There’s a Shortage of Homes on the Market Today, Not a Surplus

Mortgage Standards Were Much More Relaxed During the Crash

“Credit standards tightened in recent months due to increasing economic uncertainty and monetary policy tightening.” 

The Foreclosure Volume Is Nothing Like It Was During the Crash

“In total, mortgage holders gained $2.8 trillion in tappable equity over the past 12 months – a 34% increase that equates to more than $207,000 in equity available per borrower. . . .”

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“This is an opportunity for people with a secure job to jump into the market, when other people are a little hesitant because of a possible recession. . . They’ll have fewer buyers to compete with.”

Two Reasons There Are More Homes for Sale

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Higher Mortgage Rates Are Moderating the Housing Market 

• The 2017 through early 2020 numbers (shown in gray) give a good baseline of pre-pandemic demand. The steady up and down trends seen in each of these years show typical seasonality in the market.
• The blue on the graph represents the pandemic years. The height of those blue bars indicates home showings skyrocketed during the pandemic.
• The most recent data (shown in green), indicates buyer demand is moderating back toward more pre-pandemic levels.

Higher Mortgage Rates Slow the Once Frenzied Pace of Home Sales

• The pre-pandemic years (shown in gray) establish a baseline of the number of existing home sales in more typical years.
• The pandemic years (shown in blue) exceeded the level of sales seen in previous years. That’s largely because low mortgage rates during that time spurred buyer demand and home sales to new heights.
• This year (shown in green), the market is feeling the impact of higher mortgage rates and that’s moderating buyer demand (and by extension home sales). That’s why the expectation for home sales this year is closer to what the market saw in 2018-2019.

Why Is All of This Good News for You?

Bottom Line

• Experts say the number of homes for sale is growing this year, and that can have a big impact on your move.
• If you’re planning to buy, additional options in today’s market may be just what you’ve been waiting for. More inventory means added opportunities to find the home of your dreams.
• Let’s connect so you have the latest information on available homes in our area.

Some Highlights

• Experts say the number of homes for sale is growing this year, and that can have a big impact on your move.
• If you’re planning to buy, additional options in today’s market may be just what you’ve been waiting for. More inventory means added opportunities to find the home of your dreams.
• Let’s connect so you have the latest information on available homes in our area.

Some Highlights

• Experts say the number of homes for sale is growing this year, and that can have a big impact on your move.
• If you’re planning to buy, additional options in today’s market may be just what you’ve been waiting for. More inventory means added opportunities to find the home of your dreams.

Home Prices Rose Significantly in Recent Years

Where Experts Say Prices Will Go from Here

“. . .we’re still well below normal levels of inventory and that’s why even with the pullback in demand, we still see house prices appreciating. While there is more inventory, it’s still not enough.”

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Bottom Line

“Inflation will have a strong influence on where mortgage rates go in the months ahead. . . . Whenever inflation finally starts to ease, so will mortgage rates — but even then, home prices are still subject to demand and very tight supply.”

Homeownership Is Historically a Great Hedge Against Inflation

“Real estate is one of the time-honored inflation hedges. It's a tangible asset, and those tend to hold their value when inflation reigns, unlike paper assets. More specifically, as prices rise, so do property values.”

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

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

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

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

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

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Where Mortgage Rates Will Go Depends on Inflation

“Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.”

The Supply of Homes for Sale Projected To Continue Increasing

Home Price Forecasts Call for Ongoing Appreciation

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Bottom Line

“According to Freddie Mac, the 30-year fixed mortgage rate dropped sharply by 40 basis points to 5.3 percent. . . . As a result, home buying is about 5 percent more affordable than a week ago. This translates to about $100 less every month on a mortgage payment.”

Bottom Line

• The recent growth in home prices is because of demographics and low inventory
• Credit risks are low because underwriting and lending standards are sound

1. Low Housing Inventory Is Causing Home Prices To Rise

“The fundamentals driving house price growth in the U.S. remain intact. . . . The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.”

2. Mortgage Lending Standards Today Are Nothing Like the Last Time

“. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.”

“Consumer prices accelerated again in May as shelter, energy and food prices continued to surge at the fastest pace in decades. This marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981.”

Homeownership Helps You Stabilize One of Your Biggest Monthly Expenses

“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. That’s certainly not the case if you’re renting.”

Investing in an Asset That Historically Outperforms Inflation

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“Price growth is the key ingredient for the creation of home equity wealth. . . . This has led to the largest one-year gain in average home equity wealth for owners. . . .”

The Opportunity Your Rising Home Equity Provides

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• Appreciation is when home prices increase.
• Depreciation is when home prices decrease.
• Deceleration is when home prices continue to appreciate, but at a slower pace.

Where Home Prices Have Been in Recent Years

Where Experts Say Home Prices Are Going

“In today’s housing market, demand for homes continues to outpace supply, which is keeping the pressure on house prices, so don’t expect house prices to decline.”

“With home values at record-high levels and a vast majority of experts projecting additional price increases this year and beyond, home prices and expectations remain buoyant.”

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How an Investment in Real Estate Can Benefit You During High Inflation

“Rising rents, which continue to climb at double-digit pace . . . and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.”

When Inflation Has Risen in the Past, Home Prices Have Too

“There are many advantages to investing in real estate. . . . It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values. . . .”

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Work with a Professional To Prioritize Your Wish List

“Your budget isn’t all that you need to be concerned about; your wish list and desired location may carry just as much weight.”

Increase Your Search Radius To Consider More Locations

“. . . continued remote work flexibility is likely giving many the ability to live farther away in more affordable areas."

Bottom Line

“Home price growth continued to gain speed in early spring, as eager buyers tried to get in front of the mortgage rate surge.”

“. . . the swift move up in mortgage rates . . . doesn’t mean home prices are about to crash. In fact, every major real estate firm with a publicly released forecast model . . . still predicts home prices will climb further this year.”

What This Means for You

Bottom Line

• If recent headlines about rising inflation are making you wonder if it’s still a good time to buy, here’s what experts have to say.
• Housing is an asset that typically grows in value. Plus, your mortgage helps stabilize your monthly housing costs, and buying protects you from rising rents.
• Experts say owning a home is historically a good hedge against inflation. Let’s connect if you’re ready to start the homebuying process today.

Some Highlights

• If recent headlines about rising inflation are making you wonder if it’s still a good time to buy, here’s what experts have to say.
• Housing is an asset that typically grows in value. Plus, your mortgage helps stabilize your monthly housing costs, and buying protects you from rising rents.
• Experts say owning a home is historically a good hedge against inflation. Let’s connect if you’re ready to start the homebuying process today.

Some Highlights

• If recent headlines about rising inflation are making you wonder if it’s still a good time to buy, here’s what experts have to say.
• Housing is an asset that typically grows in value. Plus, your mortgage helps stabilize your monthly housing costs, and buying protects you from rising rents.

A Look Back: How the Current Mortgage Rate Compares to Historical Data

“. . . historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent.”

A Look Ahead: What Happens if Rates Climb Further

“. . . ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”

“With even higher interest rates on the horizon, I don’t see any reason to hold off from purchasing a home right now. If you feel financially secure, you should start looking for a home.”

“. . . if you’re on the fence about whether to buy now or wait for a better deal, buying sooner rather than later might be wise. That said, home buying is always a personal decision. Whether you should buy in 2022 depends on your financial situation and the local housing market where you live.”

Bottom Line

• To be the winning bid on their dream home
• To buy before mortgage rates rise more
• To buy before home prices go even higher

What Does This Mean for Sellers Today?

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What’s Happening with Home Prices? 

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

Where Do Experts Say Prices Will Go from Here?

“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”

What Does That Mean for You?

“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”

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Mortgage Rates Play a Large Role in Your Home Search

Work with Trusted Advisors To Know Your Budget and Make a Plan

“Get preapproved with where rates are today, but also consider what would happen if rates were to go up, say another quarter of a point, . . . Know what that would do to your monthly costs and how comfortable you are with that, so that if rates do move higher, you already know how you need to adjust in response.”

Bottom Line

• What does the rest of the year hold for the housing market? Here’s what experts have to say about what lies ahead.
• Home prices are projected to rise and so are mortgage rates. Experts are also forecasting another strong year for home sales as people move to meet their changing needs.
• Let’s connect so you can make your best move this year.

Some Highlights

• What does the rest of the year hold for the housing market? Here’s what experts have to say about what lies ahead.
• Home prices are projected to rise and so are mortgage rates. Experts are also forecasting another strong year for home sales as people move to meet their changing needs.
• Let’s connect so you can make your best move this year.

Some Highlights

• What does the rest of the year hold for the housing market? Here’s what experts have to say about what lies ahead.
• Home prices are projected to rise and so are mortgage rates. Experts are also forecasting another strong year for home sales as people move to meet their changing needs.

Offering over Asking Price

“Simply put, being willing to pay more money than other buyers is one of the best ways to get your offer accepted. You may not have to increase it by a lot — it’ll depend on the area and other factors — so look to your real estate agent for guidance.”

Putting Down a Bigger Earnest Money Deposit

“A typical earnest money deposit is 1% to 2% of the home’s purchase price, but the amount varies by location. A higher earnest money deposit may catch a seller’s attention in a hot housing market.”

Making a Higher Down Payment 

Non-Financial Options To Make a Strong Offer

“. . . Price is not the only factor sellers weigh when they look at offers. The buyer’s terms and contingencies are also taken into account, as well as pre-approval letters, appraisal requirements, and the closing time the buyer is asking for.”

Bottom Line

“With so few homes, buyers are once again left with fierce competition that’s driving the share of homes that sold over the listing price up to 66% . . . With the continued imbalance between supply and demand, home prices are likely to have another year of strong gains and are expected to average about 10% growth for the year.”

What This Means When You Sell Your House

What This Means for Your Next Purchase

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What Is a Sellers’ Market?

What Does This Mean for You When You Sell?

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