How Much Do You Need for Your Down Payment? As you set out on your homebuying journey, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment? If you think you have to put 20% down, you may have set your goal based on a common misconception. Freddie Mac says: “The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.” Unless specified by your loan type or lender, it’s typically not required to put 20% down. According to the Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And it’s even lower for first-time homebuyers, whose median down payment is only 7% (see graph below): What Does This Mean for You? While a down payment of 20% or more does have benefits, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your homebuying dream than you realize. If you’re interested in learning more about low down payment options, there are several places to go. There are programs for qualified buyers with down payments as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants. To understand your options, you need to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like downpaymentresource.com. Be sure to also work with a real estate advisor from the start to learn what you may qualify for in the homebuying process. Bottom Line Remember: a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect to start the conversation and explore your down payment options.

Expert Insights on the 2022 Housing Market As we move into 2022, both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? For the answer to those questions and more, we turn to the experts. Here’s a look at what they say we can expect in 2022. Odeta Kushi, Deputy Chief Economist, First American: “Consensus forecasts put rates at about 3.7% by the end of next year. So, that's still historically low, but certainly higher than they are today.” Danielle Hale, Chief Economist, realtor.com: “Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.” Lawrence Yun, Chief Economist, National Association of Realtors (NAR): “With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.” George Ratiu, Manager of Economic Research, realtor.com: “We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.” Mark Fleming, Chief Economist, First American: “Strong demographic demand will continue to act as the wind in the housing market’s sails.” What Does This Mean for Buyers? Hope is on the horizon for 2022. You should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor. What Does This Mean for Sellers? Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat. But don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year. Bottom Line If you’re thinking of buying or selling, 2022 may be your year. Let’s connect to discuss your goals and the unique opportunities you have in today’s housing market.   https://www.seashoreliving.com/2021/12/30/2022-housing-market-insights/  

Why Selling Your House with a Real Estate Professional Is Essential Selling your house is no simple task. And when you sell on your own – known as a FSBO (or For Sale by Owner) – you’re responsible for handling some of the more difficult aspects of the process without the expert guidance you need. The 2021 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) surveys homeowners who recently sold their house on their own and asks what difficulties they faced. Those sellers say some of the biggest headaches are prepping their house for sale, pricing it right, and handling the required paperwork. Working with an agent is the best way to ensure you have an expert on your side to guide you at every turn. Agents have the skills and knowledge that are essential to navigating each step with ease, efficiency, and accuracy. Here are just a few things a real estate agent will do to make sure you get the most out of your sale. 1. Make the Best First Impression Selling your house requires a significant amount of time and effort. Doing it right takes expertise and an understanding of today’s buyers. Your agent knows the answers to common questions, such as: Do I need to take down my personal art? How much landscaping does my house need? What colors should I paint my walls? Your time and money are important, and you don’t want to waste either one focusing on the wrong things. A real estate advisor relies on their experience to answer these questions and more, allowing you to make the right investments to prep your house before you list. 2. Maximize Your Buyer Pool – and Your Sale Today, the average home is getting 3.6 offers per sale according to recent data from NAR. That’s great news if you’re planning to sell, since the more offers you receive, the more likely you are to sell your house in a bidding war, and for a higher price. Real estate agents have an assortment of tools at their disposal, like social media followers and agency resources, that will ensure your house is viewed by the most buyers. Without access to these tools and your agent’s marketing expertise, your buyer pool – and your home’s selling potential – is limited. 3. Understand the Documentation, Including the Fine Print Today, when a house is sold, more disclosures and regulations are mandatory, meaning the number of legal documents to juggle is growing. It’s hard to understand all the requirements and fine print (especially if you’re not an expert). That’s why your advisor is an invaluable guide. Your agent knows exactly what needs to happen, what all the paperwork means, and can work through it efficiently. They’ll help you review the documentation and avoid any costly missteps that could happen if you tackle it on your own. 4. Act as Your Expert Negotiator If you sell without an agent, you’ll also be solely responsible for all negotiations. That means you have to coordinate with: The buyer, who wants the best deal possible The buyer’s agent, who will use their expertise to advocate for the buyer The inspection company, which works for the buyer and will almost always find concerns with the house The appraiser, who assesses the property’s value to protect the lender Instead of going toe-to-toe with all these parties alone, lean on an expert. Your agent relies on experience and training to make the right moves throughout the negotiation. They’ll know what levers to pull, how to address each individual concern, and when you may want to get a second opinion. When you sell your house yourself, you’ll need to be prepared to have these conversations on your own. 5. Price It Right Real estate professionals have the expertise to price your house accurately and competitively. To do so, they compare your house to recently sold homes in your area and factor in the current condition of your house. These factors are key to making sure your house is priced to move quickly and get you the maximum return on your investment. When you sell as a FSBO, you’re operating without this advantage. That could cost you in the long run if you price your house too high or too low. Bottom Line There’s a lot that goes into selling your house, and it takes time, effort, and expertise to truly maximize your sale. Instead of tackling it alone, let’s connect to make sure you have an expert on your side.   https://www.seashoreliving.com/2021/12/30/a-real-estate-professional-is-essential-when-selling/  

Key Things To Avoid After Applying for a Mortgage Once you’ve found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It’s exciting to start thinking about moving in and decorating your new place, but before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan. Here’s a list of things you shouldn’t do after applying for a mortgage. They’re all important to know – or simply just good reminders – for the process. 1. Don’t Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or Lender. Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer. 2. Don’t Make Any Large Purchases Like a New Car or Furniture for Your Home. New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Since higher ratios make for riskier loans, qualified borrowers may end up no longer qualifying for their mortgage. 3. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you’re obligated. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you. 4. Don’t Change Bank Accounts. Remember, lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer. 5. Don’t Apply for New Credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be impacted. Lower credit scores can determine your interest rate and possibly even your eligibility for approval. 6. Don’t Close Any Credit Accounts. Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants of your score. Bottom Line Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. The best plan is to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

https://www.seashoreliving.com/2021/12/24/jersey-2022-summer-concerts-heating-up/

The Perks of Putting 20% Down on a Home If you’re thinking of buying a home, you’re probably wondering what you need to save for your down payment. Is it 20% of the purchase price, or could you put down less? While there are lower down payment programs available that allow qualified buyers to put down as little as 3.5%, it’s important to understand the many perks that come with a 20% down payment. Here are four reasons why putting 20% down may be a great option if it works within your budget. 1. Your Interest Rate May Be Lower A 20% down payment vs. a 3-5% down payment shows your lender you’re more financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage interest rate they’ll likely be willing to give you. 2. You’ll End Up Paying Less for Your Home The larger your down payment, the smaller your loan amount will be for your mortgage. If you’re able to pay 20% of the cost of your new home at the start of the transaction, you’ll only pay interest on the remaining 80%. If you put down 5%, the additional 15% will be added to your loan and will accrue interest over time. This will end up costing you more over the lifetime of your home loan. 3. Your Offer Will Stand Out in a Competitive Market In a market where many buyers are competing for the same home, sellers often like to see offers come in with 20% or larger down payments. The seller gains the same confidence as the lender in this scenario. You are seen as a stronger buyer with financing that’s more likely to be approved. Therefore, the deal will be more likely to go through. 4. You Won’t Have To Pay Private Mortgage Insurance (PMI) What is PMI? According to Freddie Mac: “For homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners that protects the lender if you are unable to pay your mortgage. It is not the same thing as homeowner's insurance. It's a monthly fee, rolled into your mortgage payment, that’s required if you make a down payment less than 20%. . . . Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your monthly payment.” As mentioned earlier, if you put down less than 20% when buying a home, your lender will see your loan as having more risk. PMI helps them recover their investment in you if you’re unable to pay your loan. This insurance isn’t required if you’re able to put down 20% or more. Many times, home sellers looking to move up to a larger or more expensive home are able to take the equity they earn from the sale of their house to put 20% down on their next home. With the equity homeowners have today, it creates a great opportunity to put those savings toward a larger down payment on a new home. Bottom Line If you’re looking to buy a home, consider the benefits of 20% down versus a smaller down payment option. Let’s connect so you have expert advice to help make your homeownership goals a reality.

The Average Homeowner Gained $56,700 in Equity over the Past Year When you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the non-financial benefits, like the security or stability a home provides. But what about equity? While it can be overlooked, a homeowner’s equity helps build long-term wealth over time. Here’s a look at what equity is and why it matters. For a homeowner, your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your equity does too. That’s exactly what’s happening today. There aren’t enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. That’s because people are willing to pay more to buy a home. Right now, this low supply and high demand are giving current homeowners a significant equity boost. Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this: “Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.” To find out just how much rising home values have impacted equity, we turn to the latest Homeowner Equity Insights from CoreLogic. According to that report, the average homeowner’s equity has grown by $56,700 over the last 12 months. Curious how your state stacks up? Check out the map below to find out the average equity gain for your area. How Rising Equity Impacts You If you’re already a homeowner, equity not only builds your wealth, it also opens doors for you to achieve your goals. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, especially if you’ve decided your needs have changed and you’re looking for something new. If you’re thinking about becoming a homeowner, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth and gives you peace of mind that your investment is a wise one, not just from a lifestyle perspective, but from a financial one too. Bottom Line Whether you’re a current homeowner or you’re ready to become one, it’s important to know how equity works and why it matters. If this inspires you to make a move, let’s connect to explore your options and find out what steps you need to take next.

December 16, 2021  Catherine Mesick While strong homebuyer demand and inventory shortages will continue into 2022, the housing market is unlikely to repeat this year’s dizzying heights, in which existing-home sales reached their highest point in 15 years with an estimated 6 million sales. Slower growth in home prices, decelerating inflation, and multiple interest rate hikes by the Federal Reserve could contribute to a more normal housing market in the new year, National Association of REALTORS® Chief Economist Lawrence Yun said Wednesday during NAR’s virtual Real Estate Forecast Summit. Yun presented a consensus real estate forecast based on a survey of 20 leading economists. For 2022, the group of experts predicts that annual median home prices will increase 5.7% and inflation will rise 4%. “Overall, survey participants believe we’ll see the housing market and broader economy normalize next year,” Yun said. In addition, Yun expects existing-home sales will decline to 5.9 million in 2022 and housing starts will increase modestly to 1.67 million as the pandemic’s supply chain backlogs subside. Housing affordability remains a concern. Even if the market begins to settle down, affordability issues likely will continue to dampen homebuying prospects for many would-be owners. Housing affordability had already reached crisis levels before the pandemic added to the strain, said Todd M. Richardson, general deputy assistant secretary at the Department of Housing and Urban Development’s Office of Policy Development and Research. However, the Biden administration’s Build Back Better plan offers several programs that have the potential to increase housing access for all. The bill provides $10 billion in down payment assistance for first-generation home buyers, $24 billion for housing choice voucher rental assistance, and $15 billion for the Housing Trust Fund to build and preserve over 150,000 affordable homes for low-income households. “Our programs are about unlocking possibilities,” said Richardson. “Support is needed most for housing in low- to moderate-income communities.” Manufactured housing offers a potential source of inventory that could help ease the housing crunch. Affordable entry-level homes continue to be among the units in shortest supply, and modern manufactured housing—with its high-quality factory construction and lower per-unit cost—could help fill in some of the gaps, said Lesli Gooch, CEO of the Manufactured Housing Institute. In addition, manufactured homes could offer wealth-building opportunities for buyers. “Research by LendingTree shows that, from 2014 to 2019, the median value of manufactured homes increased by 40%—six points above site-built homes,” said Gooch. Naa Awaa Tagoe, acting deputy director at the Division of Housing Mission and Goals at the Federal Housing Finance Agency, seconded the call for more affordable housing and shared her agency’s strategies in 2022 for increasing equitable access to homeownership and rentals. Appraisal efficiency, small-balance mortgage purchases and refinances, and low-income housing tax credits are among the division’s top priorities for 2022, said Tagoe. Regional differences could affect the housing market. Housing prices are likely to moderate nationwide, but regional variation could occur in 2022. Overpriced areas with lower predicted population growth will experience a greater slowing of prices compared to those with higher predicted growth, said Ken H. Johnson, associate dean of graduate programs at Florida Atlantic University. “Everyone will experience moderation, but there will be differences,” he said. Strong building starts in the suburbs could be good news for first-time buyers. Businesses are competing for workers right now, said realtor.com® Chief Economist Danielle Hale, and that means buyers could have more flexibility in choosing where they live. In contrast to Yun, who saw “hidden gem real estate markets” in the South, Hale counseled would-be buyers to look further north. “The Mountain West, pockets of the Northeast, South, and Midwest are all locations where affordability creates incentives,” said Hale. Demographics offer insight into the future. Jessica Lautz, NAR’s vice president of behavioral insights and demographics, offered highlights from the 2021 Profile of Home Buyers and Sellers, noting several demographic trends that will continue to affect the housing market into 2022 and beyond: Baby boomers want to age in place and will continue to hold onto their homes, contributing to the ongoing inventory shortfall. Millennials are the largest generation of potential buyers, but they face significant headwinds, such as low inventory, high prices, and student loan debt. A drop in the birth rate to a 100-year low could contribute to continued stagnation in the market: The birth of a child is often a motive to buy, and a child moving out is often an impetus to downsize and sell.

Homebuyers Are Going on a Shopping Spree This Winter Black Friday and Cyber Monday are over, which means some shoppers have wrapped up their holiday buying. But there’s still a group of buyers that are very active this holiday season – homebuyers. Experts anticipate the real estate market will see a flurry of activity this winter, and that’s great news for today’s sellers. If you’re planning on listing your home, there’s no need to wait until the spring for better conditions – today’s real estate market is already heating up. Buyers Have Warmed Up to the Idea of Purchasing This Winter The past 18 months brought about significant lifestyle changes for many of us, including the rise in remote work, job changes, and even early retirement for some. For many people, it’s prompting a search for their next home now rather than waiting for warmer months. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), points out how this winter may see a significant number of sales: “Compared to other past winter seasons, this winter season’s sales activity will be stronger. . . . This winter, there will be more sales compared to pre-pandemic winters going back all the way to 2006.” You might be wondering: what does strong sales activity mean for you? It means there are likely to be more buyers active in the market this winter – far more than more normal, pre-pandemic years. In the same article, Danielle Hale, Chief Economist for realtor.com, puts it in these simple terms: “Sellers can expect to see plenty of buyers.” The more buyers there are in the market, the more likely it is your home will get noticed. That can lead to a multiple-offer scenario or a potential bidding war. Receiving multiple offers on your home means you can select the right offer and terms for your situation – so you can truly win as a seller when you list your house this winter. Bottom Line If you’re thinking about selling your house, you don’t need to wait until the spring. Buyers are ready now. Let’s connect to discuss why selling this holiday season could be the gift that keeps on giving.

What Everyone Wants To Know: Will Home Prices Decline in 2022? If you’re thinking of buying a home in today’s housing market, you may be wondering how strong your investment will be. You might be asking yourself: if I buy a home now, will it lose value? Or will it continue to appreciate going forward? The good news is, according to the experts, home prices are not projected to decline. Here’s why. With buyers still outweighing sellers, home prices are forecast to continue climbing in 2022, just at a slower or more moderate pace. Why the continued increase? It’s the simple law of supply and demand. When there are fewer items on the market than there are buyers, the competition for that item makes prices naturally rise. And while the number of homes for sale today is expected to improve with more sellers getting ready to list their houses this winter, we’re certainly not out of the inventory woods yet. Thus, the projections show continued appreciation, but at a more moderate rate than what we’ve seen over the past year. Here’s a look at the latest 2022 expert forecasts on home price appreciation:What’s the biggest takeaway from this graph? None of the major experts are projecting depreciation in 2022. They’re all showing an increase in home prices next year. And here’s what some of the industry’s experts say about how that will play out in the housing market next year: Brad Hunter of Hunter Housing Economics explains: “. . . the recent unsustainable rate of home price appreciation will slow sharply. . . . home prices will not decline. . . but they will simply rise at a more sustainable pace.” Danielle Hale from realtor.com agrees: “Price growth is expected to move back toward a normal range, but this is on top of recent high prices, . . . So prices will [still] hit new highs. . . . The pace of price growth is going to slow notably . . . ” What Does This Mean for the Housing Market? While home price appreciation is expected to continue, it isn’t projected to be the record-breaking 18 to almost 20% increase the market saw over the past 12 months. Overall, it’s important to note that price increases won’t be as monumental as they were in 2021 – but they certainly won’t decline anytime soon. What Does That Mean for You? With motivated buyers in the market and so few homes available to purchase, the imbalance of supply and demand will continue to put upward pressure on home prices in 2022. And when home price appreciation is in the forecast, that’s a clear indication your investment in homeownership is a sound one. Bottom Line It’s important to know that home prices are not projected to decline in the new year. Instead, they’re forecast to rise, just at a more moderate pace. Let’s connect to make sure you’re up to date on what’s happening with home price appreciation in our market, so you can make an informed decision about your next move.

Advice for First-Generation Homebuyers The sense of pride you’ll feel when you purchase a home can’t be overstated. For first-generation homebuyers, that feeling of accomplishment is even greater. That’s because the pride of homeownership for first-generation buyers extends far beyond the homebuyer. AJ Barkley, Head of Neighborhood and Community Lending for Bank of America, says: “Achieving this goal can create a sense of pride and accomplishment that resonates both for the buyer and those closest to them, including their parents and future generations.” In other words, your dream of homeownership has far-reaching impacts. If you’re about to be the first person in your family to buy a home, let that motivate you throughout the process. As you begin your journey, here are three helpful tips to make that dream come true. 1. Reach Out to a Real Estate Professional It’s important to reach out to a trusted advisor early in your homebuying process. Not only can an agent help you find the right home, but they’ll serve as your expert advisor and answer any questions you might have along the way. The latest Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) surveyed first-time homebuyers to see how their agent helped them with their home purchase (see chart below): As the graph shows, your agent is a great source of information throughout the process. They’ll help you understand what’s happening, assess a home’s condition, and negotiate a contract that has the best possible terms for you. These are just some of the reasons having an expert in your corner is critical as you navigate one of the most significant purchases of your life. 2. Do Your Research and Know What You Can Afford The second piece of advice for first-generation homebuyers is practical: do your research so you know what you can afford. That means getting your finances in order, reviewing your budget, and getting pre-approved through a lender. It also means learning the ins and outs of what it takes to pay for your home, including what you’ll need for a down payment. Many homebuyers believe the common misconception that you can’t purchase a home without coming up with a 20% for a down payment. As Freddie Mac says: “The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.” The chart below shows what recent homebuyers have actually put down on their purchases: On average, first-time buyers only put 7% down on their home purchase. That’s far less than the 20% many people believe is necessary. That means your down payment, and your home purchase, may be in closer reach than you realize. Keep that in mind as you work with a real estate professional to better understand what you’ll need for your purchase. 3. Don’t Lose Sight of What Home Means to You Finally, it’s important keep in mind why you’re searching for a home to begin with. Overwhelmingly, first-generation homeowners recognize the financial and non-financial benefits of owning a home. In fact, in a recent survey: 73% of first-generation homeowners say the safety and security homeownership provides is increasing in importance. Nearly two-thirds of first-generation homeowners say the importance of building equity in a home is growing more important as well. As AJ Barkley explains: “For many first-generation homeowners and their families, homeownership has a unique importance, given the collective efforts to overcome financial challenges that can often span generations…” Bottom Line If you’re a first-generation homebuyer, being prepared and working with a trusted expert is key to achieving your dream. Let’s connect today so you can get started on your path to homeownership.

If You Think the Housing Market Will Slow This Winter, Think Again. From the opportunity to take advantage of today’s low mortgage rates to changing homeowner needs, Americans have more motivation than ever to buy a home. According to the experts, buyers are making moves right now, creating an unseasonably strong housing market for this time of year. As we wrap up the fall season and move into the winter months, here’s a look at what several industry leaders have to say about the continued momentum in the current market, and what it means as we head into the early part of next year. Lawrence Yun, Chief Economist, National Association of Realtors (NAR) “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low. The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.”  Odeta Kushi, Deputy Chief Economist, First American “So far in November, purchase applications point to another strong month in sales. Still low rates and demographic demand support this strength, even as affordability and inventory headwinds remain.” The M Report “The demand for housing in the United States has reached a fever pitch, a trend that opposes the norm of this time of the year when the market cools as the winter months set in.” Mark Fleming, Chief Economist, First American “Strong demographic demand will continue to act as the wind in the housing market’s sails.” What does this mean for the winter housing market? Buyers are actively in the market, and they’re competing for homes to purchase. With the momentum coming out of this fall, all signs point to the winter housing market picking up steam, making it much busier than in a more typical year. And as we’ve seen in so many ways, 2020 and 2021 were anything but typical in real estate. It looks like 2022 may be joining that list before we know it. Bottom Line If you think the housing market will slow down this winter, think again. Whether you’re thinking of buying a home, selling your house, or both – let’s connect to determine if this winter is your best time to make a move too.

Two Reasons Why Waiting To Buy a Home Will Cost You If you’re a homeowner who’s decided your current house no longer fits your needs, or a renter with a strong desire to become a homeowner, you may be hoping that waiting until next year could mean better market conditions to purchase a home. To determine whether you should buy now or wait another year, you can ask yourself two simple questions: Where will home prices be a year from now? Where will mortgage rates be a year from now? Let’s shed some light on the answers to both of these questions. Where Will Home Prices Be a Year from Now? Three major housing industry entities are projecting ongoing home price appreciation in 2022. Here are their forecasts: Fannie Mae: 7.4% Freddie Mac: 7% Mortgage Bankers Association: 5.1% According to the National Association of Realtors (NAR), the median price of a home today is $353,900. Using an average of the three price projections above (6.5%), a home that sold for $353,900 today would be valued at $376,904 at the end of next year. As a prospective buyer, you would therefore pay an additional $23,004 by waiting. Where Will Mortgage Rates Be a Year from Now? Today, Freddie Mac announced their 30-year fixed mortgage rate was at 3.1%. However, most experts believe mortgage rates will rise as the economy recovers. Here are the forecasts for the fourth quarter of 2022 by the three major entities mentioned above: Fannie Mae: 3.4% Freddie Mac: 3.7% Mortgage Bankers Association: 4% That averages out to 3.7% if you include all three forecasts. Any increase in mortgage rates will increase your costs. What Does It Mean for You if Home Values and Mortgage Rates Increase? If both variables increase, you’ll pay a lot more in mortgage payments each month. Let’s assume you purchase a $353,900 home today with a 30-year fixed-rate loan at 3.1% (the current rate from Freddie Mac) after making a 10% down payment. According to mortgagecalculator.net, your monthly mortgage payment would be approximately $1,360 (this does not include insurance, taxes, and other fees because those vary by location). That same home one year from now could cost $376,904, and the mortgage rate could be 3.7% (based on the industry forecasts mentioned above). Your monthly mortgage payment after putting down 10%, would be approximately $1,561.The difference in your monthly mortgage payment would be $201. That’s $2,412 more per year and $72,360 over the life of the loan. Add to that the approximately $23,004 a house with a similar value would build in home equity this year due to home price appreciation, and the total net worth increase you could gain by buying this year is over $95,364 (the $72,360 mortgage savings plus the $23,004 potential gain in equity if you buy now). Bottom Line When asking if you should buy a home, you may think of the non-financial benefits of homeownership. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.

Why It Just Became Much Easier To Buy a Home Since the pandemic began, Americans have reevaluated the meaning of the word home. That’s led some renters to realize the many benefits of homeownership, including the feelings of security and stability and the financial benefits that come with rising home equity. At the same time, many current homeowners have decided their house no longer meets their needs, so they moved into homes with more space inside and out, including a home office for remote work. However, not every purchaser has been able to fulfill their desire for a new home. Here are two obstacles some homebuyers are facing: The ability to save for a down payment The ability to qualify for a mortgage at the current lending standards This past week, both of those challenges have been mitigated to some degree for many purchasers. The FHFA (which handles mortgages by Freddie Mac, Fannie Mae, and the Federal Housing Administration) is raising its loan limit for prospective purchasers in 2022. The term used to describe the maximum loan amount they will entertain is the Conforming Loan Limit. What Is the Difference Between a Conforming Loan and a Non-Conforming Loan? Investopedia explains the difference in a recent post: “Conforming loans are the only loans that meet the requirements to be acquired by Fannie Mae and Freddie Mac. Jumbo loans, which exceed the conforming limit, are the most common type of nonconforming loan.” What Difference Does It Make to Me as a Home Buyer? A Forbes article earlier this year explains the benefits of a conforming loan and why they exist: “Since lenders can’t sell non-conforming loans to Fannie Mae or Freddie Mac to free up their cash, they’re a bit riskier for the lender. This is especially true for jumbo loans, which aren’t backed by any government guarantees. If you default on a jumbo loan, it’s a huge blow to the lender. Thus, lenders generally charge higher interest rates to compensate, and they can have even more requirements. For example, lenders who give out jumbo loans often require that you make a down payment of at least 20% and show that you have at least six months’ worth of cash in reserve, if not more.” What Happened Last Week? The FHFA has significantly increased its Conforming Loan Limits for 2022. Sandra L. Thompson, FHFA Acting Director, explains in the press release that: “Compared to previous years, the 2022 Conforming Loan Limits represent a significant increase due to the historic house price appreciation over the last year. While 95 percent of U.S. countie​s will be subject to the new baseline limit of $647,200, approximately 100 counties will have conforming loan limits approaching $1 million.” This means that more homes now qualify for a conforming loan with lower down payment requirements and easier lending standards – the two challenges holding many buyers back over the last year. The Federal Housing Administration (FHA) also increased its Conforming Loan Limits for 2022. That could also mean an easier path to homeownership for many prospective buyers. As the Forbes article explains: “FHA loans can be very beneficial if you don’t have as much savings, or if your credit score could use some work.” Bottom Line Buying your first or your next home may have just gotten much easier (less stringent qualifying standards) and less expensive (possibly lower mortgage rate). Let’s connect to discuss how these changes may impact you. Resources: To get more information on the new FHFA Conforming Loan Limits, click here. To get more information on the new FHA Conforming Loan Limits, click here.

Tips for Single Homebuyers: How To Make Your Dream a Reality If you’re living on your own and looking to buy a home, know that you can make your dream a reality with thoughtful planning and the right team of experts. Research from Freddie Mac shows 28% of all households (36.1 million) are sole-person, and that number is growing. Over the past 40 years, the number of sole-person households has nearly doubled, and that’s a trend that’s expected to continue. According to Freddie Mac: “Our calculation suggests that there will be an additional 5 million sole-person households in the United States by the next decade. This means 42% of the household growth will be contributed by sole-person households, . . .” If you fall into this category, here are three tips to help you achieve your homeownership goals. 1. Know Your Credit Score When you buy a home on your own, you have to qualify for your loan based solely on your own finances and credit history. Investopedia says: “. . . lenders will be looking at just one credit profile: yours. Needless to say, it has to be in great shape. It is always a good idea to review your credit report beforehand, and this is especially true of solo buyers.” It’s important to find out your score so you know where it falls. If you’re not sure if it’s strong enough or where to focus your energy to improve it, meet with a professional for expert advice on your individual situation. 2. Explore Down Payment Options Next, look into down payment programs so you can get a feel for what you’ll need to save to buy a home. Rob Chrane, CEO of Down Payment Resource, explains: “Buyers should discuss their program options with their loan officer and real estate agent to make sure they choose the program best suited to their personal needs.” In this step, lean on the pros to determine what you’re eligible for and what’s right for you. 3. Think About Your Future Home and Your Needs You should also spend time thinking about what you want. What type of home do you picture yourself in? To answer that question, Quicken Loans shares this advice: “Think about your lifestyle, what you want out of your home and your needs. Is being close to work important? Do you need a lot of yard space? Do you want an extra bedroom that you can transform into a home office? Condo or detached home? Lots of space for entertaining? It’s all up to you (and your budget).” Again, a professional can help you balance what you want and how much you should spend on your monthly housing costs to determine what type of home is right for you. While buying a home solo can feel like a big challenge, it doesn’t have to be. If you lean on the professionals, they can help you navigate these waters and make sure you’re able to take advantage of the great opportunities in today’s housing market (like low mortgage rates) to buy your dream home. Bottom Line The share of sole-person households is growing. If you’re looking to buy a home on your own, be confident that the dream is achievable. When you’re ready to begin your search, let’s connect so you have expert advice each step of the way.

How To Think Strategically as a Buyer in Today’s Market The game of chess can provide incredible lessons to apply to all aspects of life, including the homebuying process. Chess requires you to plan and think about your strategy from the very beginning of the game. The homebuying process, like chess, requires strategy and planning. Here are a few things to keep in mind to ensure your plan is as strong as possible when you begin your home search. Pre-Approval: the Best Opening Play To Make as a Homebuyer It’s important to have a great opening play when you’re buying a home. And the best move you can make when you begin your home search is getting pre-approved by a lender. You’ve probably already heard this is an important step, but what exactly is pre-approval and what benefits does it provide you? As Freddie Mac puts it: “The pre-approval letter from your lender tells you the maximum amount you are qualified to borrow. Getting a pre-approval letter is not a loan guarantee, it simply states how much your lender is willing to lend you. . . .” And while determining how much you can afford at the start of your search is critical, the pre-approval letter also serves another important purpose. Freddie Mac also notes: “This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.” In the game of chess, a strong opening move signals to your opponent that you’re a serious competitor. As a homebuyer, your pre-approval letter signals to the seller that you’re a serious, interested buyer. Homebuying: It’s a Team Game, Not a Single-Player Experience Every step you take to create your strategy as a buyer is important in today’s market. Why? Mortgage rates are still low, but increasing. Prices are going up. There’s a limited supply of homes for sale. These are just a few key variables in today’s market you need to be prepared for. That means leaning on expert guidance as you plan every move is more important than ever. Have a team of professionals – like your trusted real estate agent and a loan officer – every step of the way to make sure you make the right moves. Bottom Line Getting a pre-approval letter isn’t just good strategy, it can be game-changing. It allows you to get a full understanding of what you can afford, and it signals to sellers that you’re serious. Let’s connect today to ensure you’re playing chess and being strategic during the home buying process.

Home Is Where the Heart Is More than Ever This Year There’s no denying the financial benefits of homeownership, but what’s often overlooked are the feelings of gratitude, security, pride, and comfort we get from owning a home. This year, those emotions are stronger than ever. We’ve lived through a time that has truly changed our needs and who we are, and as a result, homeownership has a whole new meaning for many of us. According to the 2021 State of the American Homeowner report by Unison: “Last year, staying home became a necessity and that caused many homeowners to have renewed gratitude for the roof over their head.” As a nation, we continue to work through the challenges of a pandemic that’s pushed us all to new limits. Over the past year and a half, we’ve spent more time than ever at home: working, eating, schooling, exercising, and more. The world around us changed almost overnight, and our homes were redefined. Our needs shifted, and our shelters became a place that protected us on a whole new level. The same study from Unison notes: 91% of homeowners say they feel secure, stable, or successful owning a home 64% of American homeowners say living through a pandemic has made their home more important to them than ever 83% of homeowners say their home has kept them safe during the COVID-19 pandemic It’s no surprise this study also reveals that homeowners are now more emotionally attached to their homes as well:As we’ve learned throughout this health crisis, homeownership can provide the safety and security we crave in a time of uncertainty. That sense of connection and emotional stability genuinely reaches beyond just the financial aspect of owning a home. As JD Esajian, President of CT Homes, LLC, says: “Aside from the financial factors, there are several social benefits of homeownership and stable housing to consider. It has long been thought that buying a home contributes to a sense of accomplishment. Still, most individuals fail to realize that homeownership can benefit your mental health and the community around you.” Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, take a moment to reflect on what Mark Fleming, Chief Economist at First American, notes: “Buying a home is not just a financial decision. It's also a lifestyle decision.” Bottom Line If you’re considering buying a home, it’s not entirely about the dollars and cents. Don’t forget to weigh the non-financial benefits that may truly change your life when you need them most.

Why Now Is a Great Time To Sell Your House 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. Sellers Are Still Firmly in the Driver’s Seat 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. What Does That Mean for You? 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. Bottom Line Listing your home over the next few weeks gives you the best chance to be in front of buyers competing for homes this holiday season. Let’s connect today to discuss how you can benefit from today’s sellers’ market.

How Smart Buyers Are Approaching Rising Mortgage Rates Last week, the average 30-year fixed mortgage rate from Freddie Mac inched up to 3.1%, and experts project rates will continue rising through 2022: “The 30-year fixed-rate mortgage was 2.9% in the third quarter of 2021. We forecast mortgage rates to increase slightly through the remainder of the year and reach 3.0%, rising to 3.5% for full year 2022.” If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise. Taking Time Off Can Be Costly Mortgage rates play a significant role in your home search. As rates go up, your monthly mortgage payment increases if you’re buying a home, directly affecting how much you can afford. And even the smallest increase can have a large impact on your monthly payment (see chart below):With mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of waiting and hoping rates will fall, today’s rates should motivate you to purchase now before rates increase more. Smart Buyers Can Succeed by Planning Ahead You can use your newfound motivation to energize your search and plan your next steps accordingly so you’re prepared to act no matter what happens with mortgage rates. One way to do that: take rising rates into consideration as part of your budget. Danielle Hale, Chief Economist at realtor.com, puts it best, saying: “Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higher so that they won’t be derailed by a sudden upward move. . . .” You should also be ready to act when you find the home that meets your needs. That means getting pre-approved with a lender so there won’t be any delays when the time arrives. The best way to prepare is to work with a trusted real estate advisor now. An agent can connect you with a lender, help you adjust your search based on your budget, and be ready to act quickly when it’s time to make an offer. Bottom Line Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.