Housing Market Updates December 11, 2024

Why Moving to a More Affordable Area Makes Sense

Moving to a more affordable area could be the fresh start you need to get ahead financially. While some markets are certainly more affordable than others, know that working with a trusted real estate agent to find what fits your budget and your desired location – no matter where you want to be – is always the best plan. And with the rising cost of living, many people are rethinking where they live and looking for ways to cut expenses. If that sounds like you, here’s a great place to start (see visual below):

a map of the united statesThese states are well known for lower housing costs, reduced insurance premiums, and more budget-friendly daily living expenses – but they’re not the only places to find a hidden gem. If you’re open to relocating, you might discover the savings you’re looking for.

Why Move to a Lower-Cost Area?

Life is getting more expensive by the day. From rising home prices to higher grocery bills, it feels like everything costs more than it used to. Housing, the largest expense for most people, has become especially costly.

In fact, according to data from Case-Shiller, home prices increased 3.9% from September 2023 to September 2024. And data from GOBankingRates shows insurance costs are up too, with home insurance premiums averaging $2,151 annually – a significant jump compared to recent years.

These rising costs can feel like a lot to handle. That’s why more people are considering lower-cost areas. An article from the National Association of Realtors (NAR) says:

“With the past decade of rising home prices, buyers are looking for more affordable areas . . . As housing affordability continues to shape migration patterns, these areas may provide an opportunity . . . for those looking for more cost-effective alternatives to the nation’s larger, pricier metropolitan areas.”

Lower-cost areas typically offer more affordable housing, less expensive home insurance, and reduced costs for daily living like groceries and gas. Transportation expenses and car insurance premiums also tend to be lower. For anyone feeling stretched thin, moving to a less expensive area can provide meaningful financial relief.

Planning Your Big Move

Whether it’s finding a home that fits your budget or cutting down on other expenses, making the right move in any market can bring significant financial relief. Of course, moving isn’t a decision to take lightly.

Whether you’re moving just a few towns over or to a completely different state, there’s a lot to consider. From job opportunities, to schools, to local amenities – it all has an impact on finding the right home for you.

This is where a knowledgeable local real estate agent can be your best resource. Not only can they help you navigate the housing market in your new or desired area, but they’ll also guide you to neighborhoods that balance affordability with your needs.

And don’t worry if none of the states on the affordability list seem like the right fit for you. An agent can still help you identify budget-friendly options wherever you need to be.

Bottom Line

If the rising cost of living has you feeling stuck, know that you have options. Moving to a more affordable area could be the fresh start you need to get ahead financially and improve your quality of life.

But don’t try to tackle the process alone. With the help of a real estate agent who knows the area, you’ll be well-prepared to make a move. When you’re ready to take the first step, let’s connect.

Housing Market Updates December 10, 2024

What Will It Take for Prices To Come Down?

You may be wondering if home prices are going to crash. And believe it or not, some people might even be hoping this happens so they can finally purchase a more affordable home. But experts agree that’s not what’s in the cards – and here’s why.

There are more people who want to buy a home than there are homes available to purchase. That’s what drives prices up.

Let’s break that down and explore why, nationally, home prices aren’t going to be coming down anytime soon.

Prices Depend on Supply and Demand

The housing market works like any other market – when demand is high and supply is low, prices rise.

According to the latest estimates, the U.S. is facing a housing shortfall of several million homes. That means there are far more people looking to buy (demand) than there are homes for sale (supply). That mismatch is the key reason why prices won’t fall at the national level. As David Childers, President of Keeping Current Matters (KCM), puts it:

“The main driving force on pricing is the limited amount of inventory in most markets across the country. That issue is not going to be solved overnight or in the next twelve months.”

How Did We Get Here?

For over 15 years, homebuilders haven’t been building enough homes to keep up with buyer demand. After the 2008 housing crisis, homebuilding slowed significantly, and it’s only recently started to recover (see graph below):

a graph of a number of yearsEven with new construction on the rise over the past few years, builders are playing catch-up. And according to AmericanProgress.org, they’re still not even keeping up with today’s demand, let alone making up for years of underbuilding.

And as long as there’s a housing shortage, home prices will remain steady or increase in most areas.

What About Next Year?

The majority of experts agree prices will keep rising next year, but at a much slower, healthier pace (see graph below):

a graph of green barsBut it’s important to note home prices vary by market. What happens nationally might not reflect exactly what’s happening in your area. If your local market has more inventory available, prices could grow more slowly or even decline slightly. But in areas where inventory remains tight, prices will keep climbing – and that’s what’s happening throughout most of the country. That’s why it’s crucial to work with a local real estate expert who understands your market and can explain what’s going on where you live.

Bottom Line

If you’re wondering what it’ll take for prices to come down, it all goes back to supply and demand. With inventory still limited in most markets, prices are likely to remain steady or rise.

To see what’s happening with home prices where we live, let’s connect. That way you’ll have help understanding our market and making a plan that works for you.

Sellers December 9, 2024

Why More Sellers Are Hiring Real Estate Agents

Putting your house for sale on your own – often called “For Sale by Owner” or FSBO – might be on your mind. But you should know that it gets complicated very quickly, especially in today’s complex market.

That’s why data from the National Association of Realtors (NAR) shows a record low number are going the route of selling on their own.

Instead, more and more homeowners are choosing to work with a real estate agent (see graph below):

a graph of a sales growthAnd here’s why partnering with an expert is the go-to choice. Selling your home is a big deal, and while FSBO might seem like a way to save time or money, it comes with a lot of responsibilities.

The selling process requires setting the right price, navigating a growing amount of legal paperwork, and creating a solid strategy to attract buyers. And going it alone often means taking on more than you bargained for.

Let’s look at two big reasons why working with a pro can make all the difference.

1. Getting the Price Right

One of the biggest hurdles when selling a house on your own is figuring out the right price. It’s not as simple as picking a number that sounds good – you need to hit the bullseye. Price your home too high, and buyers may overlook your listing. Price it too low, and you could leave money on the table or even raise red flags about the condition of your home.

Real estate agents are experts in finding the right price for today’s market trends. As Zillow explains:

“Agents are pros when it comes to pricing properties and have their finger on the pulse of your local market. They understand current buying trends and can provide insight into how your home compares to others for sale nearby.”

With their knowledge of the local market, buyer behavior, and what homes like yours are selling for, an agent will help you make sure you set a price that’s competitive and that’ll draw in buyers. And it’s that perfectly strategic price that’ll set the stage for selling at top dollar.

2. Understanding and Managing the Paperwork

Another part of the process is dealing with a growing stack of paperwork, from disclosure forms to contracts. Each document needs to be completed accurately, and there are legal requirements to follow that can feel overwhelming if you’re not familiar with them.

This is another area where an agent’s expertise really shines. They’ve handled these documents countless times and know exactly what’s needed to keep everything on track. Your agent will guide you through the paperwork step by step, making sure it’s done right the first time and you understand what you’re signing. With their help, you can avoid unnecessary stress and mistakes that can lead to delays, legal complications, and more.

Bottom Line

Selling your house is a big decision, and having a trusted real estate agent on your side can make all the difference.

Let’s connect so you have a pro to help with everything from pricing your home to managing the details. That way we can take the guesswork out of the process and help you sell with confidence.

Housing Market UpdatesMortgage Updates December 5, 2024

Why Owning a Home Is Worth It in the Long Run

Today’s mortgage rates and home prices may have you second-guessing whether it’s still a good idea to buy a home right now. While market factors are definitely important, there’s also a bigger picture to consider: the long-term benefits of homeownership.

Think of it this way. If you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. That’s because over time, home values usually grow – and that means a homeowner’s net worth does too. Here’s a look at how that can really add up over the years.

Home Price Growth over Time

The map below uses data from the Federal Housing Finance Agency (FHFA) to show how much prices have grown over the last five years. Since home prices vary by area, the map is broken out regionally to really showcase larger market trends:

a map of the united states

You can see that nationally, home prices increased by over 57% in just five years.

Some regions are slightly above or below that average, but overall, home prices saw a big uptick in a short time. And if you zoom out even more, the benefit of homeownership — and the drastic gains homeowners made over the years — become even more clear (see map below):

The second map shows that, over a roughly 30-year span, home prices appreciated by an average of more than 320% nationally.

So the typical homeowner who bought a house about 30 years ago saw their home triple in value during that time. And that’s a major reason so many homeowners who bought their homes years ago are still happy with their decision today.

Bottom Line

There’s no denying today’s market is complex. But if you’re ready and able to buy right now, let’s connect to talk about how we can still make your move happen. That way you can take advantage of the long-term advantages that come with homeownership, like your ability to build wealth as your home value rises.

Sellers December 4, 2024

Sell Your House During the Winter Sweet Spot

A lot of people assume spring is the ideal time to sell a house. And sure, buyer demand usually picks up at that time of year. But here’s the catch: so does your competition because a lot of people put their homes on the market at the same time.

So, what’s the real advantage of selling your house before spring? It’ll stand out.

Historically, the number of homes for sale tends to drop during the cooler months – and that means buyers have fewer options to choose from.

You can see how that trend played out over the past few years in this data from the National Association of Realtors (NAR). Each time, the supply of homes for sale dipped during these cooler months. And then, after each winter lull, inventory started to climb as more sellers jumped into the market closer to spring (see graph below):

a graph with green circles and white textHere’s why knowing how this trend works gives you an edge. While inventory is higher this year than it‘s been in the last few winters, if you work with an agent to list now, it’ll still be in this year’s sweet spot. So, while other sellers are taking their homes off the market, you can sell before the spring wave of new listings hits, and your house will have a better chance of standing out.

Why wait until spring when you can get ahead of the curve now?

Fewer Listings Also Means More Eyes on Your Home

Another big perk of selling in the winter? The buyers who are looking right now are serious about making a move.

During this season, the window-shopper crowd tends to stay busy with other things, like holiday celebrations, and avoids looking for homes when the weather’s cooler. So, the buyers out looking aren’t casually browsing—they’re motivated, whether it’s because of a job relocation, a lease ending, or some other time-sensitive reason. And those are the types of buyers you want to work with. Investopedia explains:

“. . .  if your house is up for sale in the winter and someone is looking at it, chances are that person is serious and ready to buy.”

Bottom Line

With less competition and serious buyers on the hunt, you’ll be in a great position to sell your house this winter. Let’s connect if you’re ready to get the process started.

Sellers December 3, 2024

Should You Sell Your House As-Is or Make Repairs?

recent study from the National Association of Realtors (NAR) shows most sellers (61%) completed at least minor repairs when selling their house. But sometimes life gets in the way and that’s just not possible. Maybe that’s why, 39% of sellers chose to sell as-is instead (see chart below):

a pie chart with text on itIf you’re feeling stressed because you don’t have the time, budget, or resources to tackle any repairs or updates, you may be tempted to sell your house as-is, too. But before you decide to go this route, here’s what you need to know.

What Does Selling As-Is Really Mean?

Selling as-is means you won’t make any repairs before the sale, and you won’t negotiate fixes after a buyer’s inspection. And this sends a signal to potential buyers that what they see is what they get.

If you’re eager to sell but money or time is tight, this can be a relief because it’s that much less you’ll have to worry about. But there are a few trade-offs you’ll have to be willing to make. This visual breaks down some of the pros and cons:

a screenshot of a blue and white screenTypically, a home that’s updated sells for more because buyers are often willing to pay a premium for something that’s move-in ready. That’s why you may find not as many buyers will look at your house if you sell it in its current condition. And less interest from buyers could mean fewer offers, taking longer to sell, and ultimately, a lower price. Basically, while it’s easier for you, the final sale price might be less than you’d get if you invested in repairs and upgrades.

That doesn’t mean your house won’t sell – it just means it may not sell for as much as it would in top condition.

Here’s the good news though. In today’s market, as many as 56% of buyers surveyed would be willing to buy a home that needs some work. That’s because affordability is still a challenge, and while there are more homes for sale right now, inventory is lower than the norm. So, you might find there are a few more buyers who may be willing to take on the work themselves.

How an Agent Can Help

So, how do you make sure you’re making the right decision for your move? The key is working with a pro.

good agent will help you weigh your options by showing you what comparable homes in your area have sold for, what updates your neighbors are making, and guide you in setting a fair price no matter what you decide. That helps you anticipate what your house may sell for either way – and that can be a key factor in your final decision.

Once you’ve picked which route you’re going to go and the asking price is set, your agent will market your house to maximize its appeal. And if you decide to sell as-is, they’ll call attention to the best features, like the location, size, and more, so it’s easy for buyers to see the potential, not just projects.

Bottom Line

Selling a home without making any repairs is possible in today’s market, but it does have some trade-offs. To make sure you’re considering all your options and making the best choice possible, let’s have a conversation.

Buyers November 26, 2024

How Co-Buying a Home Helps with Affordability Today

Buying a home in today’s market can feel like an uphill battle – especially with home prices and mortgage rates putting pressure on your budget. If you’re feeling stuck, co-buying could be one way to help you get your foot in the door. Freddie Mac says:

“If you are an aspiring homeowner, buying a home with your family or friends could be an option.”

But there are some things you’ll want to consider first. Let’s explore why co-buying is gaining popularity right now among some buyers and see if it may make sense for you too.

What Is Co-Buying?

Co-buying means buying a home with someone like a friend, sibling, or even a group of people. And, with today’s high home prices and mortgage rates, it’s an option more people are turning to.

According to a survey done by JW Surety Bondsnearly 15% of Americans have already co-purchased a home with someone, and another 48% would consider doing it.

Why Consider Co-Buying?

The same survey also asked people about the perks of co-buying a home. Here are some of the top responses (see graph below):

Sharing Costs (67%): From saving for a down payment to managing monthly payments, buying a home is a big financial step. When you co-buy, you split these costs, making it easier to afford a home.

Affording a Better Home (56%): By pooling your financial resources, you may also be able to afford a larger or higher-quality home than you could have on your own. This may mean getting that extra bedroom, a bigger backyard, or living in a more desirable neighborhood.

Investment Opportunity (54%): Co-buying a home can also be an investment. You could buy a house with someone so you can rent out, which could help generate passive income.

Sharing Responsibilities (48%): Owning a home comes with a lot of responsibilities, including maintenance and upkeep and more. When you co-buy, you share these commitments, which can lighten the load for everyone involved.

Other Co-Buying Considerations

While co-buying has its benefits, there’s something else you need to consider before deciding if this approach is right for you. As Rocket Mortgage says:

“Buying a house with a friend or multiple friends might be a great way for you to achieve homeownership, but it’s not a decision you should make lightly. Before diving in, make sure you understand the financial and logistical hurdles you’ll face, as well as the human and emotional elements that might affect the purchase or, more importantly, your relationship.

Basically, make sure you and your co-buyer are on the same page about things like how costs will be split, who will handle what responsibilities, and what will happen if one of you wants to sell your share of the home in the future. Leaning on an expert can help you weigh the pros and cons to make that conversation easier.

Bottom Line

If you’re looking to get your foot in the door but are having a tough time with today’s affordability challenges, co-buying could be an option to make your move happen. But, it’s important to plan carefully and make sure all parties are clear on the details. To figure out if co-buying makes sense for you, let’s connect.

Mortgage Updates November 25, 2024

Why Today’s Mortgage Debt Isn’t a Sign of a Housing Market Crash

One major reason why we’re not heading toward a foreclosure crisis is the high level of equity homeowners have today. Unlike in the last housing bubble, where many homeowners owed more than their homes were worth, today’s homeowners have far more equity than debt.

That’s a big part of the reason why even though mortgage debt is at an all-time high, this isn’t 2008 all over again. As Bill McBride, Housing Analyst for Calculated Risk, explains:

“With the recent house price increases, some people are worried about a new housing bubble – but mortgage debt isn’t a concern . . .”

Today’s homeowners are in a much stronger position than ever before. So, let’s break it down and see why today’s mortgage debt isn’t anything to fear.

More Equity, Less Risk of Foreclosures

According to the St. Louis Fed, total homeowner equity is nearly triple the total mortgage debt today (see graph below):

a graph of a graph showing the rise and fall of mortgagesHigh equity makes it less likely for homeowners to face foreclosure because they have more options. If someone struggles to make their mortgage payments, they could potentially sell their house and still come out ahead thanks to their built-up equity.

Even if home values were to dip, most homeowners would still have a comfortable cushion of equity. That’s a big contrast to the 2008 crisis, where many homeowners were underwater on their mortgages and had few options to avoid foreclosure.

Delinquency Rates Are Still Near Historic Lows

Another reassuring sign is that, according to the NY Fed, the number of mortgage payments that are more than 90 days late is still near historic lows (see graph below):

a graph showing a line going downThis is partly due to a variety of programs designed to help homeowners through temporary hardships. As Marina Walsh, VP of Industry Analysis at the Mortgage Bankers Association (MBA), says:

“. . . servicers are helping at-risk homeowners avoid foreclosures through loan workout options that can mitigate temporary distress.”

So, even if someone falls behind on their payments, there are support systems in place to help them avoid foreclosure.

Low Unemployment Helps Keep the Market Stable

One other important factor is today’s low unemployment rate. More people have stable jobs, which means they’re better able to afford their mortgage payments. As Archana Pradhan, Principal Economist at CoreLogicexplains:

“Low unemployment numbers have helped reduce the overall delinquency rate . . .”

During the last housing crisis, unemployment was much higher, which led to a wave of foreclosures. Today’s unemployment rate is very different (see graph below):

a graph of employment and financial crisisThat stability in how many people are employed is one of the reasons the market doesn’t have the same risks as it did the last time.

There’s no need to worry about a wave of distressed sales like the one we saw in 2008. Most homeowners today are employed and have low-interest mortgages they can afford, so they’re able to make their payments. As McBride states:

“The bottom line is there will not be a huge wave of distressed sales as happened following the housing bubble.” 

Bottom Line

While mortgage debt is high, rest assured the market isn’t on the brink of another crash. Instead, most homeowners are in a strong position. If you have questions or concerns, let’s connect.

Buyers November 21, 2024

Don’t Miss Out on the Growing Number of Down Payment Assistance Programs

With rising home prices and volatile mortgage rates, it’s important you know about every resource that could help make buying a home possible. And one thing you’ll want to be aware of is just how much the number of down payment assistance (DPA) programs has grown lately.

Take a look at the graph below to see how many new programs have been added in the last year, according to data from Down Payment Resource:

More Programs, More Opportunities for You

So, what does this increase mean for you? With more programs available, there’s a higher likelihood that one of them could help you reach your homeownership goals.

And these programs aren’t small-scale help either – the benefits can go a long way toward covering a chunk of your costs. As Rob Chrane, Founder and CEO of Down Payment Resourceshares:

“We are pleased to see a growing number of these programs, and think they are becoming a targeted way to help first-time and first-generation homebuyers struggling to save for a down payment get into a home they can afford. Our data shows the average DPA benefit is roughly $17,000. That can be a nice jump-start for saving for a down payment and other costs of homeownership.”

Imagine being able to qualify for $17,000 toward your down payment—that’s a big boost, especially if you’re looking to buy your first home. With that level of help, buying a home may be more within reach than you think.

But it’s worth calling out that the growth in DPA options isn’t just focused on first-time and first-generation buyers. Many of the new programs are also aimed at supporting affordable housing initiatives, which include manufactured and multi-family homes. This means that more people, and a wider variety of home types, can qualify for down payment assistance, making it easier for you to find an option that fits your needs.

Talk to a Real Estate Expert About What’s Available for You

With so many DPA programs out there, you need to make sure you’re finding the right one for you. That’s why it’s key to lean on your real estate and lending professionals for guidance. The Mortgage Reports says:

“The best way to find down payment assistance programs for which you qualify is to speak with your loan officer or broker. They should know about local grants and loan programs that can help you out.”

Your loan officer or real estate agent will know what’s available in your area and can point you toward programs that align with your goals.

Bottom Line

With more down payment assistance programs than ever before, now’s a great time to explore how these options can help on your homebuying journey. Let’s work together to make sure you’ve got a team of expert advisors in place to see which DPA programs could be a fit for you.

Buyers November 19, 2024

Is Wall Street Really Buying All the Homes?

Let’s be real – buying a home right now is tough. You’re scrolling through listings, rushing to open houses, and maybe even losing out to more competitive offers. Somewhere along the way, you might’ve heard the reason it’s so hard to find a home is because big Wall Street investors are swooping in and snatching up everything in sight.

But here’s the thing: that’s mostly a myth. While investors are part of the market, according to Redfin, they’re a relatively small part:

Here’s what that means. Five out of every six homes are being purchased by everyday homebuyers like you – not big investors.

So, before you get discouraged, let’s take a look at what’s really going on. You might be surprised to learn that Wall Street isn’t the competition you may think it is.

Most Investors Are Small Mom-and-Pops

Most investors aren’t the mega corporations you’ve probably heard about. In fact, many are your neighbors. A recent report from CoreLogic shows most investors are small, mom-and-pop types who own fewer than 10 properties. They aren’t massive companies with endless resources. Picture your neighbor who has another home they’re renting out or a vacation getaway.

Only about 1% of the market is owned by large, mega investors with thousands of properties. The majority are still owned by individuals and smaller investors – not the Wall Street giants.

Investor Purchases Are Declining

Not only are most investors small, but overall investor purchases have been on the decline. As the same report from CoreLogic says:

“Investors made 80,000 purchases in June 2024, compared with 112,000 in June 2023, and a nearly 50% percent drop from the high of 149,000 purchases in June 2021 . . .”

And what does this mean going forward? CoreLogic goes on to point out this downward trend is expected to continue into 2025.

So, if it seems like competition with investors is pushing you out of the market, it might help to know that investor activity is actually slowing down.

Bottom Line

The idea that Wall Street is buying up all the homes is largely a myth. Most investors are small ones, and the share of homes purchased by investors is declining – so you can take this one off your worry list.

If you have questions about the housing market, let’s talk.