All • Buying • Selling • November 14, 2024

Mortgage Rates Stall!

by Rodney Ward

Freddie Mac today released the results of its Primary Mortgage Market Survey ^® (PMMS^®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.78 percent.

“After a six-week climb, rates have leveled off, but overall affordability continues to be an issue for potential homebuyers,” said Sam Khater, Freddie Mac’s Chief Economist. “Our latest research shows that mortgage payments compared to rents on the same homes are elevated relative to most of the last three decades.”

The 30-year FRM averaged 6.78 percent as of November 14, 2024, down from last week when it averaged 6.79 percent. A year ago at this time, the 30-year FRM averaged 7.44 percent.
The 15-year FRM averaged 5.99 percent, down from last week when it averaged 6.0 percent. A year ago at this time, the 15-year FRM averaged 6.76 percent.

Instant Reaction:

By: Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of REALTORS®.

Facts: The average 30-year fixed mortgage rate from Freddie Mac was essentially flat at 6.78% from 6.79% last week. At 6.78%, with 20% down, a monthly mortgage payment is $2,082 on a home with a price of $400,000. With 10% down, the typical payment would be $2,342.

Positive: Mortgage applications increased this week despite higher rates over the last few weeks. The election was decided, and buyers have resumed their search after an election pause. Even with a historically low share of first-time buyers, it is important to note that late Fall and Winter months are traditionally more favorable for first-time buyers as families bow out.

Negative: There have been two Fed rate cuts, and more are expected in 2025. However, these are not directly tied to mortgage interest rates, which are more closely tied to the 10-year treasury, which has increased in the last week. This week also showed inflation (down from last year but up from last month).

Selling • November 14, 2024

Sell it or Rent it?

by Rodney Ward

When you’re ready to move, figuring out what to do with your house is a big decision. And today, more homeowners are considering renting their home instead of selling it.

Recent data from Zillow shows about two-thirds (66%) of sellers thought about renting their home before listing, with nearly a third (28%) taking that possibility seriously. Compared to 2021, when fewer than half (47%) of homeowners considered renting before selling, it’s clear this trend is on the rise.

So, should you sell your house and use the money toward your next home or keep it as a rental to build long-term wealth? Let’s walk through some important questions to help you determine the right path for your financial and lifestyle goals.

Is Your House a Good Fit for Renting?

Before you decide what to do, it’s important to think about if it would make a good rental in the first place. For instance, if you’re moving far away, managing ongoing maintenance could become a major hassle. Other factors to consider are if your neighborhood is ideal for rentals and if your house needs significant repairs before it’s ready for tenants.

If any of these situations sound familiar, selling might be a more practical choice.

Are You Ready for the Realities of Being a Landlord?

Managing a rental property involves more than collecting monthly rent. It’s a commitment that can be time-consuming and challenging.

For example, you may get maintenance calls at all hours of the day or discover damage that needs to be repaired before a new tenant moves in. There’s also the risk of tenants missing payments or breaking their lease, which can add unexpected stress and financial strain. As Redfin notes:

“Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind.”

Do You Understand the Costs?

If you’re considering renting primarily for passive income, remember, there are additional costs you should anticipate. As an article from Bankrate explains:

Mortgage and Property Taxes: You still need to pay these expenses, even if the rent doesn’t cover all of it.

Insurance: Landlord insurance typically costs about 25% more than regular home insurance, and it’s necessary to cover damages and injuries.

Maintenance and Repairs: Plan to spend at least 1% of the home’s value annually, more if the house is older.

Finding a Tenant: This involves advertising costs and potentially paying for background checks.

Vacancies: If the property sits empty between tenants, you’ll lose rental income and have to cover the cost of the mortgage until you find a new tenant.

Management and HOA Fees: A property manager can ease the burden, but typically charges about 10% of the rent. HOA fees are an additional cost too, if applicable.

Bottom Line

To sum it all up, selling or renting out your home is a personal decision. Let’s connect so you have a pro on your side to help you feel supported and informed as you make your decision.

Buying • November 13, 2024

Are More Options For Buyers Emerging?

by Rodney Ward

More Homes, Slower Price Growth – What It Means for You as a Buyer

There are more homes on the market right now than there have been in years – and that could be a game changer for you if you’re ready to buy. Let’s look at two reasons why.

You Have More Options To Choose From

An article from Realtor.com helps explain just how much the number of homes for sale has gone up this year:

“There were 29.2% more homes actively for sale on a typical day in October compared with the same time in 2023, marking the twelfth consecutive month of annual inventory growth and the highest count since December 2019.”

And while the number of homes on the market still isn’t quite back to where it was in the years leading up to the pandemic, this is definitely an improvement (see graph below):

With more homes available for sale now, you have more options to choose from. As Hannah Jones, Senior Economic Research Analyst at Realtor.com, explains:

“Though still lower than pre-pandemic, burgeoning home supply means buyers have more options . . .”

That means you have a better chance of finding a house that meets your needs. It also means the buying process doesn’t have to feel quite as rushed, because more options on the market means you’ll likely face less competition from other buyers.

Home Price Growth Is Slowing

When there aren’t many homes for sale, buyers have to compete more fiercely for the ones that are available. That’s what happened a few years ago, and it’s what drove prices up so quickly.

But now, the increasing number of homes on the market is causing home price growth to slow down (see graph below):

In certain markets, the number of available homes has not only bounced back to normal, but has even surpassed pre-pandemic levels. In those areas, home price growth has slowed or stalled completely. As Lance Lambert, Co-Founder of ResiClub, explains:

“Generally speaking, housing markets where active inventory has returned to pre-pandemic 2019 levels have seen home price growth soften or even decline outright from their 2022 peak.”

Slower or stalled price growth could give you a better chance of finding something within your budget. As Dr. Anju Vajja, Deputy Director at the Federal Housing Finance Agency (FHFA), says:

“For the third consecutive month U.S. house prices showed little movement . . . relatively flat house prices may improve housing affordability.”

But remember, inventory levels and home prices are going to vary by market.

So, having a real estate agent who knows the local area can be a big advantage. They can help you understand the trends in your community, which can make a real difference in finding a home that fits your needs and budget.

Bottom Line

More housing options – and the slower home price growth they bring – can help you find and buy a home that works for your lifestyle and budget. So don’t hesitate to reach out if you want to talk about the growing number of choices you have right now.

Buying • Selling • November 12, 2024

What’s Motivating Homeowners To Move Now?

by Rodney Ward

Over the past few years, some homeowners have decided to delay their move because they don’t want to sell and take on a higher mortgage rate on their next home. Maybe you’re thinking the same thing. And honestly, that’s no surprise. It’s a very common roadblock and is one of the biggest factors that’s kept the number of homes on the market so low for so long.

But a growing number of homeowners are deciding they just can’t wait any longer. Often, it’s because of personal or lifestyle change. As Redfin explains:

“Some homeowners are opting to bite the bullet and give up their low rate in order to move. Many are selling because a major life event like a job change, or divorce . . .”

If you’re weighing the decision to move, take a look at some of the top reasons others are choosing to sell. You might find those are reason enough for you to move now, too.

It’s Time for a Change

A new job in a different city, a desire to be closer to family, or simply wanting a change of scenery can all spark the need to sell.

Let’s say you’ve landed a great job offer that requires relocating, listing your current home quickly may be the next logical step.

There’s Just Not Enough Space in Your Current House

Sometimes, your current home just doesn’t fit your lifestyle anymore. A growing family, the need for a home office, or more room for entertaining can all drive the decision to upgrade to a larger space.

As an example, if you live in a condo and have a baby on the way, selling might be the next best move so you can find a larger home that suits your needs.

Retirement or Wanting To Downsize

On the flip side, some homeowners are ready to downsize. This could be due to children moving out, retirement, or simply wanting less to maintain.

If you’re newly retired and dreaming of a simpler lifestyle, downsizing to a smaller home could free up both time and resources to enjoy this new chapter of life.

Changes in Relationship Status

Big changes like divorce, separation, or marriage often lead to a need for new living arrangements.

If you just went through a divorce, selling the house you once shared may allow both of you to move forward and find a living situation that works better for you now.

Health and Mobility Needs

Health concerns, especially those that affect mobility, can also drive the decision to sell. A home that once worked well might no longer suit your needs.

If this sounds like your experience right now, selling your current home to move into a more accessible space, or even using the proceeds for assisted living, could significantly improve your quality of life.

Bottom Line

Selling your home isn’t just about market conditions or mortgage rates—it’s also about making the best decision for your lifestyle and future. As Bankrate says:

“Deciding whether it’s the right time to sell your home is a very personal choice. There are numerous important questions to consider, both financial and lifestyle-based . . . Your future plans and goals should be a significant part of the equation.”

If a major life change has you thinking about moving, now might still be the right time to sell. Let’s connect so you have an expert to help you navigate the process.

All • Buying • Selling • November 11, 2024

The Majority of Veterans Are Unaware of a Key VA Loan Benefit

by Rodney Ward

For over 79 years, Veterans Affairs (VA) home loans have helped countless Veterans achieve the dream of homeownership. But according to Veterans United, only 3 in 10 Veterans realize they may be able to buy a home without needing a down payment (see visual below):

That’s why it’s so important for Veterans – and anyone who cares about a Veteran – to be aware of this valuable program. Knowing about the resources available can make the path to homeownership easier and keep life-changing plans from being put on hold. As Veterans United explains:

“The ability to buy with 0% down is the signature advantage of this nearly 80-year-old benefit program. Eligible Veterans can buy as much house as they can afford, all without the need to spend years saving for a down payment.”

The Advantages of VA Home Loans

VA home loans are designed to make homeownership a reality for those who have served our country. These loans come with the following benefits according to the Department of Veterans Affairs:

Options for No Down Payment: One of the biggest perks is that many Veterans can buy a home with no down payment at all, making it simpler to get started on your homebuying journey.
Limited Closing Costs: With VA loans, there are limits on the types of closing costs Veterans have to pay. This helps keep more money in your pocket when you’re ready to finalize the sale.
No Private Mortgage Insurance (PMI): Unlike many other loan types, VA loans don’t require PMI, even with lower down payments. This means lower monthly payments, which adds up to big savings over time.

Your team of expert real estate professionals, including a local agent and a trusted lender, are the best resource to understand all the options and advantages available to help you achieve your homebuying goals.

Bottom Line

Owning a home is a key part of the American Dream, and VA home loans are a powerful benefit for those who’ve served our country. Let’s connect to make sure you have everything you need to make confident decisions in the housing market.

Videos • November 8, 2024

Why Isn’t It Selling?

by Rodney Ward

All • November 7, 2024

Inch By Inch Mortgage Rate Increases Continue

by Rodney Ward

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey ^® (PMMS^®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.79 percent.

“Mortgage rates continued to inch up this week, reaching 6.79 percent,” said Sam Khater, Freddie Mac’s Chief Economist. “It is clear purchase demand is very sensitive to mortgage rates in the current market environment. As soon as rates began to rise in early October, purchase applications fell and over the last month have declined 10 percent.”

The 30-year FRM averaged 6.79 percent as of November 7, 2024, up from last week when it averaged 6.72 percent. A year ago at this time, the 30-year FRM averaged 7.50 percent.
The 15-year FRM averaged 6.0 percent, up from last week when it averaged 5.99 percent. A year ago at this time, the 15-year FRM averaged 6.81 percent.

The PMMS^® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.

Buying • November 7, 2024

Renting vs. Buying: The Net Worth Gap You Need To See

by Rodney Ward

Trying to decide between renting or buying a home? One key factor that could help you choose is just how much homeownership can grow your net worth.

Every three years, the Federal Reserve Board shares a report called the Survey of Consumer Finances (SCF). It shows how much wealth homeowners and renters have – and the difference is significant.

On average, a homeowner’s net worth is nearly 40 times higher than a renter’s. Check out the graph below to see the difference for yourself:

Why Homeowner Wealth Is So High

In the previous version of that report, the average homeowner’s net worth was about $255,000, while the average renter’s was just $6,300. That’s still a big gap. But in the most recent update, the spread got even bigger as homeowner wealth grew even more (see graph below):

As the SCF report says:

“. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”

One big reason why homeowner wealth shot up is home equity.

Equity is the difference between your home’s value and what you owe on your mortgage. You gain equity by paying down your mortgage and when your home’s value goes up.

Over the past few years, home prices have gone up a lot. That’s because there weren’t enough available homes for all the people who wanted one. This supply-demand imbalance pushed home prices up – and that translated into faster equity gains and even more net worth for homeowners.

If you’re still torn between whether to rent or buy, here’s what you should know. While inventory has grown this year, in most places, there’s still not enough to go around. That’s why expert forecasts show prices are expected to go up again next year nationally. It’ll just be at a more moderate pace.

While that’s not the sky-high appreciation we saw during the pandemic, it still means potential equity gains for you if you buy now. As Ksenia Potapov, Economist at First American, explains:

“Despite the risk of volatility in the housing market, homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.”

But prices and inventory are going to vary by area. So, lean on a local real estate agent. They’ll be able to give you the local trends and speak to the other financial and lifestyle benefits that come with owning a home. That crucial information will help you decide the best move for you right now. As Bankrate explains:

“Deciding between renting and buying a home isn’t just about cost — the decision also involves long-term financial strategies and personal circumstances. If you’re on the fence about which is right for you, it may be helpful to speak with a local real estate agent who knows your market well. An experienced agent can help you weigh your options and make a more informed decision.”

Bottom Line

If you’re not sure if you should rent or buy, keep in mind that if you can make the numbers work, owning a home can really grow your wealth over time.

And if homeownership feels out of reach, let’s connect so we can explore programs that may make buying possible.

All • Buying • Selling • November 5, 2024

Anticipating Volatility in Today’s Housing Market?

by Rodney Ward

You’ve probably noticed one thing if you’re thinking about making a move: the housing market feels a bit unpredictable right now. The truth is, from home prices to mortgage rates, we’re seeing more volatility – and it’s important to understand why.

At a high-level, let’s break down what’s happening and the best way to navigate it.

What’s Driving Today’s Market Volatility?

Factors like economic data, unemployment numbers, decisions coming out of the Federal Reserve (The Fed), and even the presidential election, are creating uncertainty right now – and uncertainty leads to market volatility.

You can see that when you look at what’s happening with mortgage rates. New economic reports and other geopolitical events have an impact and can cause sudden shifts up or down, even though experts still forecast rates will come down overall. We’ve seen that effect play out recently, like when employment and inflation data get released each month.

And as the markets react, these types of updates will continue to have an impact on rates moving forward. As Greg McBride, CFA, Chief Financial Analyst at Bankrate, says:

“After steadily declining throughout the summer months, I expect more ups and downs to mortgage rates . . . Job market data will be closely watched as well as any clues from the Fed about the extent of upcoming interest rate cuts.”

This is exactly why the projected decline in mortgage rates isn’t going to be a straight line down over the next year. As Hannah Jones, Senior Economic Research Analyst at Realtor.com, explains:

“Rates have shown considerable volatility lately, and may continue to do so . . . Overall, we still expect a downward long-term mortgage rate trend.”

Plus, home prices and the number of homes on the market vary dramatically depending on where you’re looking to buy or sell, which makes it even harder to get a clear picture. In some areas, home prices are rising and inventory is tight, while in others, there are more homes available and it’s leading to more moderate pricing shifts.

As all of this unfolds, understanding what’s happening will help you make the right decisions, whether that’s buying or selling. And there’s one easy way to get that information: from a professional.

The Importance of Partnering with a Pro

While the road ahead may have some bumps and unexpected turns, you don’t have to go it alone. A great agent will keep you up to date on the latest market developments, guide you through any shifts, and help you make smart decisions based on your goals.

For example, as mortgage rates change, professionals (like your agent and a trusted lender) will explain how the shifts impact what you can reasonably plan for in your monthly payment. This will help you see how even a small change in rates can impact your bottom line – that way you don’t lose sight of the big picture even as shifts happen here and there.

And since conditions can vary significantly from one neighborhood to another, your agent will also help you understand the specifics of your market—whether it’s how to navigate competition with other buyers, the number of homes available, or what’s happening with local home prices. Their insights and expertise will help you adapt to any movement in the market.

Bottom Line

The housing market may be experiencing some shifts, but don’t let it stop you from making your move. With the support of an experienced real estate agent and a trusted lender, you’ll be ready to navigate the changes and make the most of the opportunities that come your way.

Let’s turn any uncertainty into your advantage, helping you move forward with confidence.

Buying • November 4, 2024

Are you Ready To Take On A Fixer Upper?

by Rodney Ward

Looking to buy a home but feeling like almost everything is out of reach? Here’s the thing. There’s still a way to become a homeowner, even when affordability seems like a huge roadblock – and it might be with a fixer upper. Let’s dive into why buying a fixer upper could be your ticket to homeownership and how you can make it work.

What Is a Fixer Upper?

A fixer upper is a home that’s in livable condition but needs some work. The amount of work varies by home – some may need cosmetic updates like wallpaper removal and new flooring, while others might require more extensive repairs like replacing a roof or updating plumbing.

Because they need some elbow grease, these homes typically have a lower price point, based on local market value. In fact, a survey from StorageCafe explains that fixer uppers generally cost about 29% less than move-in-ready homes.

And that’s why, according to a recent survey, more buyers are considering homes that need a little extra work right now (see below):

If you’re looking for an option to get your foot in the door, and you’re willing to roll up your sleeves and do a bit of work, a house with untapped potential may be a good option.

Tips for Buying a Home That Needs Some Work

Before you buy a home that may need a makeover, here are a few things to keep in mind:

Choose a Good Location: You can repair a house, but you can’t change where it is. Make sure the home is in a neighborhood you like or one with increasing property values and a growing number of local amenities. This way, even after you spend money fixing it up, the house will be worth more later.
Budget for Surprises: Fixing up a house can take more time and money than you might think. Make sure you save room in your budget for unexpected repairs or other unknowns that might come up while you’re working on the house.
Get a Home Inspection: Before you buy, hire an inspector to check out the house. They’ll help you determine the necessary repairs, so you don’t end up with expensive surprises later.
Plan Your Priorities: When deciding what to tackle first, it helps to categorize your goals. Think of your home in three ways: the must-haves (essential repairs), the nice-to-haves (upgrades that would make life easier), and the dream-state features (luxuries you can add later). This will help you prioritize and stick to your budget.

Remember, the perfect home is the one you perfect after buying it. By starting with a fixer upper, you have the opportunity to customize a home to your liking while saving money on the initial purchase price. With careful planning, budgeting, and a little bit of vision, you can turn a house that needs some love into your perfect home.

Real estate agents are great at finding homes with potential. They know the local market and can guide you to homes where smart upgrades can add value. With their help, you’re more likely to find a house that fits your total budget and has room for worthwhile improvements.

Bottom Line

In today’s market, where the cost of homeownership can be intimidating, finding a move-in-ready home that fits your budget can feel like a real challenge. But if you’re open to putting in a little work, you can transform a fixer upper into your ideal home over time. Let’s explore what’s possible and find a place that’ll work for you.

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