Are you planning to buy a home this spring? Though things are more balanced than they were at the height of the pandemic, it’s still a sellers’ market. So, when you find the home you want to buy, remember these four tips to make your best offer.
1.Lean on a Real Estate Professional
Rely on an agent who can support your goals. As Bankratenotes:
“. . . select the best real estate agent for your needs. They will be a critical part of your home buying process.”
Agents are local market experts. They know what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller needs can help your offer stand out.
2.Know Your Budget
Understanding your budget is especially important right now. As Sandy Higgins, Senior Wealth Advisor at Capstone Financial Advisors, puts it:
“Understand your current budget … what are your expenses, how’s your spending, would you need to make changes?”
The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. It helps you be more financially confident, and it shows sellers you’re serious. That can give you a competitive edge.
3.Think Through Everything Before Making an Offer
Today’s market isn’t moving at the record pace it did during the pandemic. That means you may have a bit more time to think before you need to make an offer. According to Danielle Hale, Chief Economist at realtor.com:
“In general, you likely have more time to make an offer, although that’s certainly not a guarantee. If you’re on the fence about a home or its asking price doesn’t quite fit your budget, you might want to keep an eye on it, and if it doesn’t sell right away, you may have some room to negotiate with the seller.”
While it’s still important to stay on top of the market and be prepared to move quickly, there can be more flexibility today. Lean on the advice of your agent as you explore the options in your market.
4. Work with Your Advisor To Negotiate
During the pandemic, some buyers skipped home inspections or didn’t ask for concessions from the seller in order to submit the winning bid on a home. Fortunately, today’s market is different, and you may have more negotiating power than before. When putting together an offer, your trusted real estate advisor will help you think through what levers to pull.
When you buy a home this spring, let’s connect so you have the guidance to make your best offer.
During the pandemic, many of us reexamined the meaning of home for ourselves and our loved ones. Today, that can be seen in the recent rise in multigenerational households. According to Jessica Lautz, Deputy Chief Economist and Vice President of Economic Research at the National Association of Realtors (NAR):
“Multi-generational buying may be a home where families live in the same home with elderly parents, children who have boomeranged back home, or other extended family members. While this is not a new concept of living, it is one which has gained recent popularity.”
And citing data from Pew Research Center, the Wall Street Journal (WSJ) says:
“. . . multigenerational living has made a comeback in recent years, particularly after the 2008 financial crisis and during the pandemic.”
So, if buying a multigenerational home has crossed your mind, you aren’t alone. Depending on what stage of homeownership you’re in, there are different reasons it could be the right fit. The chart below shows responses to a recent survey from NAR about the reasons people have bought a multigenerational home:
Whether your motives are financial or focused on the people you’ll share your home with, a multigenerational home has distinct advantages. It can make homeownership more affordable, and it can help you best support your loved ones. As Lautz explains:
“Multi-generational home buying is a way for families to care for one another, support one another, and often buy a home that may have been previously out of reach. . . . The trend of multigenerational buying appears to be firmly established and one that could expand in the future.”
If you’re ready to buy a house, consider the opportunities of a multigenerational home. Let’s connect so you can explore your options in our area.
You may have seen reports in the news recently saying it’s better to rent right now than it is to own your home. But before you let that impact your decisions, you should understand what these claims are based on.
A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the methodology behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio.
But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:
“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”
The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the net worth of the average homeowner and the average renter (see graph below):
So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.
If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.
After steadily falling over the winter, mortgage rates have started to rise in recent weeks. This is concerning to some potential homebuyers as the combination of higher mortgage rates and higher prices have made homes less affordable. So, if you’re planning to purchase a home this year, you too may be wondering if now’s the right time to buy or if you should hold off on your search until rates come back down.
The recent uptick in rates has been driven by what’s happening with inflation. Joel Kan, Vice President and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explains:
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time.”
The most recent weekly average 30-year fixed mortgage rate reported by Freddie Mac is 6.5%. It’s the third week in a row that rates have increased and puts them at the highest point they’ve been this year (see graph below):
Advice for Home Shoppers
If you’re thinking about pausing your home search because rates have started to go up again, you may want to reconsider. This could actually be an opportunity to buy the home you’ve been searching for. According to the MBA, mortgage applications declined by 13.3% in just one week, so it appears the rise in mortgage rates is leading some potential homebuyers to pull back on their search for a new home.
So, what does that mean for you? If you stay the course, you’ll likely face less competition among other buyers when you’re looking for a home. This is welcome relief in a market that has so few homes for sale.
Over the last few weeks, mortgage rates have risen. But that doesn’t mean you should delay your plans to buy a home. In fact, it could mean the opposite if you want to take advantage of less buyer competition. Let’s connect today to explore the options in our local market.
According to a recent Harris Poll survey, 8 in 10 Americans say buying a home is a priority, and 28 million Americans actually plan to buy within the next 12 months. Homeownership provides many financial and nonfinancial benefits, so that interest is understandable.
However, it’s unlikely all 28 million Americans will accomplish that goal in the coming year. Experts project a total of around five million homes will be sold in 2023. Why is there such a big difference? It’s partly because there can be challenges to buying a home.
In the same survey, when asked, “Which of the following are preventing you from pursuing homeownership at this time?”:
34% answered, “I don’t have enough saved for a down payment”
30% answered, “My credit score”
If you’re aiming to buy a home, here’s what you need to know to accomplish that goal.
Save for Your Down Payment
Your down payment is a big chunk of what you pay up front for your home. For most home purchases, buyers put down some amount of cash up front (a down payment) and then take out a loan (a mortgage) to pay for the rest.
It’s a longstanding myth that you need to pay 20% of the purchase price for your down payment. In reality, 20% down isn’t always required. In fact, according to the National Association of Realtors (NAR), today’s median down payment is 14% for the average buyer and just 6% for a first-time buyer.
Regardless of how much money you can save for your down payment, know there’s help available. A local lender can show you options to help you get closer to your down payment goal. Plus, there are even loan types, like FHA loans, with down payments as low as 3.5% for some buyers, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.
Beyond assistance programs and different loan types, here are a few other tips to help you as you save for your down payment:
Remember to factor in closing costs. In addition to your down payment, closing costs are usually 2-5% of the home’s purchase price.
Maintain your savings. Your down payment shouldn’t deplete all your savings. It’s important to still have some money set aside for homeownership expenses after you move in.
Explore your options and lean on your trusted advisor for expert guidance. Do your research, ask questions, and look into the resources available for buyers like you.
Improve Your Credit Score
Your credit score is a number that indicates how financially reliable you are to lenders. A higher credit score usually means you’ll be able to borrow more money at a better interest rate. If your credit score is preventing you from getting an affordable mortgage, there are steps you can take to improve it. Here are two:
Pay your bills on time. When you pay your bills on time, your credit score improves. When you’re late, it takes a hit. One way to make paying your bills on time easier? Set up automatic payments when and where you can.
Mix it up. From auto loans, to credit cards, to mortgages – there are several different types of credit. And having a mix of them improves your credit score.
If you want to purchase a home this year, let’s connect so we can start preparing.
No matter how the housing market changes, there are some things about owning a home 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.
“. . . 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:
The National Association of Realtors (NAR) also explains:
“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 net worth over time, but it also gives you and your loved ones a place to thrive. And by living near people with shared experiences, homeownership helps you connect with your community and contribute meaningfully.
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.
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 buy a home 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):
Homeownership is an essential piece for building household wealth that can be passed down to future generations. However, there are obstacles in the homebuying 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 recent report 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 buy a home. Jacob Channel, Senior Economist at LendingTree, shares:
“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 market and give the best advice. They’re also compassionate allies who will advocate for your best interests every step of the way.
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.
If you’ve seen recent headlines about foreclosures surging in the housing market, you’re certainly not alone. There’s no doubt, the stories 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 happening today. Here’s a deeper look.
According to the Year-End 2022 U.S. Foreclosure Market Report 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,notes:
“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.
So, while foreclosures are rising, keeping perspective in mind is key. As Bill McBride, Founder and Author of Calculated Risk, noted 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.”
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 home prices.
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