Finding Your Perfect Home in a Fixer Upper

If you’re trying to buy a home and are having a hard time finding one you can afford, it may be time to consider a fixer-upper. That’s a house that needs a little elbow grease or some updates, but has good bones. Fixer-uppers can be a really great option if you’re looking to break into the housing market or want to stretch your budget further. According to NerdWallet:

“Buying a fixer-upper can provide a path to homeownership for first-time home buyers or a way for repeat buyers to afford a larger home or a better neighborhood. With the relatively low inventory of homes for sale these days, a move-in ready home can be hard to find, especially if you’re on a budget.”

Basically, since the number of homes for sale is still so low, if you’re only willing to tour homes that have all your dream features, you may be cutting down your options too much and making it harder on yourself than necessary. It may be time to cast a wider net.

Sometimes the perfect home is the one you perfect after buying it.

Here’s some information that can help you pinpoint what you truly need so you can be strategic in your home search. First, make a list of all the features you want in a home. From there, work to break those features into categories like this:

• Must-Haves - If a house doesn’t have these features, it won’t work for you and your lifestyle.

• Nice-To-Haves - These are features you’d love to have but can live without. Nice-to-haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of these, it’s a contender.

• Dream State - This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner.

Once you’ve sorted your list in a way that works for you, share it with your real estate agent. They’ll help you find homes that deliver on your top needs right now and have the potential to be your dream home with a little bit of sweat equity. Lean on their expertise as you think through what’s possible, what features are easy to change or add, and how to make it happen. According to Progressive:

“Many real estate agents specialize in finding fixer-uppers and have a network of inspectors, contractors, electricians, and the like.”

Your agent can also offer advice on which upgrades and renovations will set you up to get the greatest return on your investment if you ever decide to sell down the line.

Bottom Line

If you haven’t found a home you love that’s in your budget, it may be worth thinking through all your options, including fixer-uppers. Sometimes the perfect home for you is the one you perfect after buying it. To see what’s available in our area, let’s connect.

Bridging the Gaps on the Road to Homeownership

Homeownership is a major part of the American Dream. But, the path to achieving this dream can be quite difficult. While progress has been made to improve fair housing access, households of color still face unique challenges on the road to owning a home. Working with the right real estate experts can make all the difference for diverse buyers.

It's clear that achieving homeownership is more challenging for certain groups because there’s still a measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, Black households continue to have the lowest homeownership rate nationally (see graph below):

Homeownership is an important part of building household wealth that can be passed down to future generations. According to a report by the National Association of Realtors (NAR), almost half of Black homebuyers in 2023 were first-time buyers. That means many didn’t have home equity they could use toward their home purchase.

That financial hurdle alone makes buying a home more challenging, especially at a time when affordability is a major concern for first-time buyers. Jessica Lautz, Deputy Chief Economist at NAR says:

“It’s an incredibly difficult market for all home buyers right now, especially first-time home buyers and especially first-time home buyers of color.”

Because of these challenges, there are several down payment assistance programs specifically aimed at helping minority buyers fulfill their homeownership dreams:

• The 3By30 program offers valuable resources for Black buyers, making it easier for them to secure a down payment and buy a home.

• For Native Americans, Down Payment Resource highlights 42 U.S. homebuyer assistance programs across 14 states that make homeownership more attainable by providing support with down payments and other costs.

• Fannie Mae provides down payment assistance to eligible first-time homebuyers living in Latino communities.

Even if you don’t qualify for these programs, there are many other federal, state, and local options available to look into. And a real estate professional can help you find the ones that best meet your needs.

For minority homebuyers, the challenges that remain can be a point of pain and frustration. 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 market and give the best advice, they’re also compassionate educators who will advocate for your best interests every step of the way.

Bottom Line

Let’s connect to make sure you have the information and support you need as you walk the path to homeownership.

Key Terms Every Homebuyer Should Learn [INFOGRAPHIC]

Some Highlights

• Buying a home is a big deal and can feel especially complicated if you don't know the terms used during the process.

• If you want to become a homeowner this year, it's a good idea to learn these key housing terms and understand how they relate to the current housing market. That will help you feel confident when you buy a home.

• Let’s connect so you can get expert help with any questions you have.

Homeownership Is Still at the Heart of the American Dream

Buying a home is a powerful decision, and it remains at the heart of the American Dream. Unlike renting, owning a home means more than just having a place to live – it offers a sense of belonging, stability, and freedom. According to Nicole Bachaud, Senior Economist at Zillow:

“The American Dream is still owning a home. There’s a lot of pent-up demand for ownership; that isn’t going to go away.”

Let’s explore just a few of the reasons why so many Americans continue to value homeownership. 

The Financial Benefits of Owning a Home

One possible reason homeownership is viewed so highly is because owning a home is a significant wealth-building tool. That may be why Jessica Lautz, Deputy Chief and VP of Research at the National Association of Realtors (NAR), says:

“Homeownership is the number one way to build wealth in America.”

Over time, owning a home not only helps boost your own net worth, but it also sets future generations up for success as you pass that wealth down. Habitat for Humanity explains:

“Overall, homeownership promotes wealth building by acting as a forced savings mechanism and through home value appreciation. Homeowners make monthly payments that increase their equity in their homes by paying down the principal balance of their mortgage. . . . In addition, owning a home promotes intergenerational homeownership and wealth building. Children of homeowners transition to homeownership earlier — lengthening the period over which they can accumulate wealth . . .”

It can also provide meaningful financial stability compared to renting. When you buy with a fixed-rate mortgage, you can lock in your monthly housing payments for the length of your home loan.

The Non-Financial Benefits of Homeownership

But, owning a home offers more than just financial benefits—it benefits you socially and emotionally too. Your home provides feelings of achievement, responsibility, and more. In a recent survey, Fannie Mae outlines just a few of these more emotionally-driven benefits, including:

“The top three were having control over what you do with your living space (94%) to having a sense of privacy and security (91%) and having a good place for your family or to raise your children (90%) . . .”

What Does That Mean for You?

If your idea of the American Dream involves greater freedom, security, and prosperity, homeownership could be a key player in bringing that dream to life. And with mortgage rates now on a downward trend, it might be a good time for you to consider making a move.

If you’re ready and able to buy, know that there are incredible benefits waiting at the end of your journey. You'll gain more than just a home – it's a place to grow your wealth and call your very own. Like Ksenia Potapov, Economist at First American says:

“...homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.”

Bottom Line

Buying a home is a powerful decision and the cornerstone of the American Dream. If finding a place to call your own is part of your dream for this year, let’s connect to start the process today.

Is Wall Street Buying Up All the Homes in America?

If you’re thinking about buying a home, you may find yourself interested in the latest real estate headlines so you can have a pulse on all of the things that could impact your decision. If that’s the case, you’ve probably heard mention of investors, and wondered how they’re impacting the housing market right now. That could leave you asking yourself questions like:

• How many homes do investors own?

• Are institutional investors, like large Wall Street Firms, really buying up so many homes that the average person can’t find one?

To answer those questions, here’s the real story of what’s happening based on the data.  

Let’s start with establishing how many single-family homes (SFHs) there are and what portion of those are rentals owned by investors. According to SFR Investor, which studies the single-family rental market in the United States, there are eighty-two million single-family homes in this country. But how many of them are actually rentals?

According to data shared in a recent post, sixty-eight million (82.93%) of those homes are owner-occupied – meaning the person who owns the home lives in it. If you subtract that sixty-eight million from the total number of single-family homes (82 million), that leaves just about fourteen million homes left that are single-family rentals (SFRs).

Do institutional investors own all of those remaining fourteen million homes? Not even close. Let’s take it one step further. There are four categories of investors:

• The mom & pop investor who owns between 1-9 SFRs

• The regional investor who owns between 10-99 SFRs

• Smaller national investor who owns between 100-999 SFRs

• The institutional investor who owns over 1,000 SFRs

These categories show that not all investors are large institutional investors. To help convey that even more clearly, here are the percentages of rental homes owned by each type of investor (see chart below):

 As you can see in the chart, despite what the news and social media would have you believe, the green shows the vast majority are not owned by large institutional investors. Instead, most are owned by small mom & pop investors, like your friends and neighbors.

What’s actually happening is, that there are people out there, just like you, who believe in homeownership, and they view buying a home (or a second home) as an investment. Maybe they saw an opportunity to buy a second home over the last few years to use it as a rental and generate additional income. Or maybe they just decided to keep their first house rather than sell it when they moved up.

So, don’t believe everything you read or hear about institutional investors. They aren’t buying up all the homes and making it impossible for the average person to buy. That’s just not what the numbers show. Institutional investors are actually the smallest piece of the pie chart.

Bottom Line

While it’s true that institutional investors are a player in the single-family rental marketplace, they’re not buying up all of the houses on the market. If you have other questions about things you’re hearing about the housing market, let’s connect so you have an expert to give you the context you need.

Life-Changing Events That Move the Housing Market

Life is a journey filled with unexpected twists and turns, like the excitement of welcoming a new addition, retiring and starting a new adventure, or the bittersweet feeling of an empty nest. If something like this is changing in your own life, you may be considering buying or selling a house. That’s because through all these life-altering events, there is one common thread—the need to move.

Reasons People Still Need To Move Today

According to the National Association of Realtors (NAR) there have been a lot of this type of milestone or life change over the last two years (see graph below):

 And, these big life changes are going to continue to impact people moving forward, even with the current affordability challenges brought on by higher mortgage rates and rising home prices.

As Claire Trapasso, Executive News Editor at Realtor.com, says:

"Because high mortgage rates, elevated home prices, and stubbornly low inventory make today's housing market particularly challenging, many of today's buyers are motivated by life changes, such as growing families, supporting elderly parents or grown children, or accommodating professional needs. . .”

Lean On a Real Estate Professional for Help

Whether you're beginning your search for a home or preparing to sell your current house, you don't have to go it alone. With their expertise, a real estate agent is an invaluable partner who can help you smoothly transition through these big moments in your life. Here are just a few examples.

When Buying a Home

If you’re welcoming a new addition and want more space, the need for a new home may be a top priority. While higher home prices and mortgage rates are creating challenges for buyers, you may have to find a way to meet your changing needs, even with today’s mortgage rates.

A skilled real estate agent can help. Their expertise and knowledge of the local housing market can save you a considerable amount of time and stress. An agent will take the time to understand your specific needs, budget, and preferences, allowing them to narrow down your search and present you with suitable options.

When Selling a House

If you’re retiring or going through a separation or divorce, your main focus may be to make the most out of your investment when selling your house, so you can find one that works better for you moving forward.

This is another place where a real estate agent's expertise truly shines. They can accurately assess your home's market value, suggest improvements to enhance its appeal, and craft a strategic marketing plan. Their negotiation skills are a big asset when it comes to making sure you get a fair price for your house, allowing you to move on to the next chapter of your life with confidence and peace of mind.

No matter your situation, lean on a trusted professional for help as you buy or sell a home.

Bottom Line

If recent life-changing events have you wanting or needing to move, let’s connect.

How VA Loans Can Help Make Homeownership Dreams Come True

For more than 79 years, Veterans Affairs (VA) home loans have helped millions of veterans buy their own homes. If you or someone you care about has served in the military, it's essential to learn about this program and its advantages.

Here are some important things to know about VA loans before you buy a home.

The Many Advantages of VA Home Loans

VA home loans provide a pathway to homeownership for those who have served our nation, and they’re a great benefit for buyers who qualify. According to the Department of Veteran Affairs:

• Options for No Down Payment: Qualified borrowers can often purchase a home with no down payment. That’s a huge weight lifted when you’re trying to save for a home.

• Limited Closing Costs: There are limits on the types of closing costs you pay when you qualify for a VA home loan. So, more money stays in your pocket when it’s time to seal the deal.

• Don’t Require Private Mortgage Insurance (PMI): Many other loans with down payments under 20% require PMI. VA loans do not, which means veterans can save on their monthly housing costs.

A recent article from Veterans United sums up just how impactful this loan option can be:

“For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”

Bottom Line

Owning a home is the American Dream. Veterans sacrifice a lot to protect our country, and one way we can show our appreciation is by making sure they know all the benefits of VA home loans. Thank you for your service.

Don’t Believe Everything You Read About Home Prices

According to the latest data from Fannie Mae, 23% of Americans still think home prices will go down over the next twelve months. But why do roughly 1 in 4 people feel that way?

It has a lot to do with all the negative talk about home prices over the past year. Since late 2022, the media has created a lot of fear about a price crash and those concerns are still lingering. You may be hearing people in your own life saying they’re worried about home prices or see on social media that some influencers are saying prices are going to come tumbling down.

If you’re someone who still thinks prices are going to fall, ask yourself this: Which is a more reliable place to get your information – clickbait headlines and social media or a trusted expert on the housing market?

The answer is simple. Listen to the professionals who specialize in residential real estate.

Here’s the latest data you can actually trust. Housing market experts acknowledge that nationally, prices did dip down slightly late last year, but that was short-lived. Data shows prices have already rebounded this year after that slight decline in 2022 (see graph below):

But it’s not just Fannie Mae that’s reporting this bounce back. Experts from across the industry are showing it in their data too. And that’s why so many forecasts now project home prices will net positive this year – not negative. The graph below helps prove this point with the latest forecasts from each organization:

 What’s worth noting is that, just a few short weeks ago, the Fannie Mae forecast was for 3.9% appreciation in 2023. In the forecast that just came out, that projection was updated from 3.9% to 6.7% for the year. This increase goes to show just how confident experts are that home prices will net positive this year.

So, if you believe home prices are falling, it may be time to get your insights from the experts instead – and they’re saying prices aren’t falling, they’re climbing.

Bottom Line

There’s been a lot of misleading information about home prices over the past year. And that’s still having an impact on how people are feeling about the housing market today. But it’s best not to believe everything you hear or read.

If you want information you can trust, turn to the real estate experts. Their data shows home prices are on the way back up and will net positive for the year. If you have questions about what’s happening in our local area, let’s connect. 

The Return of Normal Seasonality for Home Price Appreciation

If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. 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 there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

As the data shows, at the beginning of the year, home prices grow, but not as much as they do in 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.

After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, explains:

“High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”

Why This Is So Important to Understand

In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:

• Appreciation: when prices increase.

• Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.

• Depreciation: when prices decrease.

Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation. 

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

While the headlines are generating fear and confusion on what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in our local area, let’s connect.

What Experts Project for Home Prices Over the Next 5 Years

If you're planning to buy a home, one thing to consider is what experts project home prices will do in the future and how that might affect your investment. While you may have seen negative news over the past year about home prices, they’re doing far better than expected and are rising across the country. And data shows, experts forecast home prices will keep appreciating.

Experts Project Ongoing Appreciation

Pulsenomics polled over 100 economists, investment strategists, and housing market analysts in the latest quarterly Home Price Expectation Survey (HPES). The results show what the panelists project will happen with home prices over the next five years. Here are those expert forecasts saying home prices will go up every year through 2027 (see graph below):

If you’re someone who was worried home prices would fall because of stories you’ve read online, here's the big takeaway. Even though home prices vary by local market, experts project prices will continue to rise across the country for years to come. And these numbers indicate the return to more normal home price appreciation.

And while the projected increase in 2024 isn’t as large as 2023, it’s important to recognize home price appreciation is cumulative. In other words, if these experts are correct, after your home’s value rises by 3.32% this year, it’ll appreciate by another 2.17% next year. This is a good example of why owning a home is a choice that wins big over time.

What Does This Mean for You?

Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. To see how a typical home's value could change in the next few years using the expert projections from the HPES, check out the graph below:

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

So, if you're thinking about whether buying a home is a good choice, remember how it can be a powerful way to grow your wealth in the long run. 

Bottom Line

According to the experts, home prices are expected to grow over the next five years at a more normal pace. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) grow. Let’s connect to start the homebuying process today.

The Power of Pre-Approval

If you’re buying a home this spring, today’s housing market can feel like a challenge. With so few homes on the market right now, plus higher mortgage rates, it’s essential to have a firm grasp on your homebuying budget. You’ll also need a sense of determination to find the right house and act quickly when you go to put in an offer. One thing you can do to help you prepare is to get pre-approved.

To understand why it’s such an important step, you need to know what pre-approval is. As part of the 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 understand how much money you can borrow.

Freddie Mac explains 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 so you have a stronger grasp of your options. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You’re a Serious Buyer

That’s not the only thing pre-approval can do. Another added benefit is it can help a seller feel more confident in your offer because it shows you’re serious about buying their house. And, with sellers seeing a slight increase in the number of offers again this spring, making a strong offer when you find the perfect house is key.

As a recent article from the Wall Street Journal (WSJ) says:

“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.”

Bottom Line

Getting pre-approved is an important first step when you’re buying a home. It lets you know what you can borrow for your loan and shows sellers you’re serious. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.

Your Tax Refund Can Help You Achieve Your Homebuying Goals

Have you been saving up to buy a home this year? If so, you know there are a variety of expenses involved – from your down payment to closing costs. But there’s good news – your tax refund can help you achieve your goals by paying for some of these expenses.

SmartAsset estimates the average American will receive a $1,798 tax refund this year. The map below provides a more detailed estimate by state:

According to Freddie Mac, there are multiple ways your refund check can help you as a homebuyer. If you’re getting a refund this year and thinking about buying a home, here are a few tips to keep:

• Saving for a down payment – One of the largest barriers to homeownership is saving for a down payment. You could reach your savings goal more quickly than expected by using your tax refund to help with your down payment.

• Paying for closing costs – You have to pay fees to your lender, real estate agent, and other parties involved in the homebuying transaction before you can officially take ownership of your home. You could direct your tax refund toward these closing costs.

• Lowering your interest rate – Your lender might give you the option to buy down your mortgage interest rate during the homebuying process. That means, you could pay upfront to have a lower interest rate on your fixed-rate mortgage.

The best way to prepare to buy a home is to work with a trusted real estate professional who understands the process. They’ll help you navigate the costs you may encounter as you begin your homebuying journey.

Bottom Line

Your tax refund can help you reach your goals of homeownership. Let’s connect to discuss how you can start your journey today.

Leverage Your Equity When You Sell Your House

One of the benefits of being a homeowner is that you build equity over time. By selling your house, that equity can be used toward purchasing your next home. But before you can put it to use, you should understand exactly what equity is and how it grows. Bankrate explains it like this:

“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”

Majority of Americans Have a Large Amount of Equity

If you’ve owned your home for a while, you’ve likely built up some equity – and you may not even realize how much. Based on data from the U.S. Census Bureau and ATTOM, the majority of Americans have a substantial amount of equity right now (see graph below):

And having such large amounts of equity is a benefit to homeowners in more ways than one. Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, explains:

“Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008.”

Over time, your home equity grows. In addition to providing financial stability while you own your house, when you’re ready to sell it, that money could go a long way toward paying for your next home.

Bottom Line

By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect today so you can find out how much home equity you have and start planning your next move.

Lower Mortgage Rates Are Bringing Buyers Back to the Market

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 buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.

So, if you’ve been planning to sell your house 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, MBA:

“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, National Association of Realtors (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, Moody’s Analytics:

"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, Freddie Mac:

“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 ready to sell. Let’s connect so you can learn about buyer demand in our area the best time to put your house on the market.

Where Will You Go If You Sell? You Have Options.

There are plenty of good reasons you might be ready to move. No matter your motivations, before you list your current house, you need to consider where you’ll go next.

In today’s market, it makes sense to explore all your options. That includes both homes that have been lived in before as well as newly built ones. To help you decide which is right for you, let’s compare the benefits of each. Regardless of which option you choose to explore, working with a trusted real estate professional throughout the process is essential.

The Benefits of Newly Built Homes

First, let’s look at the benefits of purchasing a newly constructed home. With a brand-new house, you’ll be able to:

1. Build your dream home

If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more. Bankrate puts it like this:

“Building means customizing. . . . instead of wishing your home had a certain kind of flooring, a sunroom or some other special amenity, you’ll be able to tailor the property to your exact needs. You also won’t be limited to a specific location or neighborhood.”

2. Take advantage of builder concessions

In today’s market, a lot of home builders are working hard to sell their current inventory before they add more to their mix. That means many of them are offering concessions and are more willing to negotiate with buyers. That could work to your advantage in the process.

3. Minimize home repairs

Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little improvement projects to tackle. As realtor.com says:

“. . . if something goes wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties . . .”

4. Take advantage of energy efficiency

When building a home, you can choose brand-new, energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.

The Benefits of Existing Homes

Now, let’s compare those to the perks that come with buying an existing home. With a pre-existing home, you can:

1. Explore a wider variety of home styles and floorplans

With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.

2. Appreciate that lived-in charm

The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.

3. Join an established neighborhood

Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit. Plus, they have more developed landscaping and trees, which can give you additional privacy and curb appeal.

4. Move in faster

If you have a short timeframe to move or you just don’t want the process to take several months while your home is under construction, buying an existing home might make sense for you. U.S. News explains:

“When you’re choosing a home, existing or new, you should also consider how long it might take to move into that home. Just because you have a contract doesn’t mean that your new home will be completed (or even started) at the time you agree to the purchase. It can be a struggle waiting for the walls to go up as you wonder what your home will become.”

When thinking about where you’ll go after you sell your house, remember your options. As you start your search, think about what’s most important to you. By working with a trusted real estate agent, you can be confident you’re making the most educated, informed decision.

Bottom Line

If you have questions about the options in our area, let’s discuss what's available and what's right for you, so you’re ready to make your next move with confidence.

What You Want To Know If You’re Pursuing Your Dream of Homeownership

If you’re a young adult, you may be thinking about your goals and priorities for the months and years ahead. And if homeownership ranks high on your goal sheet, you’re in good company. Many of your peers are also pursuing their dream of owning a home. The 2022 Millennial & Gen Z Borrower Sentiment Report from Maxwell says:

“Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.”

Let’s take a look at why homeownership makes the top of so many young buyers’ to-do list and what you need to consider to achieve your goals if you’re one of them.

Top Motivators To Buy a Home

Before you start the homebuying process, it’s helpful to know why homeownership is so important to you. The survey mentioned above sheds light on some of the top reasons why younger generations are looking to buy a home. It finds:

• 95% believe the cost of renting is too high

• 35% think owing a home is an important wealth building tool

• 16% seek the sense of security owning a home provides

• 37% plan to use it as an investment property

No matter which of these resonates the most with you, know there are many financial and non-financial reasons why you may want to buy a home. While your top motivator may be different than that of your friends, they’re all equally valid and worthwhile.

Key Obstacles and How To Overcome Them

Whether your homeownership goals come from the heart or are driven by financial aspirations (or both), it can still be hard to know where to start when you’re looking to buy a home. From understanding the homebuying process, to getting pre-approved, and exploring down payment options, it’s a lot to wrap your head around.

The same Maxwell survey also reveals key challenges for potential buyers. Thankfully, the knowledge and guidance of a trusted real estate professional can help you overcome both. Here’s a look at two of the hurdles potential homebuyers say they face:

1. The Mortgage Process Can Be Intimidating

In the Maxwell study, 33.37% said one of their obstacles was that the mortgage process is confusing or difficult to understand.

An article by OwnUp helps explain why the mortgage process is so challenging for buyers:

“There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.”

While you may be tempted to do a quick search online to find instant answers to your questions, it may not get you the information you need to understand the full picture. Especially when it comes to financial advice, you want to lean on a true expert. Having trusted professionals on your side can help you to learn what it takes to achieve your dream of homeownership. Not to mention, an expert can give you advice specific to your situation, not generic advice like you’ll find online.

2. It’s Hard To Know How Much You Need To Save

In the Maxwell study, 45.75% believe they don’t have enough saved to cover their down payment or closing cost expenses.

What you may not realize is that, today, there’s a growing number of down payment assistance programs available nationwide to help relieve this pressure. A report from Down Payment Resource says:

“Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.”

Additionally, as the housing market cools, buyers are regaining some negotiation power and more sellers are willing to work with buyers to help with closing costs.  Understanding what’s out there and the options available may help you achieve your dream of homeownership faster than you thought possible.

Bottom Line

If you’re serious about becoming a homeowner, know it may be more in reach than you think. Lean on trusted professionals to help you overcome challenges and prioritize your next steps.

3 Trends That Are Good News for Today’s Homebuyers

While higher mortgage rates are creating affordability challenges for homebuyers this year, there is some good news for those people still looking to buy a home.

As the market has cooled this year, some of the intensity buyers faced during the peak frenzy of the pandemic has cooled too. Here are just a few trends that may benefit you when you go to buy a home today.

1. More Homes To Choose from

During the pandemic, housing supply hit a record low at the same time buyer demand skyrocketed. This combination made it difficult to find a home because there just weren’t enough to meet buyer demand. According to Calculated Risk, the supply of homes for sale increased by 39.5% for the week ending October 28 compared to the same week last year.

Even though it’s still a sellers’ market and supply is still lower than more normal levels, you have more to choose from in your home search. That makes finding your dream home a bit less difficult.

2. Bidding Wars Have Eased

One of the top stories in real estate over the past two years was the intensity and frequency of bidding wars. But today, things are different. With more options, you’ll likely see less competition from other buyers looking for homes. According to the National Association of Realtors (NAR), the average number of offers on recently sold homes has declined. This September, the average was 2.5 offers per sale. In contrast, last September, the average was 3.7 offers per sale.

If you tried to buy a house over the past two years, you probably experienced the bidding war frenzy firsthand and may have been outbid on several homes along the way. Now you have a chance to jump back into the market and enjoy searching for a home with less competition.

3. More Negotiation Power

And when you have less competition, you also have more negotiating power as a buyer. Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But the latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving those contingencies is going down.

As a buyer, this is good news. The appraisal and the inspection give you important information about the value and condition of the home you’re buying. And if something turns up in the inspection, you have more power today to renegotiate with the seller.

A survey from realtor.com confirms more sellers are accepting offers that include contingencies today. According to that report, 95% of sellers said buyers requested a home inspection, and 67% negotiated with buyers on repairs as a result of the inspection findings.

Bottom Line

While buyers still face challenges today, they’re not necessarily the same ones you may have been up against just a year or so ago. If you were outbid or had trouble finding a home in the past, now may be the moment you’ve been waiting for. Let’s connect to start the homebuying process today.

Why Pre-Approval Is a Game Changer for Homebuyers

If you’re planning to buy a home this year, you might have heard that pre-approval is a necessary step to take before starting out on your journey. But why is that? And is it still important in today’s shifting market?

The truth is, getting a pre-approval letter from your lender is critical, and when it comes to your home search, it can be a game changer in so many ways.

To better understand why, it’s important to know what pre-approval is. Freddie Mac defines the process 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. The lender you work with will provide you with a pre-approval letter, which is an official document that states the maximum amount they are willing to lend you, . . .”

Put simply, pre-approval from a lender helps you understand your true price range and how much money you can borrow for your loan. That can make it easier when you set out to search for homes. And since you’ll know what you’re approved for, it’ll also help once it’s time to submit an offer on the home of your dreams.

Another added benefit is that pre-approval lets the seller know you’re qualified to buy their house. Paul Centopani, Editor for the Mortgage Reports, explains:

“. . . most sellers won’t even consider an offer unless the buyer is pre-approved at the right price point. Sellers and their agents want to know you’re ready and able to finance your offer amount. So you’ll want to have your preapproval teed up as soon as you’re serious about bidding on a home you like.”

Every advantage you can gain as a buyer is crucial in a market that’s constantly changing. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals, such as a real estate advisor and trusted lender, on your side. They’ll help make sure you’re ready to put your best foot forward.

Bottom Line

Getting pre-approved for a mortgage helps you better understand what you can borrow and shows sellers you’re serious about purchasing their home. Let’s connect so you have the tools you need to succeed as a homebuyer in today’s shifting market.

Wondering Where You’ll Move if You Sell Your House Today?

If you put a pause on your home search because you weren’t sure where you’d go once you sold your house, it might be a good time to get back into the market. That’s because today’s market is undergoing a shift, and the supply of homes for sale is increasing as a result. That means you may have a better chance of finding a home that will meet your current needs. Here are some options to consider.

Buying an Existing Home Can Give You That Lived-in Charm

According to the National Association of Realtors (NAR), the supply of existing homes (a home that’s been previously owned) has steadily increased since the beginning of the year. The graph below indicates inventory levels are rising, and that’s largely due to more homes coming onto the market and the pace of sales slowing:

As the graph shows, if you’re looking for a home with lived-in charm, supply is rising, and that’s great news for you.

Danielle Hale, Chief Economist for realtor.com, gives insight into why more homeowners are listing their homes and adding to the growing supply of existing homes today:

“Home sellers in many markets across the country continue to benefit from rising home prices and fast-selling homes. That’s prompted a growing number of homeowners to sell homes this year compared to last, giving home shoppers much needed options. We’ve seen more homes come up for sale this year compared to last year . . .”

There are several benefits to buying an existing home. Many buyers want to purchase a home with history, and the character of older houses is hard to reproduce. Existing homes can often be part of an established neighborhood featuring mature landscaping that can give you additional privacy and boost your curb appeal.

Plus, timing can be a consideration as well. With an existing home, you can move in based on the timeline you agree to with the sellers, rather than building a new home and waiting for construction to finish. This is something to keep in mind, especially if you need to move sooner rather than later.

Just remember, while more sellers are listing their homes, supply is still low overall. That means you’ll have more options to choose from as you search for your next home, but you’ll still need to be prepared for a fast-moving market.

Purchasing a Newly Built or Under Construction Home Means Brand New Everything

Census data shows there’s an increasing number of new homes available for sale. It includes homes that are under construction, soon to be completed, and fully built. As the graph below highlights, the supply of new homes for sale has also grown this year:

When building a new home, you can create your perfect living space and customize it to your lifestyle. That could mean everything from requesting energy efficient options to specific design features. Plus, you’ll have the benefit of all new appliances, windows, roofing, and more. These can all help lower your energy costs, which can add up to significant savings over time.

The lower maintenance that comes with a newer home is another great advantage. When you have a new home, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. And with new construction, you’ll also have warranty options that may cover portions of your investment for the first few years.

Keep in mind, purchasing a new home could mean waiting a considerable amount of time before you can move. Robert Dietz, Chief Economist and Senior Vice President for Economics and Housing Policy at the National Association of Home Builders (NAHB), explains:

“New single-family home inventory remained elevated at a 7.7 months’ supply. . . . However, only 8.3% of new home inventory is completed and ready to occupy. The remaining have not started construction (25.9%) or are currently under construction.”

That’s an important factor when making your decision and one you should discuss with a trusted real estate advisor. They’ll help you think through all the pros and cons of both new and existing homes to help you arrive at your best decision.

Bottom Line

With the supply of homes for sale rising, you have options for your next home no matter what your preferences are. If you have questions or want help deciding what’s best for you, let’s connect and start the conversation today.

Should I Buy a Home Right Now?

If you’ve been thinking about buying a home, you likely have one question on the top of your mind: should I buy right now, or should I wait? While no one can answer that question for you, here’s some information that could help you make your decision.

The Future of Home Price Appreciation

Each quarter, Pulsenomics surveys a national panel of over 100 economists, real estate experts, and investment and market strategists to compile projections for the future of home price appreciation. The output is the Home Price Expectation Survey. In the latest release, it forecasts home prices will continue appreciating over the next five years (see graph below):

As the graph shows, the rate of appreciation will moderate over the next few years as the market shifts away from the unsustainable pace it saw during the pandemic. After this year, experts project home price appreciation will continue, but at levels that are more typical for the market. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says: 

“People should not anticipate another double-digit price appreciation. Those days are over. . . . We may return to more normal price appreciation of 4%, 5% a year.”

For you, that ongoing appreciation should give you peace of mind your investment in homeownership is worthwhile because you’re buying an asset that’s projected to grow in value in the years ahead.

What Does That Mean for You?

To give you an idea of how this could impact your net worth, here’s how a typical home could grow in value over the next few years using the expert price appreciation projections from the Pulsenomics survey mentioned above (see graph below):

As the graph conveys, even at a more typical pace of appreciation, you still stand to make significant equity gains as your home grows in value. That’s what’s at stake if you delay your plans.

Bottom Line

If you’re ready to become a homeowner, know that buying today can set you up for long-term success as your asset’s value (and your own net worth) is projected to grow with the ongoing home price appreciation. Let’s connect to begin your homebuying process today.