Give me a call for a free no strings attached market analysis of your homes value. I’m ready to help you move
Give me a call for a free no strings attached market analysis of your homes value. I’m ready to help you move
As we near the end of the year, more homeowners are realizing the benefits of today’s sellers’ market. Record-breaking home price appreciation, growing equity, low inventory, and competitive mortgage rates are motivating homeowners to make a move that addresses their changing lifestyles.
In fact, recent data from realtor.com shows a larger share of homeowners are planning to list their houses this winter. So, that means more homes are about to hit the market, which will lead to more choices for buyers too.
According to George Ratiu, Manager of Economic Research at realtor.com:
“The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception. Recent survey data suggests the majority of prospective sellers are actively preparing to enter the market this winter.”
If you’re thinking of waiting until the spring to sell your house, know that your neighbors may be one step ahead of you by selling this winter. If you want to stand out from the crowd, this holiday season is the best time to make sure your house is available for buyers. Here’s why.
Historically, a 6-month supply of homes for sale is needed for a normal or neutral market. That level ensures there are enough homes available for active buyers (see graph below):The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows the inventory of houses for sale sits at a 2.4-month supply. This is well below a neutral market.
When the supply of homes for sale is as low as it is today, it’s much harder for buyers to find homes to purchase. This drives up competition among buyers, who then submit increasingly competitive offers to win out against others in the home search process. As this happens, prices rise and your leverage as a seller rises too, putting you in the best position to negotiate a contract that meets your ideal terms.
And while the low housing supply we’re facing won’t be solved overnight, sellers this season should move quickly to maximize their potential. As the data shows, with more prospective sellers planning to list their homes this winter, selling sooner rather than later helps your house rise to the top of a holiday buyer’s wish list so you can close the best possible deal.
Selling your house over the next few weeks gives you the best chance to be in front of buyers competing for homes while the number of houses for sale is still low. Connect with a local real estate advisor today to discuss how you can benefit from today’s sellers’ market.
The purpose of Veterans Affairs (VA) home loans is to provide a pathway to homeownership for those who have sacrificed so much by serving our nation. As the Veterans Administration says of the program:
“The objective of the VA Home Loan Guaranty program is to help eligible Veterans, active-duty personnel, surviving spouses, and members of the Reserves and National Guard purchase, retain, and adapt homes in recognition of their service. . . .”
For over 75 years, VA home loans have provided millions of veterans and their families the opportunity to purchase their own homes.
As we reflect on their sacrifice and honor our nation’s veterans, it’s important to ensure all veterans know the full extent of benefits VA home loans offer. As Jeff London, Director of the VA Home Loan Program, says:
“VA loans offer an extraordinary opportunity for veterans because of lower interest rates, lower monthly payments, no or low-down payments, and no private mortgage insurance.”
Those who qualify for a VA home loan are eligible for the following:
One way we can honor and thank our veterans this year is to ensure they have the best information about the benefits of VA home loans. Homeownership is the American Dream. Our veterans sacrifice so much in service to our nation and deserve to achieve their homeownership goals. Thank you for your service.
Today’s housing market is truly one for the record books. Over the past year, we’ve seen the lowest mortgage rates in history. And while those rates seemed to bottom out in January of this year, the golden window of opportunity for buyers isn’t over just yet. If you’re one of the buyers who worry they’ve missed out, rest assured today’s mortgage rates are still worth taking advantage of.
Even today, our mortgage rates are below what they’ve been in recent decades. So, while you may not be able to lock in the rate your friend got recently, you’re still in a great position to secure a rate well below what your parents and even grandparents got in years past. The key will be acting sooner rather than later.
In late September, mortgage rates ticked above 3% for the first time in months. And according to experts throughout the industry, mortgage rates are projected to continue rising in the months ahead. Here’s where experts say rates are headed:While a projected half percentage point increase may not seem substantial, it does have an impact when you’re buying a home. When rates rise even slightly, it affects how much you’ll pay month-to-month on your home loan. The chart below shows how it works:In this example, if rates rise to 3.55%, you’ll pay an extra $100 each month on your monthly mortgage payment if you purchase a home around this time next year. That extra money can really add up over the life of a 15 or 30-year loan.
Clearly, today’s mortgage rates are worth taking advantage of before they climb further. The rates we’re seeing right now give you a unique opportunity to afford more home for your money while keeping your monthly payment down.
Waiting for a lower mortgage rate could cost you. Experts project rates will continue to rise in the months ahead. Work with a trusted real estate professional to seize this opportunity before they increase further.
If you’re thinking of buying or selling a house, chances are you’re focusing on the many extraordinary ways it’ll change your life. What you may not realize is that decision impacts people’s lives far beyond your own. Home purchases and sales are significant drivers of economic activity. They have a major impact on your community and the entire U.S. economy via the multiple industries and professionals that take part in the process.
The National Association of Realtors (NAR) releases a report each year that highlights just how much economic activity a home sale generates. The chart below shows how the sale of both a newly built home and an existing home impact the economy:To dive a level deeper, NAR also provides a detailed look at how that varies state-by-state for newly-built homes (see map below):As you can see, a single home sale can have a massive effect on the overall economy. Ali Wolf, Chief Economist for Zonda, talks about this in a recent article, noting there’s a significant impact at each distinct phase of the transaction:
“The housing market contributes to the economy in four main stages: during planning and land development, throughout the actual construction of the home, at the point of sale, and upon moving in.”
When you buy or sell a home, you’re leaving a lasting impression on the community at large in addition to fulfilling your own needs. That’s because each stage of the process involves numerous contractors, specialists, lawyers, town and city officials, and so many other professionals. Every individual you work with, from your trusted real estate advisor to the architects who design new homes, has their own team of professionals involved behind the scenes.
Homebuyers and sellers are economic drivers in their community and beyond. If you’re thinking of buying or selling, reach out to your trusted real estate advisor today to start the process. It won’t just change your life; it’ll make a powerful impact on your entire community.
One of the major questions real estate experts are asking today is whether prospective homebuyers still believe purchasing a home makes sense. Some claim rapidly rising home prices are impacting demand and, by extension, leading to the recent slowdown in sales activity.
However, demand isn’t the real issue. Instead, it’s the lack of supply (homes available for sale). An article from the Wall Street Journal shows this is true for new home construction:
“Home builders have sold more homes than they can build. Now they are limiting their sales in an effort to catch up.”
The article quotes David Auld, CEO of D.R. Horton Inc. (the largest homebuilder by volume in the United States since 2002), explaining how they don’t have enough homes for the number of buyers coming into their models:
“Through our history, to have somebody walk into our models and to tell them, ‘We don’t have a house for you to buy today’, is something that is foreign to us.”
Danielle Hale, Chief Economist for realtor.com, also explains that, in the existing home sale market, the slowdown in sales was a supply challenge, not a lack of demand. Responding to a recent uptick in listings coming to market, she notes:
“. . . if these changing inventory dynamics continue, we could see a wave of real estate activity heading into the latter part of the year.”
Again, the buyers are there. We just need houses to sell to them.
If the slowdown in sales was the result of demand waning, we would start to see home prices beginning to moderate – but this isn’t the case. As Mark Fleming, Chief Economist for First American, explains:
“There’s a lot of conversation around rising prices and falling quantity in the housing market, and there’s this concept, or this idea, that it’s a demand-side problem . . . . But, if demand were falling dramatically, we would actually see less price pressure, less home price growth.”
Instead, we’re seeing price appreciation accelerate throughout this year, as evidenced by the year-over-year percentage increases reported by CoreLogic:
(July numbers are not yet available)
There’s a shortage of listings, not buyers, and there are three very good reasons for purchasers to still be interested in buying a home this year.
Though home prices have risen dramatically over the last 18 months, mortgage rates remain near historic lows. Because of these near-record rates, monthly mortgage payments are affordable for most buyers.
While homes are less affordable than they were last year, when we adjust for inflation, we can see they’re also more affordable than they were in the 1970s, 1980s, 1990s, and much of the 2000s.
A recent study shows renting a home takes up a higher percentage of a household’s income than owning one. According to the analysis, here’s the percentage of income homebuyers and renters should expect to pay now versus at the end of the year.While the principal and interest of a monthly mortgage payment remain the same over the lifetime of the loan, rents increase almost every year.
Whether you’re a homeowner or an investor, real estate builds wealth through growing equity year-over-year. If you own, your household is gaining the benefit of that wealth accumulation. Fleming says:
“The major financial advantage of homeownership is the accumulation of equity in the form of house price appreciation . . . . We have to take into account the fact that the shelter that you’re owning is an equity-generating or wealth-generating asset.”
Odeta Kushi, Deputy Chief Economist at First American, elaborates in a recent article:
“. . . once the home is purchased, appreciation helps build equity in the home, and becomes a benefit rather than a cost. When accounting for the appreciation benefit in our rent versus own analysis, it was cheaper to own in every one of the top 50 markets, including the two most expensive rental markets, San Francisco and San Jose, Calif.”
Today, that equity buildup is substantial. The National Association of Realtors (NAR) reports:
“The median sales price of single-family existing homes rose in 99% of measured metro areas in the second quarter of 2021 compared to one year ago, with double-digit price gains in 94% of markets.”
In 94% of markets, there was a greater than 10% increase in median price. That means if you bought a $400,000 home in one of those markets, your net worth increased by at least $40,000. If you rented, the landlord was the recipient of the wealth increase.
For many reasons, housing demand is still extremely strong. What we need is more supply (house listings) to meet that demand.
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“Conventional conforming mortgages (mortgages that conform to guidelines set by Fannie Mae and Freddie Mac), accounted for 74% of mortgages obtained by homebuyers in May 2021, an increase from about 65% during 2018 through 2019…The share of VA-guaranteed loans has also decreased to 7% in May 2021 from about 10% in past years.”
Recent data in the latest Origination Insight Report from Ellie Mae sheds light on the continuation of this trend. Below, we can see just how small of a share of total financing VA loans made up in June of 2021, according to that Ellie Mae report:The drop in VA loan usage can be attributed to the difficulties veterans continue to face when buying a home. The NAR article elaborates:
“It is extremely difficult for FHA/VA buyers to get accepted in a multiple offer situation. They are on the bottom of the hierarchy.”
One contributing factor is that buyers with VA loans can’t waive certain contingencies. However, just because a certain contingency must be present for a particular buyer doesn’t mean that buyer’s offer shouldn’t be considered.
As a seller, it’s important to consider every offer in front of you regardless of loan type. If you’re selecting an offer because some contingencies are waived, keep in mind that it doesn’t always mean the offer is what’s best for you.
Buyers who can’t waive specific contingencies may adjust other terms in their offer to make it more appealing to sellers. This may depend on several factors, including their loan type and location, but a motivated buyer and their agent will do everything they can to present an offer that’s as appealing to you as possible.
Ultimately, you should make sure you take time to really understand the terms of their offer and see the big picture. Working with a driven buyer who’s motivated to purchase your house may provide a better opportunity for you to reach your overall best option and what’s most important to you.
If you’re selling your house, work closely with your agent to make sure you understand the terms of all offers so you can give each one fair consideration, including those buyers using a VA loan. Our veterans sacrifice so much for our country. They’ve earned our gratitude and should have the same opportunity to obtain the home of their dreams.