Baltimore Metro Area Real Estate BlogRecently posted or modified blog postshttps://www.shopbaltimorehomes.com/blog/Copyright ShopBaltimorehomes.com2023-12-01T12:08:07-07:00tag:shopbaltimorehomes.com,2012-09-20:18456Why this isn't a repeat of 20083 Graphs Showing Why Today’s Housing Market Isn’t Like 2008
<img src="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/25110313/3-graphs-showing-why-todays-housing-market-isnt-like-2008-KCM.jpg" width="600" /><br /><br />With all the headlines and talk in the media about the <a href="https://www.simplifyingthemarket.com/en/2022/09/14/is-the-real-estate-market-slowing-down-or-is-this-a-housing-bubble/?a=546968-47aa562732e5272d73f3c0ed2f73184d">shift</a> in the housing market, you might be thinking this is a housing bubble. It’s only natural for those thoughts to creep in that make you think it could be a repeat of what took place in 2008. But the good news is, there’s concrete data to show why this is nothing like the last time.
There’s Still a Shortage of Homes on the Market Today, Not a Surplus
For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to fall dramatically. <a href="https://www.simplifyingthemarket.com/en/2022/10/18/the-latest-on-supply-and-demand-in-housing/?a=546968-47aa562732e5272d73f3c0ed2f73184d">Supply</a> has increased since the start of this year, but there’s still a shortage of inventory available overall, primarily due to almost 15 years of underbuilding homes. The graph below uses <a href="https://www.nar.realtor/newsroom/existing-home-sales-decreased-1-5-in-september">data</a> from the National Association of Realtors (NAR) to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 3.2-months’ supply at the current sales pace, which is significantly lower than the last time. There just isn’t enough inventory on the market for <a href="https://www.simplifyingthemarket.com/en/2022/10/20/whats-ahead-for-home-prices/?a=546968-47aa562732e5272d73f3c0ed2f73184d">home prices</a> to come crashing down like they did last time, even though some overheated markets may experience slight declines. <a href="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/25110318/supply-of-homes-is-nothing-like-last-time-MEM.png"><img class="aligncenter wp-image-47357" src="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/25110318/supply-of-homes-is-nothing-like-last-time-MEM.png" alt="3 Graphs Showing Why Today’s Housing Market Isn’t Like 2008 | Simplifying The Market" width="650" height="488" /></a>
Mortgage Standards Were Much More Relaxed Back Then
During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. Running up to 2006, banks were creating artificial demand by lowering <a href="https://www.simplifyingthemarket.com/en/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/?a=546968-47aa562732e5272d73f3c0ed2f73184d">lending standards</a> and making it easy for just about anyone to qualify for a home loan or refinance their current home. Back then, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices. Today, things are different, and purchasers face much higher standards from mortgage companies. The graph below uses Mortgage Credit Availability Index (MCAI) <a href="https://www.mba.org/news-and-research/newsroom/news/2022/10/11/mortgage-credit-availability-decreased-in-september">data</a> from the Mortgage Bankers Association (MBA) to help tell this story. In that index, the higher the number, the easier it is to get a mortgage. The lower the number, the harder it is. In the latest report, the index fell by 5.4%, indicating standards are tightening. <a href="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/25110316/lending-standards-still-under-control-MEM.png"><img class="aligncenter wp-image-47356" src="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/25110316/lending-standards-still-under-control-MEM.png" alt="3 Graphs Showing Why Today’s Housing Market Isn’t Like 2008 | Simplifying The Market" width="650" height="488" /></a> This graph also shows just how different things are today compared to the spike in credit availability leading up to the crash. Tighter lending standards over the past 14 years have helped prevent a scenario that would lead to a wave of foreclosures like the last time.
The Foreclosure Volume Is Nothing Like It Was During the Crash
Another difference is the number of homeowners that were facing foreclosure after the housing bubble burst. Foreclosure activity has been lower since the crash, largely because buyers today are more qualified and less likely to default on their loans. The graph below uses <a href="https://www.attomdata.com/wp-content/uploads/2022/10/Foreclosure-Starts-Q322.jpg">data</a> from ATTOM Data Solutions to help paint the picture of how different things are this time: <a href="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/25110314/foreclosure-starts-then-and-now-MEM.png"><img class="aligncenter wp-image-47355" src="https://files.simplifyingthemarket.com/wp-content/uploads/2022/10/25110314/foreclosure-starts-then-and-now-MEM.png" alt="3 Graphs Showing Why Today’s Housing Market Isn’t Like 2008 | Simplifying The Market" width="650" height="488" /></a> Not to mention, homeowners today have options they just didn’t have in the housing crisis when so many people owed more on their mortgages than their homes were worth. Today, many homeowners are <a href="https://www.simplifyingthemarket.com/en/2022/09/26/the-true-strength-of-homeowners-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d">equity rich</a>. That equity comes, in large part, from the way home prices have appreciated over time. <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/">According</a> to CoreLogic:
“The total average equity per borrower has now reached almost $300,000, the highest in the data series.”
Rick Sharga, Executive VP of Market Intelligence at ATTOM Data, <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-september-and-q3-2022-u-s-foreclosure-market-report/">explains</a> the impact this has:
“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”
This goes to show homeowners are in a completely different position this time. For those facing challenges today, many have the option to use <a href="https://www.simplifyingthemarket.com/en/2022/10/05/the-long-term-benefit-of-homeownership/?a=546968-47aa562732e5272d73f3c0ed2f73184d">their equity</a> to sell their house and avoid the foreclosure process.
Bottom Line
If you’re concerned we’re making the same mistakes that led to the housing crash, the graphs above should help alleviate your fears. Concrete data and expert insights clearly show why this is nothing like the last time.
Bottom Line
If you’re concerned we’re making the same mistakes that led to the housing crash, the graphs above should help alleviate your fears. Concrete data and expert insights clearly show why this is nothing like the last time.2023-12-01T12:01:06-07:002023-12-01T12:08:07-07:00Alyssia Essigtag:shopbaltimorehomes.com,2012-09-20:17841Home Prices are Not FallingHome Prices Are Not Falling
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During the fourth quarter of last year, some housing experts projected <a href="https://www.simplifyingthemarket.com/en/2023/09/08/home-price-forecasts-revised-for-2023-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> were going to crash in 2023. The media ran with those forecasts and put out headlines calling for doom and gloom in the housing market. All of this negative news coverage made a lot of people have doubts about the strength of the residential real estate market.
If it made you question if you should delay your own <a href="https://www.simplifyingthemarket.com/en/2023/09/22/how-remote-work-helps-with-your-house-hunt-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">plans to move</a>, here’s what you really need to know.
Home Prices Never Crashed
Disregard what you saw in the headlines. The actual <a href="https://www.zillow.com/research/data/" rel="noopener noreferrer" target="_blank">data</a> shows home prices were <a href="https://www.simplifyingthemarket.com/en/2023/09/05/expert-home-price-forecasts-revised-up-for-2023/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">remarkably resilient</a> and performed far better than the media would have you believe (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230929/20231003-Percent-Change-In-Home-Values.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003-Percent-Change-In-Home-Values.png" /></a>
This graph uses <a href="https://www.blackknightinc.com/data-reports/" rel="noopener noreferrer" target="_blank">reports</a> from three trusted <a href="https://www.freddiemac.com/research/indices/house-price-index" rel="noopener noreferrer" target="_blank">sources</a> to clearly illustrate prices have <a href="https://www.simplifyingthemarket.com/en/2023/08/11/home-prices-are-back-on-the-rise-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">already rebounded</a> after experiencing only slight declines nationally. That’s a far cry from the crash so many articles called for.
The declines that did happen (shown in red), weren’t drastic but were short-lived. As Nicole Friedman, a reporter at the Wall Street Journal (WSJ), <a href="https://www.wsj.com/economy/housing/the-fall-in-home-prices-may-already-be-over-3496d6bb" rel="noopener noreferrer" target="_blank">says</a>:
“Home prices aren’t falling anymore. . . The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”
Even though some media coverage made a big deal about home prices pulling back, the slight correction that happened is already in the rearview mirror. Basically, this data shows you home prices aren’t falling anymore – they’re actually going back up.
What’s Next for Home Prices?
The consensus from experts is that <a href="https://www.simplifyingthemarket.com/en/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home price growth</a> will continue in the years ahead and is <a href="https://www.simplifyingthemarket.com/en/2023/09/26/the-return-of-normal-seasonality-for-home-price-appreciation/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">returning to normal</a> levels for the market. That means we’ll still see home prices appreciating, just at a slower pace than the last few years – and that’s a good thing.
Some news sources will see home price growth slowing and put out stories that make you think prices are falling again. The return of misleading headlines like those is already having an impact on how homebuyers are feeling again. You can see how this affects general opinion in the <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey/national-housing-survey-archive" rel="noopener noreferrer" target="_blank">Consumer Confidence Survey</a> from Fannie Mae (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230929/20231003---of-Americans-Who-Think-Home-Prices-Will-Go-Down-over-the-Next-12-Months.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230929/20231003---of-Americans-Who-Think-Home-Prices-Will-Go-Down-over-the-Next-12-Months.png" /></a>
While the percentage of Americans who think prices will fall has been slowly declining this year, the latest Consumer Confidence data indicates that’s ticked back up recently (shown in red). This change is surprising especially since the home price data shows prices are going up, not down. It tells you the impact the media still has on public opinion.
Don’t fall for the negative headlines and become part of this statistic. Remember, data from a number of sources shows home prices aren’t falling anymore.
Bottom Line
Even though the media may make things sound doom and gloom, the data shows home prices aren’t falling anymore. So, don’t let the headlines scare you or delay your plans. Let's connect so you have a trusted resource to cut through the noise and tell you what’s really happening in our area.2023-10-06T07:09:06-07:002023-10-06T07:11:25-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17761Beginning with Pre-ApprovalBeginning with Pre-Approval
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If you’re looking to buy a home this fall, there are a few things you need to know. Affordability is tight with today’s <a href="https://www.simplifyingthemarket.com/en/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> and rising <a href="https://www.simplifyingthemarket.com/en/2023/09/08/home-price-forecasts-revised-for-2023-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a>. At the same time, there’s a <a href="https://www.simplifyingthemarket.com/en/2023/09/14/why-is-housing-inventory-so-low/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">limited number of homes</a> on the market right now and that’s creating some competition among buyers. But, if you’re strategic, there are ways to navigate these waters. The first thing you’ll want to do is get pre-approved for a mortgage. That way you’ll know your numbers and can set yourself up for success from the start of your home search.
What Pre-Approval Does for You
To understand why it’s such an important step, you need to know what pre-approval is. As part of the homebuying process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you know how much money you can borrow. Freddie Mac <a href="https://myhome.freddiemac.com/blog/homebuying/how-do-i-get-pre-approved-mortgage" rel="noopener noreferrer" target="_blank">explains</a> it like this:
“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”
Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow. Why does this help you, especially today? With higher <a href="https://www.simplifyingthemarket.com/en/2023/09/06/mortgage-rates-past-present-and-possible-future/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> and <a href="https://www.simplifyingthemarket.com/en/2023/08/11/home-prices-are-back-on-the-rise-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> impacting affordability for many buyers right now, a solid understanding of your numbers is even more important so you can truly wrap your head around your options.
Pre-Approval Helps Show Sellers You’re a Serious Buyer
Let’s face it, there are more buyers looking to buy than there are homes available for sale and that imbalance is creating some competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you make an offer on a home. But getting pre-approved for a mortgage can help you stand out from other hopeful buyers.
As an article from Wall Street Journal (WSJ) <a href="https://www.wsj.com/buyside/personal-finance/mortgage-pre-approval-25dd076c" rel="noopener noreferrer" target="_blank">says</a>:
“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”
Pre-approval shows the seller you’re a serious buyer that’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or financial issues.
Bottom Line
Getting pre-approved is an important first step when you’re buying a home. The more prepared you are, the better chance you have of getting the home you want. Connect with a trusted lender so you have the tools you need to purchase a home in today’s market.2023-09-27T13:48:09-07:002023-09-27T13:50:31-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17687Are More Homes Coming onto the Market?Are More Homes Coming onto the Market?
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An important factor shaping today’s market is the number of <a href="https://www.simplifyingthemarket.com/en/2023/09/04/why-its-still-a-sellers-market-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">homes for sale</a>. And, if you’re considering whether or not to <a href="https://www.simplifyingthemarket.com/en/2023/08/29/why-you-may-still-want-to-sell-your-house-after-all/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">list your house</a>, that’s one of the biggest advantages you have right now. When housing <a href="https://www.simplifyingthemarket.com/en/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inventory</a> is this low, your house will stand out, especially if it’s priced right.
But there are some early signs that more listings are coming. According to the latest <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank">data</a>, new listings (homeowners who just put their house up for sale) are trending up. Here’s a look at why this is noteworthy and what it may mean for you.
More Homes Are Coming onto the Market than Usual
It’s well known that the busiest time in the <a href="https://www.simplifyingthemarket.com/en/2023/08/04/housing-market-forecast-for-the-rest-of-2023-infographic-1/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">housing market</a> each year is the spring buying season. That’s why there’s a predictable increase in the volume of newly listed homes throughout the first half of the year. <a href="https://www.simplifyingthemarket.com/en/2023/08/15/equity-is-a-game-changer-for-homeowners-looking-to-sell/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">Sellers</a> are anticipating this and ramping up for the months when buyers are <a href="https://www.simplifyingthemarket.com/en/2023/08/30/buyer-traffic-is-still-stronger-than-the-norm/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">most active</a>. But, as the school year kicks off and as the holidays approach, the market cools. It’s what’s expected.
But here’s what’s surprising. Based on the <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank">latest data</a> from Realtor.com, there’s an increase in the number of sellers listing their houses later this year than usual. A peak this late in the year isn’t typical. You can see both the normal seasonal trend and the unusual August in the graph below:<a href="https://www.simplifyingthemarket.com/en/content/images/20230912/20230918-New-Listings-Tick-Up.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230912/20230918-New-Listings-Tick-Up.png" /></a>As Realtor.com <a href="https://www.realtor.com/research/july-2023-data/" rel="noopener noreferrer" target="_blank">explains</a>:
“While inventory continues to be in short supply, August witnessed an unusual uptick in newly listed homes compared to July, hopefully signaling a return in seller activity heading toward the fall season . . .”
While this is only one month of data, it’s unusual enough to note. It’s still too early to say for sure if this trend will continue, but it’s something you’ll want to stay ahead of if it does.
What This Means for You
If you’ve been putting off selling your house, now may be the sweet spot to make your move. That’s because, if this trend continues, you’ll have more competition the longer you wait. And if your neighbor puts their house up for sale too, it means you may have to share buyers’ attention with that other homeowner. If you sell now, you can beat your neighbors to the punch.
But, even with more homes coming onto the market, the market is still well <a href="https://www.simplifyingthemarket.com/en/2023/08/25/todays-housing-market-has-only-half-the-usual-inventory-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">below normal</a> supply levels. And, that <a href="https://www.simplifyingthemarket.com/en/2023/9/14/why-is-housing-inventory-so-low/?override=K79ZdLFQniS5?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inventory deficit</a> isn’t going to be reversed overnight. The graph below helps put this into context, so you can see the opportunity you still have now: <a href="https://www.simplifyingthemarket.com/en/content/images/20230912/20230918-New-Listing-Count-in-August-Each-Year.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230912/20230918-New-Listing-Count-in-August-Each-Year.png" /></a>
Bottom Line
Even though inventory is still low, you don’t want to wait for more competition to pop up in your neighborhood. You still have an incredible opportunity if you sell your house today. Let’s connect to explore the benefits of selling now before more homes come to the market.2023-09-21T09:52:48-07:002023-09-21T09:56:23-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17553Why is Housing Inventory so Low?Why Is Housing Inventory So Low?
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One question that’s top of mind if you’re thinking about <a href="https://www.simplifyingthemarket.com/en/2023/08/14/where-are-people-moving-today-and-why/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">making a move</a> today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have <a href="https://www.simplifyingthemarket.com/en/2023/08/25/todays-housing-market-has-only-half-the-usual-inventory-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">more options</a>, that’s probably not the best strategy. Here’s why.
There aren’t enough homes available for sale, but that <a href="https://www.simplifyingthemarket.com/en/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">shortage</a> isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.
Underbuilding Is a Long-Standing Problem
One of the big reasons inventory is low is because builders haven’t been <a href="https://www.simplifyingthemarket.com/en/2023/08/09/the-value-of-an-agent-when-buying-your-new-construction-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">building</a> enough homes in recent years. The graph below <a href="http://www.census.gov/construction/nrc/xls/co_cust.xls" rel="noopener noreferrer" target="_blank">shows</a> new construction for single-family homes over the past five decades, including the long-term average for housing units completed:<a href="https://www.simplifyingthemarket.com/en/content/images/20230911/20230914-Single-Family-Housing-Units-Completed.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230914-Single-Family-Housing-Units-Completed.png" /></a>
For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while <a href="https://www.simplifyingthemarket.com/en/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">new home construction</a> is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight.
Today’s Mortgage Rates Create a Lock-In Effect
There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate <a href="https://www.simplifyingthemarket.com/en/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">lock-in effect</a>. Basically, some homeowners are reluctant to sell because of where <a href="https://www.simplifyingthemarket.com/en/2023/08/03/how-inflation-affects-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">illustrate</a> just how many homeowners may find themselves in this situation:<a href="https://www.simplifyingthemarket.com/en/content/images/20230911/20230914-70.7-percent-of-mortgage-rates-less-than-4.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230911/20230914-70.7-percent-of-mortgage-rates-less-than-4.png" /></a>
Those homeowners need to remember <a href="https://www.simplifyingthemarket.com/en/2023/08/29/why-you-may-still-want-to-sell-your-house-after-all/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">their needs</a> may matter just as much as the financial aspects of their move.
Misinformation in the Media Is Creating Unnecessary Fear
Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, <a href="https://www.parcllabs.com/articles/q3-real-estate" rel="noopener noreferrer" target="_blank">says</a>:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate <a href="https://www.simplifyingthemarket.com/en/2023/08/23/why-you-need-a-true-expert-in-todays-housing-market/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">fact from fiction</a>.
How This Impacts You
If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.
For <a href="https://www.simplifyingthemarket.com/en/2023/08/02/how-to-know-if-youre-ready-to-buy-a-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">buyers</a>: A limited number of homes for sale means you’ll want to seriously consider all of your options, including various areas and housing types. A skilled professional will help you explore all of what’s available and find the home that best fits your needs. They can even coach you through casting a broader net if you need to expand your search.
For <a href="https://www.simplifyingthemarket.com/en/2023/08/30/buyer-traffic-is-still-stronger-than-the-norm/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sellers</a>: Today’s low inventory actually offers incredible benefits because your house will stand out. A real estate agent can walk you through why it’s especially worthwhile to sell with these conditions. And since many sellers are also buyers, that agent is also an essential resource to help you stay up to date on the latest homes available for sale in your area so you can find your next dream home.
Bottom Line
The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, let’s connect. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in our area.2023-09-15T09:31:47-07:002023-09-15T09:36:38-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17421Mortgage Rates: Past, Present, and Possible FutureMortgage Rates: Past, Present, and Possible Future
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230906-Mortgage-Rates-Past-Present-and-Possible-Future.png" width="600" /><br /><br />
If you’re hoping to <a href="https://www.simplifyingthemarket.com/en/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">buy a home</a> this year, you’re probably paying close attention to <a href="https://www.simplifyingthemarket.com/en/2023/08/04/housing-market-forecast-for-the-rest-of-2023-infographic-1/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a>. Since mortgage rates impact what you can afford when you take out a home loan – and affordability is a challenge today – it’s a good time to look at the big picture of where mortgage rates have been historically compared to where they are now. Beyond that, it’s important to understand their relationship with <a href="https://www.simplifyingthemarket.com/en/2023/08/31/how-inflation-affects-the-housing-market/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inflation</a> for insights into where <a href="https://www.simplifyingthemarket.com/en/2023/07/19/explaining-todays-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> might go in the near future.
Giving Context to the Sticker Shock
Freddie Mac has been tracking the 30-year fixed mortgage rate since April of 1971. Every week, they release the <a href="http://www.freddiemac.com/pmms/pmms_archives.html" rel="noopener noreferrer" target="_blank">results</a> of their Primary Mortgage Market Survey, which averages mortgage application data from lenders across the country (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230905/20230906-Mortgage-Rates.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230906-Mortgage-Rates.png" /></a>Looking at the right side of the graph, mortgage rates have increased significantly since the start of last year. But even with that rise, today’s rates are still below the 52-year average. While that historical perspective is good context, buyers have gotten used to mortgage rates between 3% and 5%, which is where they’ve been over the past 15 years.
That’s important because it explains why the recent jump in rates might have you feeling sticker shock even though they’re close to their long-term average. While many buyers have <a href="https://www.simplifyingthemarket.com/en/2023/08/30/buyer-traffic-is-still-stronger-than-the-norm/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">adjusted</a> to the elevated rates over the past year, a slightly lower rate would be a welcome sight. To determine if that’s a realistic possibility, it’s important to look at <a href="https://www.simplifyingthemarket.com/en/2023/08/31/how-inflation-affects-the-housing-market/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inflation</a>.
Where Could Mortgage Rates Go in the Future?
The Federal Reserve has been working hard to lower inflation since early 2022. That’s significant because, historically, there’s been a <a href="https://www.simplifyingthemarket.com/en/2023/08/03/how-inflation-affects-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">connection</a> between inflation and mortgage rates (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230905/20230906-Inflation-and-30-year-fixed-rate-mortgage.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230905/20230906-Inflation-and-30-year-fixed-rate-mortgage.png" /></a>This graph shows a pretty reliable relationship between <a href="https://www.bls.gov/cpi/" rel="noopener noreferrer" target="_blank">inflation</a> and <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">mortgage rates</a>. Looking at the left side of the graph, each time inflation moves significantly (shown in blue), mortgage rates follow suit shortly after (shown in green).
The circled portion of the graph points out the most recent spike in inflation, with mortgage rates following closely behind. As inflation has moderated a bit this year, mortgage rates haven’t yet made a similar move.
That means, if history is any guide, the market is <a href="https://www.simplifyingthemarket.com/en/2023/08/04/housing-market-forecast-for-the-rest-of-2023-infographic-1/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">waiting</a> for mortgage rates to follow inflation and head back down. It’s impossible to accurately predict where mortgage rates will go for sure, but moderating inflation means mortgage rates going down in the near future would fit a well-established trend.
Bottom Line
To understand where mortgage rates may be going, it’s helpful to look at where they’ve been in the past. There’s a clear connection between inflation and mortgage rates, and if that historical relationship holds true, the recent decline in inflation may mean good news for the future of mortgage rates and your homeownership goals.2023-09-08T07:18:04-07:002023-09-08T07:20:36-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17347Why You May Still Want to Sell Your Home After AllWhy You May Still Want To Sell Your House After All
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Even though you may feel reluctant to <a href="https://www.simplifyingthemarket.com/en/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sell your house</a> because you don’t want to take on a <a href="https://www.simplifyingthemarket.com/en/2023/07/19/explaining-todays-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rate</a> that’s higher than the one you have now, there’s more to consider. While the financial side of things does matter, your personal needs may actually matter just as much. As an article from <a href="https://www.bankrate.com/real-estate/should-i-sell-my-house-now-or-wait/#sell-now" rel="noopener noreferrer" target="_blank">Bankrate</a> says:
“Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market.”
So, ask yourself this: why did I want to move in the first place?
Chances are your primary motivation wasn’t just financial in nature. Why you’re really thinking about <a href="https://www.simplifyingthemarket.com/en/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">selling</a> likely has more to do with something changing in your life or a shift in what you need out of your house.
Reasons Homeowners Still Need To Sell Today
Let’s explore some of the most common reasons sellers are <a href="https://www.simplifyingthemarket.com/en/2023/07/27/homebuyers-are-still-more-active-than-usual/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">moving</a> today. A recent <a href="https://www.builderonline.com/data-analysis/whats-behind-this-years-high-sales-volume-despite-the-lock-in-effect_o" rel="noopener noreferrer" target="_blank">article</a> from Builder Online helps shed light on this. In this research, they identified the following categories:
Marriage – If you just got married, you may find you either need more space than you currently have, or the two of you want to find a new place you picked out together.
Divorce – If you’re getting separated or are divorcing your partner, chances are it’ll be difficult to live under the same roof. Selling the place you have, so you can own get your own spot, may be necessary.
Births – If your household is growing, you may need more square footage, including more bedrooms. If you’re running out of room for everyone, you may not be able to wait to move.
Deaths – If you’ve recently lost a loved one, it can be hard to spend time in that home. You may need to move for financial reasons or because you no longer need all the space.
Retirement – If you’re in the process of retiring, or you just did, you may be looking to downsize to cut costs, relocate to be closer to loved ones, or move to a dream location. In this new phase of life, your current home may not be able to deliver what you need.
You may find you share one of these top motivators. If any of these resonate with you, it may be <a href="https://www.simplifyingthemarket.com/en/2023/08/10/about-11000-houses-will-sell-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">time to move</a> so you can find a house better suited to your changing needs. A survey from Realtor.com finds other sellers are in the same boat. It <a href="https://mediaroom.realtor.com/2023-04-17-Realtor-com-R-Survey-82-of-Those-Looking-to-Buy-and-Sell-a-Home-Feel-Locked-In-by-Low-Mortgage-Rate" rel="noopener noreferrer" target="_blank">says</a>, 1 in 4 sellers are choosing to move for personal reasons, even with current <a href="https://www.simplifyingthemarket.com/en/2023/08/03/how-inflation-affects-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a>:
“. . . more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.”
If you need to sell now because something in your own life has changed, don’t let rates hold you back from what you want. You have options to help make that move possible. You can use the <a href="https://www.simplifyingthemarket.com/en/2023/08/07/four-ways-you-can-use-your-home-equity/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">equity</a> you already have in your current home toward your next purchase. And with <a href="https://www.simplifyingthemarket.com/en/2023/08/15/equity-is-a-game-changer-for-homeowners-looking-to-sell/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">how much</a> equity homeowners have right now, you may be able to finance less than you’d expect, or pay all cash to avoid borrowing at all.
Bottom Line
When you're ready to prioritize your changing needs, let’s connect. You need an expert on your side to help you list your house and find a home that delivers on everything you're looking for.2023-08-30T18:03:07-07:002023-08-30T18:04:00-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17305More Jobs and Better Pay Leads to More Buyer DemandMore Jobs and Better Pay Leads to More Buyer Demand
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There’s been talk about a recession for quite a while now. But the economy has been remarkably resilient. Why? One reason is employment and wages have stayed strong. Let’s look at the latest information on each one and why both are good news if you’re thinking about selling your house.
More Jobs Are Being Created
Instead of facing the job losses typical of any recession, the economy has been growing and adding jobs. <a href="https://www.bls.gov/news.release/empsit.nr0.htm" rel="noopener noreferrer" target="_blank">According</a> to the Bureau of Labor Statistics (BLS), 187,000 jobs were created in July, which is up from the 185,000 created in June. That means more people are finding work. In fact, so many jobs are being added that the <a href="https://www.bls.gov/news.release/pdf/empsit.pdf" rel="noopener noreferrer" target="_blank">unemployment rate</a> is far lower than the long-term average of 5.7% (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230822/20230824-Unemployment-Rate-Declined-In-July.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230822/20230824-Unemployment-Rate-Declined-In-July.png" /></a>
A low unemployment rate means that most people who want to work are finding jobs. When people have jobs, they have steady incomes – and that can help set them up to consider homeownership.
People Are Making More Money
And data also shows hourly <a href="https://www.bls.gov/news.release/empsit.nr0.htm" rel="noopener noreferrer" target="_blank">earnings</a> have been going up pretty steadily over the past few years (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230822/20230824-Hourly-Earnings-Rise-4.4--from-last-year.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230822/20230824-Hourly-Earnings-Rise-4.4--from-last-year.png" /></a>
When wages rise, people have more money that they could save or use toward buying a home. This increase in income helps offset some of the affordability challenges in the housing market today. Affordability depends on three main factors: wages, <a href="https://www.simplifyingthemarket.com/en/2023/08/11/home-prices-are-back-on-the-rise-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a>, and <a href="https://www.simplifyingthemarket.com/en/2023/08/03/how-inflation-affects-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a>. With higher home prices and mortgage rates right now, Builder Online <a href="https://www.builderonline.com/data-analysis/employment-growth-cant-save-some-housing-markets-in-the-near-term_o" rel="noopener noreferrer" target="_blank">summarizes</a> how growing wages can help:
“The housing market has been a beneficiary of the strong economy and labor market. Many of those employed have saved money over the past few years and used those funds toward a down payment on a home.”
If you’re thinking about <a href="https://www.simplifyingthemarket.com/en/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">selling</a> your house, a strong job market, growing wages, and the resulting buyer demand is fantastic news. It means there’s a larger pool of potential buyers out there who are in a position to pursue their dreams of homeownership.
Bottom Line
With more jobs and rising wages creating eager <a href="https://www.mykcm.com/2023/07/27/homebuyers-are-still-more-active-than-usual/" rel="noopener noreferrer" target="_blank">buyers</a>, there’s a lot going in your favor. Let’s connect so you have someone who can guide you through the process of selling your house, from setting the right price to getting your home ready to show.2023-08-24T14:47:13-07:002023-08-24T14:48:40-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17238People Want less Expensive Homes -- And Builders are RespondingPeople Want Less Expensive Homes – And Builders Are Responding
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In today’s housing market, there are two main affordability challenges impacting buyers: <a href="https://www.simplifyingthemarket.com/en/2023/08/03/how-inflation-affects-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> that are <a href="https://www.simplifyingthemarket.com/en/2023/07/19/explaining-todays-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">higher</a> than they’ve been the past couple of <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">years</a>, and rising home prices caused by <a href="https://www.simplifyingthemarket.com/en/2023/08/08/theres-only-half-the-inventory-of-a-normal-housing-market-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">low inventory</a>. To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large <a href="https://www.simplifyingthemarket.com/en/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">percentage</a> of the total available inventory today, that search often includes brand new homes.
People Are Spending Less on Newly Built Homes
The graph below uses the latest information from the <a href="https://www.census.gov/construction/nrs/index.html" rel="noopener noreferrer" target="_blank">Census</a> to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:<a href="https://www.simplifyingthemarket.com/en/content/images/20230816/20230817-Newly-built-home-sales-by-price-segment.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230816/20230817-Newly-built-home-sales-by-price-segment.png" /></a>Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge.
Builders Are Offering Lower-Cost Options
Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Matters, <a href="https://twitter.com/KCMcrew/status/1684206839523684355" rel="noopener noreferrer" target="_blank">explains</a>:
“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”
New <a href="https://www.census.gov/construction/nrs/index.html" rel="noopener noreferrer" target="_blank">data</a> from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):<a href="https://www.simplifyingthemarket.com/en/content/images/20230816/20230817-Newly-built-home-prices-reflect-smaller-homes.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230816/20230817-Newly-built-home-prices-reflect-smaller-homes.png" /></a>And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, <a href="https://www.marketwatch.com/story/the-shrinking-american-home-as-demand-rises-builders-go-smaller-ed2a327c?siteid=msnheadlines" rel="noopener noreferrer" target="_blank">says</a>, the builders who are most responsive to this trend are forming pathways to homeownership:
“. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”
How an Agent Can Help
Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby.
Bottom Line
If you’re having a hard time finding a home you like in your budget, let’s connect. You need a <a href="https://www.mykcm.com/2023/08/09/the-value-of-an-agent-when-buying-your-new-construction-home/" rel="noopener noreferrer" target="_blank">real estate professional</a> who knows all about the latest inventory in our area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.2023-08-18T06:17:38-07:002023-08-18T06:21:20-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17175There's Only Half the Inventory of a Normal Housing Market TodayThere's Only Half the Inventory of a Normal Housing Market Today
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230807/20230808-Theres-Only-Half-the-Inventory-of-a-Normal-Housing-Market-Today.jpg" width="600" /><br /><br />
Wondering if it still makes sense to <a href="https://www.simplifyingthemarket.com/en/2023/08/01/sellers-dont-let-these-two-things-hold-you-back/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sell your house</a> right now? The short answer is, yes. Especially if you consider how few homes there are for sale today.
You may have heard <a href="https://www.simplifyingthemarket.com/en/2023/07/14/low-housing-inventory-is-a-sweet-spot-for-sellers-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inventory</a> is low right now, but you may not fully realize just how low or why that’s a perk when you go to sell your house. This graph from <a href="https://www.calculatedriskblog.com/2023/08/housing-august-7th-weekly-update.html" rel="noopener noreferrer" target="_blank">Calculated Risk</a> can help put that into perspective:
<a href="https://www.simplifyingthemarket.com/en/content/images/20230807/20230808-Inventory-Is-Still-Historically-Low.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230807/20230808-Inventory-Is-Still-Historically-Low.png" /></a>As the graph shows, while <a href="https://www.simplifyingthemarket.com/en/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">housing inventory</a> did grow slightly week-over-week (shown in the blue bar), overall supply is still low (shown in the red bars). Compared to the same week last year, supply is down roughly 10% – and it was already considered low at that time. But, if you look further back, you’ll see inventory is down even more significantly.
To gauge just how far off from normal today’s inventory is, let’s compare right now to 2019 (the last normal year in the market). When you compare the same week this year with the matching week in 2019, supply is about 50% lower. That means there are half the homes for sale now than there’d usually be.
The key takeaway? We’re still nowhere near what’s considered a balanced market. There’s plenty of <a href="https://www.simplifyingthemarket.com/en/2023/07/27/homebuyers-are-still-more-active-than-usual/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">demand</a> for your house because there just aren’t enough homes to go around. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/newsroom/existing-home-sales-retreated-3-3-in-june-monthly-median-sales-price-reached-second-highest-amount" rel="noopener noreferrer" target="_blank">explains</a>:
“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”
So, if you want to <a href="https://www.simplifyingthemarket.com/en/2023/07/12/renting-or-selling-your-house-whats-the-best-move/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">list your house</a>, know that there’s only about half the inventory there’d usually be in a more normal year. That means your house will be in the spotlight if you <a href="https://www.simplifyingthemarket.com/en/2023/07/31/pricing-your-house-right-still-matters-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sell now</a> and you may see multiple offers and a fast home sale.
Bottom Line
With the number of homes for sale roughly half of what there’d usually be in a more normal year, you can rest assured there’s demand for your house. If you want to sell, let’s connect now so your house can shine above the rest while inventory is so low.2023-08-10T07:53:56-07:002023-08-10T08:02:43-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17085Sellers: Don't Let These Two Things Hold You backSellers: Don’t Let These Two Things Hold You Back
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230727/20230801-Sellers-Don-t-let-these-two-things-hold-you-back.jpg" width="600" /><br /><br />
Many homeowners thinking about <a href="https://www.simplifyingthemarket.com/en/2023/07/07/the-benefits-of-downsizing-for-homeowners-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">selling</a> have two key things holding them back. That’s feeling locked in by today’s higher mortgage rates and worrying they won’t be able to find something to buy while supply is so low. Let’s dive into each challenge and give you some helpful advice on how to overcome these obstacles.
Challenge #1: The Reluctance to Take on a Higher Mortgage Rate
According to the Federal Housing Finance Agency (FHFA), the <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">average interest rate</a> for current homeowners with mortgages is less than 4% (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230731/20230801-Average-Mortgage-Rate-Is-Less-Than-4-.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230731/20230801-Average-Mortgage-Rate-Is-Less-Than-4-.png" /></a>But today, the typical 30-year fixed <a href="https://www.simplifyingthemarket.com/en/2023/07/19/explaining-todays-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rate</a> offered to buyers is closer to <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">7%</a>. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as the mortgage rate lock-in effect.
The Advice: Waiting May Not Pay Off
While experts project <a href="https://www.simplifyingthemarket.com/en/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> will gradually fall this year as <a href="https://www.simplifyingthemarket.com/en/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inflation</a> cools, that doesn’t necessarily mean you should wait to sell. Mortgage rates are notoriously hard to predict. And, right now <a href="https://www.simplifyingthemarket.com/en/2023/07/17/home-prices-are-rebounding/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> are back on the rise. If you move now, you’ll at least beat rising home prices when you buy your next home. And, if experts are right and rates fall, you can always refinance later if that happens.
Challenge #2: The Fear of Not Finding Something to Buy
When so many homeowners are reluctant to take on a higher rate, fewer homes are going to come onto the market. That’s going to keep <a href="https://www.simplifyingthemarket.com/en/2023/07/14/low-housing-inventory-is-a-sweet-spot-for-sellers-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inventory</a> low. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), <a href="https://themortgagereports.com/104622/homeowners-become-landlords" rel="noopener noreferrer" target="_blank">explains</a>:
“Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years.”
Even though you know this <a href="https://www.simplifyingthemarket.com/en/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">limited housing supply</a> helps your house stand out to eager buyers, it may also make you feel hesitant <a href="https://www.simplifyingthemarket.com/en/2023/06/26/the-true-cost-of-selling-your-house-on-your-own/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">to sell</a> because you don’t want to struggle to find something to purchase.
The Advice: Broaden Your Search
If fear you won’t be able to find your next home is the primary thing holding you back, remember to consider all your options. Looking at all housing types including condos, townhouses, and even <a href="https://www.simplifyingthemarket.com/en/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">newly built homes</a> can help give you more to choose from. Plus, if you’re able to work fully <a href="https://www.simplifyingthemarket.com/en/2023/07/13/how-remote-work-expands-your-homebuying-horizons/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">remote</a> or hybrid, you may be able to consider areas you hadn’t previously searched. If you can look further from your place of work, you may have more affordable options.
Bottom Line
Instead of focusing on the challenges, focus on what you can control. Let’s connect so you’re working with a professional who has the experience to navigate these waters and find the perfect home for you.2023-08-02T13:13:57-07:002023-08-03T08:22:41-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:17025Don't Fall for the Next Shocking Headlines About Home PricesDon’t Fall for the Next Shocking Headlines About Home Prices
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230724/20230725-Don-t-Fall-for-the-Next-Shocking-Headlines-About-Home-Prices.jpg" width="600" /><br /><br />
If you’re thinking of <a href="https://www.simplifyingthemarket.com/en/2023/07/13/how-remote-work-expands-your-homebuying-horizons/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">buying</a> or <a href="https://www.simplifyingthemarket.com/en/2023/07/14/low-housing-inventory-is-a-sweet-spot-for-sellers-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">selling a home</a>, one of the biggest questions you have right now is probably: what’s happening with home prices? And it’s no surprise you don’t have the clarity you need on that topic. Part of the issue is how <a href="https://www.simplifyingthemarket.com/en/2023/06/20/why-the-median-home-price-is-meaningless-in-todays-market/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">headlines</a> are talking about prices.
They’re basing their negative news by <a href="https://www.simplifyingthemarket.com/en/2023/06/12/are-home-prices-going-up-or-down-that-depends/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">comparing</a> current stats to the last few years. But you can’t compare this year to the <a href="https://www.simplifyingthemarket.com/en/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a> (when home prices reached record highs that were unsustainable). And as prices begin to normalize now, they’re talking about it like it’s a bad thing and making people fear what’s next. But the worst <a href="https://www.simplifyingthemarket.com/en/2023/07/17/home-prices-are-rebounding/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home price declines</a> are already behind us. What we’re starting to see now is the return to more normal <a href="https://www.simplifyingthemarket.com/en/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home price appreciation</a>.
To help make home price trends easier to understand, let’s focus on what’s typical for the market and omit the last few years since they were anomalies.
Let’s start by talking about seasonality in real estate. In the housing market, there are predictable ebbs and flows that happen each year. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.
That’s why, before the abnormal years we just experienced, there was a reliable long-term home price trend. The graph below uses data from <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#overview" rel="noopener noreferrer" target="_blank">Case-Shiller</a> to show typical monthly home price movement from 1973 through 2021 (not <a href="https://www.census.gov/construction/nrs/faqs/faqs_seas.html#quest2" rel="noopener noreferrer" target="_blank">adjusted</a>, so you can see the seasonality):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230724/20230725-48-year-average-monthly-home-price-movement.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230724/20230725-48-year-average-monthly-home-price-movement.png" /></a>
As the data from the last 48 years shows, at the beginning of the year, home prices grow, but not as much as they do entering the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.
Why This Is So Important to Understand
In the coming months, as the housing market moves further into a more predictable seasonal rhythm, you’re going to see even more headlines that either get what’s happening with home prices wrong or, at the very least, are misleading. Those headlines might use a number of price terms, like:
Appreciation: when prices increase.
Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
Depreciation: when prices decrease.
They’re going to mistake the slowing home price growth (deceleration of appreciation) that’s typical of market seasonality in the fall and winter and think prices are falling (depreciation). Don’t let those headlines confuse you or spark fear. Instead, remember it’s normal to see a deceleration of appreciation, slowing home price growth, as the months go by.
Bottom Line
If you have questions about what’s happening with home prices in our local area, let’s connect.2023-07-27T17:47:45-07:002023-07-27T17:48:49-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16951Home Prices Are ReboundingHome Prices Are Rebounding
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230712/20230717-home-prices-are-rebounding.jpg" width="600" /><br /><br />
If you’re following the news today, you may feel a bit unsure about what’s happening with <a href="https://www.simplifyingthemarket.com/en/2023/04/17/think-twice-before-waiting-for-lower-home-prices/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an <a href="https://www.simplifyingthemarket.com/en/2023/05/09/why-todays-housing-market-is-not-about-to-crash/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">unnecessarily negative</a> picture. If we take a year-over-year view, home prices did <a href="https://spglobal.com/spdji/en/index-announcements/article/sp-corelogic-case-shiller-index-continued-gains-in-april/" rel="noopener noreferrer" target="_blank">drop</a> some, but that’s because we’re comparing to a <a href="https://www.simplifyingthemarket.com/en/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">‘unicorn’ year</a> when prices peaked well beyond the norm.
To avoid an unfair comparison to that previous peak, we need to look at monthly data. And that tells a very different and much more positive story. While local home price trends still vary by market, here’s what the national data tells us.
The <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#news-research" rel="noopener noreferrer" target="_blank">graphs</a> below use recent monthly <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx" rel="noopener noreferrer" target="_blank">reports</a> from three <a href="https://www.corelogic.com/category/intelligence/reports/home-price-insights/" rel="noopener noreferrer" target="_blank">sources</a> to show the worst home price declines are already behind us, and prices are appreciating nationally.
<a href="https://www.simplifyingthemarket.com/en/content/images/20230712/20230717-Percent-change-in-home-values.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230712/20230717-Percent-change-in-home-values.png" /></a>
Looking at this monthly view, we can see the past year in the housing market can be divided into two parts. In the first half of 2022, home prices were going up, and fast. However, starting in July, prices began to go down (shown in red in the graphs above). By around August or September, the trend started to stabilize. But, looking at the most recent data for early 2023, these graphs also show that prices are going up again.
The fact that all three reports show prices have been going up for three or more straight months is an encouraging sign for the housing market. The month-over-month data indicates a national shift is happening – home prices are rising again.
Craig J. Lazzara, Managing Director at S&P Dow Jones Indices, <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20230627-1464869/1464869_cshomeprice-release-0627.pdf" rel="noopener noreferrer" target="_blank">says</a> this about home price trends:
“If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.”
Experts believe one of the reasons prices didn’t crash like some expected is because there aren’t enough available <a href="https://www.simplifyingthemarket.com/en/2023/07/06/todays-housing-inventory-is-a-sweet-spot-for-sellers/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">homes</a> for the number of people who want to buy them. Even with today’s <a href="https://www.simplifyingthemarket.com/en/2023/06/13/your-needs-matter-more-than-todays-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a>, there are more people looking to buy than there are homes available for sale.
Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/why-higher-mortgage-rates-dont-always-lead-to-declining-house-prices" rel="noopener noreferrer" target="_blank">explains</a> how more demand than supply keeps upward pressure on prices:
“History has shown that higher rates may take the steam out of rising prices, but it doesn’t cause them to collapse entirely. This is especially true in today’s housing market, where the demand for homes continues to outpace supply, keeping the pressure on house prices."
Doug Duncan, Senior VP and Chief Economist at Fannie Mae, <a href="https://www.fanniemae.com/newsroom/fannie-mae-news/mixed-data-complicates-economic-forecast-though-recession-remains-likely" rel="noopener noreferrer" target="_blank">states</a> home price growth is exceeding expectations thanks to that high demand:
“. . . housing prices continue to show stronger growth than what was previously expected . . . Housing’s performance is a testimony to the strength of demographic-related demand . . .”
Here’s How This Affects You
Buyers: If you've been holding off on <a href="https://www.simplifyingthemarket.com/en/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">buying</a> because you were worried the value of your home would go down, knowing home prices have bounced back should bring you some relief. It also gives you the opportunity to <a href="https://www.simplifyingthemarket.com/en/2023/06/16/how-owning-a-home-grows-your-wealth-with-time-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">own</a> something that usually becomes more <a href="https://www.simplifyingthemarket.com/en/2023/06/27/why-homeownership-wins-in-the-long-run/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">valuable</a> as time goes on.
Sellers: If you've been waiting to <a href="https://www.simplifyingthemarket.com/en/2023/06/29/where-will-you-go-if-you-sell-newly-built-homes-might-be-the-answer/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sell</a> your house because you were concerned about how changing home prices would affect its value, it might be a good idea to team up with a <a href="https://www.simplifyingthemarket.com/en/2023/06/30/key-reasons-to-use-a-real-estate-agent-when-you-sell-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">real estate agent</a> to list your house. You don't have to wait any longer because the latest data suggests things are turning in your favor.
Bottom Line
If you delayed your moving plans because you were concerned about home prices dropping, the latest data reveals the worst is already over, and <a href="https://www.mykcm.com/2023/06/20/why-the-median-home-price-is-meaningless-in-todays-market/" rel="noopener noreferrer" target="_blank">prices</a> are appreciating nationally. Let's get in touch so you know what's happening with home prices in our area.2023-07-20T18:04:04-07:002023-07-20T18:04:53-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16828Today's Housing Inventory is a Sweet Spot for SellersToday’s Housing Inventory Is a Sweet Spot for Sellers
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230705/20230706-todays-housing-inventory-is-a-sweet-spot-for-sellers.jpg" width="600" /><br /><br />
One of the biggest challenges in the housing market right now is how <a href="https://www.simplifyingthemarket.com/en/2023/05/11/the-best-time-to-sell-your-house-is-when-others-arent-selling/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">few homes</a> there are for sale compared to the number of people who want to buy them. To help emphasize just how limited housing inventory still is, let’s take a look at the latest information on active listings, or homes for sale in a given month, as it compares to more normal levels.
According to a recent report from <a href="https://news.move.com/2023-06-29-Realtor-com-R-June-Housing-Report-Home-Prices-Post-Their-First-Annual-Decline-Since-Before-2017" rel="noopener noreferrer" target="_blank">Realtor.com</a>:
“On average, active inventory in June was 50.6% below pre-pandemic 2017–2019 levels.”
The <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank">graph</a> below helps illustrate this point. It uses historical data to provide a more concrete look at how much the numbers are still lagging behind the level of inventory typical of a more normal market (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230705/20230706-the-supply-of-homes-for-sale-is-still-low.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230705/20230706-the-supply-of-homes-for-sale-is-still-low.png" /></a>
It’s worth noting that 2020-2022 are not included in this graph. That’s because they were truly <a href="https://www.simplifyingthemarket.com/en/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">abnormal years</a> for the housing market. To make the comparison fair, those have been omitted so they don’t distort the data.
When you compare the orange bars for 2023 with the last normal years for the housing market (2017-2019), you can see the count of active listings is still far below the norm.
What Does This Mean for You?
If you’re thinking about <a href="https://www.simplifyingthemarket.com/en/2023/06/26/the-true-cost-of-selling-your-house-on-your-own/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">selling your house</a>, that low inventory is why this is a <a href="https://www.simplifyingthemarket.com/en/2023/05/25/the-benefits-of-selling-now-according-to-experts/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">great time</a> to do so. Buyers have fewer choices now than they did in more normal years, and that’s continuing to impact some key statistics in the housing market. For example, sellers will be happy to see the following data from the latest <a href="https://cdn.nar.realtor/sites/default/files/documents/2023-05-realtors-confidence-index-06-22-2023.pdf" rel="noopener noreferrer" target="_blank">Confidence Index</a> from the National Association of Realtors (NAR):
The percent of homes that sold in less than a month ticked up slightly to 74%.
The median days on market went down to 18 days, showing homes are still selling fast when priced right.
The average number of offers on recently sold homes went up to 3.3 offers.
Bottom Line
When supply is so low, your house is going to be in the spotlight. That’s why sellers are seeing their homes sell a little faster and get more offers right now. If you’ve thought about <a href="https://www.mykcm.com/2023/06/13/your-needs-matter-more-than-todays-mortgage-rates/" rel="noopener noreferrer" target="_blank">selling</a>, now’s the time to <a href="https://www.mykcm.com/2023/05/26/moving-now-can-give-your-house-its-day-in-the-sun-infographic/" rel="noopener noreferrer" target="_blank">make a move</a>. Let’s connect to get the process started.2023-07-11T10:36:55-07:002023-07-11T10:38:10-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16765Americans Still View Homeowning as The American DreamAmericans Still View Homeownership as the American Dream
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Everyone’s interpretation of the American Dream is unique and personal. But, for many people, it’s tied to a sense of success, freedom, and prosperity. These are all things that owning a home can help provide.
A recent survey from <a href="https://www.bankrate.com/mortgages/homeownership-remains-centerpiece-of-american-dream/" rel="noopener noreferrer" target="_blank">Bankrate</a> asked respondents which achievements they feel most embody the American Dream. The responses prove owning a home is still important to so many Americans today (see graph below):
<a href="https://www.simplifyingthemarket.com/en/content/images/20230630/20230704-homeownership-remains-the-number-1-feature-of-the-american-dream.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230630/20230704-homeownership-remains-the-number-1-feature-of-the-american-dream.png" /></a>
As the graph shows, homeownership ranks above other significant milestones, including retirement, having a successful career, and earning a college degree.
A <a href="https://www.mynd.co/real-estate-market-consumer-insight-report" rel="noopener noreferrer" target="_blank">recent report</a> from MYND helps shed light on why so many people value homeownership. It finds:
“. . . nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.”
That’s because, when you own a home, your <a href="https://www.simplifyingthemarket.com/en/2023/06/14/a-drop-in-equity-doesnt-mean-low-equity/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">equity</a> (and <a href="https://www.simplifyingthemarket.com/en/2023/06/16/how-owning-a-home-grows-your-wealth-with-time-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">net worth</a>) grows over time as you pay down your home loan and as <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> appreciate. This can be a key factor in building intergenerational wealth and long-term financial stability.
To further drive home the difference homeownership can make in your life, a report from Fannie Mae <a href="https://www.fanniemae.com/media/47726/display" rel="noopener noreferrer" target="_blank">says</a>:
“Most consumers (87%) believe owning a home is important to ‘live the good life.’ . . . Notably, significantly more see ‘having less stress’ as a benefit achieved by owning than renting.”
Especially today, this could be because, when you own a home with a fixed-rate mortgage, you <a href="https://www.simplifyingthemarket.com/en/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">stabilize</a> what’s likely your largest monthly expense (your housing cost), and that helps combat the impact of rising costs from <a href="https://www.simplifyingthemarket.com/en/2023/05/24/owning-a-home-helps-protect-against-inflation/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">inflation</a>.
What Does This Mean for You?
While it may feel challenging to buy a home today with higher <a href="https://www.simplifyingthemarket.com/en/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> and <a href="https://www.simplifyingthemarket.com/en/2023/06/12/are-home-prices-going-up-or-down-that-depends/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a>, if the time is right for you, know that when you buy a home, incredible benefits are waiting for you at the end of your journey.
Bottom Line
Buying a home is a significant and powerful choice, embodying the foundation of the American Dream. If you plan to make your homeownership dream a reality this year, let’s connect to start the process.2023-07-05T09:35:22-07:002023-07-05T09:36:42-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16666What Homebuyers Need to Know About Credit ScoresWhat Homebuyers Need To Know About Credit Scores
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If you’re thinking about <a href="https://www.simplifyingthemarket.com/en/2023/06/06/real-estate-is-still-considered-the-best-long-term-investment-1/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">buying a home</a>, you should know your credit score’s a critical piece of the puzzle when it comes to qualifying for a home loan. Lenders review your credit to assess your ability to make payments on time, to pay back debts, and more. It’s also a factor that helps determine your <a href="https://www.simplifyingthemarket.com/en/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rate</a>. An article from Bankrate <a href="https://www.bankrate.com/real-estate/what-credit-score-do-you-need-to-buy-a-house/" rel="noopener noreferrer" target="_blank">explains</a>:
“Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”
This means your credit score may feel even more important to your homebuying plans right now since <a href="https://www.simplifyingthemarket.com/en/2023/05/19/the-impact-of-changing-mortgage-rates-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> are a key factor in <a href="https://www.simplifyingthemarket.com/en/2023/05/31/keys-to-success-for-first-time-homebuyers/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">affordability</a>, especially today. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is <a href="https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2023Q1" rel="noopener noreferrer" target="_blank">765</a>. But, that doesn’t mean your credit score has to be perfect. An article from Business Insider <a href="https://www.businessinsider.com/personal-finance/what-credit-score-is-needed-to-buy-a-house" rel="noopener noreferrer" target="_blank">explains</a> generally how your <a href="https://www.myfico.com/credit-education/credit-scores" rel="noopener noreferrer" target="_blank">FICO</a> score range can make an impact:
“. . . you don't need a perfect credit score to buy a house. . . . Aiming to get your credit score in the ‘Good’ range (670 to 739) would be a great start towards qualifying for a mortgage. But if you're wanting to qualify for the lowest rates, try to get your score within the ‘Very Good’ range (740 to 799).”
Working with a trusted lender’s the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you’re able to get. As FICO <a href="https://www.myfico.com/credit-education/credit-scores" rel="noopener noreferrer" target="_blank">says</a>:
“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single "cutoff score" used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”
If you’re looking for ways to improve your score, Experian <a href="https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/" rel="noopener noreferrer" target="_blank">highlights</a> some things you may want to focus on:
Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.
Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.
Credit Applications: If you’re looking to buy, don’t apply for other credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.
When you’re ready to start the <a href="https://www.simplifyingthemarket.com/en/2023/06/02/reasons-to-own-your-home-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">homebuying</a> process, a lender will be able to assess which range your score falls in and tell you more about the specifics for each loan type.
Bottom Line
With affordability challenges today, prioritizing ways you can have a positive impact on your credit score could help you get a better mortgage rate. If you want to learn more, let’s connect.2023-06-27T12:13:23-07:002023-06-27T12:14:50-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16603Why the Median Home Price is Meaningless in Today's MarketWhy the Median Home Price Is Meaningless in Today’s Market
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The National Association of Realtors (NAR) will release its latest Existing Home Sales (EHS) report later this week. This monthly report provides information on the sales volume and price trend for previously owned homes. In the upcoming release, it’ll likely say <a href="https://www.simplifyingthemarket.com/en/2023/06/12/are-home-prices-going-up-or-down-that-depends/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> are down. This may feel a bit confusing, especially if you’ve been following along and seeing the blogs saying that home prices have bottomed out and <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">turned a corner</a>.
So, why will this likely say <a href="https://www.simplifyingthemarket.com/en/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> are falling when so many other price reports say they’re going back up? It all depends on the methodology of each report. NAR reports on the median sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.
The Center for Real Estate Studies at Wichita State University <a href="https://realestate.wichita.edu/question/hpi-vs-median-price/#:~:text=The%20median%20sale%20price%20measures,and%20half%20sold%20for%20less" rel="noopener noreferrer" target="_blank">explains</a> median prices like this:
“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”
Investopedia helps define what a repeat sales approach <a href="https://www.investopedia.com/terms/r/repeatsales-method.asp" rel="noopener noreferrer" target="_blank">means</a>:
“Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.”
The Challenge with the Median Sales Price Today
As the quotes above say, the approaches can tell different stories. That’s why median price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are <a href="https://www.simplifyingthemarket.com/en/2023/05/12/the-worst-home-price-declines-are-behind-us-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">appreciating again</a>.
Bill McBride, Author of the Calculated Risk blog, <a href="https://calculatedrisk.substack.com/p/case-shiller-national-house-price-747" rel="noopener noreferrer" target="_blank">sums</a> the difference up like this:
“Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.”
To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.
<a href="https://files.keepingcurrentmatters.com/content/images/20230616/20230620-how-median-price-works.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230616/20230620-how-median-price-works.png" /></a>
In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.
That’s why using the median home price as a gauge of what’s happening with home values isn’t worthwhile right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But, most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When <a href="https://www.simplifyingthemarket.com/en/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable. A greater number of ‘less-expensive’ houses are selling right now for this exact reason, and that’s causing the median price to decline. But that doesn’t mean any single house lost value.
When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by <a href="https://www.simplifyingthemarket.com/en/2023/04/26/the-three-factors-affecting-home-affordability-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">affordability</a> and current <a href="https://www.simplifyingthemarket.com/en/2023/05/19/the-impact-of-changing-mortgage-rates-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a>.
Bottom Line
For a more in-depth understanding of home price trends and reports, let’s connect.2023-06-21T14:07:54-07:002023-06-21T14:09:34-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16525A Drop in Equity Doesn't Mean Low EquityA Drop in Equity Doesn’t Mean Low Equity
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You may see media coverage talking about a drop in homeowner equity. What’s important to understand is that equity is tied closely to home values. So, when home prices appreciate, you can expect equity to grow. And when home prices decline, equity does too. Here’s how this has played out recently.
Home prices rose rapidly during the <a href="https://www.simplifyingthemarket.com/en/2023/06/09/why-you-cant-compare-now-to-the-unicorn-years-of-the-housing-market-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a>. That gave homeowners a considerable equity boost. But those ‘unicorn’ years couldn’t last forever. The market had to moderate at some point, and that’s what we saw last fall and winter.
As home prices dropped slightly in the back half of 2022, equity was impacted. Based on the most recent <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q1-2023/" rel="noopener noreferrer" target="_blank">report</a> from CoreLogic, there was a 0.7% dip in homeowner equity over the last year. However, the headlines reporting on that change aren’t painting the whole picture. The reality is, while <a href="https://www.simplifyingthemarket.com/en/2023/06/12/are-home-prices-going-up-or-down-that-depends/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home price depreciation</a> during the second half of last year caused equity to drop, the data shows homeowners still have near record amounts of equity.
The graph below helps <a href="https://www.blackknightinc.com/wp-content/uploads/2023/04/BKI_MM_FEB2023_Report.pdf" rel="noopener noreferrer" target="_blank">illustrate</a> this point by looking at the total amount of tappable equity in this country going all the way back to 2005. Tappable equity is the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio (LTV). As the data shows, there was a significant equity boost during the <a href="https://www.simplifyingthemarket.com/en/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a> as home prices rapidly appreciated (see the pink in the graph below).
But here’s what’s key to realize – even though there’s been a small dip, total homeowner equity is still much higher than it was before the ‘unicorn’ years.
<a href="https://www.simplifyingthemarket.com/en/content/images/20230613/20230614-tappable-equity-still-near-all-time-highs.png?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230613/20230614-tappable-equity-still-near-all-time-highs.png" /></a>
And there’s more good news. Recent home price reports show the <a href="https://www.simplifyingthemarket.com/en/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">worst home price declines</a> are behind us, and prices have started to <a href="https://www.simplifyingthemarket.com/en/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">go up</a> again. As Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q1-2023/" rel="noopener noreferrer" target="_blank">explains</a>:
“Home equity trends closely follow home price changes. As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.”
The last part of that quote is particularly important and is the piece of the puzzle the news is leaving out. To further emphasize the positive turn we’re already seeing, experts say home prices are forecast to appreciate at a more normal rate over the next year. In the same report, Hepp puts it this way:
“The average U.S. homeowner now has more than $274,000 in equity – up significantly from $182,000 before the pandemic. Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.”
And even though Odeta Kushi, Deputy Chief Economist at First American, references a slightly different number, Kushi further <a href="https://twitter.com/odetakushi/status/1667305612298842115" rel="noopener noreferrer" target="_blank">validates</a> the fact that homeowners have a lot of equity right now:
“Homeowners today have an average of $302,000 in equity in their homes.”
That means if you’ve owned your home for a few years, you likely still have way more <a href="https://www.simplifyingthemarket.com/en/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">equity</a> than you did before the ‘unicorn’ years. And if you’ve owned your home for a year or less, the forecast for more typical price appreciation over the next year should mean your equity is already on the way back up.
Bottom Line
Context is everything when looking at headlines. While homeowner equity dropped some from last year, it’s still near <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">all-time highs</a>. Let’s <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">connect</a> so you can get the answers you deserve from an expert who’s here to help as you plan your <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">move</a> this year.2023-06-15T13:50:32-07:002023-06-19T17:28:34-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16417This Real Estate Market is the Strongest of Our LifetimeThis Real Estate Market Is the Strongest of Our Lifetime
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When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point.
1. The Current Mortgage Rate on Existing Mortgages
First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (<a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">FHFA</a>), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" /></a>
Now, there’s a lot of talk in the media about a potential <a href="https://www.simplifyingthemarket.com/en/2023/04/27/why-todays-foreclosure-numbers-are-nothing-like-2008/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">foreclosure</a> crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they <a href="https://www.simplifyingthemarket.com/en/2023/05/04/how-homeowners-win-when-they-downsize/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">downsize</a>, with today’s higher mortgage rates, it could cost more.
Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.
2. The Amount of Homeowner Equity
Second, Americans are sitting on tremendous equity right now. According to the <a href="https://data.census.gov/cedsci/all?q=mortgage" rel="noopener noreferrer" target="_blank">Census</a> and <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q1-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank">ATTOM</a>, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" /></a>
In the industry, the term for this is <a href="https://www.simplifyingthemarket.com/en/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">equity</a> rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.
But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.
Bottom Line
We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.2023-06-08T06:52:45-07:002023-06-08T06:54:41-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16346Keys to Success for First- Time HomebuyersKeys to Success for First-Time Homebuyers
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Buying your first <a href="https://www.simplifyingthemarket.com/en/2023/04/18/5-reasons-millennials-are-buying-homes/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home</a> is an exciting decision and a major milestone that has the power to change your life for the better. As a first-time homebuyer, it’s a vision you can bring to life, but, as the National Association of Realtors (NAR) <a href="https://www.nar.realtor/magazine/real-estate-news/first-time-home-buyers-are-vanishing-from-the-market" rel="noopener noreferrer" target="_blank">shares</a>, you’ll have to overcome some factors that have made it more challenging in recent years:
“Since 2011, the share of first-time home buyers has been under the historical norm of 40% as buyers face tight inventory, rising home prices, rising rents and high student debt loads.”
That said, if you’re looking to purchase your first home, here are two things you can consider to help make your dreams a reality.
Save Money with First-Time Homebuyer Programs
Being able to pay for the initial costs and fees associated with homeownership can feel like a major hurdle. Whether that’s getting a loan, being able to put together a down payment, or having money for closing costs – there are a variety of expenses that can make buying your first home feel <a href="https://www.simplifyingthemarket.com/en/2023/04/28/ways-to-overcome-affordability-challenges-in-todays-housing-market-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">challenging</a>.
Fortunately, there are a lot of public and private first-time homebuyer programs that can help you get a loan with little-to-no money upfront. CNET <a href="https://www.cnet.com/personal-finance/mortgages/advice/first-time-homebuyers-these-8-loan-programs-can-save-you-money/" rel="noopener noreferrer" target="_blank">explains</a>:
“A first-time homebuyer program can help make homeownership more affordable and accessible by offering lower mortgage rates, down payment assistance and tax incentives.”
In fact, as Bankrate <a href="https://www.bankrate.com/mortgages/first-time-homebuyer-guide/" rel="noopener noreferrer" target="_blank">says</a>, many of these programs are offered by state and local governments:
“Many states and local governments have programs that offer down payment or closing cost assistance – either low-interest-rate loans, deferred loans or even forgivable loans (aka grants) – to people looking to buy their first house . . .”
To take advantage of these programs, contact the housing authority in your state and browse sites like <a href="https://downpaymentresource.com/" rel="noopener noreferrer" target="_blank">Down Payment Resource</a>.
The Supply of Homes for Sale Is Low, So Explore Every Possibility
It’s a sellers’ market, meaning there aren’t enough homes on the market to meet buyer demand. So, how can you be sure you’re doing everything you can to find a home that works for you? You can increase your options by considering condominiums (condos) and townhomes. U.S. News <a href="https://realestate.usnews.com/real-estate/articles/what-should-you-consider-when-deciding-between-a-condo-vs-house" rel="noopener noreferrer" target="_blank">tells</a> us these housing types are often less expensive than single-family homes:
“Condos are usually less expensive than standalone houses . . . They are also less expensive to insure.”
One reason why they may be more affordable is because they’re often smaller. But they still give you the chance to get your foot in the door and achieve your dream of owning and building equity. Beyond that, another major perk is they typically require less maintenance. As U.S. News <a href="https://realestate.usnews.com/real-estate/articles/what-should-you-consider-when-deciding-between-a-condo-vs-house" rel="noopener noreferrer" target="_blank">says</a> in the same article:
“The strongest reason for purchasing a condo is that all external maintenance is usually covered by the condo association, such as landscaping, pool maintenance, external painting, paving, plowing and more. This fee also covers some internal maintenance, such as gas, electric, plumbing, HVAC and other mechanical systems.”
Townhomes and condos are great ways to get into <a href="https://www.simplifyingthemarket.com/en/2023/05/01/why-buying-a-home-makes-more-sense-than-renting-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">homeownership</a>. Owning your home allows you to build <a href="https://www.simplifyingthemarket.com/en/2023/04/18/5-reasons-millennials-are-buying-homes/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">equity</a>, increase your net worth, and can fuel a <a href="https://www.simplifyingthemarket.com/en/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">future move</a>.
The best way to make sure you’re set up for success, especially if you’re just starting out, is to work with a trusted <a href="https://www.simplifyingthemarket.com/en/2023/05/22/why-buyers-need-an-expert-agent-by-their-side/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">real estate agent</a>. They can educate you on the homebuying process, help you understand your local area to find options that are right for you, and coach you through making an offer in a competitive market.
Bottom Line
Today’s housing market provides some <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">challenges</a> for first-time homebuyers. But, there are still ways to achieve your goals, like utilizing first-time homebuyer programs and considering all of your housing options. Let’s connect so you have an expert on your side who can help you navigate the process.2023-06-01T08:32:32-07:002023-06-01T08:35:01-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16272Owning a Home Helps Protect Against InflationOwning a Home Helps Protect Against Inflation
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You’re probably feeling the impact of high inflation every day as prices have gone up on groceries, gas, and more. If you’re a renter, you’re likely experiencing it a lot as your rent continues to <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">rise</a>. Between all of those elevated costs and uncertainty about a potential <a href="https://www.simplifyingthemarket.com/en/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">recession</a>, you may be wondering if it still makes sense to buy a home today. The short answer is – it does. Here’s why.
Homeownership actually shields you from the rising costs inflation brings.
Freddie Mac <a href="https://myhome.freddiemac.com/blog/homebuying/should-inflation-change-your-homebuying-plans" rel="noopener noreferrer" target="_blank">explains</a> how:
“Not only will buying today help you begin to build equity, a fixed-rate mortgage can stabilize your monthly housing costs for the long-term even while other life expenses continue to rise – as has been the case the past few years.”
Unlike rents, which tend to rise with time, a fixed-rate mortgage payment is predictable over the life of the mortgage (typically 15 to 30 years). And, when the cost of most everything else is rising, keeping your housing payment stable is especially important.
The alternative to homeownership is <a href="https://www.simplifyingthemarket.com/en/2023/05/01/why-buying-a-home-makes-more-sense-than-renting-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">renting</a> – and rents tend to <a href="https://fred.stlouisfed.org/series/CUUR0000SEHA#0" rel="noopener noreferrer" target="_blank">move</a> alongside <a href="https://www.usinflationcalculator.com/inflation/united-states-core-inflation-rates/" rel="noopener noreferrer" target="_blank">inflation</a>. That means as inflation goes up, your monthly rent payments tend to go up, too (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230523/20230524-rents-increase-with-inflation-most-years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230523/20230524-rents-increase-with-inflation-most-years.png" /></a>
A fixed-rate mortgage allows you to protect yourself from future rent hikes. With inflation still high, when your rental agreement comes up for renewal, your property manager may decide to increase your payments to offset the impact of inflation. Maybe that’s why, <a href="https://www.buildiumstaging.com/resource/2023-property-management-industry-report/" rel="noopener noreferrer" target="_blank">according</a> to a recent survey, 73% of property managers plan to raise rents over the next two years.
Having your largest monthly expense remain stable in a time of <a href="https://www.simplifyingthemarket.com/en/2023/05/09/why-todays-housing-market-is-not-about-to-crash/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">economic uncertainty</a> is a major perk of homeownership. If you continue to rent, you don’t have that same benefit and aren’t as protected from rising costs.
Bottom Line
A stable housing payment is especially important in times of high inflation. Let’s connect so you can learn more and start your journey to homeownership today.2023-05-25T06:28:36-07:002023-05-25T06:30:01-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16271The Benefits of Selling Now, According to ExpertsThe Benefits of Selling Now, According to Experts
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If you’re trying to decide if now’s the time to <a href="https://www.simplifyingthemarket.com/en/2023/05/05/reasons-to-sell-your-house-today-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sell your house</a>, here’s what you should know. The limited number of homes available right now gives you a <a href="https://www.simplifyingthemarket.com/en/2023/04/11/the-big-advantage-if-you-sell-this-spring/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">big advantage</a>. That’s because there are <a href="https://www.simplifyingthemarket.com/en/2023/05/18/powerful-job-market-fuels-homebuyer-demand/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">more buyers</a> out there than there are homes for sale. And, with so <a href="https://www.simplifyingthemarket.com/en/2023/05/11/the-best-time-to-sell-your-house-is-when-others-arent-selling/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">few homes</a> on the market, buyers will have fewer options, so you set yourself up to get the <a href="https://www.simplifyingthemarket.com/en/2023/05/03/buyer-activity-is-up-despite-higher-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">most eyes possible</a> on your house.
Here’s what industry experts are saying about why selling now has its benefits:
<a href="https://themreport.com/news/data/03-21-2023/existing-home-sales" rel="noopener noreferrer" target="_blank">Lawrence Yun</a>, Chief Economist at the National Association of Realtors (NAR):
“Inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties.”
<a href="https://www.bankrate.com/real-estate/housing-market-predictions/#predictions" rel="noopener noreferrer" target="_blank">Selma Hepp</a>, Chief Economist at CoreLogic:
“We have not seen the traditional uptick in new listings from existing homeowners, so undersupply of housing will continue to heighten market competition and put pressure on prices in most regions. Some markets are already heating up considerably, but price premiums that we saw last spring and summer are unlikely.”
<a href="https://news.move.com/2023-03-30-Realtor-com-R-March-Housing-Report-Spring-Thaw-Lures-Buyers-Back-into-the-Housing-Market" rel="noopener noreferrer" target="_blank">Clare Trapasso</a>, Executive News Editor at Realtor.com:
“Well-priced, move-in ready homes with curb appeal in desirable areas are still receiving multiple offers and selling for over the asking price in many parts of the country . . .”
<a href="https://www.marketwatch.com/picks/after-seven-straight-months-of-home-price-declines-heres-what-6-economists-and-real-estate-pros-say-to-expect-from-the-housing-market-this-spring-df79d2c3" rel="noopener noreferrer" target="_blank">Jeff Tucker</a>, Senior Economist at Zillow:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
Bottom Line
If you’re thinking about selling your house, let’s connect so you have the expert insights you need to make the best possible move today. 2023-05-25T06:26:01-07:002023-05-25T06:28:09-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16165Homeowners Have Incredible Equity to Leverage Right NowHomeowners Have Incredible Equity To Leverage Right Now
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Even though <a href="https://www.simplifyingthemarket.com/en/2023/04/05/why-arent-home-prices-crashing/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> have moderated over the last year, many homeowners still have an incredible amount of equity. But what is equity? In the simplest terms, equity is the difference between the market value of your home and the amount you owe on your mortgage. The National Association of Realtors (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years" rel="noopener noreferrer" target="_blank">explains</a> how your equity grows over time:
“Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”
How Your Equity Can Help You Achieve Your Goals
The equity you build up over the years can be used to your advantage when you sell your current house and buy your <a href="https://www.simplifyingthemarket.com/en/2023/05/08/it-may-be-time-to-consider-a-newly-built-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">next home</a>. 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 <a href="https://www.simplifyingthemarket.com/en/2023/05/04/how-homeowners-win-when-they-downsize/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">smaller</a>. No matter the situation, your equity can be a powerful tool you can use to help you make a move in <a href="https://www.simplifyingthemarket.com/en/2023/04/26/the-three-factors-affecting-home-affordability-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">today’s market</a>. That’s because it may be some (if not all) of what you need for your down payment on your next home.
And how much equity you have may surprise you. A recent survey from Realtor.com <a href="https://news.move.com/2023-04-17-Realtor-com-R-Survey-82-of-Those-Looking-to-Buy-and-Sell-a-Home-Feel-Locked-In-by-Low-Mortgage-Rate" rel="noopener noreferrer" target="_blank">finds</a> many homeowners today estimate they’ve built up a significant amount of equity:
<a href="https://files.keepingcurrentmatters.com/content/images/20230512/20230515-homeonwers-today-estimate-they-have-a-significant-amount-of-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230512/20230515-homeonwers-today-estimate-they-have-a-significant-amount-of-equity.png" /></a>
The <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q4-2022/" rel="noopener noreferrer" target="_blank">latest data</a> from CoreLogic helps solidify why homeowners are feeling so good about the equity they’ve likely gained over time. As Selma Hepp, Chief Economist for CoreLogic, <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q4-2022/" rel="noopener noreferrer" target="_blank">says</a>:
“While equity gains contracted in late 2022 due to home price declines in some regions, U.S. homeowners on average still have about $270,000 in equity, nearly $90,000 more than they had at the onset of the pandemic.”
How a Skilled Real Estate Agent Can Help
If you’re looking to leverage your equity to boost your buying power in today’s market, having a trusted agent by your side makes a difference.
A real estate professional can help you better understand the value of your home, so you’ll get a clearer picture of how much equity you likely have. As a recent article from Bankrate <a href="https://www.bankrate.com/real-estate/sell-your-house-while-buying-another/" rel="noopener noreferrer" target="_blank">says</a>:
“Hiring a skilled real estate agent can give you a realistic estimate of home prices in your area and how to price your current home. Using that figure, you can calculate how much equity you have and what your net proceeds will look like, so you can apply that money toward the down payment and closing costs of your new home.”
Having a solid understanding of your equity is key when it comes to making decisions about buying or selling your home. A skilled agent can help you navigate the often-complicated process of <a href="https://www.simplifyingthemarket.com/en/2023/04/13/want-to-sell-your-house-this-spring-price-it-right/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">selling</a> your house and ensure the transaction goes smoothly.
Bottom Line
Today, many homeowners are sitting on a substantial amount of equity, and you may be one of them. Let’s connect so we can estimate how much equity you have and plan how you can use it toward the purchase of your next home.2023-05-16T09:29:53-07:002023-05-16T09:32:38-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16100Why Today's Housing Market is NOT about to CrashWhy Today’s Housing Market Is Not About To Crash
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There’s been some concern lately that the housing market is headed for a crash. And given some of the <a href="https://www.simplifyingthemarket.com/en/2023/04/26/the-three-factors-affecting-home-affordability-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">affordability</a> challenges in the housing market, along with a lot of <a href="https://www.simplifyingthemarket.com/en/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">recession</a> talk in the media, it’s easy enough to understand why that worry has come up.
But the data clearly shows today’s market is very different than it was before the housing crash in 2008. Rest assured, this isn’t a repeat of what happened back then. Here’s why.
It’s Harder To Get a Loan Now
It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one. As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices.
Things are different today as purchasers face increasingly higher standards from mortgage companies. The graph below uses <a href="https://www.mba.org/news-and-research/newsroom/news/2023/04/11/mortgage-credit-availability-increased-in-march" rel="noopener noreferrer" target="_blank">data</a> from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is.
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-lending-regulations-are-steady.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-lending-regulations-are-steady.png" /></a>Unemployment Recovered Faster This Time
While the pandemic caused unemployment to spike over the last couple of years, the jobless rate has already recovered back to pre-pandemic levels (see the blue line in the graph below). Things were different during the Great Recession as a large number of people stayed <a href="https://fred.stlouisfed.org/series/UNRATE" rel="noopener noreferrer" target="_blank">unemployed</a> for a much longer period of time (see the red in the graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-length-of-crisis-different-than-last-time.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-length-of-crisis-different-than-last-time.png" /></a>
Here’s how the quick job recovery this time helps the housing market. Because so many people are employed today, there’s less risk of homeowners facing hardship and defaulting on their loans. This helps put today’s housing market on stronger footing and reduces the risk of more foreclosures coming onto the market.
There Are Far Fewer Homes for Sale Today
There were also too many homes for sale during the housing crisis (many of which were short sales and <a href="https://www.simplifyingthemarket.com/en/2023/04/27/why-todays-foreclosure-numbers-are-nothing-like-2008/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">foreclosures</a>), and that caused prices to fall dramatically. Today, there’s a shortage of inventory available overall, primarily due to years of underbuilding homes.
The graph below uses data from the <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" rel="noopener noreferrer" target="_blank">National Association of Realtors</a> (NAR) and the <a href="https://fred.stlouisfed.org/series/HOSSUPUSM673N" rel="noopener noreferrer" target="_blank">Federal Reserve</a> to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 2.6-months’ supply. There just isn’t enough inventory on the market for home prices to come crashing down like they did in 2008.
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-housing-supply-is-lower-than-before.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-housing-supply-is-lower-than-before.png" /></a>
Equity Levels Are Near Record Highs
That low inventory of homes for sale helped keep upward pressure on home prices over the course of the pandemic. As a result, homeowners today have near-record amounts of equity (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-americans-have-record-amounts-of-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-americans-have-record-amounts-of-equity.png" /></a>
And, that equity puts them in a much stronger position <a href="https://fred.stlouisfed.org/series/OEHRENWBSHNO#0" rel="noopener noreferrer" target="_blank">compared</a> to the Great Recession. Molly Boesel, Principal Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/loan-performance-insights-january-2023/" rel="noopener noreferrer" target="_blank">explains</a>:
“Most homeowners are well positioned to weather a shallow recession. More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments.”
Bottom Line
The graphs above should ease any fears you may have that today’s housing market is headed for a crash. The most current data clearly shows that today’s market is nothing like it was last time.2023-05-10T13:09:34-07:002023-05-10T13:12:28-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:16041A Recession Does Not Equal a Housing CrisisA Recession Doesn’t Equal a Housing Crisis
Everywhere you look, people are talking about a potential recession. And if you’re planning to buy or sell a house, this may leave you wondering if your plans are still a wise move. To help ease your mind, experts are saying that if we do officially enter a recession, it’ll be mild and short. As the Federal Reserve <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20230322.pdf" rel="noopener noreferrer" target="_blank">explained</a> in their March meeting:
“. . . the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”
While a recession may be on the horizon, it won’t be one for the housing market record books like the crash in 2008. What we have to remember is that a recession doesn’t always lead to a housing crisis.
To prove it, let’s look at the historical data of what happened in real estate during previous recessions. That way you know why you shouldn’t be afraid of what a recession could mean for the housing market today.
A Recession Doesn’t Mean Falling Home Prices
To show that home prices don’t fall every time there’s a recession, it helps to turn to <a href="https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011" rel="noopener noreferrer" target="_blank">historical data</a>. As the graph below illustrates, looking at recessions going all the way back to 1980, home prices appreciated in four of the last six of them. So historically, when the economy slows down, it doesn’t mean home values will always fall.
<a href="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-does-not-mean-falling-prices.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-does-not-mean-falling-prices.png" /></a>
Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession will be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. Back then, one of the big reasons why prices fell was because there was a surplus of homes for sale at the same time distressed properties flooded the market. Today, the number of homes for sale is low, so while home prices may see slight declines in some areas and slight gains in others, a crash simply isn’t in the cards.
A Recession Means Falling Mortgage Rates
What a recession really means for the housing market is falling mortgage rates. As the graph below shows, <a href="https://mtg-specialists.com/recession-interest-rates-and-real-estate/" rel="noopener noreferrer" target="_blank">historically</a>, each time the economy slowed down, mortgage rates decreased.
<a href="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-means-falling-mortgage-rates.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-means-falling-mortgage-rates.png" /></a>
Bankrate <a href="https://www.bankrate.com/real-estate/buying-home-during-recession/" rel="noopener noreferrer" target="_blank">explains</a> mortgage rates typically fall during an economic slowdown:
“During a traditional recession, the Fed will usually lower interest rates. This creates an incentive for people to spend money and stimulate the economy. It also typically leads to more affordable mortgage rates, which leads to more opportunity for homebuyers.”
This year, <a href="https://www.simplifyingthemarket.com/en/2023/04/03/how-changing-mortgage-rates-can-affect-you/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a> have been quite volatile as they’ve responded to high inflation. The 30-year <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">fixed mortgage rate</a> has hovered between roughly 6-7%, and that’s impacted <a href="https://www.simplifyingthemarket.com/en/2023/04/26/the-three-factors-affecting-home-affordability-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">affordability</a> for many potential homebuyers.
But, if there is a recession, history tells us mortgage rates may fall below that threshold, even though the days of 3% are behind us.
Bottom Line
You don’t need to fear what a recession means for the housing market. If we do have a recession, experts say it will be mild and short, and history shows it also means mortgage rates go down.2023-05-04T12:06:49-07:002023-05-04T12:08:36-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15967What are Experts Saying About the Spring Housing Market?What Are the Experts Saying About the Spring Housing Market?
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The housing market’s been going through a lot of change lately, and there’s been uncertainty surrounding what will happen this spring. You may be wondering if more homes will go on the market, what’s next with <a href="https://www.simplifyingthemarket.com/en/2023/04/05/why-arent-home-prices-crashing/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">home prices</a> and <a href="https://www.simplifyingthemarket.com/en/2023/04/03/how-changing-mortgage-rates-can-affect-you/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">mortgage rates</a>, or what the best advice is for someone in your position right now.
Here’s what industry experts are saying right now about the spring housing market and what it means for you:
<a href="https://www.bankrate.com/real-estate/housing-market-predictions/#updates" rel="noopener noreferrer" target="_blank">Selma Hepp</a>, Chief Economist, CoreLogic:
“We see more competition among buyers . . . Housing supply also tends to grow during the spring months. And this is also the time of year when relatively more migration happens, as people graduate and move elsewhere looking for jobs.”
<a href="https://www.marketwatch.com/picks/after-seven-straight-months-of-home-price-declines-heres-what-6-economists-and-real-estate-pros-say-to-expect-from-the-housing-market-this-spring-df79d2c3" rel="noopener noreferrer" target="_blank">Greg McBride</a>, Chief Financial Analyst, Bankrate:
“I don’t expect big moves in prices in the span of a month, but like the flower buds of spring, the housing market is showing signs of improvement. A pick up in activity with inventory still low does bode well for home prices.”
<a href="https://www.bankrate.com/real-estate/housing-trends/#differ" rel="noopener noreferrer" target="_blank">Rick Sharga</a>, Founder and CEO, CJ Patrick Company:
“If you can find a home you love and can afford at today’s prices, don’t wait. Home prices in most of the country are unlikely to crash, and mortgage rates will only come down very gradually if they decline at all this year.”
<a href="https://www.marketwatch.com/picks/after-seven-straight-months-of-home-price-declines-heres-what-6-economists-and-real-estate-pros-say-to-expect-from-the-housing-market-this-spring-df79d2c3" rel="noopener noreferrer" target="_blank">Jeff Tucker</a>, Senior Economist, Zillow:
“The market is still much friendlier this spring for buyers who can overcome affordability hurdles, but buyers are going to see more competition than they might expect because there are not many homes on the market to go around. New listings are increasing, which they almost always do this time of year, but not nearly as quickly as usual.”
Bottom Line
If you’re thinking about <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">selling</a> your house, this spring’s a great time to do so while <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">inventory</a> is still so low. And if you’re in a good position to buy, lean on your team of expert advisors for the best advice. Whatever your plans, let’s connect to make sure you’re able to navigate the spring housing market with confidence.2023-04-26T11:24:31-07:002023-04-26T11:26:23-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:159133 Things You Should Consider When Moving to a New City: With Essig Team Agent Cydney ActieHey Everyone! It's Cydney!
Today we are going to talk about 3 things I think you should consider when moving too a new city!
1. Commute: Do you have to be in person/in office/ in a physical location for your job everyday? How long do you want be in the car commuting everyday? Lets be real... It can really affect your work life balance if you are driving long distances too and from work. This is a major component to consider when selecting a new place to live.
2 Hobbies and Interest: Does your new place or state have what you are interested in? For example, do you want to be by restaurants? Do you need to be by your nearest athletic club? Is hiking or green space important to you? Do you want the location to be walkable? These are all things that are important to consider when finding the perfect place for you to live. After all, your home is yours... it should include the things you enjoy to do!
3. Urban or Suburban Living: Do you want to be near the hustle and bustle of a city and be close to lots of things to do? Or do you want some space away from neighbors? This determines how close you want to be to a city and what sort of neighborhood you are looking for!
Reach out today if you are interested in buying or selling a home. The Essig Team of Compass wants to help you find you dream home! Lets Connect.
--Cydney Actie (Essig Team Agent)2023-04-24T12:29:48-07:002023-05-02T07:12:11-07:00Cydney Actietag:shopbaltimorehomes.com,2012-09-20:15864Think Twice Before Waiting for Lower Home Prices Think Twice Before Waiting for Lower Home Prices
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As the housing market continues to change, you may be wondering where it’ll go from here. One factor you’re probably thinking about is home prices, which have come down a bit since they peaked last June. And you’ve likely heard something in the news or on social media about a price crash on the horizon. As a result, you may be holding off on <a href="https://www.simplifyingthemarket.com/en/2023/04/06/trying-to-buy-a-home-hang-in-there/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">buying a home</a> until prices drop significantly. But that’s not the best strategy.
A recent <a href="https://www.builderonline.com/data-analysis/what-is-the-millennial-mindset-on-owning-vs-renting_o" rel="noopener noreferrer" target="_blank">survey</a> from Zonda shows 53% of millennials are still renting right now because they’re waiting for home prices to come down. But here’s the thing: the most recent data shows that home prices appear to have bottomed out and are now on the rise again. Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/us-home-price-insights-april-2023/" rel="noopener noreferrer" target="_blank">reports</a>:
“U.S. home prices rose by 0.8% in February . . . indicating that prices in most markets have already bottomed out.”
And the latest data from Black Knight shows the same shift. The graph below <a href="https://www.blackknightinc.com/wp-content/uploads/2023/04/BKI_MM_FEB2023_Report.pdf" rel="noopener noreferrer" target="_blank">compares</a> home price trends in November to those in February:
<a href="https://files.keepingcurrentmatters.com/content/images/20230414/20230417-home-prices-up-in-majority-of-country-KCM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230414/20230417-home-prices-up-in-majority-of-country-KCM.png" /></a>
So, should you keep waiting to buy a home until prices come down? If you factor in what the experts are saying, you probably shouldn’t. The <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">data</a> shows prices are increasing in much of the country, not decreasing. And the latest data from the Home Price Expectation Survey indicates that experts project home prices will rise steadily and return to more normal levels of appreciation after 2023. The best way to understand what home values are doing in your area is to work with a local real estate professional who can give you the latest insights and expert advice.
Bottom Line
If you’re waiting to buy a home until prices come down, you may want to reconsider. Let’s connect to make sure you understand what’s happening in our local housing market.2023-04-19T09:10:15-07:002023-04-19T09:29:30-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15725Homebuyer Activity Shows Signs of Warming up for SpringHomebuyer Activity Shows Signs of Warming Up for Spring
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230407/20230410-homebuyer-activity-shows-signsof-warming-up-for-spring-KCM.jpg" width="600" /><br /><br />
The spring season appears to be warming up in housing as more and more buyers enter the market. And after <a href="https://www.simplifyingthemarket.com/en/2023/04/03/how-changing-mortgage-rates-can-affect-you/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">rising</a> mortgage rates sidelined so many buyers last year, that’s a good sign for <a href="https://www.simplifyingthemarket.com/en/2023/03/13/leverage-your-equity-when-you-sell-your-house/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sellers</a>. Realtor.com <a href="https://news.move.com/2023-03-30-Realtor-com-R-March-Housing-Report-Spring-Thaw-Lures-Buyers-Back-into-the-Housing-Market" rel="noopener noreferrer" target="_blank">has</a> the latest:
“Spring is officially here, and like green shoots emerging from the bleak winter, new data suggests that more buyers are back in the market, although more subdued compared to a year ago.”
We know buyer activity is trending up because of mortgage purchase application data. <a href="https://www.investopedia.com/terms/m/mortgage-application.asp" rel="noopener noreferrer" target="_blank">According</a> to Investopedia:
“A mortgage application is a document submitted to a lender when you apply for a mortgage to purchase real estate.”
That means the number of mortgage applications shows how many buyers are applying for mortgages. Put another way, an increase in mortgage applications means an increase in buyer demand – and as Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), <a href="https://www.mba.org/news-and-research/newsroom/news/2023/03/29/mortgage-applications-increase-in-latest-mba-weekly-survey" rel="noopener noreferrer" target="_blank">explains</a>, application activity started ramping up as mortgage rates fell steadily in March:
“Application activity increased as mortgage rates declined . . . recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”
In fact, we can see how mortgage rates have a direct impact on applications over time. As rates rose dramatically last year, applications fell in response (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230407/20230410-mortgage-demand-rises-when-rates-fall-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230407/20230410-mortgage-demand-rises-when-rates-fall-MEM.png" /></a>
The recent uptick in mortgage applications, as well as the decline in mortgage rates, is good news for <a href="https://www.simplifyingthemarket.com/en/2023/03/29/4-key-tips-for-selling-your-house-this-spring/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">sellers</a> because it means more buyers are actively looking for homes.
What This Means for You
Buyers are coming this spring, which is typically the busiest time of the year in real estate. And as Realtor.com <a href="https://news.move.com/2023-03-30-Realtor-com-R-March-Housing-Report-Spring-Thaw-Lures-Buyers-Back-into-the-Housing-Market" rel="noopener noreferrer" target="_blank">tells</a> us, if you’re a <a href="https://www.simplifyingthemarket.com/en/2023/03/24/have-you-thought-about-why-you-might-want-to-sell-your-house-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" rel="noopener noreferrer" target="_blank">seller</a>, you need to prepare:
“If homeowners are planning to sell in 2023, now is the time to get ready.”
The means working with a local real estate agent to maximize your home’s appeal and get it listed at the ideal price for your area.
Bottom Line
The housing market is <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">warming</a> up for spring. If you’re thinking about <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">selling</a> your house and taking advantage of this recent uptick in buyer activity, let’s connect.2023-04-10T11:10:13-07:002023-04-10T11:12:12-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15681Trying to Buy a Home? Hang In There!Trying To Buy a Home? Hang in There.
We’re still in a sellers’ market. And if you’re looking to buy a home, that means you’re likely facing some unique challenges, like difficulty finding a home and volatile mortgage rates. But keep in mind, there are some benefits to being a buyer in today’s market that give you good reason to stick with your search. Here are a few of them.
Long-Term Benefits Outweigh Short-Term Challenges
Owning a home grows your net worth – and since building that wealth takes time, it makes sense to start as soon as you can. If you wait to buy and keep renting, you’ll miss out on those monthly housing payments going toward your home equity. Freddie Mac <a href="https://myhome.freddiemac.com/blog/homeownership/4-benefits-owning-home" rel="noopener noreferrer" target="_blank">puts</a> it this way:
“Homeownership not only builds a sense of pride and accomplishment, but it’s also an important step toward achieving long-term financial stability.”
The key there is long-term because the financial benefits homeownership provides, like home value appreciation and equity, grow over time. Those benefits are worth the short-term challenges today’s sellers’ market presents.
Mortgage Rates Are Constantly Changing
Mortgage rates have been hovering around 6.5% over the last several months. However, as Sam Khater, Chief Economist at Freddie Mac, <a href="https://www.mpamag.com/us/mortgage-industry/market-updates/mortgage-rates-slide-again-says-freddie-mac/441427" rel="noopener noreferrer" target="_blank">notes</a>, they’ve been coming down some recently:
“Economic uncertainty continues to bring mortgage rates down. Over the last several weeks, declining rates have brought borrowers back to the market . . .”
Lower mortgage rates improve your purchasing power when you buy, and that can help make homeownership more affordable. Hannah Jones, Economic Data Analyst at realtor.com, <a href="https://money.usnews.com/loans/mortgages/articles/mortgage-market-news-march-30-2023" rel="noopener noreferrer" target="_blank">explains</a>:
“As we move into the spring buying season, mortgage rates have ticked lower, a welcomed sign of progress towards affordability.”
The recent drop in mortgage rates is good news if you couldn’t afford to buy a home when they peaked.
Home Prices Will Increase
According to the <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">Home Price Expectation Survey</a>, which polls over 100 real estate experts, home values will go up steadily over the next few years after a slight decline this year (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230405/20230406-estimated-home-price-performance-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230405/20230406-estimated-home-price-performance-MEM.png" /></a>
Rising home prices in the coming years means two things for you as a buyer:
Waiting to buy a home could mean it’ll become more expensive to do so.
Buying now means the value of your home, and your net worth, will likely grow over time.
Bottom Line
If you’ve been trying to buy a home, hang in there. Mortgage rates have ticked down some recently, home prices are forecast to increase in the coming years, and the long-term benefits of homeownership outweigh many of the short-term challenges.2023-04-06T09:04:17-07:002023-04-06T09:10:33-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15566Get Ready: The Best Time to List Your House is Almost Here!Get Ready: The Best Time To List Your House Is Almost Here
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230323/20230327-get-ready-the-best-time-to-list-your-house-is-almost-here-KCM.jpg" width="600" /><br /><br />
If you’re <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">thinking</a> about selling this spring, it’s time to get moving – the best week to list your house is fast approaching.
Experts at <a href="https://www.realtor.com/research/best-time-to-sell-2023/" rel="noopener noreferrer" target="_blank">realtor.com</a> looked at seasonal trends from recent years (excluding 2020 as an uncharacteristic year due to the onset of the pandemic) and determined the ideal week to list a house this year:
“Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2023 is approaching quickly. The week of April 16-22 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.”
If you’ve been waiting for the best time to sell, this is your chance. But remember, before you put your house on the market, you’ve got to <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">get it ready</a>. And if you haven’t started that process yet, you’ll need to move quickly. Here’s what you should <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">keep</a> in mind.
Work with an Agent To Determine Which Updates To Make
Start by prioritizing which updates you’ll make. In February, realtor.com <a href="https://www.realtor.com/research/2023-q1-sellers-survey/" rel="noopener noreferrer" target="_blank">asked</a> more than 1,200 recent or potential home sellers what updates they ended up making to their house before listing it (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230323/20230329-which-updates-did-you-make-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230323/20230329-which-updates-did-you-make-MEM.png" /></a>
As you can see, the most common answers included landscaping and painting. <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">Work</a> with a trusted real estate agent to determine what projects make the most sense for your goals and local market.
If Possible, Plan To Have Your House Staged
Once you’ve made any necessary repairs and updates to your house, consider having it staged. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/profile-of-home-staging" rel="noopener noreferrer" target="_blank">National Association of Realtors</a> (NAR), 82% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home. Additionally, almost half of buyers’ agents said home staging had an effect on most buyers’ view of the home in general. Homes that are staged typically sell faster and for a higher price because they help <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">potential buyers</a> more easily picture their new life in the house.
Bottom Line
Are you ready to <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">sell</a> this spring? <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">Let’s connect</a> to <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">plan</a> your next steps. You can start by making a checklist of what you think your house needs to get ready. Then, we can work together to prioritize your list and move forward <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">together</a>.2023-03-28T12:24:16-07:002023-03-28T12:26:47-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15511What's Ahead for Home Prices in 2023What’s Ahead for Home Prices in 2023
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230316/20230320-whats-ahead-for-home-prices-in-2023-KCM.jpg" width="600" /><br /><br />
Over the past year, home prices have been a widely debated topic. Some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">which hasn’t happened</a>. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.
Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/us-home-price-insights-march-2023/" rel="noopener noreferrer" target="_blank">says</a>:
“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”
Additionally, every quarter, Pulsenomics <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">surveys</a> a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:
<a href="https://files.keepingcurrentmatters.com/content/images/20230316/20230320-estimated-home-price-performance-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230316/20230320-estimated-home-price-performance-MEM.png" /></a>
So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">making a move</a>:
Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">risen consistently</a>. The bottom line is, rent is <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">going up</a>.
Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">renter</a>.
Experts are projecting slight price depreciation in the housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.
Bottom Line
Let’s connect so you can make the most informed decision about your next move.2023-03-23T09:49:10-07:002023-03-23T09:52:04-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15417An Expert Gives you Clarity in Today's MarketAn Expert Gives You Clarity in Today’s Housing Market
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20230313/an-expert-gives-you-clarity-in-todays-housing-market-KCM.jpg" width="600" /><br /><br />
The <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">housing market</a> has been going through shifts lately. That’s why it’s so important to work with an industry professional who can be your <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">guide</a> throughout the process.
A real estate expert uses their knowledge of what’s really happening with home prices, housing supply, expert projections, and more to give you the best advice. Someone who can provide clarity like that is critical right now. Jay Thompson, Real Estate Industry Consultant, <a href="https://www.realestatenews.com/2022/11/18/agents-decoded-making-sense-of-the-headlines" rel="noopener noreferrer" target="_blank">explains</a>:
“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.”
Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty in the market. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, <a href="https://www.parcllabs.com/articles/q3-real-estate" rel="noopener noreferrer" target="_blank">says</a>:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
But it doesn’t have to be that way. <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">Buying a home</a> is a big decision, and it should be one you feel confident making. You can lean on an expert to help you separate fact from fiction and get the answers you need.
The right agent can help you understand what’s happening at the national and local levels, and they can debunk headlines using data you can trust. Experts have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the industry, historical data, and more.
Then, to make sure you have the full picture, an agent can tell you if your local area is following the <a href="https://www.shopbaltimorehomes.com/" rel="noopener noreferrer" target="_blank">national trend</a> or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision.
After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in.2023-03-15T09:23:42-07:002023-03-15T09:40:25-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:153372 Things Sellers Need to Know This Spring2 Things Sellers Need To Know This Spring
<img width="750" height="410" src="https://files.mykcm.com/2023/03/08085349/two-things-sellers-need-to-know-this-spring-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="2 Things Sellers Need To Know This Spring | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/03/08085349/two-things-sellers-need-to-know-this-spring-KCM.jpg 750w, https://files.mykcm.com/2023/03/08085349/two-things-sellers-need-to-know-this-spring-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/03/08085349/two-things-sellers-need-to-know-this-spring-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.
1. Houses That Are Priced Right Are Still Selling
Houses that are <a href="https://www.simplifyingthemarket.com/2023/02/20/spring-into-action-boost-your-homes-curb-appeal-with-expert-guidance/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="updated and priced" target="_blank" rel="noopener noreferrer">updated and priced</a> at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, <a href="https://www.forbes.com/sites/brendarichardson/2023/02/16/expect-the-spring-housing-market-to-be-calm-but-competitive/?sh=6fc73d8357bd" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, <a href="https://news.move.com/2023-03-02-Realtor-com-R-February-Housing-Report-More-Choices-for-Buyers-as-Inventory-Recovery-Continues-at-Breakneck-Speed" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”
While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on <a href="https://www.simplifyingthemarket.com/2023/01/23/want-to-sell-your-house-price-it-right/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="pricing" target="_blank" rel="noopener noreferrer">pricing</a> their house well are still finding success. And that’s great news if you’re thinking about <a href="https://www.simplifyingthemarket.com/2023/02/17/the-spring-housing-market-could-be-a-sweet-spot-for-sellers-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="selling" target="_blank" rel="noopener noreferrer">selling</a>.
2. Buyers Are Still Out There
As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of <a href="https://www.simplifyingthemarket.com/2023/02/14/why-its-easy-to-fall-in-love-with-homeownership-1/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="reasons" target="_blank" rel="noopener noreferrer">reasons</a> people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, <a href="https://www.usnews.com/news/economy/articles/2023-02-27/pending-home-sales-crush-estimates-rise-8-1-in-january" title="spells out" target="_blank" rel="noopener noreferrer">spells out</a> the mindset of today’s buyers:
“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”
That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.
Bottom Line
There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
2023-03-08T09:57:10-07:002023-03-10T08:08:32-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15223One Major Benefit of Investing in a HomeOne Major Benefit of Investing in a Home
<img width="750" height="410" src="https://files.mykcm.com/2023/02/23151144/one-major-benefit-of-investing-in-a-home-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="One Major Benefit of Investing in a Home | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/02/23151144/one-major-benefit-of-investing-in-a-home-KCM.jpg 750w, https://files.mykcm.com/2023/02/23151144/one-major-benefit-of-investing-in-a-home-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/02/23151144/one-major-benefit-of-investing-in-a-home-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
One of the many reasons to buy a home is that it’s a major way to <a href="https://www.simplifyingthemarket.com/2023/01/27/homeownership-builds-your-wealth-over-time-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="build wealth" target="_blank" rel="noopener noreferrer">build wealth</a> and gain financial stability. According to <a href="https://myhome.freddiemac.com/owning/equity-and-appreciation.html" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>:
“Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”
With spring approaching, now’s a great time to consider if <a href="https://www.simplifyingthemarket.com/2023/02/23/how-to-make-your-dream-of-homeownership-a-reality/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="buying a home" target="_blank" rel="noopener noreferrer">buying a home</a> makes sense for you. The best way to figure that out is to talk with a trusted real estate professional.
The Largest Part of Most Homeowners’ Net Worth Is Their Equity
You may be surprised to learn just how much of a homeowner’s net worth actually comes from owning their home. The National Association of Realtors (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about ten times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”
In other words, home equity does more to build the average household’s wealth than anything else. And according to data from <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building" title="First American" target="_blank" rel="noopener noreferrer">First American</a>, this holds true across different income levels (see graph below):
<a href="https://files.mykcm.com/2023/02/23151142/housing-piece-of-net-worth-is-crucial-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107614" src="https://files.mykcm.com/2023/02/23151142/housing-piece-of-net-worth-is-crucial-MEM.png" /></a>
Bottom Line
One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. Let’s connect today so you can start investing in homeownership.
2023-02-27T09:20:50-07:002023-02-27T10:50:29-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15212The Two Big Issues the Housing Market is Facing Right NowThe Two Big Issues the Housing Market’s Facing Right Now
<img width="750" height="410" src="https://files.mykcm.com/2023/02/16150441/the-two-big-issues-facing-the-housing-market-right-now-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="The Two Big Issues the Housing Market’s Facing Right Now | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/02/16150441/the-two-big-issues-facing-the-housing-market-right-now-KCM.jpg 750w, https://files.mykcm.com/2023/02/16150441/the-two-big-issues-facing-the-housing-market-right-now-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/02/16150441/the-two-big-issues-facing-the-housing-market-right-now-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/why-housing-market-potential-increased-for-the-second-straight-month" title="explains" target="_blank" rel="noopener noreferrer">explains</a> the root causes of today’s low supply:
“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy.”
Let’s break down these two big issues in today’s housing market.
Rate-Locked Homeowners
According to the Federal Housing Finance Agency (FHFA), the <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" title="average interest rate" target="_blank" rel="noopener noreferrer">average interest rate</a> for current homeowners with mortgages is less than 4% (see graph below):
<a href="https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107542" src="https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM.png" /></a>
But today, the typical mortgage rate offered to buyers is <a href="https://www.freddiemac.com/pmms" title="over 6%" target="_blank" rel="noopener noreferrer">over 6%</a>. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.
When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project <a href="https://www.simplifyingthemarket.com/2023/01/17/think-twice-before-waiting-for-3-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> will gradually fall this year, and that could mean more people will be willing to move as that happens.
The Fear of Not Finding Something To Buy
The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your <a href="https://www.simplifyingthemarket.com/2023/01/30/where-will-you-go-if-you-sell-you-have-options/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="options" target="_blank" rel="noopener noreferrer">options</a>. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate <a href="https://www.simplifyingthemarket.com/2023/2/15/should-you-consider-buying-a-newly-built-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="buydowns" target="_blank" rel="noopener noreferrer">buydowns</a>.
What Does This Mean for You?
These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a <a href="https://www.simplifyingthemarket.com/2023/2/17/the-spring-housing-market-could-be-a-sweet-spot-for-sellers-infographic?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="sweet spot" target="_blank" rel="noopener noreferrer">sweet spot</a> that can work to your advantage.
Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2022-u-s-home-equity-and-underwater-report/" title="ATTOM" target="_blank" rel="noopener noreferrer">ATTOM</a>:
“. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.”
This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.
Bottom Line
Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low across the country. But as mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come to the market.
2023-02-24T08:22:45-07:002023-02-24T08:34:03-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15137Selling your Home in Today’s Market!From our Very own Essig Team Agent, Mike Rodgers on Selling Your Home in Today’s Market!
Are you hesitant to sell you house because you have heard that the market might boom over the next year? Here is what you need to know:
You haven’t missed your window but you may need to start thinking about things a little bit differently.
Here’s what todays sellers need to consider:
Be willing to Negotiate: At the peak of the Pandemic, Sellers held all the leverage to negotiate, but todays buyers have more options. So, you may see buyers requesting inspections, repairs, or help with closing costs. Essig Team Agents can help you navigate those conversations so you feel comfortable making the move for the win!
Price your home at market value: todays higher mortgage rates means buyers are more cautious about their budgets. So, if you want to attract more buyers, let us help you set the ideal price for your home.
Think about your 1st impression on buyers… in other words, MAKE YOUR HOME MORE ATTRACTIVE! We can give you our expert insight on what updates your home may need to help it stand out from the crowd!
If you need expert advice on how to sell your home… Let’s talk! We are here to help!
- Mike Rodgers, Essig Team Philadelphia Agent
2023-02-16T13:32:31-07:002023-02-16T13:38:24-07:00Michael Rodgerstag:shopbaltimorehomes.com,2012-09-20:15119Why its Easy to Fall in Love with HomeownershipWhy It’s Easy To Fall in Love with Homeownership
<img width="750" height="410" src="https://files.mykcm.com/2023/02/13103950/why-its-easy-to-fall-in-love-with-homeownership-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Why It’s Easy To Fall in Love with Homeownership | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/02/13103950/why-its-easy-to-fall-in-love-with-homeownership-KCM.jpg 750w, https://files.mykcm.com/2023/02/13103950/why-its-easy-to-fall-in-love-with-homeownership-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/02/13103950/why-its-easy-to-fall-in-love-with-homeownership-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
No matter how the housing market changes, there are some things about <a href="https://www.simplifyingthemarket.com/2023/01/24/the-3-factors-that-affect-home-affordability/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="owning a home" target="_blank" rel="noopener noreferrer">owning a home</a> that never change—like the personal benefits it can provide. When you own your home, you likely feel a sense of attachment because of the comfort it gives and also because it’s a space that’s truly yours.
Over the last few years, we’ve fully embraced the meaning of our homes as we spent more time than ever in them. As a result, the emotional benefits our homes provide have become even more important to us.
As the most recent <a href="https://contentimages.o-prod.unison.com/images/press/2021-Unison-SOTAH-Report.pdf" title="State of the American Homeowner" target="_blank" rel="noopener noreferrer">State of the American Homeowner</a> from Unison puts it:
“. . . one thing has stayed the same: the home continues to be of the utmost importance and a place of security and comfort.”
The same study from Unison notes:
91% of homeowners say they feel secure, stable, or successful owning a home
64% of American homeowners say living through a pandemic has made their home more important to them than ever
It’s no surprise this study also reveals that homeowners now love their homes even more as our attachments to them have grown:
<a href="https://files.mykcm.com/2023/02/13103952/more-homeowners-are-falling-in-love-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107429" src="https://files.mykcm.com/2023/02/13103952/more-homeowners-are-falling-in-love-MEM.png" /></a>
The National Association of Realtors (NAR) also <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-snapshot-of-race-and-home-buying-in-the-us-04-26-2022.pdf" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“In addition to tangible financial benefits, homeownership brings substantial social benefits for [households], communities, and the country as a whole.”
In other words, not only does owning a home build your <a href="https://www.simplifyingthemarket.com/2023/01/27/homeownership-builds-your-wealth-over-time-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="net worth" target="_blank" rel="noopener noreferrer">net worth</a> over time, but it also gives you and your loved ones a place to <a href="https://www.simplifyingthemarket.com/2023/02/07/how-experts-can-help-close-the-gap-in-todays-homeownership-rate/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="thrive" target="_blank" rel="noopener noreferrer">thrive</a>. And by living near people with shared experiences, homeownership helps you connect with your community and contribute meaningfully.
Bottom Line
Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, let me be the key to unlocking a home you can truly fall in love with.
2023-02-15T09:02:14-07:002023-02-15T09:44:17-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15092What you Should Know about Closing CostsWhat You Should Know About Closing Costs
<img width="750" height="410" src="https://files.mykcm.com/2023/02/10115324/what-you-should-know-about-closing-costs-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="What You Should Know About Closing Costs | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/02/10115324/what-you-should-know-about-closing-costs-KCM.jpg 750w, https://files.mykcm.com/2023/02/10115324/what-you-should-know-about-closing-costs-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/02/10115324/what-you-should-know-about-closing-costs-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Before you buy a home, it’s important to <a href="https://www.simplifyingthemarket.com/2023/02/10/how-to-win-as-a-buyer-in-todays-housing-market-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="plan ahead" target="_blank" rel="noopener noreferrer">plan ahead</a>. While most buyers consider how much they need to save for a <a href="https://www.simplifyingthemarket.com/2023/02/03/you-may-not-need-as-much-as-you-think-for-your-down-payment-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="down payment" target="_blank" rel="noopener noreferrer">down payment</a>, many are surprised by the closing costs they have to pay. To ensure you aren’t caught off guard when it’s time to close on your home, you need to understand what closing costs are and how much you should budget for.
What Are Closing Costs?
People are sometimes surprised by closing costs because they don’t know what they are. According to <a href="https://www.bankrate.com/mortgages/understanding-the-closing-process/#wh" title="Bankrate" target="_blank" rel="noopener noreferrer">Bankrate</a>:
“Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”
In other words, your closing costs are a collection of fees and payments involved with your transaction. According to <a href="https://myhome.freddiemac.com/buying/understanding-costs" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>, while they can vary by location and situation, closing costs typically include:
Government recording costs
Appraisal fees
Credit report fees
Lender origination fees
Title services
Tax service fees
Survey fees
Attorney fees
Underwriting Fees
How Much Will You Need To Budget for Closing Costs?
Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical, too. According to the Freddie Mac article mentioned above, the costs to close are typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to cover your closing costs.
Let’s say you find a home you want to purchase for the <a href="https://www.nar.realtor/research-and-statistics" title="median price" target="_blank" rel="noopener noreferrer">median price</a> of $366,900. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,500 and $18,500.
Keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.
What’s the Best Way To Make Sure You’re Prepared at Closing Time?
Freddie Mac provides great advice for homebuyers, <a href="https://myhome.freddiemac.com/buying/understanding-costs" title="saying" target="_blank" rel="noopener noreferrer">saying</a>:
“As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”
Work with a team of trusted real estate professionals to understand exactly how much you’ll need to <a href="https://www.simplifyingthemarket.com/2023/01/19/pre-approval-in-2023-what-you-need-to-know/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="budget" target="_blank" rel="noopener noreferrer">budget</a> for closing costs. An agent can help connect you with a lender, and together your expert team can answer any questions you might have.
Bottom Line
It’s important to plan for the fees and payments you’ll be responsible for at closing. Let’s connect so I can help you feel confident throughout the process.
2023-02-13T09:55:01-07:002023-02-13T09:59:46-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15072How Experts can Help Close the Gap in Todays Homeownership RateHow Experts Can Help Close the Gap in Today’s Homeownership Rate
<img width="750" height="410" src="https://files.mykcm.com/2023/02/06143111/how-experts-can-help-close-the-gap-in-todays-homeownership-rate-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="How Experts Can Help Close the Gap in Today’s Homeownership Rate | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/02/06143111/how-experts-can-help-close-the-gap-in-todays-homeownership-rate-KCM.jpg 750w, https://files.mykcm.com/2023/02/06143111/how-experts-can-help-close-the-gap-in-todays-homeownership-rate-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/02/06143111/how-experts-can-help-close-the-gap-in-todays-homeownership-rate-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
As we celebrate Black History Month, we reflect on the past and present experiences of Black Americans. This includes the path toward investing in a home of their own. And while equitable access to housing has come a long way, homeownership can be a steeper climb for households of color. It’s an important experience to talk about, along with how it can make all the difference for diverse homebuyers to work with the right real estate experts.
We know it’s more challenging for some to <a href="https://www.simplifyingthemarket.com/2023/01/24/the-3-factors-that-affect-home-affordability/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="buy a home" target="_blank" rel="noopener noreferrer">buy a home</a> because there’s still a measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, the lowest homeownership rate persists in the Black community (see graph below):
<a href="https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107290" src="https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM.png" /></a>
Homeownership is an essential piece for building household wealth that can be passed down to future generations. However, there are obstacles in the <a href="https://www.simplifyingthemarket.com/2023/02/03/you-may-not-need-as-much-as-you-think-for-your-down-payment-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="homebuying" target="_blank" rel="noopener noreferrer">homebuying</a> process that can negatively impact certain groups. This can delay or prevent many from achieving homeownership, challenging their ability to benefit from everything owning a home offers. A <a href="https://www.nar.realtor/sites/default/files/documents/2022-snapshot-of-race-and-home-buying-in-the-us-04-26-2022.pdf" title="recent report" target="_blank" rel="noopener noreferrer">recent report</a> from the National Association of Realtors (NAR) explains:
“. . . not all [households] have the same opportunities to homeownership, with many of them facing more constraints in their effort to achieve the American Dream. . . . Given that homeownership contributes to wealth accumulation and the homeownership rate is lower in minority groups, data shows that the net worth for these groups is also lower.”
However, with the right support and resources, there are solutions if you’re part of this community and planning to <a href="https://www.simplifyingthemarket.com/2023/01/19/pre-approval-in-2023-what-you-need-to-know/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="buy a home" target="_blank" rel="noopener noreferrer">buy a home</a>. Jacob Channel, Senior Economist at LendingTree, <a href="https://www.cnbc.com/2022/08/27/black-borrowers-mortgage-denial-rate-twice-that-of-overall-population.html" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“The problem does exist. We have data that back that up. But there are solutions, and Black homebuyers shouldn’t lose faith that they’ll never be able to become homeowners.”
That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process. These professionals aren’t only experienced advisors who understand the local <a href="https://www.simplifyingthemarket.com/2023/01/17/think-twice-before-waiting-for-3-mortgage-rates/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="market" target="_blank" rel="noopener noreferrer">market</a> and give the best advice. They’re also compassionate allies who will advocate for your best interests every step of the way.
Bottom Line
Access to housing improves every day, but there are still equity challenges that some buyers face. Let’s connect to make sure you have an advocate on your side as you walk the path to homeownership.
2023-02-09T11:22:59-07:002023-02-09T12:38:23-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:15030Thinking about Downsizing?Thinking about Downsizing or planning on retiring? That’s a big decision!
Maybe you are thinking about it because your house doesn’t quite work for you anymore. Here’s the thing, if you have owned your home for a while now, you have likely built up a significant amount of equity and it can help you buy a home that would be a better fit your current needs!
What is Equity? Equity is the current value of your home, minus what you owe on the loan. Home equity increases when you pay down your loan over time and when home price appreciation drives up your home's value.
To summarize…Homeownership boosts your Net Worth through Equity.
According to data from FHFA Home prices have grown significantly over time (See link at Bottom). On average, homeowners who have owned their home for 5 years, see an increase in value of over 60%. That’s Crazy! Those who have owned their home for more than 30 years, the value has nearly tripled.
<img src="https://lh5.googleusercontent.com/gFTUBjusc8w79TFWKqbFb6bc8R3hRdLN7YI3s5__7h5xPfF9RA7MQ5BXZxVEM0fizTO_I4zkdILJTmFd6sBPIrC2zhzACVB35ZPEMieLWVFsXGDOAxD88zv6aOpv7JZvzITTJKP5hVix" width="269" height="270" />
Now this does vary by location, but based on those numbers, I bet you that your house has appreciated significantly as well.
If you are someone who has been thinking about relocating to your dream destination, retiring, downsizing, moving closer to family… Whatever your reason may be, then this is really good news! As your trusted real estate advisor and local Compass team, we want to help you get the most bang for your buck.
We can not only help you establish a plan to get your home sold for the maximum dollar amount, but we also know realtors everywhere! Wherever you want to move to, Mexico, Portugal, Hawaii, you name it, we’ve got you covered and we know the best all over the country.
If you are curious about your home equity, you know who to call.
Reach out today to talk with one of our Essig Team realtors to learn about what your home is worth, and make your dream a reality.
-Alyssia Essig: Essig Team of Compass Team Leader
<a href="https://www.instagram.com/essigteam_compass/">CLICK HERE TO LEARN MORE</a>2023-02-03T14:08:25-07:002023-02-03T14:33:23-07:00Alyssia Essigtag:shopbaltimorehomes.com,2012-09-20:15012The Housing Market is NOT crashingContrary to popular belief, The Housing Market is NOT Crashing.
I am currently writing this while at the 2023 Elite Retreat Hosted by Real Estate Coach Tom Ferry, learning all about how to best keep Essig Team buyers and sellers well informed on the current state of the housing market.
Look at these slides (See below for Link)… There is not enough inventory and the demand for housing is still high. 67% of American say that a housing market crash is imminent in the next 3 year… But, I said it once and I will say it again: The Housing Market is NOT Crashing.
Think about this: The Feds did their best trying to slow down the housing market by doubling the interest rates, which as we all know have been the highest interest rates we have all seen more than 10 years!
While it did slow us down a little, all it did was postpone SOME of the buyers.
Things to look out for: Owners with historically low interest rates, which I call “The Golden Handcuffs” and which the AVERAGE homeowner holds about 300k in Equity.
What will home owners do with that money? Renovate? Buy a vacation home??? -Alyssia Essig: Essig Team of Compass Team Leader
<a href="https://www.instagram.com/essigteam_compass/">Click Here to see Post</a>!2023-02-02T14:07:00-07:002023-02-02T17:35:30-07:00Alyssia Essigtag:shopbaltimorehomes.com,2012-09-20:14987Lower Mortgage Rates are Bringing Buyers Back to the MarketLower Mortgage Rates Are Bringing Buyers Back to the Market
<img width="750" height="410" src="https://files.mykcm.com/2023/01/30122156/lower-mortgage-rates-are-bringing-buyers-back-to-the-market-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Lower Mortgage Rates Are Bringing Buyers Back to the Market | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/01/30122156/lower-mortgage-rates-are-bringing-buyers-back-to-the-market-KCM.jpg 750w, https://files.mykcm.com/2023/01/30122156/lower-mortgage-rates-are-bringing-buyers-back-to-the-market-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/01/30122156/lower-mortgage-rates-are-bringing-buyers-back-to-the-market-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.
Now, however, rates are beginning to come down—and <a href="https://www.simplifyingthemarket.com/2023/01/26/why-it-makes-sense-to-move-before-spring/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="buyers" target="_blank" rel="noopener noreferrer">buyers</a> are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows <a href="https://www.mba.org/news-and-research/newsroom/news/2023/01/25/mortgage-applications-increase-in-latest-mba-weekly-survey" title="mortgage applications" target="_blank" rel="noopener noreferrer">mortgage applications</a> increased last week by 7% compared to the week before.
So, if you’ve been planning to <a href="https://www.simplifyingthemarket.com/2023/01/30/where-will-you-go-if-you-sell-you-have-options/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="sell your house" target="_blank" rel="noopener noreferrer">sell your house</a> but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.
Mike Fratantoni, SVP and Chief Economist, <a href="https://www.mba.org/news-and-research/newsroom/news/2023/01/18/mortgage-applications-increase-in-latest-mba-weekly-survey" title="MBA" target="_blank" rel="noopener noreferrer">MBA</a>:
“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”
Lawrence Yun, Chief Economist, <a href="https://twitter.com/NAR_Research/status/1597970968298782720?s=20&t=RM8XMxPm_1ZkD0xfSe4N6Q" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR):
“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.”
Thomas LaSalvia, Senior Economist, <a href="https://www.newsweek.com/housing-market-reckoning-wont-provide-salvation-homebuyers-1774415" title="Moody’s Analytics" target="_blank" rel="noopener noreferrer">Moody’s Analytics</a>:
"We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit."
Sam Khater, Chief Economist, <a href="https://freddiemac.gcs-web.com/node/26516/pdf" title="Freddie Mac" target="_blank" rel="noopener noreferrer">Freddie Mac</a>:
“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”
Bottom Line
If you’ve been thinking about making a move, now’s the time to get your house <a href="https://www.simplifyingthemarket.com/2023/01/23/want-to-sell-your-house-price-it-right/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="ready to sell" target="_blank" rel="noopener noreferrer">ready to sell</a>. Let’s connect so you can learn about buyer demand in our area the best time to put your house on the market.
2023-01-31T10:54:50-07:002023-01-31T11:05:03-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:14886Why You Shouldn't Fear Todays Foreclosure HeadlinesWhy You Shouldn’t Fear Today’s Foreclosure Headlines
<img width="750" height="410" src="https://files.mykcm.com/2023/01/24115337/why-you-shouldnt-fear-todays-foreclosure-headlines-kcm.jpg" class="attachment-entry size-entry wp-post-image" alt="Why You Shouldn’t Fear Today’s Foreclosure Headlines | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/01/24115337/why-you-shouldnt-fear-todays-foreclosure-headlines-kcm.jpg 750w, https://files.mykcm.com/2023/01/24115337/why-you-shouldnt-fear-todays-foreclosure-headlines-kcm-600x328.jpg 600w, https://files.mykcm.com/2023/01/24115337/why-you-shouldnt-fear-todays-foreclosure-headlines-kcm-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
If you’ve seen recent headlines about foreclosures surging in the housing market, you’re certainly not alone. There’s no doubt, the <a href="https://www.simplifyingthemarket.com/2023/01/10/the-truth-about-negative-home-equity-headlines/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="stories" target="_blank" rel="noopener noreferrer">stories</a> in the media can be pretty confusing right now. They may even make you think twice about buying a home for fear that prices could crash. The reality is, the data shows a foreclosure crisis is not where the market is headed, and understanding what that really means is mission critical if you want to know the truth about what’s <a href="https://www.simplifyingthemarket.com/2023/01/11/todays-housing-market-is-nothing-like-15-years-ago/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="happening today" target="_blank" rel="noopener noreferrer">happening today</a>. Here’s a deeper look.
According to the <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-year-end-2022-u-s-foreclosure-market-report/" title="Year-End 2022 U.S. Foreclosure Market Report" target="_blank" rel="noopener noreferrer">Year-End 2022 U.S. Foreclosure Market Report</a> from ATTOM, foreclosure filings are up 115% from 2021, but down 34% from 2019. As media headlines grab onto this 115% increase, it’s more important than ever to put that percentage into context.
While the number of foreclosure filings did more than double last year, we need to remember why that happened and how it compares to more normal, pre-pandemic years in the market. Thanks to the forbearance program and other relief options for homeowners, foreclosure filings were down to record-low levels in 2020 and 2021, so any increase last year is — no surprise — a jump up. Rick Sharga, Executive VP of Market Intelligence at ATTOM, <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-year-end-2022-u-s-foreclosure-market-report/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“Eighteen months after the end of the government’s foreclosure moratorium, and with less than five percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic. It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures.”
Clearly, these options meant millions of homeowners could stay in their homes, allowing them to get back on their feet during a very challenging period. With home values rising at the same time, many homeowners who may have found themselves facing foreclosure under other circumstances were able to leverage their equity and sell their houses rather than face foreclosure, and that trend continues today.
And remember, as the graph below shows, foreclosures today are far below the record-high 2.9 million that were reported in 2010 when the housing market crashed.
<a href="https://files.mykcm.com/2023/01/24115339/us-foreclosure-activity-doubles-annually-but-still-below-pre-pandemic-levels-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107043" src="https://files.mykcm.com/2023/01/24115339/us-foreclosure-activity-doubles-annually-but-still-below-pre-pandemic-levels-MEM.png" alt="Why You Shouldn’t Fear Today’s Foreclosure Headlines | MyKCM" width="600" height="450" /></a>
So, while foreclosures are rising, keeping perspective in mind is key. As Bill McBride, Founder and Author of Calculated Risk, <a href="https://calculatedrisk.substack.com/p/the-housing-bubble-and-mortgage-debt-76d" title="noted" target="_blank" rel="noopener noreferrer">noted</a> just last week:
“The bottom line is there will be an increase in foreclosures over the next year (from record low levels), but there will not be a huge wave of distressed sales as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.”
Bottom Line<br />
Right now, putting the data into context is more important than ever. While the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst, and that won’t lead to a crash in <a href="https://www.simplifyingthemarket.com/2023/01/20/whats-really-happening-with-home-prices-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="home prices" target="_blank" rel="noopener noreferrer">home prices</a>.
2023-01-25T12:00:00-07:002023-01-25T12:09:07-07:00Phoebe Clarktag:shopbaltimorehomes.com,2012-09-20:14704The Truth About Negative Equity HeadlinesThe Truth About Negative Home Equity Headlines
<img width="750" height="410" src="https://files.mykcm.com/2023/01/09125630/the-truth-about-negative-home-equity-headlines-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="The Truth About Negative Home Equity Headlines | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2023/01/09125630/the-truth-about-negative-home-equity-headlines-KCM.jpg 750w, https://files.mykcm.com/2023/01/09125630/the-truth-about-negative-home-equity-headlines-KCM-600x328.jpg 600w, https://files.mykcm.com/2023/01/09125630/the-truth-about-negative-home-equity-headlines-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Home equity has been a hot topic in <a href="https://www.simplifyingthemarket.com/2022/12/27/confused-about-whats-going-on-in-the-housing-market-lean-on-a-professional/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="real estate news" target="_blank" rel="noopener noreferrer">real estate news</a> lately. And if you’ve been following along, you may have heard there’s a growing number of homeowners with negative <a href="https://www.simplifyingthemarket.com/2022/09/26/the-true-strength-of-homeowners-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="equity" target="_blank" rel="noopener noreferrer">equity</a>. But don’t let those headlines scare you.
In truth, the headlines don’t give you all the information you really need to understand what’s happening and at what scale. Let’s break down one of the big equity stories you may be seeing in the news, and what’s actually taking place. That way, you’ll have the context you need to understand the big picture.
Headlines Focus on Short-Term Equity Numbers and Fail To Convey the Long-Term View
One piece of news circulating focuses on the percentage of homes purchased in 2022 that are currently underwater. The term underwater refers to a scenario where the homeowner owes more on the loan than the house is worth. This was a huge issue when the housing market crashed in 2008, but it much less significant today.
Media coverage right now is based loosely on a report from Black Knight, Inc. The actual report from that source <a href="https://www.blackknightinc.com/black-knights-october-2022-mortgage-monitor/" title="says" target="_blank" rel="noopener noreferrer">says</a> this:
“Of all homes purchased with a mortgage in 2022, 8% are now at least marginally underwater and nearly 40% have less than 10% equity stakes in their home, . . .”
Let’s unpack that for a moment and provide the bigger picture. The data-bound report from Black Knight is talking specifically about homes purchased in 2022, but media headlines don’t always mention that timeframe or provide the surrounding context about how unusual of a year 2022 was for the housing market. In 2022, <a href="https://www.simplifyingthemarket.com/2022/12/12/what-every-seller-should-know-about-home-prices/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="home price appreciation" target="_blank" rel="noopener noreferrer">home price appreciation</a> soared, and it reached its max around March-April. Since then, the rate of appreciation has been slowing down.
Homeowners who bought their house last year right at the peak or those who paid more than market value in the months that followed are more likely to fall into the category of being marginally underwater. The qualifier marginally is another key piece of the puzzle the media isn’t necessarily including in their coverage.
So, what does that mean for those who purchased a home in 2022? It’s important to remember, owning a home is a long-term investment, not a short-term play. When headlines focus on the short-term view, they’re not necessarily providing the full context.
Typically speaking, the longer you stay in your home, the more <a href="https://www.simplifyingthemarket.com/2022/12/20/homeowners-still-have-positive-equity-gains-over-the-past-12-months/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="equity" target="_blank" rel="noopener noreferrer">equity</a> you gain as you pay down your loan and as home prices appreciate. With recent market conditions, you may not have gained significant equity right away if you owned the home for just a few months. But it’s also true that many homeowners who recently bought their house are unlikely to be looking to sell quite yet.
Bottom Line
As with everything, knowing the context is important. If you have questions about real estate headlines or about how much equity you have in your home, let’s connect.
2023-01-10T16:26:33-07:002023-01-10T16:29:23-07:00Alyssia Essigtag:shopbaltimorehomes.com,2012-09-20:146733 Best Practices for Selling Your Home3 Best Practices for Selling Your House This Year
<img width="750" height="410" src="https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="3 Best Practices for Selling Your House This Year | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM.jpg 750w, https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/23115344/3-best-practices-for-selling-your-house-this-year-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
A new year brings with it the opportunity for <a href="https://www.simplifyingthemarket.com/2022/12/15/planning-to-retire-it-could-be-time-to-make-a-move/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="new experiences" target="_blank" rel="noopener noreferrer">new experiences</a>. If that resonates with you because you’re considering making a move, you’re likely juggling a mix of excitement over your next home and a sense of attachment to your current one.
A great way to ease some of those emotions and ensure you’re feeling confident in your decision is to keep these three best practices in mind.
1. Price Your Home Right
The housing market shifted in 2022 as <a href="https://www.simplifyingthemarket.com/2022/12/21/what-to-expect-from-the-housing-market-in-2023/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="mortgage rates" target="_blank" rel="noopener noreferrer">mortgage rates</a> rose, buyer demand eased, and the number of <a href="https://www.simplifyingthemarket.com/2022/12/13/ready-to-sell-todays-housing-supply-gives-you-two-opportunities/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="homes for sale" target="_blank" rel="noopener noreferrer">homes for sale</a> grew. As a seller, you’ll want to recognize things are different now and <a href="https://www.simplifyingthemarket.com/2022/12/12/what-every-seller-should-know-about-home-prices/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="price your house" target="_blank" rel="noopener noreferrer">price your house</a> appropriately based on where the market is today. Greg McBride, Chief Financial Analyst at Bankrate, <a href="https://www.bankrate.com/real-estate/housing-trends/" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“Price your home realistically. This isn’t the housing market of April or May, so buyer traffic will be substantially slower, but appropriately priced homes are still selling quickly.”
If you price your house too high, you run the risk of deterring buyers. And if you go too low, you’re leaving money on the table. An experienced real estate agent can help determine what your ideal asking price should be.
2. Keep Your Emotions in Check
Today, homeowners are living in their houses longer. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" title="National Association of Realtors" target="_blank" rel="noopener noreferrer">National Association of Realtors</a> (NAR), since 1985, the average time a homeowner has owned their home has increased from 5 to 10 years (see graph below):
<a href="https://files.mykcm.com/2022/12/23115341/todays-homeowners-are-staying-in-their-houses-for-an-average-of-10-years-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-106615" src="https://files.mykcm.com/2022/12/23115341/todays-homeowners-are-staying-in-their-houses-for-an-average-of-10-years-MEM.png" alt="3 Best Practices for Selling Your House This Year | MyKCM" width="600" height="450" /></a>
This is several years longer than what used to be the historical norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you bought or the house where your loved ones grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from the sentimental value.
For some homeowners, that makes it even harder to negotiate and separate the emotional value of the house from fair market price. That’s why you need a real estate professional to help you with the <a href="https://www.simplifyingthemarket.com/2022/12/14/you-may-have-more-negotiation-power-when-you-buy-a-home-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="negotiations" target="_blank" rel="noopener noreferrer">negotiations</a> along the way.
3. Stage Your Home Properly
While you may love your decor and how you’ve customized your home over the years, not all buyers will feel the same way about your design. That’s why it’s so important to make sure you focus on your home’s first impression so it appeals to as many buyers as possible. As NAR <a href="https://www.nar.realtor/blogs/styled-staged-sold/why-home-staging-inspires-the-best-prices-in-any-housing-market" title="says" target="_blank" rel="noopener noreferrer">says</a>:
“Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. The right arrangements can move you into a higher price-point and help buyers fall in love the moment they walk through the door.”
Buyers want to envision themselves in the space so it truly feels like it could be their own. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. A real estate professional can help you with tips to get your house <a href="https://www.simplifyingthemarket.com/2022/12/02/winter-home-selling-checklist-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="ready to sell" target="_blank" rel="noopener noreferrer">ready to sell</a>.
Bottom Line
If you’re considering selling your house, let’s connect so you have the help you need to navigate through the process while prioritizing these best practices.
2023-01-08T16:53:57-07:002023-01-08T17:29:39-07:00Alyssia Essigtag:shopbaltimorehomes.com,2012-09-20:14607Selling your home? Hire a pro!Planning To Sell Your House? It’s Critical To Hire a Pro.
<img width="750" height="410" src="https://files.mykcm.com/2022/12/21071208/planning-to-sell-your-house-its-critical-to-hire-a-pro-KCM.jpg" class="attachment-entry size-entry wp-post-image" alt="Planning To Sell Your House? It’s Critical To Hire a Pro | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/21071208/planning-to-sell-your-house-its-critical-to-hire-a-pro-KCM.jpg 750w, https://files.mykcm.com/2022/12/21071208/planning-to-sell-your-house-its-critical-to-hire-a-pro-KCM-600x328.jpg 600w, https://files.mykcm.com/2022/12/21071208/planning-to-sell-your-house-its-critical-to-hire-a-pro-KCM-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
With higher mortgage rates and moderating buyer demand, conditions in the housing market are different <a href="https://www.simplifyingthemarket.com/2022/12/21/what-to-expect-from-the-housing-market-in-2023/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="today" target="_blank" rel="noopener noreferrer">today</a>. And if you’re thinking of <a href="https://www.simplifyingthemarket.com/2022/11/22/what-homeowners-want-to-know-about-selling-in-todays-market/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="selling your house" target="_blank" rel="noopener noreferrer">selling your house</a>, it’s important to understand how the market has changed and what that means for you. The best way to make sure you’re in the know is to work with a trusted housing market expert.
Here are five reasons working with a professional can ensure you’ll get the most out of your sale.
1. A Real Estate Advisor Is an Expert on Market Trends
Leslie Rouda Smith, 2022 President of the National Association of Realtors (NAR), <a href="https://www.nar.realtor/newsroom/nar-finds-share-of-first-time-home-buyers-smaller-older-than-ever-before" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
"During challenging and changing market conditions, one thing that's calming and constant is the assurance that comes from a Realtor® being in your corner through every step of the home transaction. Consumers can rely on Realtors®' unmatched work ethic, trusted guidance and objectivity to help manage the complexities associated with the home buying and selling process.”
An expert real estate advisor has the latest information about national trends and your local area too. More importantly, they’ll know what all of this means for you so they’ll be able to help you make a decision based on trustworthy, data-bound information.
2. A Local Professional Knows How To Set the Right Price for Your House
<a href="https://www.simplifyingthemarket.com/2022/12/06/whats-going-on-with-home-prices-ask-a-professional/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="Home price appreciation" target="_blank" rel="noopener noreferrer">Home price appreciation</a> has moderated this year. If you sell your house on your own, you may be more likely to overshoot your asking price because you’re not as aware of where prices are today. If you do, you run the risk of deterring buyers or seeing your house sit on the market for longer.
Real estate professionals provide an unbiased eye when they help you determine a price for your house. They’ll use a variety of factors, like the condition of your home and any upgrades you’ve made, and compare your house to recently sold homes in your area to find the best price for today’s market. These steps are key to making sure it’s set to move as quickly as possible.
3. A Real Estate Advisor Helps Maximize Your Pool of Buyers
Since buyer demand has cooled this year, you'll want to do what you can to help bring in more buyers. Real estate professionals have a large variety of tools at their disposal, such as social media followers, agency resources, and the Multiple Listing Service (MLS) to ensure your house gets in front of people looking to make a purchase. Investopedia <a href="https://www.investopedia.com/articles/personal-finance/071514/8-reasons-not-sell-your-home-without-agent.asp#toc-4-agents-access-large-networks" title="explains" target="_blank" rel="noopener noreferrer">explains</a> why it’s risky to sell on your own without the network an agent provides:
“You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home.”
Without access to the tools and your agent’s marketing expertise, your buyer pool – and your home’s selling potential – is limited.
4. A Real Estate Expert Will Read – and Understand – the Fine Print
Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. NAR <a href="https://www.nar.realtor/magazine/tools/client-education/handouts-for-sellers/8-reasons-to-work-with-a-realtor" title="explains" target="_blank" rel="noopener noreferrer">explains</a> it like this:
“Selling a home typically requires a variety of forms, reports, disclosures, and other legal and financial documents. . . . Also, there’s a lot of jargon involved in a real estate transaction; you want to work with a professional who can speak the language.”
A real estate professional knows exactly what all the fine print means and how to work through it efficiently. They’ll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own.
5. A Trusted Advisor Is a Skilled Negotiator
In today’s market, buyers are also regaining some negotiation power as bidding wars ease. If you sell without a professional, you’ll also be responsible for any back-and-forth. That means you’ll have to coordinate with:
The buyer, who wants the best deal possible
The buyer’s agent, who will use their expertise to advocate for the buyer
The inspection company, which works for the buyer and will almost always find concerns with the house
The appraiser, who assesses the property’s value to protect the lender
Instead of going toe-to-toe with all the above parties alone, lean on an expert. They’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion.
Bottom Line
Don’t go at it alone. If you’re planning to sell your house this winter, let’s connect so you have an expert by your side to guide you in today’s market.
2022-12-29T10:31:08-07:002022-12-29T10:44:49-07:00Alyssia Essigtag:shopbaltimorehomes.com,2012-09-20:14506 You May Have More Negotiation Power When You Buy a Home TodayYou May Have More Negotiation Power When You Buy a Home Today
<img width="750" height="410" src="https://files.mykcm.com/2022/12/13093905/you-may-have-more-negotiation-power-when-you-buy-a-home-today-kcm.jpg" class="attachment-entry size-entry wp-post-image" alt="You May Have More Negotiation Power When You Buy a Home Today | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/12/13093905/you-may-have-more-negotiation-power-when-you-buy-a-home-today-kcm.jpg 750w, https://files.mykcm.com/2022/12/13093905/you-may-have-more-negotiation-power-when-you-buy-a-home-today-kcm-600x328.jpg 600w, https://files.mykcm.com/2022/12/13093905/you-may-have-more-negotiation-power-when-you-buy-a-home-today-kcm-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Did the frequency and intensity of bidding wars over the past two years make you put your <a href="https://www.simplifyingthemarket.com/2022/12/07/key-advantages-of-buying-a-home-today/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="home search" target="_blank" rel="noopener noreferrer">home search</a> on hold? If so, you should know the hyper competitive market has cooled this year as buyer demand has moderated and <a href="https://www.simplifyingthemarket.com/2022/11/23/what-buyers-need-to-know-about-the-inventory-of-homes-available-for-sale/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="housing supply" target="_blank" rel="noopener noreferrer">housing supply</a> has grown. Those two factors combined mean you may see less competition from other buyers.
And with less competition comes more <a href="https://www.simplifyingthemarket.com/2022/11/01/3-trends-that-are-good-news-for-todays-homebuyers/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="opportunity" target="_blank" rel="noopener noreferrer">opportunity</a>. Here are two trends that may be the news you need to reenter the market.
1. The Return of Contingencies
Over the last two years, more buyers were willing to skip important steps in the <a href="https://www.simplifyingthemarket.com/2022/12/05/prioritizing-your-wants-and-needs-as-a-homebuyer-in-todays-market/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="homebuying" target="_blank" rel="noopener noreferrer">homebuying</a> process, like the appraisal or the inspection, in hopes of gaining an advantage in a bidding war. But now, things are different.
The latest <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-10-realtors-confidence-index-11-18-2022.pdf" title="data" target="_blank" rel="noopener noreferrer">data</a> from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection or appraisal is down. And a recent <a href="https://www.realtor.com/advice/buy/buyers-may-have-more-power-than-they-realize-right-now/" title="article" target="_blank" rel="noopener noreferrer">article</a> from realtor.com points out more sellers are accepting contingencies:
“A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars, waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and 92% of home sellers are accepting some buyer-friendly terms (frequently related to home inspections, financing, or appraisals), . . .”
This doesn’t mean we’re in a buyers’ market now, but it does mean you have a bit more leverage when it comes time to negotiate with a seller. The days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close.
2. Sellers Are More Willing To Help with Closing Costs
Before the pandemic, it was a common negotiation tactic for sellers to cover some of the buyer’s <a href="https://www.simplifyingthemarket.com/2022/10/31/taking-the-fear-out-of-saving-for-a-home/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="closing costs" target="_blank" rel="noopener noreferrer">closing costs</a> to sweeten the deal. This didn’t happen as much during the peak buyer frenzy over the past two years.
Today, data suggests this is making a comeback. A realtor.com <a href="https://news.move.com/2022-08-30-Realtor-com-R-Survey-Bargaining-Power-is-Back-92-of-Recent-Sellers-Accepted-Buyer-Friendly-Terms" title="survey" target="_blank" rel="noopener noreferrer">survey</a> shows 32% of sellers paid some or all of their buyer’s closing costs. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area.
Bottom Line
Despite the extremely competitive housing market of the past several years, today’s data suggests negotiations are starting to come back to the table. To find out how the market is shifting in our area, let’s connect today.
2022-12-15T09:33:30-07:002022-12-15T09:34:32-07:00Veronica Carrillotag:shopbaltimorehomes.com,2012-09-20:14432Key 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=546968-47aa562732e5272d73f3c0ed2f73184d" 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=546968-47aa562732e5272d73f3c0ed2f73184d" 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=546968-47aa562732e5272d73f3c0ed2f73184d" 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=546968-47aa562732e5272d73f3c0ed2f73184d" 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=546968-47aa562732e5272d73f3c0ed2f73184d" 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=546968-47aa562732e5272d73f3c0ed2f73184d" 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.
2022-12-07T11:50:15-07:002022-12-07T12:23:05-07:00Veronica Carrillotag:shopbaltimorehomes.com,2012-09-20:14342Your House Could Be the #1 Item on a Homebuyer’s Wish List During the HolidaysYour House Could Be the #1 Item on a Homebuyer’s Wish List During the Holidays
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Each year, homeowners planning to make a move are faced with a decision: sell their house <a href="https://www.simplifyingthemarket.com/2022/11/02/sell-your-house-before-the-holidays/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="during the holidays" target="_blank" rel="noopener noreferrer">during the holidays</a> or wait. And others who have already listed their homes may think about removing their listings and waiting until the new year to go back on the market.
The truth is many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. Here are five great reasons you shouldn’t wait to sell your house.
1. While the <a href="https://www.simplifyingthemarket.com/2022/10/18/the-latest-on-supply-and-demand-in-housing/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="supply of homes" target="_blank" rel="noopener noreferrer">supply of homes</a> for sale has increased this year, there still aren’t enough homes on the market to keep up with buyer demand. As Nadia Evangelou, Senior Economist & Director of Forecasting at the National Association of Realtors (NAR), <a href="https://www.msn.com/en-us/money/realestate/soaring-mortgage-rates-get-all-the-attention-but-a-decade-of-underinvestment-in-housing-is-the-big-culprit-behind-the-country-s-affordability-crisis/ar-AA13H2ze" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“There’s still this gap between demand and supply because we were underbuilding for many years. . . . So now we see demand is slowing, but it still outpaces supply.”
2. Serious homebuyers are out looking right now. Millennials are driving homebuying demand today, and many are eager to make a purchase. Mark Fleming, Chief Economist at First American, <a href="https://www.thestreet.com/investing/housing-market-slump-forecast-continues-into-late-2023" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
"While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.”
3. The desire to <a href="https://www.simplifyingthemarket.com/2022/11/08/the-majority-of-americans-still-view-homeownership-as-the-american-dream/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="own a home" target="_blank" rel="noopener noreferrer">own a home</a> doesn’t stop during the holidays. In fact, homes decorated for the holidays appeal to many buyers. Plus, purchasers who look for homes during the holidays are ready to buy.
4. You can restrict the showings in your house to days and times that are most convenient for you. That can help you minimize disruptions, which is especially important this time of year.
5. Rents have <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" title="skyrocketed" target="_blank" rel="noopener noreferrer">skyrocketed</a> in recent years. And, many buyers are looking to escape <a href="https://www.simplifyingthemarket.com/2022/09/30/why-buying-a-home-may-make-more-sense-than-renting-infographic/?a=546968-47aa562732e5272d73f3c0ed2f73184d" title="rising rents" target="_blank" rel="noopener noreferrer">rising rents</a> and avoid falling into the rental trap for another year. As an article from <a href="https://zillow.mediaroom.com/2022-09-29-Expert-panel-Expect-a-buyers-market-before-the-end-of-2023" title="Zillow" target="_blank" rel="noopener noreferrer">Zillow</a> says:
“Over the next 12 months, rents are expected to grow more than inflation, the stock market and home values."
Your home could be their ticket to leaving renting behind for good.
Bottom Line
There are still many reasons it makes sense to list your house during the holiday season. Let’s connect to determine if selling now is your best move.
2022-11-28T11:17:45-07:002022-11-28T11:19:49-07:00Veronica Carrillo