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Real Estate Still Holds the Title of Best Long-Term Investment
With all the headlines circulating about home prices and mortgage rates, you may be asking yourself if it still makes sense to buy a home right now, or if it’s better to keep renting. Here’s some information that could help put your mind at ease by showing that investing in a home is still a powerful decision.
According to the experts at Gallup, real estate has been crowned the top long-term investment for a whopping 12 years in a row. It has consistently beat out other investment types like gold, stocks, and bonds. Just take a look at the graph below – it speaks volumes:
But why does real estate continue to reign supreme as a top-notch long-term investment? It’s because, even today, buying a home can be your golden ticket to building wealth over time.
Unlike other investments that can feel a bit like riding a rollercoaster with all the ups and downs and ongoing risk factors, real estate follows a more predictable and positive pattern.
History shows home values usually rise. And while prices may vary by market, that means as time goes by, your house is likely to appreciate in value. And that helps you grow your net worth in a big way. As an article from Realtor.com explains:
“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month, owning a home allows you to build home equity. And over time, equity can turn your mortgage debt into a sizeable asset.”
So, if you’re on the fence about whether to rent or buy, remember that real estate was consistently voted the best long-term investment for a reason. And if you want to get in on that action, it may make sense to go ahead and buy (if you’re ready and able).
Bottom Line
When it comes to building wealth that stands the test of time, real estate is the name of the game. If you’re ready to start on your own journey toward homeownership, let’s connect today.
How Long Will It Take To Sell My House?
You want your house to sell fast. And you may be wondering how long the whole process is going to take. One way to get your answer? Work with a local real estate agent.
They have the expertise to tell you how quickly homes are selling in your area and what’s impacting timelines for other sellers. That way you have realistic expectations and can work together to come up with a plan that’s based on today’s market.
Here’s a high-level overview of just one of the factors a great agent will walk you through – the supply of homes for sale and how that impacts your process.
The Growing Supply of Homes for Sale
Over the past few months, the number of homes for sale has increased. This is good news when you move because it means you’ll have more options as you search for your next home. But it also means buyers have more to choose from, so if your house doesn’t stand out – it may take a bit longer to sell.
Available inventory is made up of new listings (homes that were just put up for sale) and active listings (homes that were already on the market but haven’t sold yet). And if you look at data from Realtor.com you can see a good portion of the recent growth is from active listings that are sticking around (see the blue bars in the graph below):
How It’s Impacting Listings Today
Think of the homes on the market like loaves of bread for sale in a bakery. When a fresh batch of bread is put out, everyone wants the newest and hottest one. But if a loaf sits there too long, it starts to get stale, and fewer people want to buy it.
The same goes for homes. New listings are the freshest and most sought-after. But if a home isn’t priced correctly, doesn’t show well, or it doesn’t have an effective sales or marketing strategy behind it, it can sit on the market and become less appealing to buyers over time.
An Agent Will Help Your House Stand Out and Sell Quickly
Timing is important to you. You want to get this done, fast. By leaning on a pro, they’ll make sure your listing is fresh and doesn’t stick around long enough to go stale. As the National Association of Realtors (NAR) explains:
“Home sellers without an agent are nearly twice as likely to say they didn’t accept an offer for at least three months; 53% of sellers who used an agent say they accepted an offer within a month of listing their home.”
Your agent will factor the recent inventory growth into their plan and create a customized selling strategy for your house. The supply of homes for sale can vary a lot by area. So they’ll do things like share their valuable insights into what’s happening with supply in your market, help you price your home correctly, and create a marketing plan that gets your home noticed.
Don’t let your listing get stale—reach out to a real estate agent today to make sure your listing is fresh and appeals to buyers from the start. It makes a big difference.
Bottom Line
If you want your house to sell fast, you need to work with a pro. Let’s connect so you’ve got someone who understands the current market trends and how to build a strategy around those factors, so your house is set up to sell quickly.
Housing Market Forecast: What’s Ahead for the 2nd Half of 2024
As we move into the second half of 2024, here’s what experts say you should expect for home prices, mortgage rates, and home sales.
Home Prices Are Expected To Climb Moderately
Home prices are forecasted to rise at a more normal pace. The graph below shows the latest forecasts from seven of the most trusted sources in the industry:
The reason for continued appreciation? The supply of homes for sale. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:
“One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory.”
While inventory is up compared to the last couple of years, it’s still low overall. And because there still aren’t enough homes to go around, that’ll keep upward pressure on prices.
If you’re thinking of buying, the good news is you won’t have to deal with prices skyrocketing like they did during the pandemic. Just remember, prices aren’t expected to drop. They’ll continue climbing, just at a slower pace.
So, getting into the market sooner rather than later could still save you money in the long run. Plus, you can feel confident experts say your home will grow in value after you buy it.
Mortgage Rates Are Forecast To Come Down Slightly
One of the best pieces of news for both buyers and sellers is that mortgage rates are expected to come down a bit, according to Fannie Mae, the Mortgage Bankers Association (MBA), and NAR (see chart below):
When you buy, even a small drop in mortgage rates can make a big difference in your monthly payments. For sellers, lower rates will bring more buyers back into the market, which can help you sell faster and potentially at a higher price. Plus, it may help you get off the fence, if you’ve been hesitant to sell due to today’s rates.
Home Sales Are Projected To Hold Steady
For 2024, the number of home sales will be about the same as last year and may even rise slightly. The graph below compares the 2024 home sales forecasts from Fannie Mae, MBA, and NAR to the 4.8 million homes that sold last year:
The average of the three forecasts is about 5 million sales in 2024 – a small increase from 2023. Lawrence Yun, Chief Economist at NAR, explains why:
“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”
With more inventory available and mortgage rates expected to go down, a few more homes are expected to be sold this year compared to last year. This means more people will be able to move. Let’s work together to make sure you’re one of them.
Bottom Line
If you have any questions or need help navigating the market, reach out.
Homebuilders Aren’t Overbuilding, They’re Catching Up
You may have heard that there are more brand-new homes available right now than the norm. Today, about one in three homes on the market are newly built. And if you’re wondering what that means for the housing market and for your own move, here’s what you need to know.
Why This Isn’t Like 2008
People remember what happened to the housing market back in 2008. And one of the factors that contributed to that crash was that there were too many homes for sale. While only part of the oversupply back then came from builders, the lasting impact is that some people still feel uneasy when they hear new home construction has ramped up.
Even though the supply of new homes has grown this year, the data shows there’s no need to worry. Builders aren’t overbuilding, they’re just catching up.
The graph below uses data from the Census to show the number of new houses built over the last 52 years. Following the crash in 2008, there was a long period of underbuilding (shown in red). And it wasn’t until recently that we finally met the long-term average for how many homes are built in a typical year.
This shows, that even with the increase in new builds we’ve seen lately, there won’t suddenly be an oversupply of homes for sale. There’s too much of a gap to make up after over a decade of underbuilding. And if you’re still worried builders are overdoing it, here’s something else that should be reassuring.
New Home Construction May Be at Its Peak for the Year
The latest data from the Census on housing starts (homes where builders just broke ground) and permits (homes where builders can start development soon) shows builders are slowing down their pace right now. Why is that?
They’re responding to still high mortgage rates and how those are impacting buyer demand. Basically, they’re pulling back appropriately in response to what’s happening in the market. As an article from HousingWire explains:
“Even with a massive housing shortage across the nation, homebuilders are completing their pipelines and not seeking as many permits to construct new single-family houses.”
Builders remember what happened when they overbuilt in the crash, and they’re looking to avoid a repeat of that. So, they’re being mindful and pulling back a bit.
You May Have More Options Now Versus Later
If you’re considering a newly built home, here’s how this impacts you. With builders seeking fewer permits and not breaking ground on as many new homes, we may be at the peak of new home construction for the year. This doesn’t mean new home construction is screeching to a stop – just that the pace is slowing down now, and that’ll impact what comes to market later this year. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“Given the recent declines in housing starts, home completions will steadily show declines in about six months.”
So, if you’re ready and able to buy now, you may find you’ll have more newly built options to choose from now versus later on. This may be enough reason to kick off your search.
Just be sure to work with a local real estate agent you know and trust throughout the process. An agent will have valuable insight into builder reputations and other key factors specific to your market. And if there isn’t much new construction near you, they’ll be able to point you toward a nearby area where there is.
Bottom Line
While it’s true new home construction is a bigger segment of the market than the norm, that’s not a bad thing. Builders aren’t overbuilding, and they’re responding to market signals to avoid repeating the mistakes that were made in 2008.
Your Equity Could Make a Move Possible
Many homeowners looking to sell feel like they’re stuck between a rock and a hard place right now. Today’s mortgage rates are higher than the one they currently have on their home, and that’s making it harder to want to sell and make a move. Maybe you’re in the same boat.
But what if there was a way to offset these higher borrowing costs? There is. And the money you need probably already exists in your current home in the form of equity.
What Is Equity?
Think of equity as a simple math equation. Freddie Mac explains:
“. . . your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.”
Your equity grows as you pay down your loan over time and as home prices climb. And thanks to the rapid home price appreciation we saw in recent years, you probably have a whole lot more of it than you realize.
The latest from the Census and ATTOM shows more than two out of three homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity (shown in blue in the chart below):
That means the majority of homeowners have a game-changing amount of equity right now.
How Your Equity Can Help Fuel Your Move
After you sell your house, that equity can help you move without worrying as much about today’s mortgage rates. As Danielle Hale, Chief Economist for Realtor.com says:
“A consideration today’s homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.”
To give you some examples, here are a few ways you can use equity to buy your next home:
- Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates.
- Make a larger down payment: Your equity could also be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much at today’s rates.
The First Step: Determine How Much Equity You Have in Your Home
Want to find out how much equity you have? To do that, you’ll need two things:
- The current mortgage balance on your home
- The current value of your home
You can probably find the mortgage balance on your monthly mortgage statement. To understand the current market value of your house, you can pay hundreds of dollars for an appraisal, or you can contact a local real estate agent who will be able to present to you, at no charge, a professional equity assessment report (PEAR).
Once you’ve connected with a trusted local agent and run the numbers, you’re one step closer to making a move you may not have thought was realistic – all thanks to your equity.
Bottom Line
If you want to find out how much equity you have and talk more about how it can make your next move possible, let’s connect.
The Biggest Mistakes Buyers Are Making Today
Buyers face challenges in any market – and today’s is no different. With higher mortgage rates and rising prices, plus the limited supply of homes for sale, there’s a lot to consider.
But, there’s one way to avoid getting tripped up – and that’s leaning on a real estate agent for the best possible advice. An expert’s insights will help you avoid some of the most common mistakes homebuyers are making right now.
Putting Off Pre-approval
As part of the homebuying process, a lender will look at your finances to figure out what they’re willing to loan you for your mortgage. This gives you a good idea of what you can borrow so you can really wrap your head around the financial side of things before you start looking at homes. While house hunting can be a lot more fun than talking about finances, you don’t want to do this out of order. Make sure you get your pre-approval first. As CNET explains:
“If you wait to get preapproved until the last minute, you might be scrambling to contact a lender and miss the opportunity to put a bid on a home.”
Holding Out for Perfection
While you may have a long list of must-haves and nice-to-haves, you need to be realistic about your home search. Even though your ideal state is you find a home that checks every box, you may need to be willing to compromise – especially since inventory is still low. Plus, a home that has everything you want may be too pricey. As Investopedia puts it:
“When you expect to find the perfect home, you could prolong the homebuying process by holding out for something better. Or you could end up paying more for a home just because it meets all your needs.”
Instead, look for something that has most of your must-haves and good bones where you can add anything else you may need down the line.
Buying More House Than You Can Afford
With today’s mortgage rates and home prices, there’s no arguing it’s expensive to buy a home. And while it may be tempting to stretch your finances a bit further than you’re comfortable with to make sure you get the house, you want to avoid overextending your budget. Make sure you talk to your agent about how changing mortgage rates impact your monthly payment. Bankrate offers this advice:
“Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations. Every borrower’s case is different, so factor in your whole financial profile when determining how much house you can afford.”
Not Working with a Local Real Estate Agent
This last one may be the most important of all. Buying a home is a process that involves a lot of steps, paperwork, negotiation, and more. Rather than take all of this on yourself, it’s a good idea to have a pro working with you. The right agent will reduce your stress and help the process go smoothly. As CNET explains:
“Attempting to buy a home without a real estate agent makes the process more arduous than it needs to be. A real estate agent can give you professional legal guidance, market expertise and support, which will save you time, money and stress. They can also increase your chances of finding the right home so you don’t have to spend hours scouring the internet for listings.”
Bottom Line
Mistakes can cost you time, frustration, and money. If you want to buy a home in today’s market, let’s connect so you have a pro on your side who can help you avoid these missteps.
How Do Climate Risks Affect Your Next Home?
Climate change is impacting where people buy homes. As the experts at the National Association of Realtors (NAR) explain:
“Sixty-three percent of people who have moved since the pandemic began say they believe climate change is—or will be—an issue in the place they currently live.”
If you’re planning to move, climate change is something you might want to consider, no matter where you are. A recent study from Realtor.com helps put the growing impact climate change is having on real estate into perspective (see below):
So, how can you be sure your investment is safe from the elements?
For starters, work with a local real estate agent to understand the likelihood of your future home being exposed to hazards like wind, floods, and wildfires. Your agent will know the area and be able to tell you about the risks you’ll most likely face.
Beyond that, there are two important factors to think about: the quality of the home you want to buy and the insurance you’ll need to protect it.
A Home Built to Last
If you’re planning to be in your home for many years, you want to know it’s going to last. One way to think ahead is to work with your real estate agent to ensure the home you buy can withstand environmental hazards. They’re up to date on the most common building and remodeling techniques—like a secondary water barrier on the roof or noncombustible, fire-resistant exterior walls—used to protect homes from the effects of climate change.
And if the home you’re interested in doesn’t have the features you’re looking for, they can help you determine what you may be able to negotiate in the contract or what work it might require in the future.
Insurance To Protect It
Once you’re confident the home you’re looking at is well built, the next step is finding out what it’s going to take to insure it. As Selma Hepp, Chief Economist at CoreLogic, says:
“. . . homeowners are going to become increasingly more aware of risks of living in some areas as it becomes prohibitively expensive or very difficult to obtain hazard insurance.”
In areas where climate risks are having a bigger impact, the right home insurance can make a big difference. And the price of that insurance is an important factor when thinking about your budget and the true cost of buying and protecting your home. Get an insurance quote early in the process because you may want to compare multiple quotes and it can take several weeks to get them.
While this may feel like a lot to consider, don’t worry. An agent can help. Your real estate agent will be your go-to resource on the homebuying process, what to look for and consider, and how climate change may affect your next home. With the right planning and an agent’s expert advice, you can make this happen. Homeownership is worth it. And with a great agent by your side, you can make sure the home you find is the right fit.
Bottom Line
Climate change is an important factor to think about when buying a home. After all, your home is a huge investment, and you want to be ready for anything that might affect it. Let’s chat so you can find the perfect home.
How Buying or Selling a Home Benefits Your Community
If you’re thinking of buying or selling a house, it’s important to know it doesn’t just impact you—it helps out the local economy and your community, too.
Every year, the National Association of Realtors (NAR) puts out a report that breaks down the financial impact that comes from people buying and selling homes (see visual below):
When a house is sold, it really boosts the local economy. That’s because of all the people needed to build, fix up, and sell homes. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), explains how the housing industry adds jobs to a community:
“. . . housing is a significant job creator. In fact, for every single-family home built, enough economic activity is generated to sustain three full-time jobs for a year . . .”
It makes sense that housing creates a lot of jobs because so many different kinds of work are involved in the industry.
Think about all the people involved with selling a house—city officials, contractors, lawyers, real estate agents, specialists, etc. Everyone has a job to do to make your deal go through. So, each transaction is a big help to those who work and live in your community.
Put simply, when you buy or sell a home, you’re helping out your neighbors. So, when you decide to move, you’re not just meeting your own needs—you’re also doing something good for your community. Just knowing your move helps so many people around you can give you a sense of empowerment as you make your decision this year.
Bottom Line
Every time a home is sold, it really helps out the local economy. If you’re ready to move, let’s get in touch. It won’t just change your life—it’ll also do a lot of good for the whole community.
Tips for Younger Homebuyers: How To Make Your Dream a Reality
If you’re a member of a younger generation, like Gen Z, you may be asking the question: will I ever be able to buy a home? And chances are, you’re worried that’s not going to be in the cards with inflation, rising home prices, mortgage rates, and more seemingly stacked against you.
While there’s no arguing this housing market is challenging for first-time homebuyers, it is still achievable, especially if you have professionals on your side.
Here are some helpful tips you may get from a pro.
1. Explore Your Options for a Down Payment
If a down payment is your #1 hurdle, you may have options to give your savings a boost. There are over 2,000 down payment assistance programs designed to make homeownership more achievable. And, that’s not the only place you may be able to get a helping hand. While it may not be an option for everyone, 49% of Gen Z homebuyers got money from loved ones that they used toward a down payment, according to LendingTree.
And chances are you won’t need to put 20% down (unless specified by your loan type or lender). So be sure to work with a trusted mortgage professional to explore your options, find out how much you’ll really need, and learn about any guidelines on getting a gift from loved ones.
2. Live with Loved Ones To Boost Your Savings
Another thing a number of Gen Z buyers are doing is ditching their rental and moving back in with friends or family. This can help cut down your housing costs so you can build your savings a whole lot faster. As Bankrate explains:
“. . . many have opted to stop renting and live with family in order to boost their savings. Thirty percent of Gen Z homebuyers move directly from their family member’s home to a home of their own, according to NAR.”
3. Cast a Broad Net for Your Search
When you’ve saved up enough, here’s how a pro will help you approach your search. Since the supply of homes for sale is still low and affordability is tight, they’ll give you strategies and avenues you may not have considered to open up your pool of options.
For example, it’s usually more affordable if you consider a rural or suburban area versus an urban one. So, while the city may be livelier and more energetic, the cost of living may be reason enough to look at something further out. And if you consider smaller homes and condos or townhouses, you’ll give yourself even more ways to break into the market. As Colby Stout, Research Analyst at Bright MLS, explains:
“Being flexible on the types of home (e.g., a condo or townhome versus a single-family home) and exploring more affordable neighborhoods is important for first-time buyers.”
4. Take a Close Look at Your Wants and Needs
And lastly, an agent can help you really think about your must-have’s and nice-to-have’s. Remember, your first home doesn’t have to be your forever home. You just need to get your foot in the door to start building equity. If you want to buy, you may find making some compromises is worth it. As Chase says:
“An open-minded approach to house-hunting may be one way for Gen Z homebuyers to maintain some edge. This could mean buying in areas that are less expensive. Differentiating needs vs. wants may help in this area as well.”
An agent will help you prioritize your list of home features and find houses that can deliver on the top ones. And they’ll be able to explain how equity can benefit you in the long run and make it possible to move into that dream home down the line.
Bottom Line
Real estate professionals have expertise on what’s working for other buyers like you. Lean on them for tips and advice along the way. As Directors Mortgage says, with that support you can make it happen:
“The path to homeownership may not be a straightforward one for Gen Z, but it’s undoubtedly within reach. By adopting the right strategies, like exploring down payment assistance programs and sharing living costs with relatives, you can bring your dream of owning a home closer to reality.”
Let’s connect to get you set up for long-term success.
What’s Motivating Your Move?
Thinking about selling your house? As you make your decision, consider what’s pushing you to think about moving. A recent survey from Realtor.com looked into why people want to sell their homes this year. Here are the top two reasons (see graphic below):
Let’s take a closer look and see if they’re motivating you to make a change too.
1. To Make a Profit
If you’re thinking about selling your house, you probably have a lot of questions on your mind. Well, here’s some good news – the latest data shows most sellers get a great return on their investment when they sell. ATTOM, a property data provider, explains:
“. . . home sellers made a $121,000 profit on the typical sale in 2023, generating a 56.5 percent return on investment.”
That’s significant. And here’s one contributing factor. During the pandemic, home prices skyrocketed. There was way more buyer demand than homes available for sale and that combination pushed prices up.
Now, home prices are still rising, just not as fast. That ongoing appreciation is good news for your bottom line. Any profit you make can help offset some of today’s affordability challenges when you buy your next home.
If you want to know how much your house is worth now and what’s going on with prices in your area, talk to a local real estate agent.
2. For Family Reasons
Maybe you want to be near relatives to help take care of older family members or to have more support nearby. Or maybe you’re just eager to spend time together on special occasions like birthdays and holidays.
Selling a house and moving closer to the people who matter the most to you helps keep you connected. If the distance is making you miss out on some big milestones in their lives, it might be time to talk to a local real estate agent to find a place close by. The National Association of Realtors (NAR) says:
“A great real estate agent will guide you through the home search with an unbiased eye, helping you meet your buying objectives while staying within your budget.”
Bottom Line
If you’re thinking about selling your house, there’s probably a good reason for it. Let’s talk so you have help making the right move to reach your goals this year.
