The housing market is rapidly changing from the peak frenzy it saw over the past two years. That means you probably have questions about what your best move is if you’re thinking of buying or selling this fall.

To help you make a confident decision, lean on the professionals for insights. Here are a few things experts are saying about the fall housing market.

Expert Quotes for Fall Homebuyers

A recent article from realtor.com:

“This fall, a more moderate pace of home selling, more listings to choose from, and softening price growth will provide some breathing room for buyers searching for a home during what is typically the best time to buy a home.”

Michael Lane, VP and General Manager, ShowingTime:

“Buyers will continue to see less competition for homes and have more time to tour homes they like and consider their options.” 

Expert Quotes for Fall Sellers

Selma Hepp, Interim Lead of the Office of the Chief Economist, CoreLogic:

“. . . record equity continues to provide fuel for housing demand, particularly if households are relocating to more affordable areas.”

Danielle Hale, Chief Economist, realtor.com:

“For homeowners deciding whether to make a move this year, remember that listing prices – while lower than a few months ago – remain higher than in prior years, so you’re still likely to find opportunities to cash-in on record-high levels of equity, particularly if you’ve owned your home for a longer period of time.”

Bottom Line

Mortgage rates, home prices, and the supply of homes for sale are top of mind for buyers and sellers today. And if you want the latest information for your area, partner with a local real estate professional.

Today’s cooling housing market, the rise in mortgage rates, and mounting economic concerns have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to factor the long-term benefits of homeownership into your decision.

Consider this: 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. Why is that? The reason is tied to how you gain equity and wealth as home values grow with time.

The National Association of Realtors (NAR) explains:

“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.”

Here’s a look at how just the home price appreciation piece can really add up over the years.

Home Price Growth Over Time

Even though home price appreciation has moderated this year, home values have still increased significantly in recent years. The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy those gains have been over the last five years.

If you look at the percent change in home prices, you can see home prices grew on average by almost 64% nationwide over that period. 

That means a home’s value can increase substantially in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains you stand to make become even clearer (see map below):

The second map shows, nationwide, home prices appreciated by an average of over 290% over roughly a thirty-year span.

While home price growth varies by state and local area, the nationwide average tells you the typical homeowner who bought a house thirty years ago saw their home almost triple in value over that time. This is why homeowners who bought their homes years ago are still happy with their decision.

Even if home price appreciation eases as the market cools this year, experts say home prices are still expected to appreciate nationally in 2023. That means, in most markets, your home should grow in value over the next year even if the pace is slower than it was during the peak market frenzy when prices skyrocketed.

The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and fight annual lease hikes for no long-term financial benefit? Instead, consider buying a home. It’s an investment in your future that could set you up for long-term gains.

Bottom Line

Don’t let the shifting market delay your dreams. Data shows home values typically appreciate over time, and that gives your net worth a nice boost. If you’re ready to start your journey to homeownership, reach out to a real estate professional today.

Buying? Selling? Have Questions? Call Me (251) 278 3752

Jonathon Mansmann

Realtor/Associate Broker
JPAR Gulf Coast
(251) 432-4911

Think you’re ready to buy a home but not sure where to start? Send me a message with your questions and let me help you get started!

Email Me

 

Mortgage rates have increased significantly in recent weeks. And that may mean you have questions about what this means for you if you’re planning to buy a home. Here’s some information that can help you make an informed decision when you set your homebuying plans.

The Impact of Rising Mortgage Rates

As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.

Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is $389,500). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.

As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a real estate advisor to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.

Are Mortgage Rates Going To Go Down?

The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. Realtor.com says this about where rates could go from here:

“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.”

So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get inflation under control.

And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”

Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining equity over time which will help grow your net worth. The question now becomes: what makes more sense for you?

Bottom Line

Each person’s situation is unique. To make the best decision for you, partner with a real estate advisor to explore your options.

Today’s housing market is different than it was just a few months ago. And if you’re thinking about selling your house, that may leave you wondering what you need to do differently as a result. The answer is simple. Taking the time upfront to prep your house appropriately and create a solid plan can help bring in the greatest return on your investment.

Here are a few simple tips to make sure you maximize the sale of your house this fall.

1. Price It Right

One of the first things buyers will notice is the price of your house. That’s because the price sends a message to home shoppers. Pricing your house too high to begin with could put you at a disadvantage by discouraging buyers from making an offer. On the flip side, pricing your house too low may make buyers worry there’s some underlying issue or something wrong with the home.

Your goal in pricing your house is to gain the attention of prospective buyers and get them to make an offer. And with price growth and buyer demand moderating, as well as a greater supply of homes available for sale, pricing your home appropriately for where the market is today has become more important than ever before.

But how do you know that perfect number? Pricing your house isn’t a guessing game. It takes skill and expertise. Work with a trusted real estate advisor to determine the current market value for your home.

2. Keep It Clean

It may sound simple but keeping your house clean is another key to making sure it gets the attention it deserves. As realtor.com says in the Home Selling Checklist:

“When selling your home, it’s important to keep everything tidy for buyers, and you never know when a buyer is going to want to schedule a last-minute tour.”

Before each buyer visits, assess your space and determine what needs your attention. Wash the dishes, make the beds, and put away any clutter. Doing these simple things can reduce potential distractions for buyers.

For more tips, check out this checklist for preparing your house for sale. Ultimately an agent is your best resource for tailored advice, but this list can help get you started.

3. Help Buyers Feel at Home

Finally, it’s important for buyers to see all the possible ways they can make your house their next home. An easy first step to create this blank canvas is removing personal items, like pictures, awards, and sentimental belongings. It’s also a good idea to remove any excess furniture to help the rooms feel bigger and make sure there’s ample space for touring buyers to stand and look at the layout.

If you’re unsure what should be packed away and what can stay, consult your trusted real estate advisor. Spending the time on this step can pay off in the long run. As a recent article from the National Association of Realtors (NAR) explains:

“Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. The right arrangements can move you into a higher price-point and help buyers fall in love the moment they walk through the door.”

Bottom Line

Selling a house requires prep work and expertise. If you’re looking to sell your house this season, lean on a trusted real estate professional for advice on how to get it ready to list, how to help it stand out in today’s shifting market, and more.

Buying? Selling? Have Questions? Call Me (251) 278 3752

Jonathon Mansmann

Realtor/Associate Broker
JPAR Gulf Coast
(251) 432-4911

Think you’re ready to buy a home but not sure where to start? Send me a message with your questions and let me help you get started!

Email Me

 

If you’re following today’s housing market, you know two of the top issues consumers face are inflation and mortgage rates. Let’s take a look at each one.

Inflation and the Housing Market

This year, inflation reached a high not seen in forty years. For the average consumer, you probably felt the pinch at the gas pump and in the grocery store. It may have even impacted your ability to save money to buy a home.

While the Federal Reserve is working hard to lower inflation, the August data shows the inflation rate was still higher than expected. This news impacted the stock market and fueled conversations about a recession. It also played a role in the Federal Reserve’s decision to raise the Federal Funds Rate last week. As Bankrate says:

“. . . the Fed has raised rates again, announcing yet another three-quarter-point hike on September 21 . . . The hikes are designed to cool an economy that has been on fire. . .”

While their actions don’t directly dictate what happens with mortgage rates, their decisions have contributed to the intentional cooldown in the housing market. A recent article from Fortune explains:

“As the Federal Reserve moved into inflation-fighting mode, financial markets quickly put upward pressure on mortgage rates. Those elevated mortgage rates . . . coupled with sky-high home prices, threw cold water onto the housing boom.”

The Impact on Rising Mortgage Rates

Over the past few months, mortgage rates have fluctuated in light of growing economic pressures. Most recently, the average 30-year fixed mortgage rate according to Freddie Mac ticked above 6% for the first time in well over a decade (see graph below):

The mortgage rate increases this year are the big reason buyer demand has pulled back in recent months. Basically, as rates (and home prices) rose, so did the cost of buying a home. That pushed on affordability and priced some buyers out of the market, so home sales slowed and the inventory of homes for sale grew as a result.

Where Experts Say Rates and Inflation Will Go from Here

Moving forward, both of these factors will continue to impact the housing market. A recent article from CNET puts the relationship between inflation and mortgage rates in simple terms:

“As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.”

Sam Khater, Chief Economist at Freddie Mac, has this to say about where rates may go from here:

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, . . .”

While there’s no way to say with certainty where mortgage rates will go from here, there is something you can do to stay informed, and that’s connect with a trusted real estate advisor. They keep their pulse on what’s happening today and help you understand what the experts are projecting. They can provide you with the best advice possible.

Bottom Line

Rising inflation and higher mortgage rates have had a clear impact on housing. For expert insights on the latest trends in the housing market and what they mean for you, lean on a trusted real estate professional.

The real estate market is on just about everyone’s mind these days. That’s because the unsustainable market of the past two years is behind us, and the difference is being felt. The question now is, just how financially strong are homeowners throughout the country? Mortgage debt grew beyond 10 trillion dollars over the past year, and many called that a troubling sign when it happened for the first time in history.

Recently Odeta Kushi, Deputy Chief Economist at First American, answered that question when she said:

“U.S. households own $41 trillion in owner-occupied real estate, just over $12 trillion in debt, and the remaining ~$29 trillion in equity. The national “LTV” in Q2 2022 was 29.5%, the lowest since 1983.”

She continued on to say:

“Homeowners had an average of $320,000 in inflation-adjusted equity in their homes in Q2 2022, an all-time high.”

What Is LTV?

The term LTV refers to loan to value ratio. For more context, here’s how the Mortgage Reports defines it:

“Your ‘loan to value ratio’ (LTV) compares the size of your mortgage loan to the value of the home. For example: If your home is worth $200,000, and you have a mortgage for $180,000, your LTV ratio is 90% — because the loan makes up 90% of the total price.

You can also think about LTV in terms of your down payment. If you put 20% down, that means you’re borrowing 80% of the home’s value. So your LTV ratio is 80%.”

Why Is This Important?

This is yet another reason we won’t see the housing market crash. Home equity allows homeowners to be in control. For example, if someone did need to sell their home, they likely have the equity they need to be able to sell it and still put money in their pocket. This was not the case back in 2008, when many owed more on their homes than they were worth.

Bottom Line

Homeowners today have more financial strength than they have had since 1983. This is a combination of how homeowners have handled equity since the crash and rising home prices of the last two years. And this is yet another reason homeownership in any market makes sense.

If recent headlines about the housing market cooling and buyer demand moderating have you worried you’ve missed your chance to sell, here’s what you need to know. Buyer demand hasn’t disappeared, it’s just eased from the peak intensity we saw over the past two years.

Buyer Demand Then and Now

During the pandemic, mortgage rates hit record lows, and that spurred a significant rise in buyer demand. This year, as rates increased due to factors like rising inflation, buyer demand pulled back or softened as a result. The latest data from ShowingTime confirms this trend (see graph below):

The orange bars in the graph above represent the last few months of data and the clear cooldown in the volume of home showings the market has seen since mortgage rates started to rise. But context is important. To get the full picture of where today’s demand stands, let’s look at the July data for the past six years (see graph below):

This second visual makes it clear that, while moderating compared to the frenzy in 2020 and 2021, showing activity is still beating pre-pandemic levels – and those pre-pandemic years were great years for the housing market. That goes to show there’s still demand if you sell your house today.

What That Means for You When You Sell

The key to selling in a changing market is understanding where the housing market is now. It’s not the same market we had last year or even earlier this year, but that doesn’t mean the opportunity to sell has passed.

While things have cooled a bit, it’s still a sellers’ market. If you work with a trusted local expert to price your house at the current market value, the demand is still there, and it should sell quickly. According to a recent survey from realtor.com, 92% of homeowners who sold in August reported being satisfied with the outcome of their sale.

Bottom Line

Buyer demand hasn’t disappeared, it’s just moderated this year. If you’re ready to sell your house today, lean on a trusted real estate professional to understand how the market has shifted and how to plan accordingly for your sale.

Buying? Selling? Have Questions? Call Me (251) 278 3752

Jonathon Mansmann

Realtor/Associate Broker
JPAR Gulf Coast
(251) 432-4911

Think you’re ready to buy a home but not sure where to start? Send me a message with your questions and let me help you get started!

Email Me