finance Agency</a> (FHFA), 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-q2-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank">ATTOM</a>, a property data provider, nearly two-thirds (68.7%) of homeowners have either fully paid off their mortgages or have at least 50% equity (see chart below):
<a href="https://www.mykcm.com/content/images/20230914/20230919-Americans-Sitting-On-Tremendous-Equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230914/20230919-Americans-Sitting-On-Tremendous-Equity.png" /></a>
That means nearly 70% of homeowners have a tremendous amount of equity right now.
How Equity Helps with Your Affordability Concerns
With today’s affordability challenges, your equity can make a big difference when you decide to move. After you sell your house, you can use the equity you've built up in your home to help you buy your next one. Here’s how:
Be an all-cash buyer: If you've been living in your current home for a long time, you might have enough equity to buy a new house without having to take out a loan. If that's the case, you won't need to borrow any money or worry about mortgage rates. The National Association of Realtors (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/cash-rules" rel="noopener noreferrer" target="_blank">states</a>:
“These all-cash home buyers are happily avoiding the higher mortgage interest rates . . .”
Make a larger down payment: Your equity could be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won't have to borrow as much money so today’s rates become less of a sticking point. Experian <a href="https://www.experian.com/blogs/ask-experian/does-your-down-payment-affects-your-mortgage/" rel="noopener noreferrer" target="_blank">explains</a>:
“Increasing your down payment lowers your principal loan amount and, consequently, your loan-to-value ratio, which could lead to a lower interest rate offer from your lender.”
Bottom Line
If you're thinking about moving, the equity you've built up can make a big difference, especially today. To find out how much equity you've got in your current house and how you can use it for your next home, let’s connect.
2023-09-22T06:00:00-07:002023-09-20T20:37:07-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39249Are More Homes Coming onto the Market?
<img src="https://files.keepingcurrentmatters.com/content/images/20230912/20230918-Are-More-Homes-Coming-onto-the-Market.png" />
An important factor shaping today’s market is the number of homes for sale. And, if you’re considering whether or not to list your house, that’s one of the biggest advantages you have right now. When housing inventory is this low, your house will stand out, especially if it’s priced right.
But there are some early signs that more listings are coming. According to the latest <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank">data</a>, new listings (homeowners who just put their house up for sale) are trending up. Here’s a look at why this is noteworthy and what it may mean for you.
More Homes Are Coming onto the Market than Usual
It’s well known that the busiest time in the housing market each year is the spring buying season. That’s why there’s a predictable increase in the volume of newly listed homes throughout the first half of the year. Sellers are anticipating this and ramping up for the months when buyers are most active. But, as the school year kicks off and as the holidays approach, the market cools. It’s what’s expected.
But here’s what’s surprising. Based on the <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank">latest data</a> from Realtor.com, there’s an increase in the number of sellers listing their houses later this year than usual. A peak this late in the year isn’t typical. You can see both the normal seasonal trend and the unusual August in the graph below:<a href="https://www.mykcm.com/content/images/20230912/20230918-New-Listings-Tick-Up.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230912/20230918-New-Listings-Tick-Up.png" /></a>As Realtor.com <a href="https://www.realtor.com/research/july-2023-data/" rel="noopener noreferrer" target="_blank">explains</a>:
“While inventory continues to be in short supply, August witnessed an unusual uptick in newly listed homes compared to July, hopefully signaling a return in seller activity heading toward the fall season . . .”
While this is only one month of data, it’s unusual enough to note. It’s still too early to say for sure if this trend will continue, but it’s something you’ll want to stay ahead of if it does.
What This Means for You
If you’ve been putting off selling your house, now may be the sweet spot to make your move. That’s because, if this trend continues, you’ll have more competition the longer you wait. And if your neighbor puts their house up for sale too, it means you may have to share buyers’ attention with that other homeowner. If you sell now, you can beat your neighbors to the punch.
But, even with more homes coming onto the market, the market is still well below normal supply levels. And, that inventory deficit isn’t going to be reversed overnight. The graph below helps put this into context, so you can see the opportunity you still have now: <a href="https://www.mykcm.com/content/images/20230912/20230918-New-Listing-Count-in-August-Each-Year.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230912/20230918-New-Listing-Count-in-August-Each-Year.png" /></a>
Bottom Line
Even though inventory is still low, you don’t want to wait for more competition to pop up in your neighborhood. You still have an incredible opportunity if you sell your house today. Let’s connect to explore the benefits of selling now before more homes come to the market.
2023-09-21T06:00:00-07:002023-09-20T20:31:32-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39248Why Is Housing Inventory So Low?
<img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230914-Why-Is-Housing--Inventory-So-Low.png" />
One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.
Underbuilding Is a Long-Standing Problem
One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below <a href="http://www.census.gov/construction/nrc/xls/co_cust.xls" rel="noopener noreferrer" target="_blank">shows</a> new construction for single-family homes over the past five decades, including the long-term average for housing units completed:<a href="https://www.mykcm.com/content/images/20230911/20230914-Single-Family-Housing-Units-Completed.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230914-Single-Family-Housing-Units-Completed.png" /></a>
For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while <a href="https://www.mykcm.com/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/" rel="noopener noreferrer" target="_blank">new home construction</a> is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight.
Today’s Mortgage Rates Create a Lock-In Effect
There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">illustrate</a> just how many homeowners may find themselves in this situation:<a href="https://www.mykcm.com/content/images/20230911/20230914-70.7-percent-of-mortgage-rates-less-than-4.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230914-70.7-percent-of-mortgage-rates-less-than-4.png" /></a>
Those homeowners need to remember <a href="https://www.mykcm.com/2023/08/29/why-you-may-still-want-to-sell-your-house-after-all/" rel="noopener noreferrer" target="_blank">their needs</a> may matter just as much as the financial aspects of their move.
Misinformation in the Media Is Creating Unnecessary Fear
Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, <a href="https://www.parcllabs.com/articles/q3-real-estate" rel="noopener noreferrer" target="_blank">says</a>:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction.
How This Impacts You
If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.
For buyers: A limited number of homes for sale means you’ll want to seriously consider all of your options, including various areas and housing types. A skilled professional will help you explore all of what’s available and find the home that best fits your needs. They can even coach you through casting a broader net if you need to expand your search.
For sellers: Today’s low inventory actually offers incredible benefits because your house will stand out. A real estate agent can walk you through why it’s especially worthwhile to sell with these conditions. And since many sellers are also buyers, that agent is also an essential resource to help you stay up to date on the latest homes available for sale in your area so you can find your next dream home.
Bottom Line
The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, let’s connect. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in our area.
2023-09-20T06:00:00-07:002023-09-20T20:19:15-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39247Should Baby Boomers Buy or Rent After Selling Their Houses?
<img src="https://files.keepingcurrentmatters.com/content/images/20230912/20230913-Should-Baby-Boomers-Buy-or-Rent-After-Selling-Their-Houses.png" />
Are you a baby boomer who’s lived in your current house for a long time and you’re ready for a change? If you’re thinking about selling your house, you have a lot to consider. Will you move to a different state or stay nearby? Is it time to downsize or do you want more space to accommodate your loved ones? But maybe the biggest consideration boils down to this – will you buy your next home or choose to rent instead?
That decision ultimately depends on your current situation and your future plans. Here are two important factors to help you decide what’s right for you.
Expect Rents to Keep Going Up
The graph below uses <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">data</a> from the Census to show how rents have been climbing steadily since 1988:<a href="https://www.mykcm.com/content/images/20230912/20230913-Median-Asking-Rent-Since-1988.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230912/20230913-Median-Asking-Rent-Since-1988.png" /></a>Rents have been going up consistently over the long run. If you choose to rent, there’s a risk your rental payment will go up each time you renew your lease. Having a higher rental expense may not be something you want to deal with every year.
When you buy a home with a fixed-rate mortgage, it helps stabilize your monthly housing payment. This allows you to lock in your monthly payment for the duration of your home loan. That keeps your payments steady and predictable for the long haul. Freddie Mac <a href="https://myhome.freddiemac.com/blog/homebuying/should-inflation-change-your-homebuying-plans" rel="noopener noreferrer" target="_blank">sums</a> it up like this:
“. . . homeowners with fixed-rate loans will see little to no change to their monthly housing cost over the life of their loan. You can be confident in knowing that your mortgage payments won’t change much in the long term, even when life’s other costs do.”
Owning Your Home Comes with Unique Benefits
<a href="https://www.aarp.org/brandamp/anywhere-buy-instead-of-rent.html" rel="noopener noreferrer" target="_blank">According</a> to AARP, buying your next home is a better long-term strategy than renting:
“Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”
To help you choose what you’ll do after you sell, here are just a few of the benefits of homeownership that article covers:
Owning your home can help you save money for the future. Your home, and the equity you build as a homeowner, can provide generational wealth that could be passed on to loved ones, giving them a better life.
You might not have to pay a monthly mortgage payment at all. If you have enough equity to buy your next home outright, you wouldn’t have a monthly mortgage payment. While you might still need to cover property taxes or maintenance fees, not having to worry about a monthly mortgage payment could be a big relief.
Aging in place can be simpler. If your needs change, owning your home gives you the freedom to make renovations and updates that can make everyday life easier.
Bottom Line
If you're a baby boomer who’s wondering whether you should buy or rent your next home, let’s connect. With rents going up and homeownership providing so many benefits, it may make sense to consider buying your next home.
2023-09-19T06:00:00-07:002023-09-20T20:10:32-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39246 What Experts Project for Home Prices Over the Next 5 Years
<img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230912-What-Experts-Project-for-Home-Prices-Over-The-Next-5-Years.png" />
If you're planning to buy a home, one thing to consider is what experts project <a href="https://www.mykcm.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/" rel="noopener noreferrer" target="_blank">home prices</a> will do in the future and how that might affect your investment. While you may have seen negative news over the past year about home prices, they’re doing far better than expected and are rising across the country. And data shows, experts forecast home prices will keep appreciating.
Experts Project Ongoing Appreciation
Pulsenomics polled over 100 economists, investment strategists, and housing market analysts in the latest quarterly <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">Home Price Expectation Survey</a> (HPES). The results show what the panelists project will happen with home prices over the next five years. Here are those expert forecasts saying home prices will go up every year through 2027 (see graph below):<a href="https://www.mykcm.com/content/images/20230911/20230912-Estimated-Home-Price-Performance.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230912-Estimated-Home-Price-Performance.png" /></a>If you’re someone who was worried home prices would fall because of stories you’ve read online, here's the big takeaway. Even though home prices vary by local market, experts project prices will continue to rise across the country for years to come. And these numbers indicate the return to more normal home price appreciation.
And while the projected increase in 2024 isn’t as large as 2023, it’s important to recognize home price appreciation is cumulative. In other words, if these experts are correct, after your home’s value rises by 3.32% this year, it’ll appreciate by another 2.17% next year. This is a good example of why owning a home is a choice that wins big over time.
What Does This Mean for You?
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. To see how a typical home's value could change in the next few years using the expert projections from the HPES, check out the graph below:<a href="https://www.mykcm.com/content/images/20230911/20230912-Potential-Growth-In-Household-Wealth.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230912-Potential-Growth-In-Household-Wealth.png" /></a>In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.
So, if you're thinking about whether buying a home is a good choice, remember how it can be a powerful way to grow your wealth in the long run.
Bottom Line
According to the experts, home prices are expected to grow over the next five years at a more normal pace. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) grow. Let’s connect to start the homebuying process today.
2023-09-18T06:00:00-07:002023-09-20T20:05:25-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39023Planning to Retire? Your Equity Can Help You Make a Move<img src="https://files.keepingcurrentmatters.com/content/images/20230907/20230911-Planning-to-Retire-Your-Equity-Can-Help-You-Make-a-Move.png" />
Reaching retirement is a significant milestone in life, bringing with it a lot of change and new opportunities. As the door to this exciting chapter opens, one thing you may be considering is selling your house and finding a home better suited for your evolving needs.
Fortunately, you may be in a better position to make a move than you realize. Here are a few reasons why.
Consider How Long You’ve Been in Your Home
From 1985 to 2009, the average length of time homeowners stayed in their homes was roughly six years. But <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">according</a> to the National Association of Realtors (NAR), that number is higher today. Since 2010, the average home tenure is just over nine years (see graph below):
<a href="https://www.mykcm.com/content/images/20230907/20230911-Todays-homeowners-are-staying-in-their-houses-for-an-average-of-9-years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230907/20230911-Todays-homeowners-are-staying-in-their-houses-for-an-average-of-9-years.png" /></a>This means many homeowners have been living in their houses even longer in recent years. When you live in a home for such a significant amount of time, it’s natural for you to experience changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you.
Consider the Equity You’ve Gained
And, if you’ve been in your home for more than a few years, you’ve likely built-up substantial equity that can fuel your next move. That’s because you gain equity as you pay down your loan and as home prices appreciate. And, the longer you’ve been in your home, the more you may have gained. <a href="https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx" rel="noopener noreferrer" target="_blank">Data</a> from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below):
<a href="https://www.mykcm.com/content/images/20230907/20230911-How-home-prices-have-grown-over-time.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230907/20230911-How-home-prices-have-grown-over-time.png" /></a>While <a href="https://www.mykcm.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/" rel="noopener noreferrer" target="_blank">home prices</a> vary by area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by nearly 60%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.
Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to friends or loved ones, that equity can help. Whatever your home goals are, a trusted real estate agent can work with you to find the best option. They’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today.
Bottom Line
As you plan for your retirement, let’s connect so we can find out how much equity you’ve built up over the years and plan how you can use it toward the purchase of a home that fits your changing needs.
2023-09-12T06:00:00-07:002023-09-11T22:11:24-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39022Get Ready for Smaller, More Affordable Homes<img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230907-Get-Ready-for-Smaller-More-Affordable-Homes.jpg" />
Have you been trying to buy a home, but higher mortgage rates and home prices are limiting your options? If so, here’s some good news – based on what Ali Wolf, Chief Economist at Zonda, has to say – smaller, more affordable homes are on the way:
“Buyers should expect that over the next 12 to 24 months there will be a notable increase in the number of entry-level homes available.”
In some ways, smaller homes are already here. When the pandemic hit, the meaning of home changed. People needed the space their home provided not only as a place to live, but as a place to work, go to school, exercise, and more. Those who had that space were more likely to keep it. And those that didn’t were in a position where they were trying to sell their smaller house to move up to a larger one. That meant the homes coming to the market during the pandemic were smaller than those on the market before the pandemic – and that trend continues today (see graph below):<a href="https://www.mykcm.com/content/images/20230905/20230907-Home-Size-Smaller-than-Pre-Pandemic.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230907-Home-Size-Smaller-than-Pre-Pandemic.png" /></a>This graph also <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank">shows</a> how the size of homes on the market changes seasonally. Larger homes tend to come on the market during the summer months when households with children who are out of school are looking to move.
That seasonality means, based on historical trends and the fact that fall is now approaching, we can expect smaller, more affordable homes to come to the market throughout the rest of the year.
That’s great news because, as Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), <a href="https://eyeonhousing.org/2023/08/single-family-home-size-moves-lower-to-more-than-a-decade-low/" rel="noopener noreferrer" target="_blank">states</a>, the need for these types of homes has gone up recently:
“. . . as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower.”
What Does This Mean for You?
The seasonal trend of smaller homes coming to the market in the later months of the year, coupled with builders bringing smaller, more affordable newly built homes to the market right now, is good news – especially if you’re finding it difficult to afford a home. Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, <a href="https://www.marketwatch.com/story/the-shrinking-american-home-as-demand-rises-builders-go-smaller-ed2a327c" rel="noopener noreferrer" target="_blank">says</a> this about a potential increase in the availability of smaller homes:
“It’s not solving the affordability crisis, but it is creating opportunities for people to be able to afford an entry-level home in an area.”
Bottom Line
If a smaller, more affordable home sounds appealing to you, good news – they’re coming. To keep up with what’s available in our area, let’s connect.
2023-09-11T06:00:00-07:002023-09-11T22:06:40-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39021Mortgage Rates: Past, Present, and Possible Future<img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230906-Mortgage-Rates-Past-Present-and-Possible-Future.png" />
If you’re hoping to <a href="https://www.mykcm.com/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/" rel="noopener noreferrer" target="_blank">buy a home</a> this year, you’re probably paying close attention to mortgage rates. Since mortgage rates impact what you can afford when you take out a home loan – and affordability is a challenge today – it’s a good time to look at the big picture of where mortgage rates have been historically compared to where they are now. Beyond that, it’s important to understand their relationship with inflation for insights into where mortgage rates might go in the near future.
Giving Context to the Sticker Shock
Freddie Mac has been tracking the 30-year fixed mortgage rate since April of 1971. Every week, they release the <a href="http://www.freddiemac.com/pmms/pmms_archives.html" rel="noopener noreferrer" target="_blank">results</a> of their Primary Mortgage Market Survey, which averages mortgage application data from lenders across the country (see graph below):
<a href="https://www.mykcm.com/content/images/20230905/20230906-Mortgage-Rates.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230906-Mortgage-Rates.png" /></a>Looking at the right side of the graph, mortgage rates have increased significantly since the start of last year. But even with that rise, today’s rates are still below the 52-year average. While that historical perspective is good context, buyers have gotten used to mortgage rates between 3% and 5%, which is where they’ve been over the past 15 years.
That’s important because it explains why the recent jump in rates might have you feeling sticker shock even though they’re close to their long-term average. While many buyers have <a href="https://www.mykcm.com/2023/08/30/buyer-traffic-is-still-stronger-than-the-norm/" rel="noopener noreferrer" target="_blank">adjusted</a> to the elevated rates over the past year, a slightly lower rate would be a welcome sight. To determine if that’s a realistic possibility, it’s important to look at inflation.
Where Could Mortgage Rates Go in the Future?
The Federal Reserve has been working hard to lower inflation since early 2022. That’s significant because, historically, there’s been a connection between inflation and mortgage rates (see graph below):
<a href="https://www.mykcm.com/content/images/20230905/20230906-Inflation-and-30-year-fixed-rate-mortgage.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230906-Inflation-and-30-year-fixed-rate-mortgage.png" /></a>This graph shows a pretty reliable relationship between <a href="https://www.bls.gov/cpi/" rel="noopener noreferrer" target="_blank">inflation</a> and <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">mortgage rates</a>. Looking at the left side of the graph, each time inflation moves significantly (shown in blue), mortgage rates follow suit shortly after (shown in green).
The circled portion of the graph points out the most recent spike in inflation, with mortgage rates following closely behind. As inflation has moderated a bit this year, mortgage rates haven’t yet made a similar move.
That means, if history is any guide, the market is waiting for mortgage rates to follow inflation and head back down. It’s impossible to accurately predict where mortgage rates will go for sure, but moderating inflation means mortgage rates going down in the near future would fit a well-established trend.
Bottom Line
To understand where mortgage rates may be going, it’s helpful to look at where they’ve been in the past. There’s a clear connection between inflation and mortgage rates, and if that historical relationship holds true, the recent decline in inflation may mean good news for the future of mortgage rates and your homeownership goals.
2023-09-08T06:00:00-07:002023-09-11T21:42:24-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39020Expert Home Price Forecasts Revised Up for 2023
<img src="https://files.keepingcurrentmatters.com/content/images/20230825/20230905-expert-home-price-forecasts-revised-up-for-2023.png" />
Toward the end of last year, there were a number of headlines saying home prices were going to fall substantially in 2023. That led to a lot of fear and questions about whether there was going to be a repeat of the housing crash that happened back in 2008. But the headlines got it wrong.
While there was a slight home price correction after the sky-high price appreciation during the ‘unicorn’ years, nationally, home prices didn’t come crashing down. If anything, prices were a lot more resilient than many people expected.
Let's take a look at some of the expert forecasts from late last year stacked against their most recent forecasts to show that even the experts recognize they were overly pessimistic.
Expert Home Price Forecasts: Then and Now
This visual shows the <a href="https://www.zillow.com/research/data/" rel="noopener noreferrer" target="_blank">2023</a> home price <a href="https://www.mba.org/news-and-research/forecasts-and-commentary/mortgage-finance-forecast-archives" rel="noopener noreferrer" target="_blank">forecasts</a> from seven <a href="https://www.fanniemae.com/research-and-insights/forecast/forecast-monthly-archive" rel="noopener noreferrer" target="_blank">organizations</a>. It provides the original 2023 forecasts (released in late <a href="https://ustoday.news/a-20-drop-in-house-prices-7-forecast-models-tend-to-crash-here-the-other-13-models-show-the-housing-market-in-2023/" rel="noopener noreferrer" target="_blank">2022</a>) for what would happen to <a href="https://twitter.com/NewsLambert/status/1671900591113609216" rel="noopener noreferrer" target="_blank">home prices</a> by the end of <a href="https://twitter.com/NewsLambert/status/1671556169712672768" rel="noopener noreferrer" target="_blank">this year</a> and their most recently <a href="https://twitter.com/NewsLambert/status/1686959362563092480" rel="noopener noreferrer" target="_blank">revised</a> 2023 <a href="https://twitter.com/NewsLambert/status/1691799764466008217" rel="noopener noreferrer" target="_blank">forecasts</a> (see chart below):
<a href="https://www.mykcm.com/content/images/20230831/20230905-2023-Year-end-home-price-forecasts.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230831/20230905-2023-Year-end-home-price-forecasts.png" /></a>As the red in the middle column shows, in all instances, their original forecast called for home prices to fall. But, if you look at the right column, you’ll see all experts have updated their projections for the year-end to show they expect prices to either be flat or have positive growth. That’s a significant change from the original negative numbers.
There are a number of reasons why home prices are so resilient to falling. As Odeta Kushi, Deputy Chief Economist at First American, <a href="https://blog.firstam.com/economics/the-reconomy-podcast-why-us-homeowners-have-a-big-advantage-in-a-rising-mortgage-rate-environment" rel="noopener noreferrer" target="_blank">says</a>:
“One thing is for sure, having long-term, fixed-rate debt in the U.S. protects homeowners from payment shock, acts as an inflation hedge - your primary household expense doesn't change when inflation rises - and is a reason why home prices in the U.S. are downside sticky.”
A Look Forward To Get Ahead of the Next Headlines
For home prices, you’re going to continue to see misleading media coverage in the months ahead. That’s because there’s seasonality to home price appreciation and they’re going to misunderstand that. Here’s what you need to know to get ahead of the next round of negative headlines.
As activity in the housing market slows at the end of this year (as it typically does each year), home price growth will slow too. But, this doesn’t mean prices are falling – it’s just that they’re not increasing as quickly as they were when the market was in the peak homebuying season.
Basically, deceleration of appreciation is not the same thing as home prices depreciating.
Bottom Line
The headlines have an impact, even if they’re not true. While the media said home prices would fall significantly in their coverage at the end of last year, that didn’t happen. Let’s connect so you have a trusted resource to help you separate fact from fiction with reliable data.
2023-09-07T06:00:00-07:002023-09-11T21:34:02-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39019Why It’s Still a Seller’s Market Today
<img src="https://files.keepingcurrentmatters.com/content/images/20230831/20230904-Why-It-s-still-a-sellers-market-today.png" />
Even though activity in the housing market has slowed from the frenzy that was the ‘unicorn’ years, it’s still a seller’s market because the supply of homes for sale is so low. But what does that really mean for you? And why are conditions today so good if you want to sell your house?
The latest <a href="https://www.nar.realtor/newsroom/existing-home-sales-slipped-2-2-in-july" rel="noopener noreferrer" target="_blank">Existing Home Sales Report</a> from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Housing inventory is measured by the number of available homes on the market. It’s also measured by months’ supply, meaning the number of months it would take to sell all those available homes based on current demand. In a balanced market, there’s usually about a six-month supply. Today, we have only about 3 months’ supply of homes at the current sales pace (see graph below):
<a href="https://www.mykcm.com/content/images/20230831/20230904-Months-Inventory-of-homes-for-sale.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230831/20230904-Months-Inventory-of-homes-for-sale.png" /></a>As the visual shows, given the current <a href="https://www.mykcm.com/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/" rel="noopener noreferrer" target="_blank">inventory of homes</a>, it’s still a seller's market.
Today, we’re nowhere near what’s considered a balanced market. In fact, the current months’ supply is half of what’s typical of a normal market. That means there just aren’t enough homes to go around based on today’s buyer demand.
As Lawrence Yun, Chief Economist for NAR, <a href="https://www.cnn.com/2023/07/20/homes/existing-home-sales-june/index" rel="noopener noreferrer" target="_blank">says</a>:
“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”
How Does Being in a Seller’s Market Benefit You?
Sellers, these conditions give you a real edge. Right now, there are buyers who are ready, willing, and able to purchase a home. And, because there's a shortage of homes up for sale, the ones that do hit the market are like magnets for those buyers.
If you work with a local real estate agent to list your house right now, in good condition, and at the <a href="https://www.mykcm.com/2023/07/31/pricing-your-house-right-still-matters-today/" rel="noopener noreferrer" target="_blank">right price</a>, it could get a lot of attention. You might even end up with multiple offers.
Bottom Line
Today’s seller’s market sets you up with a big advantage when you sell your house. Because supply is so low, your house will be in the spotlight for motivated buyers who are craving more options. Let’s connect so you understand what’s happening in our local area as you get ready to enter the market.
2023-09-06T06:00:00-07:002023-09-11T21:05:02-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39018How Inflation Affects the Housing Market
<img src="https://files.keepingcurrentmatters.com/content/images/20230829/20230831-How-Inflation-Affects-the-housing-market.png" /><br /><br />Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two.
The Relationship Between Housing Inflation and Overall Inflation
Shelter inflation is the measure of price growth specific to housing. It comes from a <a href="https://www.bls.gov/news.release/cpi.nr0.htm" rel="noopener noreferrer" target="_blank">survey</a> of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d rent their homes for, if they weren’t living in them.
Much like overall inflation measures the cost of everyday items, shelter inflation measures the cost of housing. And for four consecutive months, based on that survey, shelter inflation has been <a href="https://www.bls.gov/news.release/cpi.nr0.htm" rel="noopener noreferrer" target="_blank">coming down</a> (see graph below):
<a href="https://www.mykcm.com/content/images/20230829/20230831-Shelter--housing--inflation-pulls-back.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230829/20230831-Shelter--housing--inflation-pulls-back.png" /></a>Why does this matter? Well, shelter inflation makes up about one-third of overall inflation, as measured by the <a href="https://www.bls.gov/cpi/" rel="noopener noreferrer" target="_blank">Consumer Price Index</a> (CPI). So, when shelter inflation moves, it leads to noticeable moves in overall inflation. That means the recent dip in shelter inflation might be a sign that overall inflation could fall in the months ahead.
That moderation would be a welcome sight for the Federal Reserve (the Fed). They’ve been working to get inflation under control since early 2022. While they’ve made some headway (it peaked at <a href="https://www.bls.gov/news.release/cpi.nr0.htm" rel="noopener noreferrer" target="_blank">8.9%</a> in the middle of last year), they’re still trying to get to their 2% goal (the latest report is <a href="https://www.bls.gov/news.release/cpi.nr0.htm" rel="noopener noreferrer" target="_blank">3.3%</a>).
Inflation and the Federal Funds Rate
What’s the Fed been doing to lower inflation? They’ve been increasing the Federal Funds Rate. That interest rate influences how much it costs banks to borrow money from each other. When inflation climbed, the Fed responded by raising the Federal Funds Rate to keep the economy from overheating.
The graph below shows the relationship between the two. Each time inflation (shown in the blue line) starts to climb, the Fed raises the Federal Funds Rate (shown in the orange line) to try to get it back to their target of 2% (see below):
<a href="https://www.mykcm.com/content/images/20230829/20230831-Federal-Reserve-Rate-Actions-and-inflation.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230829/20230831-Federal-Reserve-Rate-Actions-and-inflation.png" /></a>The circled portion of the graph shows the most recent spike in inflation, the Fed’s actions to raise the Federal Funds Rate to fight that, and the moderation of inflation that happened in response to that hike. As inflation gets closer to the Fed’s current 2% goal, they may not need to raise the Federal Funds Rate much further.
A Brighter Future for Mortgage Rates?
So, what does all of this mean for you? While the actions coming out of the Fed don’t determine mortgage rates, they do have an impact. As Mortgage Professional America (MPA) <a href="https://www.mpamag.com/us/mortgage-industry/guides/reasons-why-mortgage-rates-are-going-up/455281" rel="noopener noreferrer" target="_blank">explains</a>:
“. . . mortgage rates and inflation are connected, however indirectly. When inflation rises, mortgage rates rise to keep up with the value of the US dollar. When inflation drops, mortgage rates follow suit.”
While no one can predict the future for mortgage rates, it’s encouraging to see the signs of moderating inflation in the economy.
Bottom Line
Whether you’re looking to buy, sell, or just stay informed about the housing market, let’s connect.
2023-09-05T06:00:00-07:002023-09-11T20:59:33-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:39017Buyer Traffic Is Still Stronger than the Norm
<img src="https://files.keepingcurrentmatters.com/content/images/20230824/20230830-Buyer-Traffic-is-still-stronger-than-the-norm.png" />
Are you putting off selling your house because you’re worried no one’s buying because of where mortgage rates are? If so, know this: the latest data shows plenty of buyers are still out there, and they’re purchasing homes today. Here’s the data to prove it.
The <a href="https://www.showingtime.com/blog/june-2023-showing-index-results/" rel="noopener noreferrer" target="_blank">ShowingTime Showing Index</a> is a measure of buyers touring homes. The graph below uses the latest numbers available and compares them to the same month in the last normal years to show just how active today’s buyers still are:
<a href="https://www.mykcm.com/content/images/20230824/20230830-Buyer-traffic-stronger-than-normal-years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230824/20230830-Buyer-traffic-stronger-than-normal-years.png" /></a>As you can see, when June 2023 numbers are stacked alongside what’s typical for the housing market at this time of year, it's clear buyers are still active. And, they’re actually a lot more active than the norm.
If you’re wondering how this could possibly be true, it’s because buyers are getting used to higher mortgage rates and accepting them as the new reality. As Danielle Hale, Chief Economist, Realtor.com, <a href="https://www.prnewswire.com/news-releases/realtorcom-july-housing-report-number-of-homes-for-sale-drops-below-year-ago-levels-301892480.html" rel="noopener noreferrer" target="_blank">explains</a>:
“Interest rate hikes continue to further cut into buyers' purchasing power, although they appear to have adapted to the higher mortgage rate environment . . .”
It’s simple. Buyers will always need to buy, and those who can afford to move at today’s rates are going to do so.
The Key Takeaway for You
While it’s true things have slowed down from the frenzy of the last couple of years, it doesn’t mean today’s market is at a standstill. The reality is: buyer traffic is still strong today. Even with today’s mortgage rates, plenty of buyers are still making their moves. So why delay <a href="https://www.mykcm.com/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/" rel="noopener noreferrer" target="_blank">your own move</a> when there’s clearly a market for your house?
Bottom Line
Don’t put off your plans because you’re worried no one will buy your home. The opposite is true, and more buyers are more active than the norm. Let’s connect to get your house ready to sell, so it makes the best first impression possible on those eager buyers.
2023-09-04T06:00:00-07:002023-09-11T20:53:45-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38789Why You May Still Want To Sell Your House After All
<img src="https://files.keepingcurrentmatters.com/content/images/20230817/20230822-Why-You-May-Still-Want-To-Sell-Your-House-After-All.jpg" />
Even though you may feel reluctant to sell your house because you don’t want to take on a mortgage rate that’s higher than the one you have now, there’s more to consider. While the financial side of things does matter, your personal needs may actually matter just as much. As an article from <a href="https://www.bankrate.com/real-estate/should-i-sell-my-house-now-or-wait/#sell-now" rel="noopener noreferrer" target="_blank">Bankrate</a> says:
“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.”
So, ask yourself this: why did I want to move in the first place?
Chances are your primary motivation wasn’t just financial in nature. Why you’re really thinking about selling likely has more to do with something changing in your life or a shift in what you need out of your house.
Reasons Homeowners Still Need To Sell Today
Let’s explore some of the most common reasons sellers are moving today. A recent <a href="https://www.builderonline.com/data-analysis/whats-behind-this-years-high-sales-volume-despite-the-lock-in-effect_o" rel="noopener noreferrer" target="_blank">article</a> from Builder Online helps shed light on this. In this research, they identified the following categories:
Marriage – If you just got married, you may find you either need more space than you currently have, or the two of you want to find a new place you picked out together.
Divorce – If you’re getting separated or are divorcing your partner, chances are it’ll be difficult to live under the same roof. Selling the place you have, so you can own get your own spot, may be necessary.
Births – If your household is growing, you may need more square footage, including more bedrooms. If you’re running out of room for everyone, you may not be able to wait to move.
Deaths – If you’ve recently lost a loved one, it can be hard to spend time in that home. You may need to move for financial reasons or because you no longer need all the space.
Retirement – If you’re in the process of retiring, or you just did, you may be looking to downsize to cut costs, relocate to be closer to loved ones, or move to a dream location. In this new phase of life, your current home may not be able to deliver what you need.
You may find you share one of these top motivators. If any of these resonate with you, it may be <a href="https://www.mykcm.com/2023/08/10/about-11000-houses-will-sell-today/" rel="noopener noreferrer" target="_blank">time to move</a> so you can find a house better suited to your changing needs. A survey from Realtor.com finds other sellers are in the same boat. It <a href="https://mediaroom.realtor.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">says</a>, 1 in 4 sellers are choosing to move for personal reasons, even with current mortgage rates:
“. . . more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.”
If you need to sell now because something in your own life has changed, don’t let rates hold you back from what you want. You have options to help make that move possible. You can use the equity you already have in your current home toward your next purchase. And with how much equity homeowners have right now, you may be able to finance less than you’d expect, or pay all cash to avoid borrowing at all.
Bottom Line
When you're ready to prioritize your changing needs, let’s connect. You need an expert on your side to help you list your house and find a home that delivers on everything you're looking for.
2023-08-30T06:00:00-07:002023-08-29T23:32:22-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38788Gen Z: The Next Generation Is Making Moves in the Housing Market
<img src="https://files.keepingcurrentmatters.com/content/images/20230825/20230828-Gen-Z-The-Next-Generation-Is-Making-Moves-in-the-Housing-Market.png" />
Generation Z (Gen Z) is eager to put down their own roots and achieve financial independence. As a result, they’re turning to homeownership. According to the latest <a href="https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf" rel="noopener noreferrer" target="_blank">Home Buyers and Sellers Generational Trends Report</a> from the National Association of Realtors (NAR), 30% of Gen Z buyers transitioned straight from living under their parents' roofs to owning their own homes.
If you’re a member of this generation, and you’re interested in pursuing your own dream of homeownership, here’s some information you may find helpful on why and where your peers are buying.
The Reasons Gen Z Want To Become Homeowners
A recent survey by Rocket Mortgage <a href="https://www.rocketmortgage.com/learn/gen-z-home-buying#:~:text=Of%20those%20surveyed%2C%2034%25%20said,eager%20to%20establish%20a%20household." rel="noopener noreferrer" target="_blank">identifies</a> some of the top <a href="https://www.mykcm.com/2023/06/02/reasons-to-own-your-home-infographic/" rel="noopener noreferrer" target="_blank">motivators</a> driving Gen Z buyers to purchase a home:
“Of those surveyed, 34% said that starting or growing their family was their main motivation to buy a home. . . . Along with growing a family comes establishing a home base.”
Another key reason the survey says Gen Z wants to buy is because <a href="https://www.mykcm.com/2023/05/24/owning-a-home-helps-protect-against-inflation/" rel="noopener noreferrer" target="_blank">homeownership</a> can give them more stability (20.8%). That’s because buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost.
When you have a fixed-rate mortgage on your home, you can lock in your monthly payment for the duration of your loan, often 15 to 30 years. If you keep renting, you don’t have that same benefit, and you won’t be protected from rising housing costs.
So, if you’re ready to start a new chapter in your life or if you’re craving more <a href="https://www.mykcm.com/2023/07/21/real-estate-continues-to-be-the-best-investment-infographic/" rel="noopener noreferrer" target="_blank">stability</a>, know that your peers feel the same way, and those motivators are why they’re turning to <a href="https://www.mykcm.com/2023/07/20/owning-your-home-helps-you-build-wealth/" rel="noopener noreferrer" target="_blank">homeownership</a>.
Gen Z's Next Stop: Where Are They Making Their Moves?
If those reasons have you feeling ready to buy, here’s some information on where your peers are finding their homes that could help you with your search. According to a recent Lending Tree <a href="https://www.lendingtree.com/home/mortgage/the-most-popular-us-cities-for-gen-z-homebuyers-ranked/" rel="noopener noreferrer" target="_blank">survey</a>, Gen Z buyers are focusing on more affordable areas to help boost their buying power and offset the challenges that come with today’s mortgage rates.
Many Gen Z buyers still want the convenience and excitement of city life, but also value the affordability, open air, and space more suburban areas offer. Jacob Channel, Senior Economist at LendingTree, <a href="https://www.nytimes.com/2023/06/15/realestate/gen-z-home-buying.html" rel="noopener noreferrer" target="_blank">explains</a>:
“. . . they want to live in a city, but they also want to be close to nature.”
Locating a home that offers both of those things requires expertise. Working with a trusted real estate professional can help you find a home in your budget and desired area. Your agent will know the most affordable neighborhoods to search in. They can also highlight the amenities and features that location offers and how those are aligned with your goals. They’ll also be able to walk you through how things like remote work can help you cast a broader net for your search.
Bottom Line
If you’re a member of Gen Z and are just getting started on your homebuying journey, or if you want to learn more about the process, let’s connect. That way, you have a guide to help you find a home that fits both your lifestyle and your budget.
2023-08-29T06:00:00-07:002023-08-29T23:21:27-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38787More Jobs and Better Pay Leads to More Buyer Demand
<img src="https://files.keepingcurrentmatters.com/content/images/20230822/20230824-More-Jobs-and-Better-Pay-Leads-to-More-Buyer-Demand.jpg" />
There’s been talk about a recession for quite a while now. But the economy has been remarkably resilient. Why? One reason is employment and wages have stayed strong. Let’s look at the latest information on each one and why both are good news if you’re thinking about selling your house.
More Jobs Are Being Created
Instead of facing the job losses typical of any recession, the economy has been growing and adding jobs. <a href="https://www.bls.gov/news.release/empsit.nr0.htm" rel="noopener noreferrer" target="_blank">According</a> to the Bureau of Labor Statistics (BLS), 187,000 jobs were created in July, which is up from the 185,000 created in June. That means more people are finding work. In fact, so many jobs are being added that the unemployment rate is far lower than the long-term average of 5.7% (see graph below):
<a href="https://www.mykcm.com/content/images/20230822/20230824-Unemployment-Rate-Declined-In-July.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230822/20230824-Unemployment-Rate-Declined-In-July.png" /></a>
A low unemployment rate means that most people who want to work are finding jobs. When people have jobs, they have steady incomes – and that can help set them up to consider homeownership.
People Are Making More Money
And data also shows hourly <a href="https://www.bls.gov/news.release/empsit.nr0.htm" rel="noopener noreferrer" target="_blank">earnings</a> have been going up pretty steadily over the past few years (see graph below):
<a href="https://www.mykcm.com/content/images/20230822/20230824-Hourly-Earnings-Rise-4.4--from-last-year.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230822/20230824-Hourly-Earnings-Rise-4.4--from-last-year.png" /></a>
When wages rise, people have more money that they could save or use toward buying a home. This increase in income helps offset some of the affordability challenges in the housing market today. Affordability depends on three main factors: wages, <a href="https://www.mykcm.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/" rel="noopener noreferrer" target="_blank">home prices</a>, and <a href="https://www.mykcm.com/2023/08/03/how-inflation-affects-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a>. With higher home prices and mortgage rates right now, Builder Online <a href="https://www.builderonline.com/data-analysis/employment-growth-cant-save-some-housing-markets-in-the-near-term_o" rel="noopener noreferrer" target="_blank">summarizes</a> how growing wages can help:
“The housing market has been a beneficiary of the strong economy and labor market. Many of those employed have saved money over the past few years and used those funds toward a down payment on a home.”
If you’re thinking about <a href="https://www.mykcm.com/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/" rel="noopener noreferrer" target="_blank">selling</a> your house, a strong job market, growing wages, and the resulting buyer demand is fantastic news. It means there’s a larger pool of potential buyers out there who are in a position to pursue their dreams of homeownership.
Bottom Line
With more jobs and rising wages creating eager <a href="https://www.mykcm.com/2023/07/27/homebuyers-are-still-more-active-than-usual/" rel="noopener noreferrer" target="_blank">buyers</a>, there’s a lot going in your favor. Let’s connect so you have someone who can guide you through the process of selling your house, from setting the right price to getting your home ready to show.
2023-08-28T06:00:00-07:002023-08-29T23:16:17-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38679Why You Need a True Expert in Today’s Housing Market
<img src="https://files.keepingcurrentmatters.com/content/images/20230821/20230823-Why-You-Need-a-True-Expert-in-Today-s-Housing-Market.jpg" />
The housing market continues to <a href="https://www.mykcm.com/2023/08/03/how-inflation-affects-mortgage-rates/" rel="noopener noreferrer" target="_blank">shift and change</a>, and in a fast-moving landscape like we’re in right now, it’s more important than ever to have a trusted real estate agent on your side. Whether you’re buying your first home or selling once again, it’s mission critical to work with an expert who can guide you through each unique step of the process.
The reality is, not all agents operate the same way. To truly make a powerful and confident decision as you buy or sell a home, you need a real estate expert who uses their knowledge of what’s really happening with home prices, housing supply, industry projections, and more to give you the best possible advice. Someone who can provide clarity and trust like that is essential to your success. Jay Thompson, Real Estate Industry Consultant, <a href="https://www.realestatenews.com/2022/11/18/agents-decoded-making-sense-of-the-headlines" rel="noopener noreferrer" target="_blank">explains</a>:
“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.”
Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty for consumers. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, <a href="https://www.parcllabs.com/articles/q3-real-estate" rel="noopener noreferrer" target="_blank">says</a>:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You can lean on an expert to help you separate fact from fiction and get the answers you need.
The right agent can assist you in figuring out what’s going on at the national level and in your local area. They can debunk headlines using data you can trust. Experts have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the housing market, historical data, and more.
Then, to make sure you have the full picture, an agent can tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision.
After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in.
Bottom Line
If you want sound advice and trusted information about our local housing market, let’s connect!
2023-08-24T06:00:00-07:002023-08-23T13:47:29-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38677Why Median Home Sales Price Is Confusing Right Now
<img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230821-Why-median-homes-sales-price-is-confusing-right-now.jpg" /><br />The National Association of Realtors (NAR) is set to release its most recent Existing Home Sales (EHS) report tomorrow. This monthly release provides information on the volume of sales and price trends for homes that have previously been owned. In the upcoming release, it’ll likely say home prices are down. This may seem a bit confusing, especially if you’ve been following along and reading the blogs saying home prices have hit the bottom and have since rebounded.
So, why would this say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each one. NAR reports on the median home 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 sales 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 Home Sales Price Today
As the quotes above say, the approaches can tell different stories. That’s why median home sales price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are appreciating again.
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://www.mykcm.com/content/images/20230814/20230821-How-Median-Price-Works.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230821-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 sales price as a gauge of what’s happening with home values may be confusing 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 mortgage rates are higher, you may have to buy a less expensive home to keep your monthly housing expenses affordable.
That’s why a greater number of ‘less-expensive’ houses are selling right now – and that’s causing the median home sales 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 home sales price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by affordability and current mortgage rates.
Bottom Line
For a more in-depth understanding of home price trends and reports, let’s connect.
2023-08-23T13:37:28-07:002023-08-23T13:41:02-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38678Why You Don’t Need To Fear the Return of Adjustable-Rate Mortgages
<img src="https://files.keepingcurrentmatters.com/content/images/20230821/20230822-Why-You-Don-t-Need-To-Fear-the-Return-of-Adjustable-Rate-Mortgages.jpg" />
If you remember the housing crash back in 2008, you may recall just how popular adjustable-rate mortgages (ARMs) were back then. And after years of being virtually nonexistent, more people are once again using ARMs when buying a home. Let’s break down why that’s happening and why this isn’t cause for concern.
Why ARMs Have Gained Popularity More Recently
This graph uses <a href="http://www.mba.org/" rel="noopener noreferrer" target="_blank">data</a> from the Mortgage Bankers Association (MBA) to show how the percentage of adjustable-rate mortgages has increased over the past few years:
<a href="https://www.mykcm.com/content/images/20230821/20230822-Percent-of-arms-increased-since-2021.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230821/20230822-Percent-of-arms-increased-since-2021.png" /></a>
As the graph conveys, after hovering around 3% of all mortgages in 2021, many more homeowners turned to adjustable-rate mortgages again last year. There’s a simple explanation for that increase. Last year is when mortgage rates climbed dramatically. With higher borrowing costs, some homeowners decided to take out this type of loan because traditional borrowing costs were high, and an ARM gave them a lower rate.
Why Today’s ARMs Aren’t Like the Ones in 2008
To put things into perspective, let’s remember these aren’t like the ARMs that became popular leading up to 2008. Part of what caused the housing crash was loose lending standards. Back then, when a buyer got an ARM, banks and lenders didn’t require proof of their employment, assets, income, etc. Basically, people were getting loans that they shouldn’t have been awarded. This set many homeowners up for trouble because they couldn’t pay back the loans that they never had to qualify for in the first place.
This time around, lending standards are different. Banks and lenders learned from the crash, and now they verify income, assets, employment, and more. This means today’s buyers actually have to qualify for their loans and show they’ll be able to repay them.
Archana Pradhan, Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/rising-rates-lead-to-increase-in-adjustable-rate-mortgage-arm-activity/" rel="noopener noreferrer" target="_blank">explains</a> the difference between then and now:
“Around 60% of Adjustable-Rate Mortgages (ARM) that were originated in 2007 were low- or no-documentation loans . . . Similarly, in 2005, 29% of ARM borrowers had credit scores below 640 . . . Currently, almost all conventional loans, including both ARMs and Fixed-Rate Mortgages, require full documentation, are amortized, and are made to borrowers with credit scores above 640.”
In simple terms, Laurie Goodman at Urban Institute helps drive this point home by <a href="https://www.urban.org/urban-wire/should-borrowers-be-afraid-adjustable-rate-mortgages" rel="noopener noreferrer" target="_blank">saying</a>:
“Today’s Adjustable-Rate Mortgages are no riskier than other mortgage products and their lower monthly payments could increase access to homeownership for more potential buyers.”
Bottom Line
If you’re worried today’s adjustable-rate mortgages are like the ones from the housing crash, rest assured, things are different this time.
And, if you’re a first-time homebuyer and you’d like to learn more about lending options that could help you overcome today’s affordability challenges, reach out to a trusted lender.
2023-08-23T06:00:00-07:002023-08-23T13:43:53-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38676People Want Less Expensive Homes – And Builders Are Responding
<img src="https://files.keepingcurrentmatters.com/content/images/20230816/20230817-People-want-less-expensive-homes-and-builders-are-responding.jpg" />
In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory. To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes.
People Are Spending Less on Newly Built Homes
The graph below uses the latest information from the <a href="https://www.census.gov/construction/nrs/index.html" rel="noopener noreferrer" target="_blank">Census</a> to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:<a href="https://www.mykcm.com/content/images/20230816/20230817-Newly-built-home-sales-by-price-segment.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230816/20230817-Newly-built-home-sales-by-price-segment.png" /></a>Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge.
Builders Are Offering Lower-Cost Options
Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Matters, <a href="https://twitter.com/KCMcrew/status/1684206839523684355" rel="noopener noreferrer" target="_blank">explains</a>:
“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”
New <a href="https://www.census.gov/construction/nrs/index.html" rel="noopener noreferrer" target="_blank">data</a> from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):<a href="https://www.mykcm.com/content/images/20230816/20230817-Newly-built-home-prices-reflect-smaller-homes.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230816/20230817-Newly-built-home-prices-reflect-smaller-homes.png" /></a>And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, <a href="https://www.marketwatch.com/story/the-shrinking-american-home-as-demand-rises-builders-go-smaller-ed2a327c?siteid=msnheadlines" rel="noopener noreferrer" target="_blank">says</a>, the builders who are most responsive to this trend are forming pathways to homeownership:
“. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”
How an Agent Can Help
Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby.
Bottom Line
If you’re having a hard time finding a home you like in your budget, let’s connect. You need a real estate professional who knows all about the latest inventory in our area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.
2023-08-22T06:00:00-07:002023-08-23T13:37:15-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38674Don’t Expect a Flood of Foreclosures
<img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230816-dont-expect-a-flood-of-foreclosures.jpg" />
The rising cost of just about everything from groceries to gas right now is leading to speculation that more people won’t be able to afford their mortgage payments. And that’s creating concern that a lot of foreclosures are on the horizon. While it’s true that foreclosure filings have gone up a bit compared to last year, experts say a flood of foreclosures isn’t coming.
Take it from Bill McBride of Calculated Risk. McBride is an expert on the housing market, and after closely following the data and market environment leading up to the crash, he was able to see the foreclosures coming in 2008. With the same careful eye and analysis, he has a different <a href="https://calculatedrisk.substack.com/p/fannie-and-freddie-single-family" rel="noopener noreferrer" target="_blank">take</a> on what’s ahead in the current market:
“There will not be a foreclosure crisis this time.”
Let’s look at why another flood is so unlikely.
There Aren’t Many Homeowners Who Are Seriously Behind on Their Mortgage Payments
One of the main reasons there were so many foreclosures during the last housing crash was because relaxed lending standards made it easy for people to take out mortgages, even if they couldn't show that they’d be able to pay them back. At that time, lenders weren’t being very strict when assessing applicant credit scores, income levels, employment status, and debt-to-income ratio.
But now, lending standards have tightened, leading to more qualified buyers who can afford to make their mortgage payments. And <a href="https://www.freddiemac.com/investors/financials/pdf/0523mvs.pdf" rel="noopener noreferrer" target="_blank">data</a> from <a href="https://www.freddiemac.com/investors/financials/pdf/0623mvs.pdf" rel="noopener noreferrer" target="_blank">Freddie Mac</a> and <a href="https://www.fanniemae.com/media/48496/display" rel="noopener noreferrer" target="_blank">Fannie Mae</a> shows the number of homeowners who are seriously behind on their mortgage payments is declining (see graph below):
<a href="https://www.mykcm.com/content/images/20230814/20230816-Serious-Delinquencies-on-a-decline.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230816-Serious-Delinquencies-on-a-decline.png" /></a>Molly Boese, Principal Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/loan-performance-insights-july-2023/" rel="noopener noreferrer" target="_blank">explains</a> just how few homeowners are struggling to make their mortgage payments:
“May’s overall mortgage delinquency rate matched the all-time low, and serious delinquencies followed suit. Furthermore, the rate of mortgages that were six months or more past due, a measure that ballooned in 2021, has receded to a level last observed in March 2020.”
Before there can be a significant rise in foreclosures, the number of people who can’t make their mortgage payments would need to rise. Since so many buyers are making their payments today, a wave of foreclosures isn’t likely.
Bottom Line
If you’re worried about a potential flood of foreclosures, know there’s nothing in the data today to suggest that’ll happen. In fact, qualified buyers are making their mortgage payments at a very high rate.
2023-08-21T06:00:00-07:002023-08-23T13:29:38-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38535Equity Is a Game Changer for Homeowners Looking To Sell
<img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230815-Equity-is-a-game-changer-for-homeowners-looking-to-sell.jpg" />
If you’re a homeowner, you might be torn on whether or not to sell your house right now. Maybe that’s because you don’t want to take on a higher mortgage rate on your next home. If that’s your biggest hurdle, understanding your equity may be exactly what you need to help you feel more comfortable making your move.
What Equity Is and How It Works
Equity is the current value of your home minus what you owe on the loan. And recently, that <a href="https://www.mykcm.com/2023/06/16/how-owning-a-home-grows-your-wealth-with-time-infographic/" rel="noopener noreferrer" target="_blank">equity</a> has been growing far faster than you may expect.
Over the last few years, home prices rose dramatically, and that gave your equity a big boost very quickly. While the market has started to normalize, there’s still an imbalance between the number of homes available for sale and the number of buyers looking to make a purchase. And it’s because homes are in such high demand that <a href="https://www.mykcm.com/2023/07/17/home-prices-are-rebounding/" rel="noopener noreferrer" target="_blank">prices</a> are back on the rise today. Rob Barber, CEO of ATTOM, a property data provider, <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q2-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank">explains</a>:
“Equity levels were high even during the recent downturn, and now they are going back up and better than ever.”
How Equity Benefits You in Today’s Market
With today’s <a href="https://www.mykcm.com/2023/07/07/the-benefits-of-downsizing-for-homeowners-infographic/" rel="noopener noreferrer" target="_blank">affordability challenges</a>, that equity can be a game changer when you move. Here’s why. Based on data from <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q2-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank">ATTOM</a> and the <a href="https://data.census.gov/cedsci/all?q=mortgage" rel="noopener noreferrer" target="_blank">Census</a>, nearly two-thirds (68.7%) of homeowners have either paid off their mortgages or have at least 50% equity (see chart below):<a href="https://www.mykcm.com/content/images/20230814/20230815-Americans-Sitting-On-Tremendous-Equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230815-Americans-Sitting-On-Tremendous-Equity.png" /></a>
That means roughly 70% have a tremendous amount of equity right now.
Once you sell your house, you can use your equity to help with your next purchase. It could be some (if not all) of what you’ll need for your next down payment. It may even be enough to allow you to put a considerably larger down payment on your next home, so you don’t have to finance quite as much. And, if you’ve been in your current house for years, you may have even built up enough equity to pay in all cash. If that’s true for you, you’d be able to avoid borrowing altogether, so you wouldn’t have to worry about today’s mortgage rates.
How To Find Out How Much Equity You Have
The best way to learn how much you have is to reach out to a trusted real estate agent for a Professional Equity Assessment Report (PEAR).
Bottom Line
If you’re planning to make a move, the equity you’ve gained can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, let’s connect.
2023-08-18T06:00:00-07:002023-08-15T22:00:34-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38495Where Are People Moving Today and Why?
<img src="https://files.keepingcurrentmatters.com/content/images/20230809/20230814-Where-are-people-moving-today-and-why.jpg" />
Plenty of people are still moving these days. And if you’re thinking of making a move yourself, you may be considering the inventory and affordability challenges in the housing market and wondering what you can do to help offset those.
A new <a href="https://474803.fs1.hubspotusercontent-na1.net/hubfs/474803/The%20State%20of%20U.S.%20Population%20Movement_0623.pdf" rel="noopener noreferrer" target="_blank">report</a> from Gravy Analytics provides insight into where people are searching for homes and what they’re prioritizing most right now. That information could help you plan your own move.
1. People Are Moving to Cities with Lower Housing Costs
One big factor motivating where buyers are going is affordability and that’s no big surprise. People are relocating to areas that have less expensive housing options. As a result, small cities are thriving. Hannah Jones, Economics Data Analyst at Realtor.com, <a href="https://www.realtor.com/news/trends/affordable-what-americas-20-hottest-housing-markets-all-have-in-common-now/" rel="noopener noreferrer" target="_blank">summarizes</a> why:
“Affordability is still very much front and center . . . a lot of what’s available is outside of the price range of many buyers. . . . so they look elsewhere for a little more bang for the buck.”
The takeaway for you? If you’re having trouble finding a home that fits your budget, it may help to browse other, more affordable locations nearby.
2. People Want to Live Where They Vacation
And, if you’re already expanding your search radius, you may be able to include a location that features your favorite type of destination, like a suburb near the beach or a mountain town. Data shows many other homeowners are making that type of move a priority today. <a href="https://474803.fs1.hubspotusercontent-na1.net/hubfs/474803/The%20State%20of%20U.S.%20Population%20Movement_0623.pdf" rel="noopener noreferrer" target="_blank">According</a> to the same report from Gravy Analytics:
“Whether it’s the opportunity to enjoy more weekend hikes in the mountains or to wake up to a lakeside sunrise, people are moving to areas that were once thought of as vacation spots.”
Even with today’s <a href="https://www.mykcm.com/2023/07/17/home-prices-are-rebounding/" rel="noopener noreferrer" target="_blank">home prices</a> and <a href="https://www.mykcm.com/2023/08/03/how-inflation-affects-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a>, here’s why a move like this could be possible for you. If you’re already a homeowner, the <a href="https://www.mykcm.com/2023/08/07/four-ways-you-can-use-your-home-equity/" rel="noopener noreferrer" target="_blank">equity</a> you’ll get when you sell your current house can help fuel that move and give you the down payment you’d need for your dream home.
3. People Who Work Remotely Are Taking Advantage of that Flexibility
Ongoing <a href="https://www.mykcm.com/2023/07/13/how-remote-work-expands-your-homebuying-horizons/" rel="noopener noreferrer" target="_blank">remote work</a> is another major factor in where people are moving. A recent <a href="https://www.mckinsey.com/mgi/our-research/empty-spaces-and-hybrid-places-chapter-1" rel="noopener noreferrer" target="_blank">report</a> from the McKinsey Global Institute says this about recent movement patterns:
“Many of these moves happened because employees untethered from their daily commutes began to care less about how far they lived from the office.”
If you’re a remote or hybrid worker, you don’t have to live in the same city, or sometimes even the same state, as your job. That means you can prioritize other things, like being closer to loved ones, when buying a home.
In fact, the same McKinsey Global Institute report <a href="https://www.mckinsey.com/mgi/our-research/empty-spaces-and-hybrid-places-chapter-1" rel="noopener noreferrer" target="_blank">notes</a> for people who moved during the pandemic, 55% reported moving farther from the office. And since remote work is still a popular choice today, homebuyers will likely continue to take advantage of that flexibility.
Bottom Line
Lots of people are still moving today. If you want help navigating today’s inventory or affordability challenges, and expert advice to help you find your ideal home, let's connect.
2023-08-17T06:00:00-07:002023-08-15T01:04:50-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38494About 11,000 Houses Will Sell Today
<img src="https://files.keepingcurrentmatters.com/content/images/20230807/20230810-About-11000-houses-will-sell-today.jpg" />
Some homeowners have been waiting for months to put their house on the market because they don’t think people are buying homes right now. If that’s you, know that even though the housing market has slowed compared to the frenzy of a couple of years ago, it isn’t at a standstill. Contrary to what you may believe, buyers are still active and plenty of homes are selling right now.
<a href="https://www.nar.realtor/newsroom/existing-home-sales-retreated-3-3-in-june-monthly-median-sales-price-reached-second-highest-amount" rel="noopener noreferrer" target="_blank">According</a> to the National Association of Realtors (NAR), based on the pace of sales right now, just over 4 million homes will sell this year. With some simple math, let’s break down what that really means for you:
4.16 million homes divided by 365 days in a year = 11,397 houses sell each day
11,397 divided by 24 hours in a day = 475 houses sell per hour
475 divided by 60 minutes in an hour = about 8 houses sell each minute
So, on average, about 11,000 homes sell each day in this country.
A real estate expert can give you more information about how many houses are being sold in your neighborhood, the amazing advantages that sellers are experiencing right now, and the most important things buyers are searching for in your area. Together you’ll use this knowledge to shape how you market your house based on local trends.
Bottom Line
If you’ve been waiting to sell because you don’t think there are buyers out there, know today’s market is active. Every day you wait, around 11,000 other homeowners are selling. In the time it took you to read this, eight homes sold. When you’re ready to sell too, let’s connect.
2023-08-16T06:00:00-07:002023-08-15T00:58:17-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38493The Value of an Agent When Buying Your New Construction Home
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Buying a new construction 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 reputation 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 contracts 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.
2023-08-15T06:00:00-07:002023-08-15T00:55:01-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38492There's Only Half the Inventory of a Normal Housing Market Today
<img src="https://files.keepingcurrentmatters.com/content/images/20230807/20230808-Theres-Only-Half-the-Inventory-of-a-Normal-Housing-Market-Today.jpg" />
Wondering if it still makes sense to sell your house right now? The short answer is, yes. Especially if you consider how few homes there are for sale today.
You may have heard inventory is low right now, but you may not fully realize just how low or why that’s a perk when you go to sell your house. This graph from <a href="https://www.calculatedriskblog.com/2023/08/housing-august-7th-weekly-update.html" rel="noopener noreferrer" target="_blank">Calculated Risk</a> can help put that into perspective:
<a href="https://www.mykcm.com/content/images/20230807/20230808-Inventory-Is-Still-Historically-Low.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230807/20230808-Inventory-Is-Still-Historically-Low.png" /></a>As the graph shows, while <a href="https://www.mykcm.com/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/" rel="noopener noreferrer" target="_blank">housing inventory</a> did grow slightly week-over-week (shown in the blue bar), overall supply is still low (shown in the red bars). Compared to the same week last year, supply is down roughly 10% – and it was already considered low at that time. But, if you look further back, you’ll see inventory is down even more significantly.
To gauge just how far off from normal today’s inventory is, let’s compare right now to 2019 (the last normal year in the market). When you compare the same week this year with the matching week in 2019, supply is about 50% lower. That means there are half the homes for sale now than there’d usually be.
The key takeaway? We’re still nowhere near what’s considered a balanced market. There’s plenty of <a href="https://www.mykcm.com/2023/07/27/homebuyers-are-still-more-active-than-usual/" rel="noopener noreferrer" target="_blank">demand</a> for your house because there just aren’t enough homes to go around. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/newsroom/existing-home-sales-retreated-3-3-in-june-monthly-median-sales-price-reached-second-highest-amount" rel="noopener noreferrer" target="_blank">explains</a>:
“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”
So, if you want to list your house, know that there’s only about half the inventory there’d usually be in a more normal year. That means your house will be in the spotlight if you sell now and you may see multiple offers and a fast home sale.
Bottom Line
With the number of homes for sale roughly half of what there’d usually be in a more normal year, you can rest assured there’s demand for your house. If you want to sell, let’s connect now so your house can shine above the rest while inventory is so low.
2023-08-14T06:00:00-07:002023-08-15T00:52:00-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38294Four Ways You Can Use Your Home Equity<img src="https://files.keepingcurrentmatters.com/content/images/20230804/20230807-Four-Ways-You-Can-Use-Your-Home-Equity.jpg" />
If you’re a homeowner, odds are your equity has grown significantly over the last few years. Equity builds over time as home values grow and as you pay down your home loan. And, since home prices skyrocketed during the ‘unicorn’ years, you’ve likely gained more than you think.
According to the latest <a href="https://www.corelogic.com/press-releases/corelogic-us-home-borrowers-see-first-annual-home-equity-losses-since-2012-in-q1-2023-but-overall-mortgage-performance-remains-strong/" rel="noopener noreferrer" target="_blank">Equity Insights Report</a> from CoreLogic, the average homeowner has more than $274,000 in equity right now. That much equity can help you achieve certain goals. In a recent article, Bankrate <a href="https://www.bankrate.com/home-equity/homeowner-equity-data-and-statistics/#negative-equity" rel="noopener noreferrer" target="_blank">elaborates:</a>
“While the pandemic created serious challenges, the silver lining for anyone who owned a home was the sizable equity gain. Understanding how home equity works, and how to leverage it, is important for any homeowner.”
Here are a few examples of how you can put your home equity to work for you.
1. Buy a Home That Fits Your Needs
If your current space no longer meets your needs, it might be time to think about moving to a bigger home. And if you've got too much space, downsizing to a smaller home could be just right. Either way, you can put your equity toward a down payment on a home that fits your changing lifestyle. A real estate agent can help you figure out how much equity you've got and how to use it when buying your next home.
2. Reinvest in Your Current Home
Renovations are a great option if you want to change your living space, but you aren’t yet ready to make a move. Home improvement projects give you the freedom to tailor your home to match your needs and personal style. But it's important to consider the long-term benefits certain upgrades can bring to your home’s value. Lean on a real estate professional for the best advice on which improvement projects to prioritize in order to get the greatest return on your investment when you sell later on.
3. Pursue Personal Ambitions
Home equity can also serve as a catalyst for realizing your life-long dreams. That could mean investing in a new business venture, retirement, or funding an education. While you shouldn’t use your equity for unnecessary spending, using it responsibly for something meaningful and impactful can really make a difference in your life.
4. Understand Your Options to Avoid Foreclosure
Today the number of foreclosure filings remains below the norm, so there’s no need to fear a wave of foreclosed homes flooding the market. But unfortunately, there are still some homeowners who experience the foreclosure process each year. If you’re facing financial difficulties, having a clear understanding of your options and how your equity can help is crucial. Equity can act as a financial cushion that can be used in times of unexpected challenges or unforeseen circumstances that may disrupt your ability to make mortgage payments on time.
In an article, Freddie Mac <a href="https://myhome.freddiemac.com/blog/homeownership/how-selling-equity-can-help-you-avoid-foreclosure" rel="noopener noreferrer" target="_blank">explains</a> it this way:
“If exiting your home is the best option for you, selling with equity may be a good option. When selling with equity, you are using the proceeds from selling your home at a higher price than the amount you owe on your mortgage to pay off your remaining mortgage debt.”
Bottom Line
Your equity can be a game changer in reinvesting in your needs, pursuing your goals, and even helping you avoid foreclosure during difficult times. If you’re unsure how much equity you have in your home, let’s connect so you can start planning your next move.
2023-08-11T06:00:00-07:002023-08-07T22:25:50-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38293How Inflation Affects Mortgage Rates
<img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230803-How-Inflation-Affects-Mortgage-Rates.jpg" />
When you read about the housing market in the news, you might see something about a recent decision made by the Federal Reserve (the Fed). But how does this decision affect you and your plans to buy a home? Here's what you need to know.
The Fed is trying hard to reduce inflation. And even though there’s been 12 straight months where inflation has cooled (see graph below), the most recent <a href="https://www.bls.gov/news.release/cpi.nr0.htm" rel="noopener noreferrer" target="_blank">data</a> shows it’s still higher than the Fed’s target of 2%:
<a href="https://www.mykcm.com/content/images/20230731/20230803-Inflation-Continues-Moderating.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230803-Inflation-Continues-Moderating.png" /></a>
While you may have been hoping the Fed would stop their hikes since they’re making progress on their goal of bringing down inflation, they don’t want to stop too soon, and risk inflation climbing back up as a result. Because of this, the Fed decided to increase the Federal Funds Rate again last week. As Jerome Powell, Chairman of the Fed, <a href="https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20230726.pdf" rel="noopener noreferrer" target="_blank">says</a>:
“We remain committed to bringing inflation back to our 2 percent goal and to keeping longer-term inflation expectations well anchored.”
Greg McBride, Senior VP, and Chief Financial Analyst at Bankrate, <a href="https://www.nbcnews.com/business/economy/interest-rate-hike-july-2023-how-much-higher-federal-reserve-rcna96210" rel="noopener noreferrer" target="_blank">explains</a> how high inflation and a strong economy play into the Fed’s recent decision:
“Inflation remains stubbornly high. The economy has been remarkably resilient, the labor market is still robust, but that may be contributing to the stubbornly high inflation. So, Fed has to pump the brakes a bit more.”
Even though a Federal Fund Rate hike by the Fed doesn’t directly dictate what happens with mortgage rates, it does have an impact. As a recent article from Fortune <a href="https://fortune.com/recommends/mortgages/what-fed-rate-hikes-mean-for-mortgage-rates/" rel="noopener noreferrer" target="_blank">says</a>:
“The federal funds rate is an interest rate that banks charge other banks when they lend one another money . . . When inflation is running high, the Fed will increase rates to increase the cost of borrowing and slow down the economy. When it’s too low, they’ll lower rates to stimulate the economy and get things moving again.”
How All of This Affects You
In the simplest sense, when inflation is high, mortgage rates are also high. But, if the Fed succeeds in bringing down inflation, it could ultimately lead to lower mortgage rates, making it more affordable for you to buy a home.
This graph helps illustrate that point by showing that when inflation decreases, mortgage rates typically go down, too (see graph below):
<a href="https://www.mykcm.com/content/images/20230731/20230803-Mortgage-Rates-Follow-Behind-Inflation.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230803-Mortgage-Rates-Follow-Behind-Inflation.png" /></a>
As the data above shows, inflation (shown in the blue trend line) is slowly coming down and, based on historical trends, mortgage rates (shown in the green trend line) are <a href="https://www.mykcm.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/" rel="noopener noreferrer" target="_blank">likely to follow</a>. McBride <a href="https://www.cnet.com/personal-finance/mortgages/mortgage-refinance-rates-for-july-26-2023-rates-advance/" rel="noopener noreferrer" target="_blank">says</a> this about the future of mortgage rates:
“With the backdrop of easing inflation pressures, we should see more consistent declines in mortgage rates as the year progresses, particularly if the economy and labor market slow noticeably.”
Bottom Line
What happens to mortgage rates depends on inflation. If inflation cools down, mortgage rates should go down too. Let's talk so you can get expert advice on housing market changes and what they mean for you.
2023-08-10T06:00:00-07:002023-08-07T22:17:47-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38292How To Know If You’re Ready to Buy a Home
<img src="https://files.keepingcurrentmatters.com/content/images/20230728/20230802-How-to-know-if-youre-ready-to-buy-a-home.jpg" />
If you’re trying to decide if you’re ready to buy a home, there’s probably a lot on your mind. You’re thinking about your finances, today’s mortgage rates and home prices, the limited supply of homes for sale, and more. And, you’re juggling how all of those things will impact the choice you’ll make.
While housing market conditions are definitely a factor in your decision, your own life and your finances may be even more important. As an article from NerdWallet <a href="https://www.nerdwallet.com/article/mortgages/is-it-a-good-time-to-buy-a-house" rel="noopener noreferrer" target="_blank">says</a>:
“Housing market trends give important context. But whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner.”
Instead of trying to time the market, it may help to focus on what you can control. Here are a few questions that can give you clarity on whether you’re ready to make your move.
1. Do You Have a Stable Job?
One thing to consider is how stable you feel your employment is. Buying a home is a big purchase, and you’re going to sign a home loan stating you’re going to pay that loan back. That can feel like a big obligation. Knowing you have a reliable job and income coming in can help put your mind at ease. As NerdWallet <a href="https://www.nerdwallet.com/article/mortgages/is-it-a-good-time-to-buy-a-house" rel="noopener noreferrer" target="_blank">explains</a>:
“A mortgage is a big commitment . . . Wait until your employment is stable before thinking about buying a house.”
2. Have You Figured Out What You Can Afford?
To make sure you have a good idea of what you’ll need to save and what you can expect to spend on your monthly payment, talk to a trusted lender. They’ll be able to tell you about the pre-approval process and what you can borrow, current mortgage rates and approximate monthly payments, closing costs to anticipate, what percent of the purchase price of the home you’ll need for a <a href="https://www.mykcm.com/2023/06/19/saving-for-a-down-payment-heres-what-you-need-to-know/" rel="noopener noreferrer" target="_blank">down payment</a>, and more.
The best part is you may find out you’re closer to your goals than you realized. You don’t necessarily need to put 20% down, unless it’s specified by your lender or loan type. As Down Payment Resource <a href="https://downpaymentresource.com/homebuyers/" rel="noopener noreferrer" target="_blank">says</a>:
“A 20% down payment on a home is great, but . . . Many mortgages require no more than 3% to 5% of the purchase price as a down payment. Plus, there are loans and grants that may help cover these costs. Search for down payment assistance in your area, and discuss your results with your mortgage lender . . .”
3. How Long Do You Plan to Live There?
Another important thing to think about is how long you plan to stay put. It takes time to build equity in your home through paying down your loan and home price appreciation. If you plan to move too soon, you may not recoup your investment. For example, if you’re looking to sell and move again in a year, it might not make sense to buy right now. As a recent article from CNET <a href="https://www.cnet.com/personal-finance/mortgages/advice/should-you-rent-or-buy-a-home/#to-rent-or-to-buy--questions-to-ask-yourself" rel="noopener noreferrer" target="_blank">says</a>:
“Buying a home is a good idea if you’re planning to stay put for at least three years. Home values typically increase between 2% and 5% annually, so you could end up paying more in closing costs than you’d earn in proceeds if you sell after only a year or two.”
So, think about your future. If you plan to transfer to a new city with the upcoming promotion you’re working toward or you anticipate your loved ones will need you to move closer to take care of them, that’s something to factor in.
Above all else, the most important question to answer is: do you have a team of real estate professionals in place? If not, finding a trusted local agent and a lender is a good first step.
Bottom Line
If you’re trying to decide if you’re ready to buy a home, these questions can help. But ultimately, your best and more reliable resource is the help of trusted real estate professionals.
2023-08-09T06:00:00-07:002023-08-08T08:29:31-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38291Sellers: Don’t Let These Two Things Hold You Back
<img src="https://files.keepingcurrentmatters.com/content/images/20230727/20230801-Sellers-Don-t-let-these-two-things-hold-you-back.jpg" />
Many homeowners thinking about selling 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.mykcm.com/content/images/20230731/20230801-Average-Mortgage-Rate-Is-Less-Than-4-.png" 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.mykcm.com/2023/07/19/explaining-todays-mortgage-rates/" 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 mortgage rates will gradually fall this year as <a href="https://www.mykcm.com/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/" 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.mykcm.com/2023/07/17/home-prices-are-rebounding/" 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 inventory 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 limited housing supply helps your house stand out to eager buyers, it may also make you feel hesitant to sell 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 newly built homes can help give you more to choose from. Plus, if you’re able to work fully remote 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.
2023-08-08T06:00:00-07:002023-08-08T06:07:20-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38290Pricing Your House Right Still Matters Today
<img src="https://files.keepingcurrentmatters.com/content/images/20230727/20230731-Pricing-your-house-right-still-matters-today.jpg" />
While this isn’t the frenzied market we saw during the ‘unicorn’ years, homes that are priced right are still selling quickly and seeing multiple offers right now. That’s because the number of homes for sale is still so low. <a href="https://cdn.nar.realtor/sites/default/files/documents/2023-06-realtors-confidence-index-07-20-2023.pdf" rel="noopener noreferrer" target="_blank">Data</a> from the National Association of Realtors (NAR) shows 76% of homes sold within a month and the average saw 3.5 offers in June.
To set yourself up to see advantages like these, you need to rely on an agent. Only an agent has the expertise needed to find the right asking price for your house. Here’s what’s at stake if that price isn’t accurate for today’s market value.
The price you set for your house sends a message to potential buyers.
Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with it. Not to mention, if you undervalue your house, you could leave money on the table, which decreases your future buying power.
On the other hand, price it too high and you run the risk of deterring buyers from ever touring it in the first place. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it <a href="https://www.mykcm.com/2023/07/10/reasons-your-home-may-not-be-selling/" rel="noopener noreferrer" target="_blank">sits on the market</a> for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.
A <a href="https://www.nerdwallet.com/article/mortgages/price-home-sell" rel="noopener noreferrer" target="_blank">recent article</a> from NerdWallet sums it up like this:
"Your house’s market debut is your first chance to attract a buyer and it’s important to get the pricing right. If your home is overpriced, you run the risk of buyers not seeing the listing . . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house."
Think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value.
Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see multiple offers too. Plus, when homes are priced right, they still tend to sell quickly.
To get a high-level look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:
<a href="https://www.mykcm.com/content/images/20230727/20230731-Underpriced-Market-Value-Overpriced.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230727/20230731-Underpriced-Market-Value-Overpriced.png" /></a>
Lean on a Professional’s Expertise to Price Your House Right
So why is an agent essential in finding the right price? Your local agent has the skill and the insight necessary to find the market value of your home. They’ll use their expertise to determine a realistic listing price by assessing:
The prices of recently sold homes
The current market conditions
The size and condition of your house
The location of your house
Bottom Line
Pricing your house at market value is critical, so don’t rely on guesswork. Let’s connect to make sure your house is priced right for today’s market.
2023-08-07T06:00:00-07:002023-08-08T05:56:23-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38277Homebuyers Are Still More Active Than Usual<img src="https://files.keepingcurrentmatters.com/content/images/20230726/20230727-homebuyers-are-still-more-active-than-usual.jpg" />
Even though the housing market is no longer experiencing the frenzy that was so characteristic of the last couple of years, it doesn’t mean today’s market is at a standstill. In actuality, buyer traffic is still strong today.
The ShowingTime <a href="https://www.showingtime.com/blog/may-2023-showing-index-results/" rel="noopener noreferrer" target="_blank">Showing Index</a> is a measure of how much buyers are touring homes. The graph below uses that index to illustrate buyer activity trends over time to help put today into the proper perspective.
<a href="https://www.mykcm.com/content/images/20230726/20230727-Buyer-Traffic-Returning-to-Seasonality.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230726/20230727-Buyer-Traffic-Returning-to-Seasonality.png" /></a>
It shows there’s <a href="https://www.mykcm.com/2023/07/25/dont-fall-for-the-next-shocking-headlines-about-home-prices/" rel="noopener noreferrer" target="_blank">seasonality</a> in real estate. If you look at the last normal years in the market (shown in gray), there was a consistent pattern as buyer activity peaked in the first half of each year (during the peak homebuying season in the spring) and slowed as each year came to a close.
When the pandemic hit in March of 2020, that trend was disrupted as the market responded to the resulting uncertainty (shown in blue in the middle). From there, we entered the <a href="https://www.mykcm.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a> of housing (shown in pink). This is when mortgage rates were record-low and buyer demand was sky high. Similar seasonal trends still existed even during that time, just at much higher levels.
Now, let’s look at 2023. Traffic is down from the previous month and it’s also lower than the peaks we saw in the <a href="https://www.mykcm.com/2023/06/09/why-you-cant-compare-now-to-the-unicorn-years-of-the-housing-market-infographic/" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a>. But what’s happening isn’t a steep drop off in demand – it’s a slow return toward more normal seasonality. As the ShowingTime report <a href="https://www.showingtime.com/blog/may-2023-showing-index-results/" rel="noopener noreferrer" target="_blank">explains</a>:
“Showing traffic declined about 10% in May . . . This follows a typical seasonal pattern – disrupted by the pandemic but now beginning to return . . .”
And, to highlight this isn’t a drastic decline, let’s zoom in. Here’s a graph using just the May data for the last five years. It shows just how strong buyer demand still is.
<a href="https://www.mykcm.com/content/images/20230726/20230727-Traffic-Remains-Above-Pre-Pandemic-Levels.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230726/20230727-Traffic-Remains-Above-Pre-Pandemic-Levels.png" /></a>
What Does That Mean for You?
Buyers are still out there touring homes. They’re more active than they were in May 2022 (when sticker shock over higher mortgage rates started to set in) and certainly more than they were in the last normal years. So, remember, buyer activity is still strong. And it could actually be even stronger if it wasn’t constrained by the limited supply of homes for sale. According to <a href="https://realestate.usnews.com/real-estate/articles/when-will-the-housing-market-crash" rel="noopener noreferrer" target="_blank">U.S. News</a>:
“Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.”
Bottom Line
Don’t lose sight of just how active the market still is today. If your house isn’t on the market, it’s not getting in front of all those buyers who are looking to make a purchase right now. Let’s connect to start the process.
2023-08-04T09:49:00-07:002023-08-08T05:54:58-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38276Tips for Making Your Best Offer on a Home<img src="https://files.keepingcurrentmatters.com/content/images/20230718/20230726-Tips-for-making-your-best-offer-on-a-home.jpg" />
While the wild ride that was the ‘unicorn’ years of housing is behind us, today’s market is still competitive in many areas because the supply of homes for sale is still low. If you’re looking to buy a home this season, know that the peak frenzy of bidding wars is in the rearview mirror, but you may still come up against some multiple-offer scenarios.
Here are a few things to consider to help you put your best foot forward when making an offer on a home.
1. Lean on a Real Estate Professional
Rely on an agent who can support your goals and help you understand what’s happening in today’s housing market. Agents are experts in the local market and on the national trends too. They’ll use both of those areas of expertise to make sure you have all the information you need to move with confidence.
Plus, they know what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller needs can help your offer stand out. As an article from Forbes <a href="https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/" rel="noopener noreferrer" target="_blank">says</a>:
"Getting to know a local realtor where you’re hoping to buy can also potentially give you a crucial edge in a tight housing market."
2. Get Pre-Approved for a Home Loan
Having a clear budget in mind is especially important right now given the current affordability challenges. The best way to get a clear picture of what you can borrow is to work with a lender so you can get pre-approved for a home loan.
That’ll help you be more financially confident because you’ll have a better understanding of your numbers. It shows sellers you’re serious, too. And that can give you a competitive edge if you do get into a multiple-offer scenario.
3. Make a Fair Offer
It’s only natural to want the best deal you can get on a home. However, submitting an offer that’s too low does have some risks. You don’t want to make an offer that will be tossed out as soon as it’s received just to see if it sticks. As Realtor.com <a href="https://www.realtor.com/advice/buy/five-tips-successful-lowball-offer/" rel="noopener noreferrer" target="_blank">explains</a>:
“. . . an offer price that’s significantly lower than the listing price, is often rejected by sellers who feel insulted . . . Most listing agents try to get their sellers to at least enter negotiations with buyers, to counteroffer with a number a little closer to the list price. However, if a seller is offended by a buyer or isn’t taking the buyer seriously, there’s not much you, or the real estate agent, can do.”
The expertise your agent brings to this part of the process will help you stay competitive and find a price that’s fair to you and the seller.
4. Trust Your Agent’s Expertise Throughout Negotiations
During the ‘unicorn’ years of housing, some buyers skipped home inspections or didn’t ask for concessions from the seller in order to submit the winning bid on a home. An article from Bankrate <a href="https://www.bankrate.com/real-estate/smart-way-to-waive-home-inspection/" rel="noopener noreferrer" target="_blank">explains</a> this isn’t happening as often today, and that’s good news:
“While the market has largely calmed down since then, sellers are still very much in the driver’s seat in this era of scarce housing inventory. It’s not as common for buyers to waive inspections anymore, but it does still happen. . . . It’s in the buyer’s best interest to have a home inspected . . . Inspections alert you to existing or potential problems with the home, giving you not just an early heads up but also a useful negotiating tactic.”
Fortunately, today’s market is different, and you may have more negotiating power than before. When putting together an offer, your trusted real estate advisor will help you think through what levers to pull and which ones you may not want to compromise on.
Bottom Line
When you buy a home this summer, let’s connect so you have an expert on your side who can help you make your best offer.
2023-08-03T09:45:00-07:002023-08-08T05:54:03-07:00Janelle Endrestag:waterfrontgulfhomes.com,2012-09-20:38275Don’t Fall for the Next Shocking Headlines About Home Prices
<img src="https://files.keepingcurrentmatters.com/content/images/20230724/20230725-Don-t-Fall-for-the-Next-Shocking-Headlines-About-Home-Prices.jpg" />
If you’re thinking of buying or selling a home, one of the biggest questions you have right now is probably: what’s happening with home prices? And it’s no surprise you don’t have the clarity you need on that topic. Part of the issue is how headlines are talking about prices.
They’re basing their negative news by comparing current stats to the last few years. But you can’t compare this year to the ‘unicorn’ years (when home prices reached record highs that were unsustainable). And as prices begin to normalize now, they’re talking about it like it’s a bad thing and making people fear what’s next. But the worst home price declines are already behind us. What we’re starting to see now is the return to more normal home price appreciation.
To help make home price trends easier to understand, let’s focus on what’s typical for the market and omit the last few years since they were anomalies.
Let’s start by talking about seasonality in real estate. In the housing market, there are predictable ebbs and flows that happen each year. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.
That’s why, before the abnormal years we just experienced, there was a reliable long-term home price trend. The graph below uses data from <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#overview" rel="noopener noreferrer" target="_blank">Case-Shiller</a> to show typical monthly home price movement from 1973 through 2021 (not <a href="https://www.census.gov/construction/nrs/faqs/faqs_seas.html#quest2" rel="noopener noreferrer" target="_blank">adjusted</a>, so you can see the seasonality):
<a href="https://www.mykcm.com/content/images/20230724/20230725-48-year-average-monthly-home-price-movement.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230724/20230725-48-year-average-monthly-home-price-movement.png" /></a>
As the data from the last 48 years shows, at the beginning of the year, home prices grow, but not as much as they do entering the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.
Why This Is So Important to Understand
In the coming months, as the housing market moves further into a more predictable seasonal rhythm, you’re going to see even more headlines that either get what’s happening with home prices wrong or, at the very least, are misleading. Those headlines might use a number of price terms, like:
Appreciation: when prices increase.
Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
Depreciation: when prices decrease.
They’re going to mistake the slowing home price growth (deceleration of appreciation) that’s typical of market seasonality in the fall and winter and think prices are falling (depreciation). Don’t let those headlines confuse you or spark fear. Instead, remember it’s normal to see a deceleration of appreciation, slowing home price growth, as the months go by.
Bottom Line
If you have questions about what’s happening with home prices in our local area, let’s connect.
2023-08-02T09:39:00-07:002023-08-08T05:50:10-07:00Janelle Endres