Metro Richmond Real Estate BlogRecently posted or modified blog postshttps://www.simpsonrealtygrouprva.com/blog/Copyright SimpsonRealtyGroupRVA.com2024-03-04T08:04:57-07:00tag:simpsonrealtygrouprva.com,2012-09-20:19453The Truth About Down PaymentsThe Truth About Down Payments
<br /><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240222/20240226-The-Truth-About-Down-Payments.png" width="600" /><br /><br />
If you’re planning to <a href="https://www.simplifyingthemarket.com/en/2024/01/19/key-terms-every-homebuyer-should-learn-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" rel="noopener noreferrer" target="_blank">buy</a> your first home, saving up for all the costs involved can feel daunting, especially when it comes to the <a href="https://www.simplifyingthemarket.com/en/2023/12/15/what-you-need-to-know-about-down-payments-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" rel="noopener noreferrer" target="_blank">down payment</a>. That might be because you’ve heard you need to save 20% of the home’s price to put down. Well, that isn’t necessarily the case.
Unless specified by your loan type or lender, it’s typically not required to put 20% down. That means you could be closer to your <a href="https://www.simplifyingthemarket.com/en/2024/01/05/achieving-your-homebuying-dreams-in-2024-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" rel="noopener noreferrer" target="_blank">homebuying dream</a> than you realize.
As The Mortgage Reports <a href="https://themortgagereports.com/18520/20-percent-downpayment-risk-mortgage-interest-rate" rel="noopener noreferrer" target="_blank">says</a>:
“Although putting down 20% to avoid mortgage insurance is wise if affordable, it’s a myth that this is always necessary. In fact, most people opt for a much lower down payment.”
<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), the median down payment hasn’t been over 20% since 2005. In fact, for all homebuyers today it’s only 15%. And it’s even lower for first-time homebuyers at just 8% (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240222/20240226-Today-s-Median-Down-Payment-Is-Less-Than-20-.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240222/20240226-Today-s-Median-Down-Payment-Is-Less-Than-20-.png" alt="a graph of a number of blue squares" /></a>
The big takeaway? You may not need to save as much as you originally thought.
Learn About Resources That Can Help You Toward Your Goal
<a href="https://downpaymentresource.com/" rel="noopener noreferrer" target="_blank">According</a> to Down Payment Resource, there are also over 2,000 homebuyer assistance programs in the U.S., and many of them are intended to help with down payments.
Plus, there are loan options that can help too. For example, <a href="https://www.hud.gov/buying/loans" rel="noopener noreferrer" target="_blank">FHA loans</a> offer down payments as low as <a href="https://www.benefits.gov/benefit/504" rel="noopener noreferrer" target="_blank">3.5%</a>, while <a href="https://www.va.gov/housing-assistance/home-loans/loan-types/" rel="noopener noreferrer" target="_blank">VA</a> and <a href="https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program" rel="noopener noreferrer" target="_blank">USDA loans</a> have no down payment requirements for qualified applicants.
With so many resources available to help with your down payment, the best way to find what you qualify for is by consulting with your loan officer or broker. They know about local grants and loan programs that may help you out.
Don’t let the misconception that you have to have 20% saved up hold you back. If you’re ready to become a homeowner, lean on the professionals to find resources that can help you make your dreams a reality. If you put your plans on hold until you’ve saved up 20%, it may actually cost you in the long run. <a href="https://www.usbank.com/home-loans/mortgage/first-time-home-buyers/down-payment.html" rel="noopener noreferrer" target="_blank">According</a> to U.S. Bank:
“. . . there are plenty of reasons why it might not be possible. For some, waiting to save up 20% for a down payment may “cost” too much time. While you’re saving for your down payment and paying rent, the price of your future home may go up.”
Home prices are expected to <a href="https://www.simplifyingthemarket.com/en/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" rel="noopener noreferrer" target="_blank">keep appreciating</a> over the next 5 years – meaning your future home will likely go up in price the longer you wait. If you’re able to use these resources to buy now, that future price growth will help you build equity, rather than cost you more.
Bottom Line
Keep in mind that you don't always need a 20% down payment to buy a <a href="https://www.simplifyingthemarket.com/en/2024/02/14/why-so-many-people-fall-in-love-with-homeownership/?a=521618-d1117c67b02ed4126b90dce8398522a4" rel="noopener noreferrer" target="_blank">home</a>. If you're looking to make a move this year, let’s connect to start the conversation about your homebuying goals.2024-03-04T08:01:38-07:002024-03-04T08:04:57-07:00Joshua Simpsontag:simpsonrealtygrouprva.com,2012-09-20:14475What Every Seller Should Know About Home PricesWhat Every Seller Should Know About Home Prices
<img width="750" height="410" src="https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="What Every Seller Should Know About Home Prices | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM.jpg 750w, https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/09102646/what-every-seller-should-know-about-home-prices-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re trying to decide whether or not to <a href="https://www.simplifyingthemarket.com/2022/11/28/your-house-could-be-the-1-item-on-a-homebuyers-wish-list-during-the-holidays/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a>, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.
What’s Really Happening with Home Prices?
It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.
While home prices are down slightly month-over-month in some markets, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses the latest <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-20-city-composite-home-price-nsa-index/#news-research" title="data" target="_blank" rel="noopener noreferrer">data</a>from S&P Case-Shiller to help tell the story of what’s actually happening in the <a href="https://www.spglobal.com/spdji/en/index-announcements/article/sp-corelogic-case-shiller-index-continued-to-decline-in-september/" title="housing market" target="_blank" rel="noopener noreferrer">housing market</a> today:
<a href="https://files.mykcm.com/2022/12/09102647/home-price-growth-since-january-2019-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106293" src="https://files.mykcm.com/2022/12/09102647/home-price-growth-since-january-2019-MEM.png" alt="What Every Seller Should Know About Home Prices | MyKCM" width="600" height="450" /></a>
As the graph shows, it’s true <a href="https://www.simplifyingthemarket.com/2022/11/09/whats-ahead-for-mortgage-rates-and-home-prices/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="home price" target="_blank" rel="noopener noreferrer">home price</a> growth has moderated in recent months (shown in green) as buyer demand has pulled back in response to higher <a href="https://www.simplifyingthemarket.com/2022/11/21/mortgage-rates-will-come-down-its-just-a-matter-of-time/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a>. This is what the headlines are drawing attention to today.
But what’s important to notice is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market.
The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a year was more typical (see bars for January 2019 through mid-2020). But even the latest data for this year shows prices have still climbed by roughly 10% over last year.
What Does This Mean for Your Home’s Equity?
While you may not be able to capitalize on the 20% appreciation we saw in early 2022, in most markets your home’s value, on average, is up 10% over last year – and a 10% gain is still dramatic compared to a more normal level of appreciation (3-4%).
The big takeaway? Don’t let the headlines get in the way of your <a href="https://www.simplifyingthemarket.com/2022/11/16/top-questions-about-selling-your-home-this-winter/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="plans to sell" target="_blank" rel="noopener noreferrer">plans to sell</a>. Over the past two years alone, you’ve likely gained a substantial amount of <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity" target="_blank" rel="noopener noreferrer">equity</a> in your home as home prices climbed. Even though <a href="https://www.simplifyingthemarket.com/2022/12/06/whats-going-on-with-home-prices-ask-a-professional/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="home price moderation" target="_blank" rel="noopener noreferrer">home price moderation</a> will vary by market moving forward, you can still use the boost your <a href="https://www.simplifyingthemarket.com/2022/11/14/home-equity-a-source-of-strength-for-homeowners-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity" target="_blank" rel="noopener noreferrer">equity</a> got to help power your move.
As Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/house-prices-decline-but-equity-buffers-remain-robust" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”
Bottom Line
If you have questions about home prices or how much equity you have in your current home, let’s connect so you have an expert’s advice.
2022-12-16T06:50:00-07:002022-12-13T06:51:02-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:14428Key Advantages of Buying a Home TodayKey Advantages of Buying a Home Today
<img width="750" height="410" src="https://files.mykcm.com/2022/12/06123754/key-advantages-of-buying-a-home-today-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Key Advantages of Buying a Home Today | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/06123754/key-advantages-of-buying-a-home-today-KCM.jpg 750w, https://files.mykcm.com/2022/12/06123754/key-advantages-of-buying-a-home-today-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/06123754/key-advantages-of-buying-a-home-today-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
There’s no doubt <a href="https://www.simplifyingthemarket.com/2022/11/01/3-trends-that-are-good-news-for-todays-homebuyers/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="buying a home" target="_blank" rel="noopener noreferrer">buying a home</a> today is different than it was over the past couple of years, and the shift in the market has led to advantages for buyers today. Right now, there are specific reasons that make this housing market attractive for those who’ve thought about buying but have sidelined their search due to rising mortgage rates.
<a href="https://www.simplifyingthemarket.com/2022/12/01/what-you-want-to-know-if-youre-pursuing-your-dream-of-homeownership/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="Buying a home" target="_blank" rel="noopener noreferrer">Buying a home</a> in any market is a personal decision, and the best way to make that decision is to educate yourself on the facts, not following sensationalized headlines in the news today. The reality is, headlines do more to terrify people thinking about buying a home than they do to clarify what’s actually going on with real estate.
Here are three reasons potential homebuyers should consider buying a home today.
1. More Homes Are for Sale Right Now
According to <a href="https://www.nar.realtor/topics/existing-home-sales" title="data" target="_blank" rel="noopener noreferrer">data</a> from the National Association of Realtors (NAR), this year, the <a href="https://www.simplifyingthemarket.com/2022/11/23/what-buyers-need-to-know-about-the-inventory-of-homes-available-for-sale/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="supply of homes" target="_blank" rel="noopener noreferrer">supply of homes</a> for sale has grown significantly compared to where we started the year (see graph below):
<a href="https://files.mykcm.com/2022/12/06123756/the-supply-of-homes-for-sale-has-grown-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106173" src="https://files.mykcm.com/2022/12/06123756/the-supply-of-homes-for-sale-has-grown-MEM.png" alt="Key Advantages of Buying a Home Today | MyKCM" width="600" height="450" /></a>
This growth has happened for two reasons: homeowners listing their homes for sale and homes staying on the market a bit longer as buyer demand has moderated in response to higher mortgage rates.
The good news for you is that more inventory means more homes to choose from. And when there are more homes on the market, you could also see less competition from other buyers because the peak frenzy of competing over the same home has eased too.
2. Home Prices Are Not Projected To Crash
Experts don’t believe home prices will <a href="https://www.simplifyingthemarket.com/2022/10/26/3-graphs-showing-why-todays-housing-market-isnt-like-2008/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="crash" target="_blank" rel="noopener noreferrer">crash</a> like they did in 2008. Instead, <a href="https://www.simplifyingthemarket.com/2022/12/06/whats-going-on-with-home-prices-ask-a-professional/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="home prices" target="_blank" rel="noopener noreferrer">home prices</a> will moderate at various levels depending on the local market and the factors, like supply and demand, at play in that area. That’s why some experts are calling for slight appreciation and others are calling for slight depreciation (see graph below):
<a href="https://files.mykcm.com/2022/12/06131036/home-price-forecasts-for-2023-2-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106176" src="https://files.mykcm.com/2022/12/06131036/home-price-forecasts-for-2023-2-MEM.png" alt="Key Advantages of Buying a Home Today | MyKCM" width="600" height="450" /></a>
If you consider the big picture and average the expert forecasts for 2023 together, the expectation is for relatively flat or neutral price appreciation next year. So, if you’re worried about buying a home because you’re afraid home prices will crash like they did in 2008, rest assured that’s not what expert projections tell us.
3. Mortgage Rates Have Risen, but They Will Come Down
While <a href="https://www.simplifyingthemarket.com/2022/11/21/mortgage-rates-will-come-down-its-just-a-matter-of-time/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> have risen dramatically this year, the rapid increases we’ve seen have <a href="https://www.freddiemac.com/pmms/archive" title="moderated" target="_blank" rel="noopener noreferrer">moderated</a> in recent weeks as early signs hint that inflation may be easing slightly. Where they’ll go from here largely depends on what happens next with inflation. If inflation does truly begin to cool, mortgage rates may come down as a result.
When that happens, expect more buyers to jump back into the market. For you, that means you’ll once again face more competition. Buying your house now before more buyers reenter the market could help you get one step ahead. As Lawrence Yun, Chief Economist for NAR, <a href="https://twitter.com/NAR_Research/status/1597970968298782720?s=20&t=RM8XMxPm_1ZkD0xfSe4N6Q" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”
When mortgage rates come down, those waiting on the sidelines will jump back in. Your advantage is getting in before they do.
Bottom Line
If you’re thinking about buying a home, you should seriously consider the advantages today’s market offers. Let’s connect so you can make the dream of homeownership a reality.
2022-12-09T04:58:00-07:002022-12-07T04:59:04-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:143753 Ways You Can Use Your Home Equity3 Ways You Can Use Your Home Equity
<img width="750" height="410" src="https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="3 Ways You Can Use Your Home Equity | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM.jpg 750w, https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/11/21144827/3-ways-you-can-use-your-home-equity-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re a homeowner, odds are your <a href="https://www.simplifyingthemarket.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/'?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity" target="_blank" rel="noopener noreferrer">equity</a> has grown significantly over the last few years as home prices skyrocketed and you made your monthly mortgage payments. <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="Home&nbsp;equity" target="_blank" rel="noopener noreferrer">Home equity</a> builds over time and can help you achieve certain goals. According to the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="Equity Insights Report" target="_blank" rel="noopener noreferrer">Equity Insights Report</a> from CoreLogic, the average borrower with a home loan has almost $300,000 in equity right now.
As you weigh your options, especially in the face of inflation and talk of a <a href="https://www.simplifyingthemarket.com/2022/10/25/what-happens-to-housing-when-theres-a-recession/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="recession" target="_blank" rel="noopener noreferrer">recession</a>, it’s important to understand your assets and how you can leverage them. A real estate professional is the best resource to help you understand how much home equity you have and advise you on some of the ways you can use it. Here are a few examples.
1. Buy a Home That Fits Your Needs
If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle.
If you want to upgrade your house, you can put your equity toward a <a href="https://www.simplifyingthemarket.com/2022/10/10/saving-for-a-down-payment-heres-what-you-should-know/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="down payment" target="_blank" rel="noopener noreferrer">down payment</a> on the home of your dreams. And if you’re planning to downsize, you may be surprised that your equity may cover some, if not all, of the cost of your next home. A real estate advisor can help you figure out how much equity you have and how you can use it toward the purchase of your next home.
2. Reinvest in Your Current House
According to a recent survey from <a href="https://hello.point.com/hubfs/PR/fall2022-homeowner-survey.pdf" title="Point" target="_blank" rel="noopener noreferrer">Point</a>, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space but you aren’t ready to make a move just yet.
Home improvement projects allow you to customize your home to suit your needs and sense of style. Just remember to think ahead with any updates you make, as some renovations add more value to your home and are more likely to appeal to future buyers than others. For example, a <a href="https://www.nar.realtor/sites/default/files/documents/2022-remodeling-impact-report-04-19-2022.pdf" title="report" target="_blank" rel="noopener noreferrer">report</a> from the National Association of Realtors (NAR) shows refinishing or replacing wood flooring has a high cost recovery. Lean on a local professional for the best advice on which projects to invest in to get the greatest return on your investment when you sell.
3. Pursue Your Personal Goals
In addition to making a move or updating your house, home equity can also help you achieve the life goals you’ve dreamed of. That could mean investing in a new business venture, retiring or downsizing, or funding an education. While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other lifelong goals.
Bottom Line
Your equity can be a game changer. If you’re unsure how much equity you have in your home, let’s connect so you can start planning your next move.
2022-12-02T07:50:00-07:002022-12-01T07:52:19-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:14374What You Want To Know If You’re Pursuing Your Dream of HomeownershipWhat You Want To Know If You’re Pursuing Your Dream of Homeownership
<img width="750" height="410" src="https://files.mykcm.com/2022/11/30125538/what-you-want-to-know-if-youre-pursuing-your-dream-of-homeownership-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="What You Want To Know If You’re Pursuing Your Dream of Homeownership | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/11/30125538/what-you-want-to-know-if-youre-pursuing-your-dream-of-homeownership-KCM.jpg 750w, https://files.mykcm.com/2022/11/30125538/what-you-want-to-know-if-youre-pursuing-your-dream-of-homeownership-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/11/30125538/what-you-want-to-know-if-youre-pursuing-your-dream-of-homeownership-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re a young adult, you may be thinking about your goals and priorities for the months and years ahead. And if <a href="https://www.simplifyingthemarket.com/2022/11/08/the-majority-of-americans-still-view-homeownership-as-the-american-dream/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="homeownership" target="_blank" rel="noopener noreferrer">homeownership</a> ranks high on your goal sheet, you’re in good company. Many of your peers are also pursuing their dream of owning a home. The <a href="https://himaxwell.com/resources/ebooks-white-papers/1h-2022-millennial-genz-borrower-sentiment-report/#downloadnow" title="2022 Millennial &amp; Gen Z Borrower Sentiment Report" target="_blank" rel="noopener noreferrer">2022 Millennial & Gen Z Borrower Sentiment Report</a> from Maxwell says:
“Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.”
Let’s take a look at why homeownership makes the top of so many young buyers’ to-do list and what you need to consider to achieve your goals if you’re one of them.
Top Motivators To Buy a Home
Before you start the homebuying process, it’s helpful to know why homeownership is so important to you. The survey mentioned above sheds light on some of the top reasons why younger generations are looking to buy a home. It finds:
95% believe the <a href="https://www.simplifyingthemarket.com/2022/09/30/why-buying-a-home-may-make-more-sense-than-renting-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="cost of renting" target="_blank" rel="noopener noreferrer">cost of renting</a> is too high
35% think owing a home is an important <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="wealth building tool" target="_blank" rel="noopener noreferrer">wealth building tool</a>
16% seek the sense of security owning a home provides
37% plan to use it as an <a href="https://www.simplifyingthemarket.com/2022/11/03/do-you-believe-homeownership-is-out-of-reach-maybe-it-doesnt-have-to-be/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="investment property" target="_blank" rel="noopener noreferrer">investment property</a>
No matter which of these resonates the most with you, know there are many financial and non-financial reasons why you may want to buy a home. While your top motivator may be different than that of your friends, they’re all equally valid and worthwhile.
Key Obstacles and How To Overcome Them
Whether your <a href="https://www.simplifyingthemarket.com/2022/10/07/the-journey-to-buy-a-home-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="homeownership" target="_blank" rel="noopener noreferrer">homeownership</a> goals come from the heart or are driven by financial aspirations (or both), it can still be hard to know where to start when you’re looking to buy a home. From understanding the homebuying process, to getting <a href="https://www.simplifyingthemarket.com/2022/10/24/pre-approval-is-a-critical-first-step-on-your-homebuying-journey/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="pre-approved" target="_blank" rel="noopener noreferrer">pre-approved</a>, and exploring <a href="https://www.simplifyingthemarket.com/2022/10/31/taking-the-fear-out-of-saving-for-a-home/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="down payment options" target="_blank" rel="noopener noreferrer">down payment options</a>, it’s a lot to wrap your head around.
The same Maxwell survey also reveals key challenges for potential buyers. Thankfully, the knowledge and guidance of a trusted real estate professional can help you overcome both. Here’s a look at two of the hurdles potential homebuyers say they face:
1. The Mortgage Process Can Be Intimidating
In the Maxwell study, 33.37% said one of their obstacles was that the mortgage process is confusing or difficult to understand.
An <a href="https://resources.ownup.com/home-buyer-mortgage-shopping-study-overview-2022?utm_content=normal" title="article" target="_blank" rel="noopener noreferrer">article</a> by OwnUp helps explain why the <a href="https://www.simplifyingthemarket.com/2022/10/28/applying-for-a-mortgage-doesnt-have-to-be-scary-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="mortgage process" target="_blank" rel="noopener noreferrer">mortgage process</a> is so challenging for buyers:
“There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.”
While you may be tempted to do a quick search online to find instant answers to your questions, it may not get you the information you need to understand the full picture. Especially when it comes to financial advice, you want to lean on a true expert. Having trusted professionals on your side can help you to learn what it takes to achieve your dream of homeownership. Not to mention, an expert can give you advice specific to your situation, not generic advice like you’ll find online.
2. It’s Hard To Know How Much You Need To Save
In the Maxwell study, 45.75% believe they don’t have enough saved to cover their down payment or closing cost expenses.
What you may not realize is that, today, there’s a growing number of down payment assistance programs available nationwide to help relieve this pressure. A report from Down Payment Resource <a href="https://downpaymentresource.com/professional-resource/homebuyer-assistance-programs-proliferate-in-q3-as-median-u-s-down-payment-skyrockets/" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.”
Additionally, as the housing market cools, buyers are regaining some <a href="https://www.simplifyingthemarket.com/2022/09/15/buyers-are-regaining-some-of-their-negotiation-power-in-todays-housing-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="negotiation power" target="_blank" rel="noopener noreferrer">negotiation power</a> and more sellers are willing to work with buyers to help with closing costs. Understanding what’s out there and the options available may help you achieve your dream of homeownership faster than you thought possible.
Bottom Line
If you’re serious about becoming a homeowner, know it may be more in reach than you think. Lean on trusted professionals to help you overcome challenges and prioritize your next steps.
2022-11-25T07:49:00-07:002022-12-01T07:50:29-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:14271Top Questions About Selling Your Home This WinterTop Questions About Selling Your Home This Winter
<img width="750" height="410" src="https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Top Questions About Selling Your Home This Winter | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM.jpg 750w, https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/11/15092131/top-questions-about-selling-your-home-this-winter-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
There’s no denying the housing market is undergoing a shift this season, and that may leave you with some questions about whether it still makes sense to <a href="https://www.simplifyingthemarket.com/2022/10/13/perspective-matters-when-selling-your-house-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a>. Here are three of the top questions you may be asking – and the data that helps answer them – so you can make a confident decision.
1. Should I Wait To Sell?
Even though the supply of homes for sale has increased in 2022, inventory is still low overall. That means it’s still a sellers’ market. The graph below helps put the inventory growth into perspective. Using <a href="https://www.nar.realtor/topics/existing-home-sales" title="data" target="_blank" rel="noopener noreferrer">data</a> from the National Association of Realtors (NAR), it shows just how far off we are from flipping to a buyers’ market:
<a href="https://files.mykcm.com/2022/11/15092129/as-supply-grows-its-still-a-sellers-market-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105808" src="https://files.mykcm.com/2022/11/15092129/as-supply-grows-its-still-a-sellers-market-MEM.png" alt="Top Questions About Selling Your Home This Winter | MyKCM" width="600" height="450" /></a>
While buyers have regained some <a href="https://www.simplifyingthemarket.com/2022/09/15/buyers-are-regaining-some-of-their-negotiation-power-in-todays-housing-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="negotiation power" target="_blank" rel="noopener noreferrer">negotiation power</a> as inventory has grown, you haven’t missed your window to sell. Your house could still stand out since inventory is low, especially if you list now while <a href="https://www.simplifyingthemarket.com/2022/11/02/sell-your-house-before-the-holidays/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="other sellers" target="_blank" rel="noopener noreferrer">other sellers</a> hold off until after the holiday rush and the start of the new year.
2. Are Buyers Still Out There?
If you’re thinking of selling your house but are hesitant because you’re worried buyer demand has disappeared in the face of higher mortgage rates, know that isn’t the case for everyone. While demand has eased this year, <a href="https://www.simplifyingthemarket.com/2022/10/27/millennials-are-still-a-driving-force-of-todays-buyer-demand/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="millennials" target="_blank" rel="noopener noreferrer">millennials</a> are still looking for homes. As an article in Forbes <a href="https://www.forbes.com/sites/forbesbusinesscouncil/2022/05/25/the-power-to-drive-change-how-millennials-are-affecting-the-housing-market/?sh=6d09dd06716c" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the ‘rent generation,’ millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.”
While the millennial generation has been dubbed the renter generation, that namesake may not be appropriate anymore. <a href="https://www.simplifyingthemarket.com/2022/11/03/do-you-believe-homeownership-is-out-of-reach-maybe-it-doesnt-have-to-be/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="Millennials" target="_blank" rel="noopener noreferrer">Millennials</a>, the largest generation, are actually a significant driving force for buyer demand in the housing market today. If you’re wondering if buyers are still out there, know that there are still people who are searching for a home to buy today. And your house may be exactly what they’re looking for.
3. Can I Afford To Buy My Next Home?
If current market conditions have you worried about how you’ll afford your next move, consider this: you may have more <a href="https://www.simplifyingthemarket.com/2022/11/04/homeownership-wins-over-time-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity" target="_blank" rel="noopener noreferrer">equity</a> in your current home than you realize.
Homeowners have gained <a href="https://www.simplifyingthemarket.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="significant equity" target="_blank" rel="noopener noreferrer">significant equity</a> over the past few years and that equity can make a big difference in the <a href="https://www.simplifyingthemarket.com/2022/11/07/key-factors-affecting-home-affordability-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="affordability" target="_blank" rel="noopener noreferrer">affordability</a> equation, especially with mortgage rates higher now than they were last year. <a href="https://blog.firstam.com/economics/whats-the-outlook-for-housing-market-potential-for-the-rest-of-2022" title="According" target="_blank" rel="noopener noreferrer">According</a> to Mark Fleming, Chief Economist at First American:
“. . . homeowners, in aggregate, have historically high levels of home equity. For some of those equity-rich homeowners, that means moving and taking on a higher mortgage rate isn’t a huge deal—especially if they are moving to a more affordable city.”
Bottom Line
If you’re thinking about selling your house this season, let’s connect so you have the expert insights you need to make the best possible move today.
2022-11-18T06:57:17-07:002022-11-18T06:57:53-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:141243 Trends That Are Good News for Today’s Homebuyers3 Trends That Are Good News for Today’s Homebuyers
<img width="750" height="410" src="https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="3 Trends That Are Good News for Today’s Homebuyers | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM.jpg 750w, https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/10/31110909/3-trends-that-are-good-news-for-todays-homebuyers-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
While higher <a href="https://www.simplifyingthemarket.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> are creating affordability challenges for <a href="https://www.simplifyingthemarket.com/2022/10/19/should-you-still-buy-a-home-with-the-latest-news-about-inflation/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="homebuyers" target="_blank" rel="noopener noreferrer">homebuyers</a> this year, there is some good news for those people still looking to buy a home.
As the market has cooled this year, some of the intensity buyers faced during the peak frenzy of the pandemic has cooled too. Here are just a few trends that may benefit you when you go to buy a home today.
1. More Homes To Choose from
During the pandemic, housing supply hit a record low at the same time buyer demand skyrocketed. This combination made it difficult to find a home because there just weren’t enough to meet buyer demand. According to Calculated Risk, the supply of homes for sale increased by <a href="https://www.calculatedriskblog.com/2022/10/housing-october-31st-weekly-update.html" title="39.5%" target="_blank" rel="noopener noreferrer">39.5%</a> for the week ending October 28 compared to the same week last year.
Even though it’s still a sellers’ market and supply is still lower than more normal levels, you have more to choose from in your home search. That makes finding your dream home a bit less difficult.
2. Bidding Wars Have Eased
One of the top stories in real estate over the past two years was the intensity and frequency of bidding wars. But today, things are different. With more options, you’ll likely see less competition from other buyers looking for homes. According to the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-09-realtors-confidence-index-10-20-2022.pdf" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR), the average number of offers on recently sold homes has declined. This September, the average was 2.5 offers per sale. In contrast, last September, the average was 3.7 offers per sale.
If you tried to buy a house over the past two years, you probably experienced the bidding war frenzy firsthand and may have been outbid on several homes along the way. Now you have a chance to jump back into the market and enjoy searching for a home with less competition.
3. More Negotiation Power
And when you have less competition, you also have more negotiating power as a buyer. Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or <a href="https://www.simplifyingthemarket.com/2022/08/19/why-a-home-inspection-is-important-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="inspection" target="_blank" rel="noopener noreferrer">inspection</a>, to try to win a bidding war. But the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-09-realtors-confidence-index-10-20-2022.pdf" title="latest data" target="_blank" rel="noopener noreferrer">latest data</a> from the National Association of Realtors (NAR) shows the percentage of buyers waiving those contingencies is going down.
As a buyer, this is good news. The appraisal and the inspection give you important information about the value and condition of the home you’re buying. And if something turns up in the inspection, you have more power today to renegotiate with the seller.
A <a href="https://www.realtor.com/research/2022-summer-sellers-survey/" title="survey" target="_blank" rel="noopener noreferrer">survey</a> from realtor.com confirms more sellers are accepting offers that include contingencies today. According to that report, 95% of sellers said buyers requested a home inspection, and 67% negotiated with buyers on repairs as a result of the inspection findings.
Bottom Line
While buyers still face challenges today, they’re not necessarily the same ones you may have been up against just a year or so ago. If you were outbid or had trouble finding a home in the past, now may be the moment you’ve been waiting for. Let’s connect to start the homebuying process today.
2022-11-11T11:50:00-07:002022-11-03T10:52:16-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:14071Millennials Are Still a Driving Force of Today’s Buyer DemandMillennials Are Still a Driving Force of Today’s Buyer Demand
<img width="750" height="410" src="https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Millennials Are Still a Driving Force of Today’s Buyer Demand | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM.jpg 750w, https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/10/25130523/millennials-are-still-a-driving-force-of-todays-buyer-demand-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re thinking about <a href="https://www.simplifyingthemarket.com/2022/10/13/perspective-matters-when-selling-your-house-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="selling your house" target="_blank" rel="noopener noreferrer">selling your house</a> but wondering if buyers are still out there, know that there are still people who are searching for a home to buy today. And your house may be exactly what they’re looking for.
While the millennial generation has been dubbed the <a href="https://www.simplifyingthemarket.com/2022/09/30/why-buying-a-home-may-make-more-sense-than-renting-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="renter" target="_blank" rel="noopener noreferrer">renter</a> generation, that namesake may not be appropriate anymore. Millennials, the largest generation, are actually a significant driving force for buyer demand in the housing market today. Here’s why.
Millennial Homebuying Power
While there’s no denying higher <a href="https://www.simplifyingthemarket.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> are making it more challenging to afford a home today, many millennials are still eager and able to buy homes – whether it’s their first or they’re moving up. That’s in large part because of the value they place on education.
A <a href="https://blog.firstam.com/economics/why-educated-millennials-still-hold-the-key-to-future-homeownership-demand" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> from First American says millennials may be the most educated generation in our nation’s history. Because of that, they tend to earn higher wages, and that translates to greater homebuying power. Odeta Kushi, Deputy Chief Economist at First American, <a href="https://blog.firstam.com/economics/why-educated-millennials-still-hold-the-key-to-future-homeownership-demand" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“In 2020, millennials with a bachelor’s degree had a median household income of over $100,000, while those with at least a graduate degree had a median household income of over $120,000. Compare those income levels with the median household income of millennials with just a high school degree (or some college) of $60,000 and the earning power benefits of higher education are undeniable. . . . Millennials’ pursuit of higher education is good news for the housing market. . . because education is the key to unlock both greater earning power and, in turn, homeownership.”
And since wages are one of the key things that factor into affordability when it comes to buying a home, these higher earnings can help millennials achieve their homeownership goals.
Millennials Continue To Be a Driving Force of Demand
A number of studies have looked into how the millennial generation views homeownership and how they’re uniquely positioned to define the housing market moving forward. As the largest generation, the volume of potential millennial homebuyers will have an impact on the market for years to come. As an article in Forbes <a href="https://www.forbes.com/sites/forbesbusinesscouncil/2022/05/25/the-power-to-drive-change-how-millennials-are-affecting-the-housing-market/?sh=3c55ec63716c" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the ‘rent generation,’ millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.”
If you’re thinking of selling your house but are hesitant because you’re worried that <a href="https://www.simplifyingthemarket.com/2022/10/18/the-latest-on-supply-and-demand-in-housing/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="buyer demand" target="_blank" rel="noopener noreferrer">buyer demand</a> has disappeared in the face of higher mortgage rates, know that isn’t the case for everyone. While demand has eased this year, millennials are still looking for homes. As Mark Fleming, Chief Economist at First American, <a href="https://www.thestreet.com/investing/housing-market-slump-forecast-continues-into-late-2023" title="says" target="_blank" rel="noopener noreferrer">says</a> in an article:
"While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.”
Bottom Line
Millennials are interested in and well-positioned to achieve their homeownership dreams. If you’re ready to sell your house, know that it may be just what they’re looking for.
2022-11-04T05:54:00-07:002022-10-28T05:55:49-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:140353 Questions You May Be Asking About Selling Your House Today [INFOGRAPHIC]3 Questions You May Be Asking About Selling Your House Today [INFOGRAPHIC]
<img width="1046" height="2637" src="https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-1046x2637.png" class="attachment-entry size-entry wp-post-image" alt="3 Questions You May Be Asking About Selling Your House Today [INFOGRAPHIC] | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-1046x2637.png 1046w, https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-238x600.png 238w, https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-406x1024.png 406w, https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-768x1936.png 768w, https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-609x1536.png 609w, https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-812x2048.png 812w, https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM-100x252.png 100w, https://files.mykcm.com/2022/10/20151852/3-questions-you-may-be-asking-about-selling-your-house-today-MEM.png 1300w" sizes="(max-width: 1046px) 100vw, 1046px" /><br /><br />
Some Highlights
If you’re planning to <a href="https://www.simplifyingthemarket.com/2022/10/03/how-to-prep-your-house-for-sale-this-fall/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a> this year, you likely have <a href="https://www.simplifyingthemarket.com/2022/09/19/will-my-house-still-sell-in-todays-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="questions" target="_blank" rel="noopener noreferrer">questions</a> about what the shift in the housing market means for your home sale.
You might be wondering: Should I wait <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" title="to sell" target="_blank" rel="noopener noreferrer">to sell</a>? Are <a href="https://www.showingtime.com/blog/august-2022-showing-index-results/" title="buyers" target="_blank" rel="noopener noreferrer">buyers</a> still out there? And can I afford to buy my <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="next home" target="_blank" rel="noopener noreferrer">next home</a>?
Let’s connect so you can get answers to these questions and learn about the opportunities you still have in today’s housing market.
2022-10-28T05:44:00-07:002022-10-25T05:45:10-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13949Perspective Matters When Selling Your House TodayPerspective Matters When Selling Your House Today
<img width="750" height="410" src="https://files.mykcm.com/2022/10/12112112/20221013-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Perspective Matters When Selling Your House Today | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/12112112/20221013-KCM-Share.jpg 750w, https://files.mykcm.com/2022/10/12112112/20221013-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/10/12112112/20221013-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Does the latest news about the housing market have you questioning your plans to <a href="https://www.simplifyingthemarket.com/2022/09/29/if-youre-thinking-of-selling-your-house-this-fall-hire-a-pro/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a>? If so, perspective is key. Here are some of the ways a trusted real estate professional can explain <a href="https://www.simplifyingthemarket.com/2022/09/14/is-the-real-estate-market-slowing-down-or-is-this-a-housing-bubble/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="the shift" target="_blank" rel="noopener noreferrer">the shift</a> that’s happening today and why it’s still a sellers’ market even during the cooldown.
Fewer Homes for Sale than Pre-Pandemic
While the supply of homes available for sale has increased this year compared to last, we’re still nowhere near what’s considered a balanced market. A <a href="https://www.calculatedriskblog.com/2022/10/housing-october-10th-weekly-update.html" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> from Calculated Riskhelps put this year’s increased inventory into context (see graph below):
<a href="https://files.mykcm.com/2022/10/12112113/20221013-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105077" src="https://files.mykcm.com/2022/10/12112113/20221013-MEM-Eng-1.png" alt="Perspective Matters When Selling Your House Today | MyKCM" width="600" height="450" /></a>
It shows supply this year has surpassed 2021 levels by over 30%. But the further back you look, the more you’ll understand the big picture. Compared to 2020, we’re just barely above the level of inventory we saw then. And if you go all the way back to 2019, the last normal year in real estate, we’re roughly 40% below the housing supply we had at that time.
Why does this matter to you? When inventory is low, there is still demand for your house because there just aren’t enough homes available for sale.
Homes Are Still Selling Faster Than More Normal Years
And while homes aren’t selling as quickly as they did a few months ago, the average number of days on the market is still well below pre-pandemic norms – in large part because inventory is so low. The graph below uses data from the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-08-realtors-confidence-index-09-21-2022.pdf" title="Realtors’ Confidence Index" target="_blank" rel="noopener noreferrer">Realtors’ Confidence Index</a> by the National Association of Realtors (NAR) to illustrate this trend:
<a href="https://files.mykcm.com/2022/10/12112115/20221013-MEM-Eng-2.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105078" src="https://files.mykcm.com/2022/10/12112115/20221013-MEM-Eng-2.png" alt="Perspective Matters When Selling Your House Today | MyKCM" width="600" height="450" /></a>
As the graph shows, the pre-pandemic numbers (shown in blue) are higher than the numbers we saw during the pandemic (shown in green). That’s because the average days on the market started to decrease as homes sold at record pace during the pandemic. Most recently, due to the cooldown in the housing market, the average days on the market have started to tick back up slightly (shown in orange) but are still far below the pre-pandemic norm.
What does this mean for you? While it may not be as fast as it was a couple of months ago, homes are still selling much faster than they did in more normal, pre-pandemic years. And if you price it right, your home could still go under contract quickly.
Buyer Demand Has Moderated and Is Now in Line with More Typical Years
Buyer demand has softened this year in response to rising <a href="https://www.simplifyingthemarket.com/2022/09/27/how-an-expert-can-help-you-understand-inflation-mortgage-rates/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a>. But again, perspective is key. Getting 3-5 offers like <a href="https://www.simplifyingthemarket.com/2022/09/21/top-reasons-homeowners-are-selling-their-houses-right-now/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sellers" target="_blank" rel="noopener noreferrer">sellers</a> did during the pandemic isn’t the norm. The graph below uses <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-08-realtors-confidence-index-09-21-2022.pdf" title="data" target="_blank" rel="noopener noreferrer">data</a> from NAR going back to 2018 to help tell the story of this shift over time (see graph below):
<a href="https://files.mykcm.com/2022/10/12112108/20221013-MEM-Eng-3.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105075" src="https://files.mykcm.com/2022/10/12112108/20221013-MEM-Eng-3.png" alt="Perspective Matters When Selling Your House Today | MyKCM" width="600" height="450" /></a>
Prior to the pandemic, it was typical for homes sold to see roughly 2-2.5 offers (shown in blue). As the market heated up during the pandemic, the average number of offers skyrocketed as record-low mortgage rates drove up demand (shown in green). But most recently, the number of offers on homes sold today (shown in orange) has started to return to pre-pandemic levels as the market cools from the frenzy.
What’s the takeaway for you? Buyer demand has moderated from the pandemic peak, but it hasn’t disappeared. The buyers are still out there, and if you <a href="https://www.simplifyingthemarket.com/2022/08/09/selling-your-house-your-asking-price-matters-more-now-than-ever/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="price your house" target="_blank" rel="noopener noreferrer">price your house</a> at current market value, you’ll still be able <a href="https://www.simplifyingthemarket.com/2022/09/19/will-my-house-still-sell-in-todays-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a> today.
Bottom Line
If you have questions about selling your house in today’s housing market, let’s connect. That way you have context around what’s happening now, so you’re up to date on what you can expect when you’re ready to move.
2022-10-21T07:27:00-07:002022-10-17T07:28:02-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13887Saving for a Down Payment? Here’s What You Should Know.Saving for a Down Payment? Here’s What You Should Know.
<img width="750" height="410" src="https://files.mykcm.com/2022/10/05164531/20221010-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Saving for a Down Payment? Here’s What You Should Know. | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/05164531/20221010-KCM-Share.jpg 750w, https://files.mykcm.com/2022/10/05164531/20221010-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/10/05164531/20221010-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
As you set out to <a href="https://www.simplifyingthemarket.com/2022/09/30/why-buying-a-home-may-make-more-sense-than-renting-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="buy a home" target="_blank" rel="noopener noreferrer">buy a home</a>, saving for a down payment is likely top of mind. But you may still have questions about the process, including how much to save and where to start.
If that sounds like you, your down payment could be more in reach than you originally thought. Here’s why.
The 20% Down Payment Myth
If you believe you have to put 20% down on a home, you may have based your goal on a common misconception. Freddie Mac <a href="https://myhome.freddiemac.com/buying/down-payments-and-pmi" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Unless it’s specified by your loan type or lender, it’s typically not required to put 20% down. According to the latest <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" title="Profile of Home Buyers and Sellers" target="_blank" rel="noopener noreferrer">Profile of Home Buyers and Sellers</a> from the National Association of Realtors(NAR), the median down payment hasn’t been over 20% since 2005. There are even loan types, like <a href="https://www.hud.gov/buying/loans" title="FHA loans" target="_blank" rel="noopener noreferrer">FHA loans</a>, with down payments as low as 3.5%, as well as options like <a href="https://www.benefits.va.gov/homeloans/index.asp" title="VA loans" target="_blank" rel="noopener noreferrer">VA loans</a> and <a href="https://www.rd.usda.gov/newsroom/news-release/usda-rural-home-loans-offer-100-financing-and-no-down-payment" title="USDA loans" target="_blank" rel="noopener noreferrer">USDA loans</a> with no down payment requirements for qualified applicants.
This is good news for you because it means you could be closer to your homebuying dream than you realize. For more information, turn to a trusted lender.
Down Payment Assistance Programs Can Be a Game Changer
A professional will be able to show you other options that could help you get closer to your down payment goal. According to latest <a href="https://downpaymentresource.com/homebuyer-resource/homeownership-program-index-highlights-programs-for-community-heroes/" title="Homeownership Program Index" target="_blank" rel="noopener noreferrer">Homeownership Program Index</a> from downpaymentresource.com, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.
A recent article <a href="https://downpaymentresource.com/homebuyer-resource/5-ways-you-can-benefit-from-down-payment-programs/" title="explains" target="_blank" rel="noopener noreferrer">explains</a> why programs like these are helpful:
“These resources can immediately build your home buying power and help you take action sooner than you thought possible.”
And if you’re wondering if you have to be a <a href="https://www.simplifyingthemarket.com/2022/06/29/homeownership-could-be-in-reach-with-down-payment-assistance-programs/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="first-time buyer" target="_blank" rel="noopener noreferrer">first-time buyer</a> to qualify for these programs, that’s not always the case. According to an article from <a href="https://downpaymentresource.com/professional-resource/more-homebuyer-assistance-programs-introduced-as-affordability-declines-in-most-u-s-counties/" title="downpaymentresource.com" target="_blank" rel="noopener noreferrer">downpaymentresource.com</a>:
“It is a common misconception that homebuyer assistance is only available to first-time homebuyers, however, 38% of homebuyer assistance programs in Q1 2022 did not have a first-time homebuyer requirement.”
There are also location and profession-based programs you could qualify for as well.
Bottom Line
Saving for your down payment is an important first step on your homebuying journey. Don't have a trusted lender in your back pocket? Reach out and let us connect you with local lenders to work with regularly and trust.
2022-10-14T05:52:00-07:002022-10-25T05:41:02-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13805The Cost of Waiting for Mortgage Rates To Go DownThe Cost of Waiting for Mortgage Rates To Go Down
<img width="750" height="410" src="https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The Cost of Waiting for Mortgage Rates To Go Down | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share.jpg 750w, https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/10/03144306/20221003-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Mortgage rates have <a href="https://www.freddiemac.com/pmms/archive" title="increased significantly" target="_blank" rel="noopener noreferrer">increased significantly</a> in recent weeks. And that may mean you have questions about what this means for you if you’re planning to buy a home. Here’s some information that can help you make an informed decision when you set your homebuying plans.
The Impact of Rising Mortgage Rates
As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.
Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is <a href="https://www.nar.realtor/newsroom/existing-home-sales-slipped-0-4-in-august" title="$389,500" target="_blank" rel="noopener noreferrer">$389,500</a>). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.
<a href="https://files.mykcm.com/2022/10/03144304/20221004-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-105012" src="https://files.mykcm.com/2022/10/03144304/20221004-MEM-Eng-1.png" alt="The Cost of Waiting for Mortgage Rates To Go Down | MyKCM" width="600" height="450" /></a>
As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a <a href="https://www.simplifyingthemarket.com/2022/09/09/why-its-so-important-to-hire-a-pro-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="real estate advisor" target="_blank" rel="noopener noreferrer">real estate advisor</a> to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.
Are Mortgage Rates Going To Go Down?
The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. Realtor.com <a href="https://www.realtor.com/news/trends/column-homebuyers-have-hard-the-bad-news-heres-the-good/" title="says" target="_blank" rel="noopener noreferrer">says</a>this about where rates could go from here:
“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.”
So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get <a href="https://www.simplifyingthemarket.com/2022/09/27/how-an-expert-can-help-you-understand-inflation-mortgage-rates/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="inflation" target="_blank" rel="noopener noreferrer">inflation</a> under control.
And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-september-15-2022" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”
Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining <a href="https://www.simplifyingthemarket.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity" target="_blank" rel="noopener noreferrer">equity</a> over time which will help grow your <a href="https://www.simplifyingthemarket.com/2022/09/06/how-owning-a-home-builds-your-net-worth/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="net worth" target="_blank" rel="noopener noreferrer">net worth</a>. The question now becomes: what makes more sense for you?
Bottom Line
Each person’s situation is unique. To make the best decision for you, let's connect to explore your options.
2022-10-07T04:25:00-07:002022-10-25T05:41:16-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13739 Top Reasons Homeowners Are Selling Their Houses Right NowTop Reasons Homeowners Are Selling Their Houses Right Now
<img width="750" height="410" src="https://files.mykcm.com/2022/09/20103544/20220921-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Top Reasons Homeowners Are Selling Their Houses Right Now | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/09/20103544/20220921-KCM-Share.jpg 750w, https://files.mykcm.com/2022/09/20103544/20220921-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/09/20103544/20220921-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Some people believe there’s a group of homeowners who may be reluctant to <a href="https://www.simplifyingthemarket.com/2022/09/12/getting-your-house-ready-to-sell-work-with-an-agent-for-expert-advice/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sell their houses" target="_blank" rel="noopener noreferrer">sell their houses</a> because they don’t want to lose the historically low mortgage rate they have on their current home. You may even have the same hesitation if you’re <a href="https://www.simplifyingthemarket.com/2022/09/08/should-i-sell-my-house-this-year/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="thinking about selling" target="_blank" rel="noopener noreferrer">thinking about selling</a> your house.
<a href="https://nationalmortgageprofessional.com/news/mortgage-rates-rise-half-homeowners-say-so-what" title="Data" target="_blank" rel="noopener noreferrer">Data</a> shows 51% of homeowners have a mortgage rate under 4% as of April this year. And while it’s true mortgage rates are higher than that right now, there are other non-financial factors to consider when it comes to making a move. In other words, your mortgage rate is important, but you may have other things going on in your life that make a move essential, regardless of where rates are today. As Jessica Lautz, Vice President of Demographics and Behavioral Insights at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/newsroom/home-buyers-motivated-by-desire-to-be-closer-to-family-and-friends-sellers-collected-full-asking-price" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Home sellers have historically moved when something in their lives changed – a new baby, a marriage, a divorce or a new job. . . .”
So, if you’re thinking about selling your house, it may help to explore the other reasons homeowners are choosing to make a move today. The <a href="https://www.realtor.com/research/2022-summer-sellers-survey/" title="2022 Summer Sellers Survey" target="_blank" rel="noopener noreferrer">2022 Summer Sellers Survey</a> by realtor.com asked recent home sellers why they decided to sell. The visual below breaks down how those homeowners responded:
<a href="https://files.mykcm.com/2022/09/20103542/20220921-MEM-Eng.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-104830" src="https://files.mykcm.com/2022/09/20103542/20220921-MEM-Eng.png" alt="Top Reasons Homeowners Are Selling Their Houses Right Now | MyKCM" width="600" height="450" /></a>
As the visual shows, an appetite for different features or the fact that their current home could no longer meet their needs topped the list for recent sellers. Additionally, remote work and whether or not they need a home office or are tied to a specific physical office location also factored in, as did the desire to live close to their loved ones.
The realtor.com <a href="https://www.realtor.com/research/2022-summer-sellers-survey/" title="survey" target="_blank" rel="noopener noreferrer">survey</a> summarizes the findings like this:
“The primary reason homeowners decided to sell in the last year was the realization that, after so much time spent at home, they wanted different features and amenities, such as walkability, outdoor space, pool, etc. . . . ”
If you, like the homeowners they surveyed, find yourself wanting features, space, or amenities your current home just can’t provide, it may be time to consider listing your house for sale.
Even with today’s mortgage rates, your lifestyle needs may be enough to motivate you to make a change. The best way to find out what’s right for you is to partner with a trusted <a href="https://www.simplifyingthemarket.com/2022/09/09/why-its-so-important-to-hire-a-pro-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="real estate professional" target="_blank" rel="noopener noreferrer">real estate professional</a> who can provide expert guidance and advice throughout the process. They can help walk you through your options, so you can make a confident decision based on what matters most to you and your loved ones.
Bottom Line
While the financial reasons for moving are important, there’s often far more to consider. Non-financial reasons can also be a significant motivating factor. If you need help weighing the pros and cons of selling your house, let’s connect today.
2022-09-30T04:32:00-07:002022-09-27T07:33:01-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13740What Experts Say Will Happen with Home Prices Next YearWhat Experts Say Will Happen with Home Prices Next Year
<img width="750" height="410" src="https://files.mykcm.com/2022/09/21134211/20220919-KCM-Share-1.jpg" class="attachment-entry size-entry wp-post-image" alt="What Experts Say Will Happen with Home Prices Next Year | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/09/21134211/20220919-KCM-Share-1.jpg 750w, https://files.mykcm.com/2022/09/21134211/20220919-KCM-Share-1-600x328.jpg 600w, https://files.mykcm.com/2022/09/21134211/20220919-KCM-Share-1-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Experts are starting to make their 2023 home price forecasts. As they do, most agree homes will continue to gain value, just at a slower pace. Over the past couple of years, <a href="https://www.simplifyingthemarket.com/2022/08/30/whats-actually-happening-with-home-prices-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="home prices" target="_blank" rel="noopener noreferrer">home prices</a>have risen at an unsustainable rate, leaving many to wonder how long it would last. If you’re asking yourself: what’s ahead for the price of my home, know that experts are now answering this question, and its welcome news for homeowners who may have been led by the media to believe their home would lose value.
Historically, home prices have appreciated at a rate near <a href="https://www.forbes.com/sites/qai/2022/08/30/housing-prices-are-dropping---yes-a-house-is-still-a-good-investment/?sh=54fdefd17372" title="4%" target="_blank" rel="noopener noreferrer">4%</a>. For 2023, the average of six major forecasters noted below is 2.5%. While one, <a href="https://www.zelmanassociates.com/" title="Zelman &amp; Associates" target="_blank" rel="noopener noreferrer">Zelman & Associates</a>, is calling for depreciation, the other five are calling for appreciation. The graph below outlines each expert forecast to show where they project home prices are going in the coming year.
<a href="https://files.mykcm.com/2022/09/21134209/20220922-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-104843" src="https://files.mykcm.com/2022/09/21134209/20220922-MEM-Eng-1.png" alt="What Experts Say Will Happen with Home Prices Next Year | MyKCM" width="600" height="450" /></a>
To understand why experts are calling for appreciation next year, look to the economics of supply and demand. Dave Ramsey, Financial Expert, <a href="https://www.youtube.com/watch?v=NDDwGqTVAdU" title="says" target="_blank" rel="noopener noreferrer">says</a> this:
“The root issue of what drives house prices almost always is supply and demand . . .”
Two things are driving home prices upward. First, the <a href="https://www.simplifyingthemarket.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="undersupply" target="_blank" rel="noopener noreferrer">undersupply</a> of homes on the market is an issue we continue to face in this country. We still don’t have <a href="https://www.simplifyingthemarket.com/2022/09/08/should-i-sell-my-house-this-year/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="enough homes" target="_blank" rel="noopener noreferrer">enough homes</a> on the market for the <a href="https://www.simplifyingthemarket.com/2022/09/19/will-my-house-still-sell-in-todays-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="number of people" target="_blank" rel="noopener noreferrer">number of people</a> that want to buy them. To further that point, we’re still in a <a href="https://www.simplifyingthemarket.com/2022/09/02/heres-why-its-still-a-sellers-market-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sellers’ market" target="_blank" rel="noopener noreferrer">sellers’ market</a> nationally, and in that scenario, home prices tend to appreciate.
Second, millennials are moving through their peak homebuying years. Since they’re the largest demographic behind the baby boomers, demand isn’t going away any time soon.
Bottom Line
Experts are calling for home prices to appreciate next year, although at a slower pace than the previous three years. The reason for this is simple. The dynamics of supply and demand are playing out in real estate and will continue for many years to come.
2022-09-23T04:34:00-07:002022-09-27T07:34:57-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13610What’s Actually Happening with Home Prices Today?What’s Actually Happening with Home Prices Today?
<img width="750" height="410" src="https://files.mykcm.com/2022/08/29125429/20220830-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="What’s Actually Happening with Home Prices Today? | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/08/29125429/20220830-KCM-Share.jpg 750w, https://files.mykcm.com/2022/08/29125429/20220830-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/08/29125429/20220830-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
One of the biggest questions people are asking right now is: what’s happening with home prices? There are headlines about ongoing price appreciation, but at the same time, some sellers are reducing the price of their homes. That can feel confusing and makes it more difficult to get a clear picture.
Part of the challenge is that it can be hard to understand what experts are saying when the words they use sound similar. Let’s break down the differences among those terms to help clarify what’s actually happening today.
Appreciation is when home prices increase.
Depreciation is when home prices decrease.
Deceleration is when home prices continue to appreciate, but at a slower or more moderate pace.
Experts agree that, nationally, what we’re seeing today is deceleration. That means home prices are appreciating, just not at the record-breaking pace they have over the past year. In 2021, <a href="https://www.corelogic.com/intelligence/corelogic-hpi-posted-record-year-over-year-growth-in-2021/" title="data" target="_blank" rel="noopener noreferrer">data</a> from CoreLogic tells us home prices appreciated by an average of 15% nationwide. And earlier this year, that appreciation was upward of 20%. This year, <a href="https://www.simplifyingthemarket.com/2022/08/11/what-does-the-rest-of-the-year-hold-for-home-prices/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="experts forecast" target="_blank" rel="noopener noreferrer">experts forecast</a> home prices will appreciate at a decelerated pace of around 10 to 11%, on average.
The graph below uses the <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/" title="latest data" target="_blank" rel="noopener noreferrer">latest data</a> from CoreLogic to help tell the story of how home prices are decelerating, but not depreciating so far this year.
<a href="https://files.mykcm.com/2022/08/29125430/20220830-MEM-Eng.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-104401" src="https://files.mykcm.com/2022/08/29125430/20220830-MEM-Eng.png" alt="What’s Actually Happening with Home Prices Today? | MyKCM" width="600" height="450" /></a>
As the green bars show, home prices appreciated between 19-20% year-over-year from January to March. But over the last few months, the pace of that appreciation has decelerated to 18%. This means price growth is still climbing compared to last year but at a slower rate.
As the Monthly Mortgage Monitor from Black Knight <a href="https://www.blackknightinc.com/black-knights-june-2022-mortgage-monitor/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Annual home price growth dropped by nearly two percentage points . . . – the greatest single-month slowdown on record since at least the early 1970s. . . While June’s slowdown was record-breaking, home price growth would need to decelerate at this pace for six more months to drive annual appreciation back to 5%, a rate more in line with long-run averages.”
Basically, this means, while moderating, home prices are still far above the norm, and we’d have to see a lot more deceleration to even fall in line with more typical rates of home price growth. That’s still not home price depreciation.
The big takeaway is home prices haven’t fallen or depreciated nationwide, they’re just decelerating or moderating. While some unique and overheated markets may see declines, nationally, home prices are forecast to appreciate. And when we look at the country as a whole, none of the experts <a href="https://www.simplifyingthemarket.com/2022/08/05/housing-market-forecast-for-the-rest-of-2022-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="project" target="_blank" rel="noopener noreferrer">project</a> home prices will net depreciate or fall. They’re all projecting ongoing appreciation.
Bottom Line
If you have questions about what’s happening with home prices in our local area, let’s connect.
2022-09-16T08:29:00-07:002022-09-12T03:29:42-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13609How Owning a Home Builds Your Net WorthHow Owning a Home Builds Your Net Worth
<img width="750" height="410" src="https://files.mykcm.com/2022/09/01094139/20220906-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="How Owning a Home Builds Your Net Worth | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/09/01094139/20220906-KCM-Share.jpg 750w, https://files.mykcm.com/2022/09/01094139/20220906-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/09/01094139/20220906-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
<a href="https://www.simplifyingthemarket.com/2022/08/15/the-u-s-homeownership-rate-is-growing/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="Owning a home" target="_blank" rel="noopener noreferrer">Owning a home</a> is a major financial milestone and an achievement to take pride in. One major reason: the <a href="https://www.simplifyingthemarket.com/2022/07/06/how-your-equity-can-grow-over-time/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity" target="_blank" rel="noopener noreferrer">equity</a> you build as a homeowner gives your net worth a big boost. And with high <a href="https://www.simplifyingthemarket.com/2022/07/20/should-you-buy-a-home-with-inflation-this-high/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="inflation" target="_blank" rel="noopener noreferrer">inflation</a> right now, the link between owning your home and building your wealth is especially important.
If you’re looking to increase your financial security, here’s why now could be a good time to start on your journey toward <a href="https://www.simplifyingthemarket.com/2022/08/25/why-you-may-want-to-start-your-home-search-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="homeownership" target="_blank" rel="noopener noreferrer">homeownership</a>.
Owning a Home Is a Key Ingredient for Financial Success
A <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-snapshot-of-race-and-home-buying-in-the-us-report-02-23-2022_0.pdf" title="report" target="_blank" rel="noopener noreferrer">report</a> from the National Association of Realtors (NAR) details several homeownership trends, including a significant gap in net worth between homeowners and renters. It finds:
“. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”
To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter’s. This difference shows owning a home is a key step in achieving financial success.
Equity Gains Can Substantially Boost a Homeowner’s Net Worth
The net worth gap between owners and renters exists in large part because homeowners build equity. When you own a home, your equity grows as your home <a href="https://www.simplifyingthemarket.com/2022/08/30/whats-actually-happening-with-home-prices-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="appreciates in value" target="_blank" rel="noopener noreferrer">appreciates in value</a> and you make your mortgage payments each month. As a <a href="https://www.simplifyingthemarket.com/2022/08/03/buying-a-home-may-make-more-financial-sense-than-renting-one/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="renter" target="_blank" rel="noopener noreferrer">renter</a>, you don’t have that same opportunity. A recent article from CNET <a href="https://www.cnet.com/personal-finance/mortgages/should-you-buy-a-home-in-2022-heres-what-you-need-to-know/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you're building equity in your home . . . When you rent, you aren't investing in your financial future the same way you are when you're paying off a mortgage.”
But on top of that, your home equity grows even more as your home <a href="https://www.simplifyingthemarket.com/2022/08/11/what-does-the-rest-of-the-year-hold-for-home-prices/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="appreciates" target="_blank" rel="noopener noreferrer">appreciates</a> in value over time. That has a major impact on the wealth you build, as a recent article from Bankrate<a href="https://www.bankrate.com/home-equity/how-to-build-equity-in-your-home/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“Building home equity can help you increase your wealth over time, . . . A home is one of the only assets that have the potential to appreciate in value as you pay it down.”
In other words, when you own your home, you have the advantage of your mortgage payment acting as a contribution to a forced savings account that <a href="https://www.simplifyingthemarket.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="grows in value" target="_blank" rel="noopener noreferrer">grows in value</a> as your home does. And when you sell, any <a href="https://www.simplifyingthemarket.com/2022/07/08/why-growing-home-equity-is-great-news-if-you-plan-to-move-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity" target="_blank" rel="noopener noreferrer">equity</a> you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month.
Bottom Line
Owning a home is an important part of building your net worth. If you’re ready to start on your journey to homeownership, let’s connect today.
2022-09-09T08:27:00-07:002022-09-12T03:28:06-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:134703 Tips for Buying a Home Today3 Tips for Buying a Home Today
<img width="750" height="410" src="https://files.mykcm.com/2022/08/18154016/20220822-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="3 Tips for Buying a Home Today | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/08/18154016/20220822-KCM-Share.jpg 750w, https://files.mykcm.com/2022/08/18154016/20220822-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/08/18154016/20220822-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you put off your home search at any point over the past two years, you may want to consider picking it back up based on today’s housing market conditions. Recent data shows the <a href="https://www.simplifyingthemarket.com/2022/07/29/three-reasons-to-buy-a-home-in-todays-shifting-market-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="supply of homes" target="_blank" rel="noopener noreferrer">supply of homes</a> for sale is increasing, giving buyers like you additional options.
But it’s important to keep in mind that while <a href="https://www.simplifyingthemarket.com/2022/07/22/great-news-about-housing-inventory-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="inventory is improving" target="_blank" rel="noopener noreferrer">inventory is improving</a>, it’s still a <a href="https://www.simplifyingthemarket.com/2022/08/04/why-its-still-a-sellers-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sellers’ market" target="_blank" rel="noopener noreferrer">sellers’ market</a>. And that means you need to be prepared as you set out on your home search. Here are three tips for buying the home of your dreams today.
1. Understand How Mortgage Rates Impact Your Homebuying Power
Mortgage rates have <a href="https://www.freddiemac.com/pmms/archive" title="increased" target="_blank" rel="noopener noreferrer">increased</a> significantly this year, and over the past few weeks, they’ve been fluctuating quite a bit. It’s important to stay up to date on what’s happening with rates and understand how they can impact your purchasing power when you’re thinking of buying a home. The chart below can help.
Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within or below that range, while the red is a payment that exceeds it.
<a href="https://files.mykcm.com/2022/08/18154018/20220822-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-104074" src="https://files.mykcm.com/2022/08/18154018/20220822-MEM-Eng-1.png" alt="3 Tips for Buying a Home Today | MyKCM" width="600" height="450" /></a>
As the chart shows, even a small change in mortgage rates can have a big impact on your monthly payments. If rates rise, you could exceed your budget unless you pursue a lower home loan amount. If rates fall, your purchasing power may increase, which could give you additional options for your search.
2. Be Open to Exploring Different Options During Your Search
The <a href="https://www.simplifyingthemarket.com/2022/07/27/want-to-buy-a-home-now-may-be-the-time/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="supply of homes" target="_blank" rel="noopener noreferrer">supply of homes</a> for sale is improving, which gives you more homes to choose from. But historically, supply is still low. That means as you search for homes, if you still don’t find something that meets your needs, it may be worth expanding your search.
A <a href="https://www.washingtonpost.com/business/2022/07/28/navigating-crazy-housing-market/" title="recent article" target="_blank" rel="noopener noreferrer">recent article</a> from the Washington Post highlights a few things buyers can consider today. It encourages opening yourself up to more areas. For example, if there’s a location you’ve previously ruled out (like a particular town, for example) it may be worth taking another look.
And if you’re able to, opening your search up to include other housing types, like newly built homes, condominiums, or townhomes can further increase your pool of options. Even as the inventory of <a href="https://www.simplifyingthemarket.com/2022/08/10/is-the-shifting-market-a-challenge-or-an-opportunity-for-homebuyers/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="homes for sale" target="_blank" rel="noopener noreferrer">homes for sale</a> improves today, finding ways to cast a wider net during your search could help you find a hidden gem.
3. Work with a Local Real Estate Professional for Expert Guidance
Ultimately, you need to be prepared when you set out to buy a home. Jeff Ostrowski, Senior Mortgage Reporter for Bankrate, <a href="https://www.bankrate.com/real-estate/how-to-buy-a-house/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Taking the leap to homeownership can provide a feeling of pride while boosting your long-term financial outlook, if you go in well-prepared and with your eyes open.”
No matter where you’re at in your homeownership journey, the best way to make sure you’re set up for success is to work with a <a href="https://www.simplifyingthemarket.com/2022/07/28/a-real-estate-professional-helps-you-separate-fact-from-fiction/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="real estate professional" target="_blank" rel="noopener noreferrer">real estate professional</a>. If you’re just starting your search, a real estate professional can help you understand your local market and search for available homes. And when it’s time to make an offer, they’ll be an expert advisor and negotiator to help yours stand out above the rest.
Bottom Line
Strategically planning your home search by understanding today’s mortgage rates, casting a wide net, and building a team of experts can be the keys to finding the home of your dreams. To make sure you have expert advice each step of the way, let’s connect.
2022-08-26T04:53:00-07:002022-08-26T04:54:18-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:13469What Sellers Need to Know in Today's Housing MarketWhat Sellers Need To Know in Today’s Housing Market
<img width="750" height="410" src="https://files.mykcm.com/2022/08/22152838/20220823-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="What Sellers Need To Know in Today’s Housing Market | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/08/22152838/20220823-KCM-Share.jpg 750w, https://files.mykcm.com/2022/08/22152838/20220823-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/08/22152838/20220823-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’re thinking about <a href="https://www.simplifyingthemarket.com/2022/07/18/wondering-where-youll-move-if-you-sell-your-house-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="selling your house" target="_blank" rel="noopener noreferrer">selling your house</a>, you may have heard about the housing market slowing down in recent months. While it’s still a sellers’ market, the peak frenzy the market saw over the past two years has cooled some. If you’re asking yourself if you’ve missed your chance to sell your house and make a move, the good news is you haven’t – motivated buyers are still out there. But you do need to price your house right for today’s market. Here’s why.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/newsroom/existing-home-sales-slid-5-4-in-june" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
It’s true buyer demand has slowed over the past few months as higher mortgage rates made it more expensive to buy a home. The result is fewer <a href="https://www.simplifyingthemarket.com/2022/08/10/is-the-shifting-market-a-challenge-or-an-opportunity-for-homebuyers/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="bidding wars" target="_blank" rel="noopener noreferrer">bidding wars</a> and less competition among buyers (see visual below):
<a href="https://files.mykcm.com/2022/08/22152839/20220823-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-104252" src="https://files.mykcm.com/2022/08/22152839/20220823-MEM-Eng-1.png" alt="What Sellers Need To Know in Today’s Housing Market | MyKCM" width="600" height="450" /></a>
But don’t forget – that’s compared to the severely overheated market we saw over the past two years. According to the latest <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-07-realtors-confidence-index-08-18-2022.pdf" title="Confidence Index" target="_blank" rel="noopener noreferrer">Confidence Index</a> from NAR:
“. . . 39% of homes sold above list price, down from 51% a month ago and 50% a year ago.”
While this is a slower pace than even one month ago, serious buyers are still actively in the market, and they’re buying homes that are priced right. In fact, the Confidence Index also notes the average home is selling in just 14 days.
If you’re aiming to sell your house, be sure you’re working with your agent to price it for today’s housing market. As buyer demand softens, it’s important to understand this isn’t the same market as last year. It’s not even the same market as just a few months ago. But it is still a <a href="https://www.simplifyingthemarket.com/2022/08/04/why-its-still-a-sellers-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sellers’ market" target="_blank" rel="noopener noreferrer">sellers’ market</a>.
If you’re ready to sell your house, seek the advice of a <a href="https://www.simplifyingthemarket.com/2022/07/28/a-real-estate-professional-helps-you-separate-fact-from-fiction/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="real estate professional" target="_blank" rel="noopener noreferrer">real estate professional</a>. In some cases, you’ll need to adjust your expectations accordingly to meet the market where it is today. Selma Hepp, Interim Lead, Deputy Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights-august-2022/" title="explains" target="_blank" rel="noopener noreferrer">explains</a> what’s happening and what it means when you sell:
“Signs of a broader slowdown in the housing market are evident, . . . This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates. . . . Nevertheless, buyers still remain interested, which is keeping the market competitive — particularly for attractive homes that are properly priced.”
Bottom Line
While the housing market has cooled from its overheated frenzy, it’s still a sellers’ market. Let’s connect so you understand what’s happening with buyer demand and home prices in our local area as you get ready to enter the market.
2022-08-26T04:52:00-07:002022-08-26T04:53:28-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:12024Why It's Critical To Price Your House RightWhy It’s Critical To Price Your House Right
<img width="750" height="410" src="https://files.mykcm.com/2022/03/04133540/20220307-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Why It’s Critical To Price Your House Right | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/03/04133540/20220307-KCM-Share.jpg 750w, https://files.mykcm.com/2022/03/04133540/20220307-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/03/04133540/20220307-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
When you make a move, you want to sell your house for the <a href="https://www.simplifyingthemarket.com/2022/02/10/want-top-dollar-for-your-house-nows-the-time-to-list-it/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="highest price">highest price</a> possible. That might be why many homeowners are eager to list in today’s <a href="https://www.simplifyingthemarket.com/2022/02/24/the-1-reason-to-sell-your-house-today/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="sellers’ market">sellers’ market</a>. After all, with record-low <a href="https://www.simplifyingthemarket.com/2022/02/23/how-supply-and-demand-can-impact-your-buying-and-selling-goals/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="inventory">inventory</a> and high <a href="https://www.simplifyingthemarket.com/2022/02/18/whats-driving-todays-high-buyer-demand-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="buyer demand">buyer demand</a>, many homes are selling for more than asking price. Data from the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-01-realtors-confidence-index-02-18-2022.pdf" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR) shows 46% of homes are selling above list price today.
But even in a market like we have now, working with an agent to set the right asking price is critical, as pricing it too high or too low could have a negative impact on your final sale. Here’s why.
Pricing Your House Right Is Crucial Even in a Sellers’ Market
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 the property. Not to mention, you could leave money on the table, which decreases your future buying power if you undervalue your house.
On the other hand, price it too high and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market 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.
In other words, 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 a bidding war, too. And when a bidding war happens, you’ll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.
To get a 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://files.mykcm.com/2022/03/04133358/20220307-MEM-Eng.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101345" src="https://files.mykcm.com/2022/03/04133358/20220307-MEM-Eng.png" alt="Why It’s Critical To Price Your House Right | MyKCM" width="600" height="450" /></a>
Lean on a Professional’s Expertise To Price Your House Right
There are <a href="https://www.nar.realtor/determining-asking-price" title="several factors" target="_blank" rel="noopener noreferrer">several factors</a> that go into pricing your house and balancing them is the key. That’s why it’s important to lean on an expert real estate advisor when you’re ready to move. A local real estate advisor is knowledgeable about:
The value of homes in your neighborhood
The current demand for houses in today’s market
The condition of your house and how it affects the value
A real estate professional will balance these factors to make sure the price of your house makes the best first impression and gives you the greatest return on your investment in the end.
Bottom Line
Even in a sellers’ market, pricing your house right is critical. Don’t rely on guesswork. Let’s connect to make sure your house is perfectly priced.
2022-03-11T07:26:00-07:002022-03-11T07:26:46-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:11965Real Estate Voted Best Investment Eight Years In A RowReal Estate Voted the Best Investment Eight Years in a Row
<img width="750" height="410" src="https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Real Estate Voted the Best Investment Eight Years in a Row | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
In an annual <a href="https://news.gallup.com/poll/349607/americans-expect-home-prices-rise-divided-buying.aspx" title="Gallup" target="_blank" rel="noopener noreferrer">Gallup</a> poll, Americans chose real estate as the best long-term investment. And it’s not the first time it’s topped the list, either. Real estate has been on a winning streak for the past eight years, consistently gaining traction as the best <a href="https://www.simplifyingthemarket.com/2022/01/21/americans-choose-real-estate-as-the-best-investment-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="long-term investment">long-term investment</a> (see graph below):
<a href="https://files.mykcm.com/2022/02/18105653/20220221-MEM-ENG.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101232" src="https://files.mykcm.com/2022/02/18105653/20220221-MEM-ENG.png" alt="Real Estate Voted the Best Investment Eight Years in a Row | MyKCM" width="600" height="450" /></a>If you’re thinking about purchasing a home this year, this poll should reassure you. Even when inflation is rising like it is today, Americans agree an investment like real estate truly shines.
Why Is Real Estate a Great Investment During Times of High Inflation?
With inflation reaching its highest level in <a href="https://www.cbsnews.com/news/consumer-prices-inflation-highest-rate-in-40-years/" title="40 years" target="_blank" rel="noopener noreferrer">40 years</a>, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board. That includes goods, services, housing costs, and more. But when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing housing payments. James Royal, Senior Wealth Management Reporter at Bankrate, <a href="https://www.bankrate.com/investing/inflation-hedges-to-protect-against-rising-prices/" title="explains" target="_blank" rel="noopener noreferrer">explains</a> it like this:
“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
If you’re a <a href="https://www.simplifyingthemarket.com/2022/01/04/avoid-the-rental-trap-in-2022/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="renter">renter</a>, you don’t have that same benefit, and you aren’t protected from increases in your housing costs, especially rising rents.
History Shows During Inflationary Periods, Home Prices Rise as Well
As a homeowner, your house is an asset that typically increases in value over time, even during inflation. That‘s because, as prices rise, the value of your home does, too. And that makes <a href="https://www.simplifyingthemarket.com/2022/01/12/two-ways-homebuyers-can-win-in-todays-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="buying a home">buying a home</a> a great hedge during periods of high inflation. Natalie Campisi, Advisor Staff for Forbes, <a href="https://www.forbes.com/advisor/mortgages/homebuying-can-hedge-against-inflation/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.”
Bottom Line
Housing truly is a strong investment, especially when inflation is high. When you lock in a mortgage payment, you’re shielded from housing cost increases, and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.
2022-03-04T10:35:00-07:002022-03-03T10:36:18-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:11916How Supply & Demand Can Impact Your Buying & Selling GoalsHow Supply and Demand Can Impact Your Buying and Selling Goals
<img width="750" height="410" src="https://files.mykcm.com/2022/02/22152831/20220223-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="How Supply and Demand Can Impact Your Buying and Selling Goals | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/02/22152831/20220223-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/22152831/20220223-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/22152831/20220223-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
In today’s <a href="https://www.simplifyingthemarket.com/2022/02/10/want-top-dollar-for-your-house-nows-the-time-to-list-it/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="housing market">housing market</a>, there are far more buyers looking for homes than sellers listing their houses. Based on the concept of supply and demand, this means home prices will naturally rise. Why is that? When there are more people trying to buy an item than there are making that item available for sale, that drives prices up. And that’s exactly the case in today’s housing market. So, knowing what’s happening with the inventory of homes for sale and the demand for housing is crucial for today’s buyers and sellers.
Nationally, Demand Is High and Supply Is Very Low
The latest buyer and seller <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index" title="activity data" target="_blank" rel="noopener noreferrer">activity data</a> from the National Association of Realtors (NAR) indicates buyer traffic heavily outweighs seller traffic today, as shown in the maps below. There are far darker blues (strong buyer activity) on the left and much lighter blues (weak seller activity) on the right. In other words, this shows how the demand for homes is significantly greater than what’s available to purchase.
<a href="https://files.mykcm.com/2022/02/22152834/20220223-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101244" src="https://files.mykcm.com/2022/02/22152834/20220223-MEM-Eng-1.png" alt="How Supply and Demand Can Impact Your Buying and Selling Goals | MyKCM" width="600" height="338" /></a>
What Does This Mean if You’re a Seller?
Supply is struggling to keep pace with demand. In fact, the inventory of homes for sale recently hit an <a href="https://www.simplifyingthemarket.com/2022/01/27/why-right-now-is-a-once-in-a-lifetime-opportunity-for-sellers/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="all-time low">all-time low</a>. That gives you an <a href="https://www.simplifyingthemarket.com/2021/11/02/sellers-have-incredible-leverage-in-todays-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="incredible advantage">incredible advantage</a> when you sell your house. With so few listings, it’s likely more potential buyers will view your house – especially if you work with an agent to price it right. That means there’s a high chance you’ll receive <a href="https://www.simplifyingthemarket.com/2022/02/10/want-top-dollar-for-your-house-nows-the-time-to-list-it/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="multiple offers">multiple offers</a> or buyers will enter a bidding war for your house. And that dynamic can drive the sale price of your home up.
What Does This Mean if You’re a Buyer?
As a buyer with <a href="https://www.simplifyingthemarket.com/2022/01/20/buyers-want-to-know-why-is-housing-supply-still-so-low/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="fewer options">fewer options</a> available, you’re likely to see more competition, so you need to be strategic to <a href="https://www.simplifyingthemarket.com/2022/02/11/how-to-win-as-a-buyer-in-a-sellers-market-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="win">win</a>. First, make sure you have a trusted professional on your side. Your real estate agent will help you understand your local market and work with you to <a href="https://www.simplifyingthemarket.com/2022/01/12/two-ways-homebuyers-can-win-in-todays-market/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="act quickly">act quickly</a> when the time is right. Even when it’s challenging to find a home, you can still succeed as a buyer today if you have a trusted advisor on your side every step of the way.
Bottom Line
Whether you’re a homebuyer, seller, or both, knowledge truly is power. Let’s connect today so you can better understand what’s happening in our local market and achieve your homebuying and selling goals this year.
2022-02-25T08:59:00-07:002022-02-25T08:59:53-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:11858This is Not a Housing Bubble4 Simple Graphs Showing Why This Is Not a Housing Bubble
<img width="750" height="410" src="https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/16120300/20220217-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
A <a href="https://magazine.realtor/daily-news/2022/02/03/77-of-consumers-believe-we-re-in-a-housing-bubble" title="recent survey" target="_blank" rel="noopener noreferrer">recent survey</a> revealed that many consumers believe there’s a housing bubble beginning to form. That feeling is understandable, as year-over-year home price appreciation is still in the double digits. However, this market is very different than it was during the housing crash 15 years ago. Here are four key reasons why today is nothing like the last time.
1. Houses Are Not Unaffordable Like They Were During the Housing Boom
The affordability formula has three components: the price of the home, wages earned by the purchaser, and the mortgage rate available at the time. Conventional lending standards say a purchaser should not spend more than <a href="https://myhome.freddiemac.com/buying/what-can-you-afford" title="28%" target="_blank" rel="noopener noreferrer">28%</a> of their gross income on their mortgage payment.
Fifteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased, and the mortgage rate, even after the recent spike, is still well below 6%. That means the average purchaser today pays less of their monthly income toward their mortgage payment than they did back then.
In the latest <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2021-u-s-home-affordability-report/" title="Affordability Report" target="_blank" rel="noopener noreferrer">Affordability Report</a> by ATTOM Data, Chief Product Officer Todd Teta addresses that exact point:
“The average wage earner can still afford the typical home across the U.S., but the financial comfort zone continues shrinking as home prices keep soaring and mortgage rates tick upward.”
Affordability isn’t as strong as it was last year, but it’s much better than it was during the boom. Here’s a chart showing that difference:
<a href="https://files.mykcm.com/2022/02/16120303/20220217-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101200" src="https://files.mykcm.com/2022/02/16120303/20220217-MEM-Eng-1.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
If costs were so prohibitive, how did so many homes sell during the housing boom?
2. Mortgage Standards Were Much More Relaxed During the Boom
During the housing bubble, it was much easier to get a mortgage than it is today. As an example, let’s review the number of mortgages granted to purchasers with credit scores under 620. According to <a href="https://credit.org/blog/what-is-a-good-credit-score-infographic/" title="credit.org" target="_blank" rel="noopener noreferrer">credit.org</a>, a credit score between 550-619 is considered poor. In defining those with a score below 620, they explain:
“Credit agencies consider consumers with credit delinquencies, account rejections, and little credit history as subprime borrowers due to their high credit risk.”
Buyers can still qualify for a mortgage with a credit score that low, but they’re considered riskier borrowers. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the 14 years since.
<a href="https://files.mykcm.com/2022/02/16120306/20220217-MEM-Eng-2.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101201" src="https://files.mykcm.com/2022/02/16120306/20220217-MEM-Eng-2.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
Mortgage standards are nothing like they were the last time. Purchasers that acquired a mortgage over the last decade are much more qualified. Let’s take a look at what that means going forward.
3. The Foreclosure Situation Is Nothing Like It Was During the Crash
The most obvious difference is the number of homeowners that were facing foreclosure after the housing bubble burst. The Federal Reserve issues a <a href="https://www.newyorkfed.org/microeconomics/hhdc.html" title="report" target="_blank" rel="noopener noreferrer">report</a> showing the number of consumers with a new foreclosure notice. Here are the numbers during the crash compared to today:
<a href="https://files.mykcm.com/2022/02/16120309/20220217-MEM-Eng-3.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101202" src="https://files.mykcm.com/2022/02/16120309/20220217-MEM-Eng-3.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
There’s no doubt the 2020 and 2021 numbers are impacted by the forbearance program, which was created to help homeowners facing uncertainty during the pandemic. However, there are fewer than 800,000 homeowners left in the program today, and most of those will be able to work out a repayment plan with their banks.
Rick Sharga, Executive Vice President of RealtyTrac, <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-november-2021-u-s-foreclosure-market-report/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect.”
Why are there so few foreclosures now? Today, homeowners are equity rich, not tapped out.
In the run-up to the housing bubble, some homeowners were using their homes as personal ATM machines. Many immediately withdrew their equity once it built up. When home values began to fall, some homeowners found themselves in a negative equity situation where the amount they owed on their mortgage was greater than the value of their home. Some of those households decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area.
Homeowners, however, have learned their lessons. Prices have risen nicely over the last few years, leading to <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2021-u-s-home-equity-and-underwater-report/" title="over 40%" target="_blank" rel="noopener noreferrer">over 40%</a> of homes in the country having more than 50% equity. But owners have not been tapping into it like the last time, as evidenced by the fact that national tappable equity has increased to a record <a href="https://www.blackknightinc.com/wp-content/uploads/2022/02/BKI_MM_Dec2021_Report.pdf" title="$9.9 trillion" target="_blank" rel="noopener noreferrer">$9.9 trillion</a>. With the average home equity now standing at <a href="https://twitter.com/odetakushi/status/1471125050199883783" title="$300,000" target="_blank" rel="noopener noreferrer">$300,000</a>, what happened last time won’t happen today.
As the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="Homeowner Equity Insights" target="_blank" rel="noopener noreferrer">Homeowner Equity Insights</a> report from CoreLogic explains:
“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”
There will be nowhere near the same number of foreclosures as we saw during the crash. So, what does that mean for the housing market?
4. We Don’t Have a Surplus of Homes on the Market – We Have a Shortage
The supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation. As the next graph shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing the acceleration in home values to continue.
<a href="https://files.mykcm.com/2022/02/16120313/20220217-MEM-Eng-4.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101203" src="https://files.mykcm.com/2022/02/16120313/20220217-MEM-Eng-4.png" alt="4 Simple Graphs Showing Why This Is Not a Housing Bubble | MyKCM" width="600" height="450" /></a>
Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a shortage of homes for sale.
Bottom Line
If you’re worried that we’re making the same mistakes that led to the housing crash, the graphs above show data and insights to help alleviate your concerns.
2022-02-18T06:38:00-07:002022-02-18T06:39:39-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:11791Consumers Agree: It's a Good Time to SellConsumers Agree: It’s a Good Time To Sell
<img width="750" height="410" src="https://files.mykcm.com/2022/02/04125433/20220207-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Consumers Agree: It’s a Good Time To Sell | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/02/04125433/20220207-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/04125433/20220207-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/04125433/20220207-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
In today’s sellers’ market, many homeowners are weighing their options and trying to decide if they should sell their house. If you’re in that group, you may be balancing things like the ongoing health crisis, rising mortgage rates, and your own changing needs to determine your best time to make a move.
However, recent data shows that time may already be here. According to the latest <a href="https://www.fanniemae.com/newsroom/fannie-mae-news/softening-hpsi-may-portend-slower-housing-market-2022" title="Home Purchase Sentiment Index" target="_blank" rel="noopener noreferrer">Home Purchase Sentiment Index</a> (HPSI) by Fannie Mae, 76% of consumers believe now is a good <a href="https://www.simplifyingthemarket.com/2022/01/14/when-is-the-right-time-to-sell-infographic/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="time to sell">time to sell</a>.
Looking back over the past few years, its clear consumers are incredibly optimistic today. The graph below shows the percent of survey respondents who say it’s a good time to sell a house, and their positive outlook is on the rise. The big dip near the middle of the chart indicates how consumer sentiment about selling dropped at the beginning of the pandemic as uncertainty about the health crisis and its impact grew. The good news is, the trend today shows a continued, drastic improvement, and people are feeling more and more confident with time about selling a home.
In fact, survey respondents think it’s an even better time to sell a house today than they did in the lead-up to the health crisis. The latest survey results indicate we’re at one of the strongest peaks in seller sentiment since March of 2019, hitting highs when 77% of people thought it was a good time to sell only twice before in June and October of 2021.
<a href="https://files.mykcm.com/2022/02/04130946/20220107-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101015" src="https://files.mykcm.com/2022/02/04130946/20220107-MEM-Eng-1.png" alt="Consumers Agree: It’s a Good Time To Sell | MyKCM" width="600" height="450" /></a>
Why Are Consumers So Optimistic About Today’s Housing Market?
From record-high <a href="https://www.simplifyingthemarket.com/2021/12/21/the-average-homeowner-gained-56700-in-equity-over-the-past-year/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="equity gains">equity gains</a> to record-low <a href="https://www.simplifyingthemarket.com/2022/01/20/buyers-want-to-know-why-is-housing-supply-still-so-low/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="housing supply">housing supply</a> and significant <a href="https://www.simplifyingthemarket.com/2022/01/27/why-right-now-is-a-once-in-a-lifetime-opportunity-for-sellers/?a=521618-d1117c67b02ed4126b90dce8398522a4" title="buyer demand">buyer demand</a>, homeowners have more motivation than ever to sell. There are more buyers in today’s market than there are homes for sale, and that’s driving home prices up, making it a great time to sell your house.
According to the National Association of Realtors (NAR), the current <a href="https://www.nar.realtor/newsroom/annual-existing-home-sales-hit-highest-mark-since-2006" title="supply of homes" target="_blank" rel="noopener noreferrer">supply of homes</a> for sale today is at a 1.8-month supply, which is an all-time low. When the supply of homes for sale is low, sellers will likely see more offers, which is exactly what’s happening right now. As NAR notes:
“The average home for sale is receiving 3.8 offers today, up from 3.3 offers just one year ago.”
Bottom Line
With the inventory of houses for sale so low today pushing home prices in an upward direction, it’s no wonder consumers think it’s a good time to sell. If you’re ready to take advantage of today’s favorable sellers’ market, let’s connect today.
2022-02-10T10:56:00-07:002022-02-10T10:57:31-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:11755Top Indicator For Where Mortgage Interest Rates Are HeadingThe Top Indicator if You Want To Know Where Mortgage Rates Are Heading
<img width="750" height="410" src="https://files.mykcm.com/2022/02/01171558/20220202-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The Top Indicator if You Want To Know Where Mortgage Rates Are Heading | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/02/01171558/20220202-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/01171558/20220202-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/01171558/20220202-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Mortgage rates have increased significantly since the beginning of the year. Each Thursday, Freddie Mac releases its <a href="http://www.freddiemac.com/pmms/" title="Primary Mortgage Market Survey" target="_blank" rel="noopener noreferrer">Primary Mortgage Market Survey</a>. According to the latest survey, the average 30-year fixed-rate mortgage has risen from 3.22% at the start of the year to 3.55% as of last week. This is important to note because any increase in mortgage rates changes what a purchaser can afford. To give you an idea of how rising mortgage rates impact your purchasing power, see the table below:
<a href="https://files.mykcm.com/2022/02/01171602/20220202-MEM-Eng-1.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-100996" src="https://files.mykcm.com/2022/02/01171602/20220202-MEM-Eng-1.png" alt="The Top Indicator if You Want To Know Where Mortgage Rates Are Heading | MyKCM" width="600" height="450" /></a>
How Can You Know Where Mortgage Rates Are Headed?
While it’s always difficult to know exactly where mortgage rates will go, a great indicator of where they may head is by looking at the 50-year history of the 10-year treasury yield, and then following its path. Understanding the mechanics of the <a href="https://www.investopedia.com/ask/answers/062315/which-economic-factors-impact-treasury-yields.asp" title="treasury yield" target="_blank" rel="noopener noreferrer">treasury yield</a> isn’t as important as knowing that there’s a correlation between how it moves and how mortgage rates follow. Here’s a graph showing that relationship over the last 50 years:
<a href="https://files.mykcm.com/2022/02/01171606/20220202-MEM-Eng-2.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-100997" src="https://files.mykcm.com/2022/02/01171606/20220202-MEM-Eng-2.png" alt="The Top Indicator if You Want To Know Where Mortgage Rates Are Heading | MyKCM" width="600" height="450" /></a>
This correlation has continued into the new year. The treasury yield has started to climb, and that’s driven rates up. As of last Thursday, the treasury yield was 1.81%. That’s 1.74% below the mortgage rate reported the same day (3.55%) and is very close to the average spread we see between the two numbers (average spread is 1.7).
Where Will the Treasury Yield Head in the Future?
With this information in mind, a 10-year treasury-yield forecast would be a good indicator of where mortgage rates may be headed. The Wall Street Journal just <a href="https://www.wsj.com/articles/economic-forecasting-survey-archive-11617814998" title="surveyed" target="_blank" rel="noopener noreferrer">surveyed</a> a panel of over 75 academic, business, and financial economists asking them to forecast the treasury yield over the next few years. The consensus was that experts project the treasury yield will climb to 2.84% by the end of 2024. Based on the 50-year history of following this yield, that would likely put mortgage rates at about 4.5% in three years.
While the correlation between the 30-year fixed mortgage rate and the 10-year treasury yield is clear in the data shown above for the past 50 years, it shouldn’t be used as an exact indicator. They’re both hard to forecast, especially in this unprecedented economic time driven by a global pandemic. Yet understanding the relationship can help you get an idea of where rates may be going. It appears, based on the information we have now, that mortgage rates will continue to rise over the next few years. If that’s the case, your best bet may be to purchase a home sooner rather than later, if you’re able.
Bottom Line
Forecasting mortgage rates is very difficult. As Mark Fleming, Chief Economist at First American, once <a href="https://blog.firstam.com/economics/reconomy-podcast-2021-housing-market-outlook" title="said" target="_blank" rel="noopener noreferrer">said</a>:
“You know, the fallacy of economic forecasting is don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.”
However, if you’re either a first-time homebuyer or a current homeowner thinking of moving into a home that better fits your changing needs, understanding what’s happening with the 10-year treasury yield and mortgage rates can help you make an informed decision on the timing of your purchase.
2022-02-04T10:40:00-07:002022-02-04T10:41:28-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:11613Buyers Want To Know: Why Is Housing Supply Still So Low?2022-01-20T11:58:00-07:002022-01-25T07:13:19-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:11609A Guide to Buying Your First Home in 2022!Ready to buy your first home in Richmond in 2022? Simpson Realty Group specializes in helping first-time home buyers, like you, find their dream property in Richmond.
Before you start searching for homes online, it's important to take the first step to house shopping: Getting pre-approved for a mortgage.
Your pre-approval will tell you what you can afford and what your monthly payment will be, so it's important to determine this before you start searching for your new home.
Pre-approval is good for about 30-90 days, so once you're ready, take these first 3 steps to get it done.
Contact us, and We’ll send over a list of lenders we know and trust.
Look over the list, check out online reviews, and ask friends and family for referrals.
Email 2-3 lenders you like or let us introduce you over email.
Once you've got your pre-approval letter in hand, it's time to start the search!
Before we hop into the home search, we like to advise our clients to create a "Needs" list and a "Wants" list. This will help us to really focus on the things that are most important in your future home.
Needs are the non-negotiable features; the features you simply must have in your next home. Wants are the ones you’d like to have, but you can add or change down the road. Remember, you can’t change the lot or the location so make sure you love both.
Once you've established what you're looking for, we will set you up on a search so you can receive an email the second a home that fits your criteria goes live. If you have any questions about a property, send us the information and we will find out for you. Send us listings you like and we can get more information and set up showings on your behalf.
After touring houses and choosing the one you love, it's time to make an offer. To do this, you'll need your pre-approval letter or proof of funds. If your offer is accepted, you'll also need to make an escrow deposit of at least 1-2% of the purchase price. This will go towards your closing costs at closing.
Have more questions about buying a home or what happens after making an offer? Reach out to us today!2022-01-20T08:54:00-07:002022-01-24T10:11:34-07:00Sarah Kennedytag:simpsonrealtygrouprva.com,2012-09-20:10644Is Getting a Home Mortgage Still Too Difficult?<img src="https://assets.site-static.com/userfiles/3463/image/getting-a-home-mortgage.jpg" alt="Is Getting a Home Mortgage Still Too Difficult?" title="Is Getting a Home Mortgage Still Too Difficult?" height="410" width="750" />
Potential homebuyers are always cautioned to be aware of mortgage lending standards and the difficulty they might face when trying to obtain a mortgage. Credit availability is expanding, making it easier to get a mortgage now than it was a year ago. The market is still tight however, and homebuyers should be prepared to shop around until they find a lender who is offering something that will meet the needs of their family.
Mortgage lending companies have high standards so it is important to make sure you and anyone else who will be included on the mortgage have their credit in check. The mortgage market is strict because lenders do not want to be put in a situation where they are forced to repurchase loans that are not paid on. They also do not want to end up in a litigation situation due to loan issues.
What Has Happened to the Number of Mortgages?
Due to the strict nature and requirements of the lending companies, the number of mortgages given out has significantly dropped. A report by the Housing Financial Policy Center at the Urban Institute showed that about 6.3 million fewer mortgages were given out between 2009 and 2015. The reasons behind this statistic are strict regulations and policies. These mortgages would have been granted if the lending standards where more reasonable.
Mortgage companies rely on calculations to determine if a home buyer will become delinquent on their payment. They will not give you a loan if you are too much of a risk for them. Credit history has a huge impact on this decision since lenders can see how often you pay back your debts. The history they receive is extensive. This view into your financial past causes lenders to take less risk when lending to you for your mortgage.
The Effect on the Economy
The housing market is recovering at a slower pace than it should since less potential homebuyers are being offered loans. While the market is still recovering with positive trends, fewer buyers can create a strain on other economic factors like home goods or construction jobs. Bottom Line
After the housing market boom and bust, mortgage lenders became stricter in their lending standards. It is not impossible to get a mortgage loan, but it can still be difficult for potential home buyers. Stay on top of your credit and make sure you and anyone else who is applying are in a good financial position so you can be approved for a loan. It is important to research different companies and their requirements to ensure success in getting a mortgage.2021-09-15T12:43:00-07:002021-09-15T12:45:40-07:00Joshua Simpsontag:simpsonrealtygrouprva.com,2012-09-20:10643Why You Should Consider Selling in the Winter<img src="https://assets.site-static.com/userfiles/3463/image/selling-in-the-winter-attracts-serious-buyers.jpg" alt="Selling In Winter Attracts Serious Buyers" title="Selling In Winter Attracts Serious Buyers" height="410" width="750" />
The season you sell your home can have an impact on how much you get for your home and how quickly it sells. The season that has the most success in selling homes is spring. This is a good time of year for families moving to new school districts and is also more convenient weather for moving. Because of this trend, most people will recommend waiting to list your home until after the winter is over. Avoiding the winter is a huge misconception in the housing industry and can cause homeowners to miss out on opportunities.
Selling in the winter can give you a few advantages. There will be fewer houses on the market since most people assume winter is a bad time to sell. This gives your home more attention. Potential buyers are always looking no matter the time of year. Keeping your house on the market in the winter might bring the right buyer to your door. Real estate agents also tend to be less busy during these months and commit more time to getting your home sold.
Studies have shown winter buyers are buying because they need to move right away either for a relocation or personal situation. They will want to close quickly and allow for a much smoother sale.
Bottom Line
If you need to sell your home right away, or have some time but want to see what is out there, consider listing in the winter. Most homeowners who are going to sell will list their home in the spring, making for a competitive market. The winter allows buyers who are in a hurry to move consider your home and sell for more money than you would have in the spring.2021-09-15T12:43:00-07:002021-09-15T12:45:51-07:00Joshua Simpsontag:simpsonrealtygrouprva.com,2012-09-20:10642Common Things to Look Out for Before Buying Your Dream Home<img src="https://assets.site-static.com/userfiles/3463/image/3-questions-to-ask-before-buying-your-dream-home.jpg" alt="Common Things to Look Out for Before Buying Your Dream Home" title="Common Things to Look Out for Before Buying Your Dream Home" height="410" width="750" />
It is easy to become overwhelmed when you enter the home buying market. Friends, family, colleagues, and even acquaintances will give you their opinions if you are a first time home buyer. While most of them are looking out for your best interest, they are not fully aware of what is happening in the housing market.
It is important for you to be prepared and have your own questions ready. No matter what other opinions you are getting, you are the one buying the home and your comfort level will help make your final decision. Here are three important questions to ask before you purchase a home.
1. Why am I Buying a Home?
Regardless of the finances, it is important to think about what made you want to buy a home in the first place. Usually the reasons don’t have to do with money. Instead, home buyers are focused on how the house will impact their family in the future. A study done by the Joint Center for House Studies at Harvard found there are four reasons people buy a home. Those reasons include schools for your children, a safe environment, more room for your family to grow, and control of your own space.
These factors are the most common reasons people look to buy a new home. When you ask yourself why you are looking to purchase a home, do any of those factors come up? Spend time with your spouse or family members who are involved in this decision and determine why you want a home in the first place. Creating this list will help when searching for a home and can help your real estate agent find the best home for your needs.
2. What is the Trend with Home Values?
Our current economy and housing market is strong. That means home values and mortgage rates are increasing. If you are looking to purchase a home but want to stay within a budget, it may be in your best interest to move quickly. It is forecasted for these trends to continue in an upward motion, causing home values to continue to increase.
3. What About Current Mortgage Rates?
The ticket price is not the only thing you should be concerned with when purchasing a home. Mortgage rates are always changing and can have a huge impact on your monthly payments. Current trends show mortgage rates are rising. This is something to consider if you are debating the right time to purchase a home, since the rates may be even higher down the road.
Bottom Line
You and your family are the only ones who can determine the right time to purchase your dream home. It is important to decide exactly why you want a new home for your family and decide on a budget that will be comfortable moving forward. This budget may affect the amount of time you have to search for a home, since home prices and mortgage rates are increasing. 2021-09-15T12:43:00-07:002021-09-15T12:45:47-07:00Joshua Simpson