Category: Home Selling

Key Takeaways:

• The spring real estate market is going to be busy
• Lower mortgage rates mean increased competition
• Get ready to succeed this spring—contact us today!

The spring real estate market starts to shake things up after the quieter winter season, and this year is no exception. With mortgage rates cooling off from last year’s highs, the spring 2023 real estate market indicates that there will be plenty of homebuying and selling activity—and it’s starting early. So let’s take a look at what you can expect and how you can work with our team to help you find success and get into your next home.

Mortgage rates are trending lower

The good news for homeowners and potential homebuyers is that mortgage rates have reached their highest point and are now heading south toward a more comfortable rate. According to Forbes, the Mortgage Bankers Association (MBA) anticipates that the 30-year mortgage rate will be near 5.2% by the end of 2023, over one percentage point lower than their current level.

The decrease in rates comes as NAR’s Senior Economist Nadia Evangelou indicates that inflation should continue to subside, which would result in mortgage rates dropping even further. An expected reduction of this magnitude could save those with mortgages or looking to buy considerable amounts of money over time, making it an exciting opportunity for those in the market for new housing.

Expect an increase in homebuying activity during Spring

With mortgage rates decreasing, the National Association of Home Builders expects increased demand and more buyers returning to the market. Plus, more inventory on the market could further encourage potential buyers. Open houses are seeing more interest, with multiple bids surfacing after a prolonged lull. These are encouraging signs, indicating that an influx of new properties on the market could spark increased enthusiasm among eager homebuyers who’ve been waiting on the sidelines for some time now.

Once those buyers enter the market, they will attract new sellers and fill out the housing inventory available on the market. (Tight inventory was one of the defining issues of last year’s housing market, but there will be more to choose from this year during a busy spring season.) And, once those sellers turn around and buy, you’ll see the fast-paced, exciting spring real estate market we all know and love is in full bloom.

Look for deals on new construction homes

America’s homebuilders are showing positive signs of growth as the demand for new houses rises alongside dropping mortgage rates. According to the National Association of Home Builders, sentiment among builders has increased for the first time in a year, with reports of increases in sales, traffic, and expectations for sales over the next six months. This surge in confidence and activity is influenced mainly by low interest rates, which is driving more homebuyers into the market.

According to Zillow, the number of new homes currently under construction has risen 50% since February 2020. And newly complete homes are showing up on the market quickly, meaning there’s plenty for homebuyers to choose from. Our team will help you expertly work with builders to find special offers and incentives to get you into one of those gorgeous new homes!

Hop Into the Spring Market With Us

Are you ready for the 2023 spring real estate market? We are! There’s so much to consider, from mortgage rates to inventory and new construction homes. Buyers and sellers alike are eager to get things in full swing, so contact our team now so we can start building your ideal real estate strategy and take action. Spring is just around the corner—reach out today!

Get ready to sell by increasing your curb appeal.

Key Takeaways:

• Low default rates are a positive sign of the housing market’s resiliency
• There are signals that the market is shifting to favor homebuyers
• Our team is ready to help you achieve your goals, so contact us today!

As with any investment, the best time to enter the housing market is when prices are low. It’s no different when it comes to real estate. With one historic and unprecedented event after another these days, knowing when to move in today’s market can be complicated and intimidating, but it doesn’t need to be.

Analysts agree about where the market is likely headed. So as 2022 winds down, let’s review the latest news to help you better understand where your opportunity lies (and why now may actually be the best time to buy!).

Low loan defaults are keeping the housing market healthy

The current housing market is not a repeat of the previous financial crisis in 2008. The two primary factors that contributed to the housing market crash back then were cheap credit and lax lending standards. Remember the terms subprime, mortgage-backed securities, CDOs, and adjustable rate mortgage? Thankfully, that’s not what’s making headlines this time around.

Today, lending standards are more strict than they were 15 years ago, and because of this, most homeowners are not teetering on loan default like they were back in 2008. In response to the global COVID-19 pandemic, banks introduced various programs to help homeowners stay current on their mortgages and avoid default. The result is historic mortgage balance lows, with loans that are 90 days past due pegged at just 0.5%. That’s a far cry from the staggering 11.36% rate back in 2010 when homeowners struggled to make payments.

Economic signals indicate this is becoming a buyer’s market

Putting today’s housing market in proper historical context is paramount to making an informed decision. While the current 7% mortgage interest rates are certainly higher than the pandemic-induced low of 2.65% in December 2020 (the lowest in history!), that doesn’t mean you should avoid buying a home. Compared to the all-time high of 18.45% set back in 1981, today’s average rate of 7% is suddenly far less imposing.

Experts all agree: home equities are going to decline. The only dispute between analysts is by how much, with some analysts projecting an average decline of about 20%. According to Black Knight, a mortgage technology and data provider, home prices have declined slightly, but mortgage holders possess $11.5 trillion in tappable equity.

Even though recent news and numbers seem to suggest that the real estate market may be experiencing a slowdown, Black Knight added that the “market is on strong footing to weather a correction” given that the total market leverage (including both first and second liens) was just 42% of mortgaged homes’ values – the lowest number on record.

Homes are always a solid investment strategy

Eager would-be homebuyers waiting for home prices to enter the housing market to fall have some good news ahead of them. But, homeowners have good news, too. While there’s plenty of panic around a “decline” in home prices, the Case-Shiller Index reports it’s just 2.2%—meaning homeowners are still in command of a 38.33% increase in the last two years.

With mortgage interest rates hovering around 7% and home values stabilizing, the tail-end of 2022 or 2023 may be the best time for you to finally make that move, especially as two-thirds of major regional housing markets (98 out of 148) prices continue to drop.

We’ll Help You Buy For the Right Price

When you’re ready to make your move, reach out and contact our trusted real estate team. We know the local housing market and can help guide you to the best deals available on the market today. And, there’s plenty of ways to extend your buying power and reduce your interest rates! Our team can’t wait to share our proven strategies with you, so contact us today!

Entering the market as a first-time buyer.

You might hear a lot of doom and gloom news about the housing market lately, but let’s put it in perspective. The COVID-19 global pandemic caused unprecedented disruptions to financial markets, including housing. Now, with everyone ready to move forward, the historic hot housing market is returning to normal. Let’s look at what that means for buyers and sellers. 

Key Takeaways:

• Ignore the negative news—the market is coming back down to earth
• Homeowners have record equity, and buyers have more inventory
• This is a great time to make a move in the market, so contact us today!

The current housing market and forecast 

Our last blog post looked at mortgage rates in their historical context. While today’s rates range between 5-6% and are certainly higher than homebuyers’ rates during the COVID-19 pandemic, they’re nothing extraordinary. Today’s rates are still far below the all-time high of 18.45% set back in the 1980s! 

A recent report by Fannie Mae forecasts that over the next 12 months, US consumers anticipate home prices to fall for the first time in two years. With potential buyers expecting further price declines and sellers not keen on giving up their lower, fixed mortgage rate, now is the time to buy or sell your home.

However, for first-time homebuyers seeking to make a move, news of continued cooling of home prices is welcome, which will keep demand high. While current homeowners considering selling may be concerned that they missed the window to realize their equity gains or will lose out on their current lower mortgage rate, it’s important to remember the larger historical trends regarding real estate investments. And, if you’re purchasing another home, you have more homes to choose from.

What home sellers need to know right now

Don’t listen to the news cycle pedaling doom and gloom about your equity gains and home value. Buying or selling property is always a good investment. The real estate market always presents opportunities, and home prices are simply moderating from historic highs. 

Moreover, homeownership is a long-term asset that pays out over time, and the record equity gains of the past few years that current homeowners have enjoyed aren’t likely to ever happen again. So, while home prices are cooling off, the decline is less than 1%, leaving those equity gains intact when you decide it’s time to sell.

What home buyers need to know right now

CoStar Group, an online real estate analytics provider, recently reported negative growth in asking rental prices for the first time in 20 months, falling 0.1%. While this is undoubtedly welcome news for renters and would-be homeowners battling skyrocketing rental prices, the cost of rent remains a high hurdle for many to clear every month. 

For potential homebuyers wondering if now is the time to stop paying rent and move toward homeownership, it’s worth remembering that owning a home will always be a better long-term investment of your money than renting. 

So, despite a new Fannie May survey declaring that around half of today’s consumers hold a negative view of the market and think it would be difficult to get a mortgage today, this is overly pessimistic. Moreover, there are numerous loan options for qualifying buyers, such as first-time buyers and veteran programs. 

Getting a mortgage is one of the most significant financial moves a person will ever make, and preparation is critical. So before you apply, spend some time ensuring that your credit and finances are in order. Because when you find your perfect home, you’ll want to be able to make an offer immediately.

Take the Next Step

If you’re ready to make a move, don’t get caught up in the frenzy of negative news. Instead, work with your local team that knows the micro-housing market in your area. Our real estate agents have decades of experience and understand how to help you navigate the market. Contact us today to figure out your best options for buying and selling your home!

For more information read our article on Staying Ahead of the Housing Market.