Living with Loved Ones Could Help You Achieve Your Homeownership Goals

“. . . an increasing percentage of young adult first-time homebuyers are relying on support from older generations, including their parents, to buy a home together.”

Other Key Benefits of Multigenerational Living

“Residing with relatives can offer advantages . . . you can pool multiple streams of income, for instance. And in households with young children, grandparents can pitch in with child care.”

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“. . . don’t expect a housing bust like the mid-2000s, as lending standards in this housing cycle have been much tighter and homeowners have historically high levels of home equity, so there likely won’t be a surge in foreclosures.”

“Typically, default is triggered when a borrower misses a specific number of monthly payments . . . Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.”

• Reinstatement
• Loan modification
• Deed-in-lieu of foreclosure
• Short sale

You May Be Able To Use Your Equity To Sell Your House

“The total average equity per borrower has now reached almost $300,000, the highest in the data series.”

“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”

Lean on Experts To Explore Your Options

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Mortgage Rates Will Continue To Respond to Inflation

“Just one year ago, rates were under 3%. This means that while mortgage rates are not as high as they were in the 80’s, they have more than doubled in the past year. Mortgage rates have never doubled in a year before.”

Home Price Changes Will Vary by Market

“House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.”

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Agents:

The Financial Benefits of Owning a Home

“Understanding the potential benefits of homeownership helps individuals see the value of owning property instead of renting. . . . household wealth among homeowners is a whopping 1,469% higher on average compared to renters, excluding home equity, making the allure of homeownership even more enticing.”

“Most Americans (78%) still associate homeownership with the ‘American dream.’ And nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.”

The Non-Financial Benefits of Homeownership

“. . . buying a home is not just a financial decision. It's also a lifestyle decision.”

• Providing you with more freedom and control over your living space
• Giving you a greater sense of pride
• Helps with community engagement

What Does That Mean for You?

“. . . research has consistently shown that homeownership is also associated with multiple economic and social benefits to individual homeowners. Homeownership has always been an important way to build wealth.”

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1. Mortgage Rates

“U.S. 30-year fixed mortgage rates have increased 3.83 percentage points since the end of last year. That's the biggest year-to-date increase in rates in over 50 years.”

2. Home Prices

3. Wages

“Median weekly earnings of the nation's 120.2 million full-time wage and salary workers were $1,070 in the third quarter of 2022 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported…This was 6.9 percent higher than a year earlier…”

“Buying or selling a home involves a series of requirements and variables, and it's important to have someone in your corner from start to finish to make the process as smooth as possible… and objectivity to deliver trusted expertise to consumers in every U.S. ZIP code.”

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What the Experts Are Saying About Home Prices Next Year

What Does This Mean?

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

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Homeownership Is Historically a Great Hedge Against Inflation

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

“Inflation refuses to budge. In September, consumer prices rose by 8.2%. Rents rose by 7.2%, the highest pace in 40 years.”

Bottom Line

• If you’re trying to buy your first home in today’s housing market, you’ll want to know what you can do as mortgage rates rise and inventory stays low overall.
• Connect with a lender to get pre-approved, prioritize your wish list, consider condos, and expand your search radius.
• Your first home is out there. Let’s connect to explore your options and what other first-time buyers are doing to find their homes.

Some Highlights

• If you’re trying to buy your first home in today’s housing market, you’ll want to know what you can do as mortgage rates rise and inventory stays low overall.
• Connect with a lender to get pre-approved, prioritize your wish list, consider condos, and expand your search radius.
• Your first home is out there. Let’s connect to explore your options and what other first-time buyers are doing to find their homes.

Some Highlights

• If you’re trying to buy your first home in today’s housing market, you’ll want to know what you can do as mortgage rates rise and inventory stays low overall.
• Connect with a lender to get pre-approved, prioritize your wish list, consider condos, and expand your search radius.

Your Credit Score

“When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”

Your Loan Type

“There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose.”

Your Loan Term

“When choosing the right home loan for you, it’s important to consider the loan term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”

Your Down Payment

“In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”

Bottom Line

“While even two months ago rates above 7% may have seemed unthinkable, at the current pace, we can expect rates to surpass that level in the next three months.”

1. Where Do I Think Home Prices Are Heading?

2. Where Do I Think Interest Rates Are Heading?

“While mortgage rates are expected to continue to drift higher over the coming months, much of the rapid increase in rates is likely behind us.” 

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

Home Price Growth Over Time

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The Impact of Rising Mortgage Rates

Are Mortgage Rates Going To Go Down?

“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.”

“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.”

Bottom Line

• If you’re trying to decide whether to rent or buy a home, consider the advantages homeownership offers.
• Buying a home can help you escape the cycle of rising rents, it’s a powerful wealth-building tool, and it’s typically considered a good hedge against inflation.
• If you’re ready to take advantage of the benefits of homeownership, let’s connect to explore your options.

Some Highlights

• If you’re trying to decide whether to rent or buy a home, consider the advantages homeownership offers.
• Buying a home can help you escape the cycle of rising rents, it’s a powerful wealth-building tool, and it’s typically considered a good hedge against inflation.
• If you’re ready to take advantage of the benefits of homeownership, let’s connect to explore your options.

Some Highlights

• If you’re trying to decide whether to rent or buy a home, consider the advantages homeownership offers.
• Buying a home can help you escape the cycle of rising rents, it’s a powerful wealth-building tool, and it’s typically considered a good hedge against inflation.

“The root issue of what drives house prices almost always is supply and demand . . .”   

Bottom Line

“Home sellers have historically moved when something in their lives changed – a new baby, a marriage, a divorce or a new job. . . .”

“The primary reason homeowners decided to sell in the last year was the realization that, after so much time spent at home, they wanted different features and amenities, such as walkability, outdoor space, pool, etc. . . . ”

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Buyer Demand Then and Now

What That Means for You When You Sell

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“Compared to one year ago, the monthly mortgage payment rose to $1,944 from $1,265, an increase of 53.7%.”

1. Expand Your Search Area and Criteria

“Area growth is likely to keep pace with the market, which means that the outskirts of town might be hopping within five years. Consider stepping out of your ideal location by searching in the nearby cities. You may find better prices and more square footage.”

2. Explore Alternative Financing Options

“A variety of mortgages are available with varying down payment and eligibility requirements.”

3. Look for Grants, Gift Funds, and Down Payment Assistance

“Many local governments and non-profit organizations offer down-payment assistance grants and loans, targeted to area borrowers and often with specific borrower requirements.”

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Experts Project Mortgage Rates Will Stabilize

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The Supply of Newly Built Homes Is Rising

What That Means for You

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What’s Causing Housing Inventory To Grow?

“We are seeing a significant change in inventory, but no pickup in new listings. Most of the increase in inventory so far has been due to softer demand - likely because of higher mortgage rates.”

Why This Growth Is Good News for You

“Nationally, the inventory of homes actively for sale on a typical day in July increased by 30.7% over the past year, the largest increase in inventory in the data history and higher than last month’s growth rate of 18.7% which was itself record-breaking. This amounted to 176,000 more homes actively for sale on a typical day in July compared to the previous year and more choice for buyers who are still looking for a new home.”

Bottom Line

1. Understand How Mortgage Rates Impact Your Homebuying Power

2. Be Open to Exploring Different Options During Your Search

3. Work with a Local Real Estate Professional for Expert Guidance

“Taking the leap to homeownership can provide a feeling of pride while boosting your long-term financial outlook, if you go in well-prepared and with your eyes open.”

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Why Are More People Becoming Homeowners?

“In the 1970s, when inflation was running around 10%, home prices were rising at approximately the same rate. Renters actually have a harder time in inflationary periods, because rents tend to rise along with inflation, whereas mortgage payments stay the same for homeowners with fixed-rate mortgages.”

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Last Year’s Rapid Home Price Growth Wasn’t the Norm

“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”

Home Price Appreciation Moderates Today

What Does That Mean for You?

Bottom Line

• The housing market is shifting away from the intensity of the past two years. Here’s what experts project for the remainder of 2022.
• Home prices are forecast to rise more moderately than last year. Mortgage rates will respond to inflation, and home sales will be more in line with pre-pandemic years.
• Let’s connect so you can make your best move this year.

Some Highlights

• The housing market is shifting away from the intensity of the past two years. Here’s what experts project for the remainder of 2022.
• Home prices are forecast to rise more moderately than last year. Mortgage rates will respond to inflation, and home sales will be more in line with pre-pandemic years.
• Let’s connect so you can make your best move this year.

Some Highlights

• The housing market is shifting away from the intensity of the past two years. Here’s what experts project for the remainder of 2022.
• Home prices are forecast to rise more moderately than last year. Mortgage rates will respond to inflation, and home sales will be more in line with pre-pandemic years.

“The median rent across the 50 largest US metropolitan areas reached $1,876 in June, a new record level for Realtor.com data for the 16th consecutive month.”

If You Need More Space, Buying a Home May Be More Affordable

Homeownership Also Provides Stability and a Chance To Grow Your Wealth

“...if you buy a house and secure a fixed-rate mortgage, that means that no matter how much prices or interest rates go up, your fixed payment will stay the same every month. That's an advantage over renting since there's a good chance your landlord will raise your rent to counter inflationary pressures.” 

“Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you're building equity in your home that you can tap into later on. When you rent, you aren't investing in your financial future the same way you are when you're paying off a mortgage.”

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