All • May 18, 2023

Fluctuations In Mortgage Rates Expected To Persist

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 6.39 percent.

“The 30-year fixed-rate mortgage averaged 6.39 percent this week, as economic crosscurrents have kept rates within a ten-basis point range over the last several weeks,” said Sam Khater, Freddie Mac’s Chief Economist. “After the substantial slowdown in growth last fall, home prices stabilized during the winter and began to modestly rise over the last few months. This indicates that while affordability remains a hurdle, homebuyers are getting used to current rates and continue to pursue homeownership.”

30-year fixed-rate mortgage averaged 6.39 percent as of May 18, 2023, up from last week when it averaged 6.35 percent. A year ago at this time, the 30-year FRM averaged 5.25 percent.
15-year fixed-rate mortgage averaged 5.75 percent, unchanged from last week. A year ago at this time, the 15-year FRM averaged 4.43 percent.

NAR Senior Economist and Director of Real Estate Research Nadia Evangelou said of this week’s mortgage rate rise week that these fluctuations in rates will continue to persist, affecting the housing market as mortgage rates have a direct impact on the monthly mortgage payment. But with inflation easing further and the Federal Reserve expected to pause its rate hikes soon, mortgage rates will stabilize near 6% in the second half of the year.

With a 6.4% rate, the typical buyer can afford to purchase a home up to $380,000 – $9,000 or 2% less than the median-priced home if they put 20% down. About 45% of the listings are in this price range. For buyers who decide to put 14% down – the median down payment in 2022 – they will need to look for less expensive homes up to $355,000.

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

Check with your mortgage lender for more information on daily mortgage interest rate changes. You can also visits sites online such as Mortgage News Daily.

Selling • May 12, 2023

The Best Time To Sell Your House Is When Others Aren’t Selling

by Rodney Ward

If you’re thinking about selling your house, you should know the number of homes for sale right now is low. That’s because, this season, there are fewer sellers listing their houses for sale than the norm.

Looking back at every April since 2017, the only year when fewer sellers listed their homes was in April 2020, when the pandemic hit and stalled the housing market (shown in red in the graph below). In more typical years, roughly 500,000 sellers add their homes to the market in April. This year, we saw fewer than 400,000 sellers entering the market in April (see graph below):

While there are a number of factors contributing to this trend, one thing keeping inventory low right now is that some homeowners are reluctant to move when the mortgage rate they have on their current house is lower than the one they could get today on their next house. It’s called rate lock.

As a recent survey from Realtor.com explains, 56% of people who are planning to sell in the next 12 months say they’re waiting for rates to come down.

While this wait-and-see approach is right for some sellers, it also creates an opening for more eager sellers to jump in now.

If your current house truly doesn’t fit your needs anymore and you’re ready to move, don’t miss this chance to stand out. When fewer sellers are putting their homes up for sale, buyers will have fewer options, so you set yourself up to get the most eyes possible on your house. That’s why your house could see multiple offers as buyers compete over the limited supply of homes for sale – especially if you price it right.

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“Inventory levels are still at historic lows . . . Consequently, multiple offers are returning on a good number of properties.”

Bottom Line

If you’re ready to sell now, beat the competition before it comes onto the market. If you do, your house should stand out and could get multiple offers. Let’s connect to get you market ready.

All • May 11, 2023

Mortgage Interest Rates Inched Down

by Rodney Ward

Freddie Mac (OTCQB: FMCC) today (05/11/2023) released the results of its Primary Mortgage Market Survey (PMMS), showing the 30-year fixed-rate mortgage (FRM) averaged 6.35 percent.

“This week’s decrease continues a recent sideways trend in mortgage rates, which is a welcome departure from the record increases of last year,” said Sam Khater, Freddie Mac’s Chief Economist. “While inflation remains elevated, its rate of growth has moderated and is expected to decelerate over the remainder of 2023. This should bode well for the trajectory of mortgage rates over the long-term.”

30-year fixed-rate mortgage averaged 6.35 percent as of May 11, 2023, down from last week when it averaged 6.39 percent. A year ago at this time, the 30-year FRM averaged 5.30 percent.
15-year fixed-rate mortgage averaged 5.75 percent, down slightly from last week when it averaged 5.76 percent. A year ago at this time, the 15-year FRM averaged 4.48 percent.

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

Check with your mortgage lender for more information on daily mortgage interest rate movements. Or you may find information online on sites such as Mortgage News Daily.

All • May 9, 2023

Concerns Continue About A Housing Market Crash

by Rodney Ward

Why Today’s Housing Market Is Not About To Crash

There are continuing concerns that the housing market is headed for a crash. And given some of the affordability challenges in the housing market, along with a lot of recession talk in the media, it’s easy enough to understand why that worry has come up.

But the data clearly shows today’s market is very different than it was before the housing crash in 2008. Rest assured, this isn’t a repeat of what happened back then. Here’s why.

It’s Harder To Get a Loan Now

It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one. As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices.

Things are different today as purchasers face increasingly higher standards from mortgage companies. The graph below uses data from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is.

Unemployment Recovered Faster This Time

While the pandemic caused unemployment to spike over the last couple of years, the jobless rate has already recovered back to pre-pandemic levels (see the blue line in the graph below). Things were different during the Great Recession as a large number of people stayed unemployed for a much longer period of time (see the red in the graph below):

Here’s how the quick job recovery this time helps the housing market. Because so many people are employed today, there’s less risk of homeowners facing hardship and defaulting on their loans. This helps put today’s housing market on stronger footing and reduces the risk of more foreclosures coming onto the market.

There Are Far Fewer Homes for Sale Today

There were also too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to fall dramatically. Today, there’s a shortage of inventory available overall, primarily due to years of underbuilding homes.

The graph below uses data from the National Association of Realtors (NAR) and the Federal Reserve to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 2.6-months’ supply. There just isn’t enough inventory on the market for home prices to come crashing down like they did in 2008.

Equity Levels Are Near Record Highs

That low inventory of homes for sale helped keep upward pressure on home prices over the course of the pandemic. As a result, homeowners today have near-record amounts of equity (see graph below):

And, that equity puts them in a much stronger position compared to the Great Recession. Molly Boesel, Principal Economist at CoreLogic, explains:

“Most homeowners are well positioned to weather a shallow recession. More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments.”

Bottom Line

The graphs above should ease any fears you may have that today’s housing market is headed for a crash. The most current data clearly shows that today’s market is nothing like it was last time.

Selling • May 8, 2023

Why Sell Your House Today?

by Rodney Ward

Reasons To Sell Your House Today

Some Highlights

Not sure if selling your house is the right move today? You should know there are a number of reasons it still makes sense to sell now.
Your house will stand out because inventory is low. That’s why the number of offers on recently sold homes is on the rise. And most homeowners have a lot of equity that can fuel a move.
If you’re thinking about selling your house, let’s connect to discuss if now may be the time to move.

All • Buying • Selling • May 4, 2023

What You Win When You Downsize

by Rodney Ward

Downsizing has long been a popular option when homeowners reach retirement age. But there are plenty of other life changes that could make downsizing worthwhile. Homeowners who have experienced a change in their lives or no longer feel like their house fits their needs may benefit from downsizing too. U.S. News explains:

“Downsizing is somewhat common among older people and retirees who no longer have children living at home. But these days, younger people are also looking to downsize to save money on housing . . .”

And when inflation has made most things significantly more expensive, saving money where you can has a lot of appeal. So, if you’re thinking about ways to budget differently, it could be worthwhile to take your home into consideration.

When you think about cutting down on your spending, odds are you think of frequent purchases, like groceries and other goods. But when you downsize your house, you often end up downsizing the bills that come with it, like your mortgage payment, energy costs, and maintenance requirements. Realtor.com shares:

“A smaller home typically means lower bills and less upkeep. Then there’s the potential windfall that comes from selling your larger home and buying something smaller.”

That windfall is thanks to your home equity. If you’ve been in your house for a while, odds are you’ve developed a considerable amount of equity. Your home equity is an asset you can use to help you buy a home that better suits your needs today.

And when you’re ready to make a move, your team of real estate experts will be your guides through every step of the process. That includes setting the right price for your house when you sell, finding the best location and size for your next home, and understanding what you can afford at today’s mortgage rate.

What This Means for You

If you’re thinking about downsizing, ask yourself these questions:

Do the original reasons I bought my current house still stand, or have my needs changed since then?
Do I really need and want the space I have right now, or could somewhere smaller be a better fit?
What are my housing expenses right now, and how much do I want to try to save by downsizing?

Once you know the answers to these questions, meet with a real estate advisor to get an answer to this one: What are my options in the market right now? A local housing market professional can walk you through how much equity you have in your house and how it positions you to win when you downsize.

Bottom Line

If you’re looking to save money, downsizing your home could be a great help toward your goal. Let’s connect to talk about your goals in the housing market this year.

All • Buying • Selling • May 3, 2023

Buyers Lining Up Again

by Rodney Ward

Buyer Activity Is Up Despite Higher Mortgage Rates

If you’re a homeowner thinking about making a move, you may wonder if it’s still a good time to sell your house. Here’s the good news. Even with higher mortgage rates, buyer traffic is actually picking up speed.

Data from the latest ShowingTime Showing Index, which is a measure of buyers actively touring homes, helps paint the picture of how much buyer demand has increased in recent months (see graph below):

As the graph shows, the first two months of 2023 saw a noticeable increase in buyer traffic. That’s likely because the limited number of homes for sale kept shoppers looking for homes even during colder months.

To help tell the story of why the latest report is significant, let’s compare foot traffic this February with each February for the last six years (see graph below). It shows this was one of the best Februarys for buyer activity we’ve seen in recent memory.

In the last six years, we saw the most February buyer traffic in 2021 and 2022 (shown in green above), but those years were highly unusual for the housing market. So, if we compare February 2023 with the more normal, pre-pandemic years, data shows this year still marks a clear rise in buyer activity.

The uptick in buyer traffic is even more noteworthy considering the increase in mortgage rates this February. The Freddie Mac 30-year fixed mortgage rate rose from 6.09% during the week of February 2^nd to 6.50% in the week of February 23^rd. But even with higher rates, more buyers were looking for a home.

Jeff Tucker, Senior Economist at Zillow, says the increased buyer activity could continue:

“More buyers will keep coming out of the woodwork. We always see a seasonal uptick in home shoppers in March and April . . .”

If you’re looking to sell your house, seeing buyers still active in the market this year should be encouraging. It’s a sign buyers are out there and could be looking for a home just like yours. Working with a real estate professional to list your house now will help you get your home in front of eager buyers today.

Bottom Line

Rising foot traffic is a bright spot for this year’s housing market and indicates that buyers are looking to purchase this year, even with higher mortgage rates. If you’re ready to sell your house, let’s connect.

All • May 2, 2023

Will A Recession Cause A Housing Crisis?

by Rodney Ward

A Recession Doesn’t Equal a Housing Crisis

Everywhere you look, people are talking about a potential recession. And if you’re planning to buy or sell a house, this may leave you wondering if your plans are still a wise move. To help ease your mind, experts are saying that if we do officially enter a recession, it’ll be mild and short. As the Federal Reserve explained in their March meeting:

“. . . the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”

While a recession may be on the horizon, it won’t be one for the housing market record books like the crash in 2008. What we have to remember is that a recession doesn’t always lead to a housing crisis.

To prove it, let’s look at the historical data of what happened in real estate during previous recessions. That way you know why you shouldn’t be afraid of what a recession could mean for the housing market today.

A Recession Doesn’t Mean Falling Home Prices

To show that home prices don’t fall every time there’s a recession, it helps to turn to historical data. As the graph below illustrates, looking at recessions going all the way back to 1980, home prices appreciated in four of the last six of them. So historically, when the economy slows down, it doesn’t mean home values will always fall.

Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession will be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. Back then, one of the big reasons why prices fell was because there was a surplus of homes for sale at the same time distressed properties flooded the market. Today, the number of homes for sale is low, so while home prices may see slight declines in some areas and slight gains in others, a crash simply isn’t in the cards.

A Recession Means Falling Mortgage Rates

What a recession really means for the housing market is falling mortgage rates. As the graph below shows, historically, each time the economy slowed down, mortgage rates decreased.

Bankrate explains mortgage rates typically fall during an economic slowdown:

“During a traditional recession, the Fed will usually lower interest rates. This creates an incentive for people to spend money and stimulate the economy. It also typically leads to more affordable mortgage rates, which leads to more opportunity for homebuyers.”

This year, mortgage rates have been quite volatile as they’ve responded to high inflation. The 30-year fixed mortgage rate has hovered between roughly 6-7%, and that’s impacted affordability for many potential homebuyers.

But, if there is a recession, history tells us mortgage rates may fall below that threshold, even though the days of 3% are behind us.

Bottom Line

You don’t need to fear what a recession means for the housing market. If we do have a recession, experts say it will be mild and short, and history shows it also means mortgage rates go down.

Buying • May 2, 2023

Does Buying Today Make More Sense Than Renting?

by Rodney Ward

Why Buying a Home Makes More Sense Than Renting Today

Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988.

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years).

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

Homeownership Allows You To Start Building Equity

In addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth.

And, as home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

Bottom Line

If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it may make more sense to pursue your dream of homeownership.

Buying • April 28, 2023

Ways To Overcome Affordability Challenges in Today’s Housing Market

by Rodney Ward

Ways To Overcome Affordability Challenges in Today’s Housing Market

Some Highlights

With so few homes on the market right now, widening the scope of your search to include nearby areas could help you find more options in your budget.
You can also work with a trusted lender to consider alternative financing options and search for down payment assistance.
If you’ve been searching for a home but are concerned about rising costs, make sure you have a team of trusted real estate professionals for expert advice.

Fluctuations In Mortgage Rates Expected To Persist

The Best Time To Sell Your House Is When Others Aren’t Selling

Bottom Line

Mortgage Interest Rates Inched Down

Concerns Continue About A Housing Market Crash

Why Today’s Housing Market Is Not About To Crash

There are continuing concerns that the housing market is headed for a crash. And given some of the affordability challenges in the housing market, along with a lot of recession talk in the media, it’s easy enough to understand why that worry has come up.

It’s Harder To Get a Loan Now

Unemployment Recovered Faster This Time

There Are Far Fewer Homes for Sale Today

Equity Levels Are Near Record Highs

Bottom Line

Why Sell Your House Today?

Reasons To Sell Your House Today

Some Highlights

What You Win When You Downsize

What This Means for You

Bottom Line

Buyers Lining Up Again

Buyer Activity Is Up Despite Higher Mortgage Rates

If you’re a homeowner thinking about making a move, you may wonder if it’s still a good time to sell your house. Here’s the good news. Even with higher mortgage rates, buyer traffic is actually picking up speed.

Bottom Line

Will A Recession Cause A Housing Crisis?

A Recession Doesn’t Equal a Housing Crisis

A Recession Doesn’t Mean Falling Home Prices

A Recession Means Falling Mortgage Rates

Bottom Line

Does Buying Today Make More Sense Than Renting?

Why Buying a Home Makes More Sense Than Renting Today

Owning a Home Could Be More Affordable if You Need More Space

Homeownership Allows You To Start Building Equity

Bottom Line

Ways To Overcome Affordability Challenges in Today’s Housing Market

Ways To Overcome Affordability Challenges in Today’s Housing Market

Some Highlights

Home

Properties

About Me

Blog

Neighborhood News

Bottom Line

Why Today’s Housing Market Is Not About To Crash

There are continuing concerns that the housing market is headed for a crash. And given some of the affordability challenges in the housing market, along with a lot of recession talk in the media, it’s easy enough to understand why that worry has come up.

It’s Harder To Get a Loan Now

<img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-lending-regulations-are-steady.png" data-eio="l" />Unemployment Recovered Faster This Time

There Are Far Fewer Homes for Sale Today

Equity Levels Are Near Record Highs

Bottom Line

Reasons To Sell Your House Today

Some Highlights

What This Means for You

Bottom Line

Buyer Activity Is Up Despite Higher Mortgage Rates

If you’re a homeowner thinking about making a move, you may wonder if it’s still a good time to sell your house. Here’s the good news. Even with higher mortgage rates, buyer traffic is actually picking up speed.

Bottom Line

A Recession Doesn’t Equal a Housing Crisis

A Recession Doesn’t Mean Falling Home Prices

A Recession Means Falling Mortgage Rates

Bottom Line

Why Buying a Home Makes More Sense Than Renting Today

Owning a Home Could Be More Affordable if You Need More Space

Homeownership Allows You To Start Building Equity

Bottom Line

Ways To Overcome Affordability Challenges in Today’s Housing Market

Some Highlights

Unemployment Recovered Faster This Time