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Buying a Home May Make More Sense Than Renting
![Buying a Home May Make More Sense Than Renting [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2023/03/09112231/Buying-A-Home-May-Make-More-Sense-Than-Renting-MEM-1046x2938.png)
Some Highlights
- If you’re trying to decide whether to rent or buy a home, there are a few things you should consider.
- Homeownership can help you escape the cycle of rising rents, builds your wealth, and serves as a hedge against inflation.
- If you’re ready to take advantage of the benefits of homeownership, let’s connect to explore your options.
Mortgage Rates Continue to Increase
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®) for the week ending 03/069/2023, showing the 30-year fixed-rate mortgage (FRM) averaged 6.73 percent.
“Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” said Sam Khater, Freddie Mac’s Chief Economist. “Overall, consumers are spending in sectors that are not interest rate sensitive, such as travel and dining out. However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”
- 30-year fixed-rate mortgage averaged 6.73 percent as of March 9, 2023, up from last week when it averaged 6.65 percent. A year ago at this time, the 30-year FRM averaged 3.85 percent.
- 15-year fixed-rate mortgage averaged 5.95 percent, up from last week when it averaged 5.89 percent. A year ago at this time, the 15-year FRM averaged 3.09 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.
Tips for Making Your Best Offer on a Home
Are you planning to buy a home this spring? Though things are more balanced than they were at the height of the pandemic, it’s still a sellers’ market. So, when you find the home you want to buy, remember these four tips to make your best offer.
1.Lean on a Real Estate Professional
Rely on an agent who can support your goals. As Bankrate notes:
“. . . select the best real estate agent for your needs. They will be a critical part of your home buying process.”
Agents are local market experts. They know what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller needs can help your offer stand out.
2.Know Your Budget
Understanding your budget is especially important right now. As Sandy Higgins, Senior Wealth Advisor at Capstone Financial Advisors, puts it:
“Understand your current budget … what are your expenses, how’s your spending, would you need to make changes?”
The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. It helps you be more financially confident, and it shows sellers you’re serious. That can give you a competitive edge.
3.Think Through Everything Before Making an Offer
Today’s market isn’t moving at the record pace it did during the pandemic. That means you may have a bit more time to think before you need to make an offer. According to Danielle Hale, Chief Economist at realtor.com:
“In general, you likely have more time to make an offer, although that’s certainly not a guarantee. If you’re on the fence about a home or its asking price doesn’t quite fit your budget, you might want to keep an eye on it, and if it doesn’t sell right away, you may have some room to negotiate with the seller.”
While it’s still important to stay on top of the market and be prepared to move quickly, there can be more flexibility today. Lean on the advice of your agent as you explore the options in your market.
4. Work with Your Advisor To Negotiate
During the pandemic, some buyers skipped home inspections or didn’t ask for concessions from the seller in order to submit the winning bid on a home. Fortunately, today’s market is different, and you may have more negotiating power than before. When putting together an offer, your trusted real estate advisor will help you think through what levers to pull.
Bottom Line
When you buy a home this spring, let’s connect so you have the guidance to make your best offer.
Selling? Two Things To Know This Spring
A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.
1. Houses That Are Priced Right Are Still Selling
Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:
“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”
While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on pricing their house well are still finding success. And that’s great news if you’re thinking about selling.
2. Buyers Are Still Out There
As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:
“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”
That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.
Bottom Line
There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
Is A Multigenerational Home Right for You?
During the pandemic, many of us reexamined the meaning of home for ourselves and our loved ones. Today, that can be seen in the recent rise in multigenerational households. According to Jessica Lautz, Deputy Chief Economist and Vice President of Economic Research at the National Association of Realtors (NAR):
“Multi-generational buying may be a home where families live in the same home with elderly parents, children who have boomeranged back home, or other extended family members. While this is not a new concept of living, it is one which has gained recent popularity.”
And citing data from Pew Research Center, the Wall Street Journal (WSJ) says:
“. . . multigenerational living has made a comeback in recent years, particularly after the 2008 financial crisis and during the pandemic.”
So, if buying a multigenerational home has crossed your mind, you aren’t alone. Depending on what stage of homeownership you’re in, there are different reasons it could be the right fit. The chart below shows responses to a recent survey from NAR about the reasons people have bought a multigenerational home:
Whether your motives are financial or focused on the people you’ll share your home with, a multigenerational home has distinct advantages. It can make homeownership more affordable, and it can help you best support your loved ones. As Lautz explains:
“Multi-generational home buying is a way for families to care for one another, support one another, and often buy a home that may have been previously out of reach. . . . The trend of multigenerational buying appears to be firmly established and one that could expand in the future.”
Bottom Line
If you’re ready to buy a house, consider the opportunities of a multigenerational home. Let’s connect so you can explore your options in our area.
Is It Better To Rent Than To Own a Home Right Now?
You may have seen reports in the news recently saying it’s better to rent right now than it is to own your home. But before you let that impact your decisions, you should understand what these claims are based on.
A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the methodology behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio.
But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:
“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”
The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the net worth of the average homeowner and the average renter (see graph below):
So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.
Bottom Line
If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.
After I Sell My house, Where Will I Go?
It’s the question of the day for many potential sellers – Where Will I Go After I Sell My House? Putting geographic location aside, the question turns to what type of housing will I be looking for. I know, because I’ve been asking these same questions.
![Where Will You Go After You Sell Your House? [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2023/03/02130948/Where-Will-You-Go-After-You-Sell-Your-House-MEM-1046x2045.png)
Some Highlights
- If you’re thinking of selling your house, be sure to explore all the options you have for your next home.
- Both newly built homes and existing homes offer plenty of unique benefits.
- If you have questions about the options in our area, let’s discuss what’s available and what’s right for you.
Mortgage Rates Higher This Week
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®) for the week ending today 03/02/2023, showing the 30-year fixed-rate mortgage (FRM) averaged 6.65 percent.
“As we started the year, the 30-year fixed-rate mortgage decreased with expectations of lower economic growth, inflation and a loosening of monetary policy. However, given sustained economic growth and continued inflation, mortgage rates boomeranged and are inching up toward seven percent,” said Sam Khater, Freddie Mac’s Chief Economist. “Lower mortgage rates back in January brought buyers back into the market. Now that rates are moving up, affordability is hindered and making it difficult for potential buyers to act, particularly for repeat buyers with existing mortgages at less than half of current rates.”
- 30-year fixed-rate mortgage averaged 6.65 percent as of March 2, 2023, up from last week when it averaged 6.50 percent. A year ago at this time, the 30-year FRM averaged 3.76 percent.
- 15-year fixed-rate mortgage averaged 5.89 percent, up from last week when it averaged 5.76 percent. A year ago at this time, the 15-year FRM averaged 3.01 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.
Contact your mortgage lender for more information on daily mortgage interest rate movements. You may also find daily mortgage rate information online on sites such as Mortgage News Daily.
