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Why Now Is the Right Time to Buy Your Dream Home

Many would-be homebuyers are fearful of rising mortgage rates. It seems like the news is non-stop negative when it comes to talking about the housing market. But it’s worth putting those headlines into perspective. In 1981, mortgage rates hit an all-time high of 18.45%! On a 30-year fixed mortgage right now, you can expect to find rates around 5.9%—that’s 68% less than the highest mortgage rates homeowners have historically managed. Let’s take a look at today’s mortgage rates and see why this is still the time to buy your dream home. 

Key Takeaways:

  • Mortgage rates are going up, but they’re actually not that high. 
  • You’re still in control: you can get yourself a lower rate with these smart tips.
  • Find opportunities in your local real estate market—contact us today!

Why are mortgage rates increasing right now?

Sitting smiling happy meeting with real state agent signing mortgage loan at bank.

The COVID-19 pandemic had unexpected financial consequences across the entire world. One of those was a real estate boom in the United States, spurred by record-low mortgage rates. 

In December 2020, the 30-year fixed mortgage rate was an astonishing 2.68%. And guess what? These were the lowest mortgage rates in history. The whole year of 2020 saw the lowest annual average rate in history at 3.11%.

That historical high of 18.45%? That was caused by record inflation during the OPEC embargo. And, the Federal Reserve is working hard to curb inflation right now to avoid things like double-digit mortgage rates returning. 

So, while plenty of lucky homeowners were able to purchase new homes or refinance their existing ones at around a 3% mortgage rate in 2020, it was extremely unlikely that those rates would ever become the norm—because they have never been. It was only due to the COVID-19 pandemic that rates were temporarily at their lowest of all time. 

Can I still buy a home with 5% mortgage rates?

Cheerful couple with keys to their new home.

Of course you can still buy that dream home! Before COVID-19 ushered in a few years of unprecedented global economics, in January 2019 the average mortgage rate was around 4.5% and around two-thirds of Americans still owned and occupied their homes. 

Mortgage rates have seen spikes and dips and national and international events influence financial markets. But for more good news, let’s consider that the average mortgage rates have actually declined every decade since the 1970s, and the amount of homeowners has steadily increased as well. 

With rates around 5% right now and more economic uncertainty on the horizon, this is still a great time to buy a home. You can lock in a rate that’s actually on the lower end, and be able to refinance when the time comes that they fall below 5% again. Or, you’ll be in a perfect position to sell your home at that time and realize your equity gains. 

How you can secure a lower mortgage rate

Family teaching their daughter to save money.

There are still steps you can take to lower your rate, independent of the Federal Reserve. Even though the Federal Reserve is responsible for setting interest rates, mortgage rates are only influenced by the Federal Reserve, and there are more factors you can control. 

First and foremost, make sure you pay attention to improving your credit score. It’s always important to have a decent credit score when applying for loans, but even more so when you can save yourself money every month on your mortgage.

Next, pay down or off any debt and try to increase your income if you can. A higher annual income helps with mortgage rates, but may also give you some extra spending to pay down debt before applying for a home loan. 

And finally, shop around for different lenders, and consider different types of mortgages. There isn’t just one lender in town, and there are more options than the conventional 30-year fixed mortgage. A combination of the right lender and the right mortgage for your financial situation can make a big difference in your final monthly payment.

Let’s Buy Your Dream Home

There are still plenty of wonderful homes for sale in all types of price ranges in different neighborhoods. That’s why it’s important to contact your local real estate team. Don’t worry so much about the headline news—focus on what’s happening in your backyard, and what kind of home you can buy right now. Contact us today to get started!

Read our article on This is the Key to Your Dream Home for more information.

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Property Organizer: The Key To Your Dream Home

Why Use a Property Organizer

Have you ever been overwhelmed in the buying and selling process? With so many options out there and the market constantly changing, it can be challenging to stay organized during your search. Luckily, there’s a user-friendly tool that has your back. The property organizer is an overlooked yet extremely beneficial tool that stimulates and simplifies your home search. It’s important for buyers to utilize, as it offers advantageous qualities for each. 

Key Takeaways:

  • Understanding why it’s your secret weapon
  • Learning how to use it
  • Discovering how it will benefit you

How Will the Property Organizer Help Me?

man online looking for homes

This handy tool provides an easy way for you to save your favorite listings and property search settings. It delivers properties within your search settings directly to your inbox. Benefits include: 

  • Allows you to see listings that match your criteria
  • Speeds the process of home searching
  • Lists properties as soon as they hit the market
  • Allows you to save and organize your favorite listings
  • Provides a wider range of listings for as many options possible

Property Organizer and Email Alerts

First, you need to know how to use the tool to your advantage. Create a search for the area, price point and any additional criteria that fits within your home search. Once you create your search, save that search to receive email notifications directly in your inbox.  Email alerts are widely beneficial, as they ensure that properties in your criteria aren’t missed. You can adjust your settings to expand the area, price range, and how often you receive alerts.

For Buyers 

person getting keys to home

As a buyer, using the property organizer feature is vital to your home search journey. You have an advantage by using the property organizer, even if you aren’t ready to buy. No matter what stage you’re at in the buying process, creating a saved search in your property organizer is essential as far as monitoring trends, seeing what type of properties are available in your price range, and being aware of what features are common in the area. Overall, this is a tool that helps you to become more active and engaged, so your next dream home won’t be missed! 

For Sellers

family buying new house

The property organizer helps to facilitate the selling process, as it allows buyers to see what’s out there with no limitation. When you list with an agent who has one on their site, you can be assured that your property is marketed directly into buyers’ inboxes as soon as it hits the market.

So, how is this beneficial to a seller versus a buyer? Well, the organizer may help your home sell faster by increasing the chances of your property being seen, and maximizing its reach. As a seller, you’ll be notified anytime a home is listed in your market, along with its price, size, and other specific features, which promotes awareness and strategy behind your listings. It is is also advantageous to sellers in the sense that it allows them to monitor aspects such as market trends and pricing strategies. 

Ready To Use The Property Organizer?

If you’re not sure how to set up a property organizer don’t worry, our team is here to help you! Buyers, just let us know your price point, area, and any details you would like us to include in your search. Sellers, provide us with your address and you will be notified when properties sell in your area.

To see the property organizer in action, read our article 3 Reasons All Buyers and Sellers Should Use Listing Alerts.

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Why You Need a Real Estate Agent in This Shifting Market

Key Takeaways:

  • Understanding the ebbs and flows of the market is crucial to success
  • A real estate agent is on your side and knows your local market best 
  • Start planning your next move now – contact us!

What to Do When the Market Changes

Buying or selling a home is one of the most exciting moments in people’s lives, and it’s also affected by broader economic trends. The challenging process is filled with details and detours. Today’s housing market is continually pivoting amid persistent global pandemic-related influences and a subsequent housing supply crisis.

If you’re looking to buy, sell, or both, employing the services of a trusted real estate professional is a critical decision that can make or break your deal. The local knowledge and experience they bring to the table will help you navigate the real estate investing process wisely, especially in today’s rapidly shifting housing market. 

So, let’s take a deeper look at current housing market trends to better understand what’s going on, why hiring a professional real estate agent is essential, and let’s help you figure out your next best step!

Understanding the current housing market 

Real estate agent explains the current housing market to young couple.

Understanding the shifts occurring in today’s housing market is simple when you boil it down to basics: people moved in response to the COVID-19 pandemic. Some homeowners moved because their jobs went remote, and others upgraded or downsized to cash in on their equity gains. But, regardless of their reasons, people flooded into the housing market, disrupting the balance between supply and demand.

Recently, numerous reports have stated that we are in a “buyer’s market” now due to home prices beginning to stabilize and houses sitting on the market longer. However, at the same time, because of higher mortgage interest rates and the available housing supply continuing to lag behind current market demand, others have declared that we’re still in a “seller’s market.” With all these conflicting reports about what is happening in today’s housing market, it’s easy to get confused about what’s really going on. 

Here’s the truth: today’s historic hot housing market is a robust win-win for both buyers and sellers. With the available housing supply finally beginning to rise, buyers benefit from having more properties to choose from and don’t feel the need to settle or place an offer for fear of missing out. At the same time, sustained demand has preserved historic equity gains that remain beneficial for sellers should they choose to put their homes on the market.

Why hiring a trusted real estate agent never goes out of style

Real Estate Agent Shows Bright New Home to a Young Couple. Successful Young Couple Becoming Homeowners, Embraces and Hugs Each Other.

It is not uncommon or unusual for real estate markets to change. It happens all the time. However, one thing that doesn’t change is the value and peace of mind that hiring a trusted real estate professional provides you. 

If you’ve been reading the national headlines and wondering what it all means for you and your local area of interest, hiring a local real estate agent is vital, since real estate is all about location, location, location. Some neighborhoods and communities thrive amid all the turbulence, while others are staying cooler even in this hot market. If you’re selling, your agent will know the best way to position and market your property to get top dollar for the sale. And if you’re buying, your agent will help steer you in the right direction of your desired neighborhood, and cut through all the larger noise of the national market.

The best part? Your agent is a trained negotiator, and their expertise goes way beyond finding a place to call home. With your agent’s help, you can get what you want out of the deal. Think beyond purchase price and consider all of your contract’s terms, with potential benefits including a longer closing date, special repairs, and upgrades to the property, or even getting the seller to pay some of your closing costs.

Ready to Conquer the Market?

The best way to beat the market swings is to work with a real estate professional that knows your area. With decades of experience, our team is here to help. We’ve seen it all, and are here with smart advice to give you the competitive advantage. Let’s connect today and figure out how we can achieve your goals.

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The 2022 Summer Housing Market

Key Takeaways:

  • There’s a lot to be excited about with this summer’s housing market.
  • Homes are for sale with the features you want, like swimming pools.
  • Our team knows how to help get the most for your home – contact us!

Despite news about a looming recession, high mortgage interest rates, and low inventory negatively impacting the housing market, many good things are still happening and worth getting excited about in the 2022 summer housing market. 

Some promising news in today’s historic housing market is that home demand remains strong, with well-vetted, qualified buyers making cash offers, creating a more balanced seller’s and buyer’s market. Additionally, home values continue to defy the odds and climb higher with no end in sight, helping your equity gains grow, which creates opportunities to put your equity gains to use that have never been better.

So, let’s take a deeper look at the 2022 summer market trends and help you figure out your next best step!

Upgrade to a home with the summer features you want

Senior neighbors having fun spending sunny summer day together outdoors, having a backyard barbecue party by the swimming pool

Maybe you’ve just returned from vacation, and you miss relaxing by the sea, or perhaps you didn’t go on holiday this year and missed out on getting to spend afternoons poolside or get to the ocean. Or possibly you’ve looked into getting a pool, or some other addition, installed at your home and have encountered supply chain issues. Regardless, there’s no reason to be discouraged. 

While housing supply is at record lows, it’s important to remember that historically, summer marks a lull in inventory that gets improved upon by the season’s end. This year is no different, with plenty of updated and newly-built properties available on the market, so it’s a great time to look and see if your ideal property that already has a pool or a pavilion is on the market right now waiting for you. 

Real estate is a proven safeguard against recession

Closeup house model over the Sale representative offer the house price list and condition for house purchase or rental on the working space table in new house

A shrinking economy marks a recession. People will spend less money on discretionary purchases, focusing instead on essentials. Companies may slow down hiring or even begin laying off workers to bolster their bottom lines. Stock prices may drop in the face of uncertainty about the economy.

When a recession sets in, the value of your stock portfolio may take a hit if prices drop temporarily. While downturns aren’t ideal, they can create opportunities for savvy real estate investors. If you’re considering investing in real estate during a recession or already own investment property, you need to have a strategy for maximizing your equity gains. 

Real estate can offer some stability for investors when the economy slows. Of course, a recession doesn’t automatically cause a drop in home values. But if a recession causes a hot housing market to cool off, that could open up opportunities for you to find your dream property at a discount.

It may seem contradictory to move during these challenging times, but remember, even with higher mortgage interest rates, there are always opportunities, even in the most demanding of seasons. What makes the difference is doing your research, knowing what you want and can afford, and most importantly, working with a capable guide before leaping.

Just remember: As with any real estate purchase, it’s not about right-timing the market but about buying at the right time for your personal goals and finances.

Let’s Talk About Your Real Estate Goals

Whether following local and national trends and guiding you through a shifting market or pricing your house right, a trusted real estate agent has the expertise you’ll want to rely on throughout your next transaction. So if you’ve been considering selling, let’s connect so you can have an expert on your side.

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Is It Better to Rent or Buy Right Now?

Key Takeaways:

  • Homeownership remains one of the best ways to build long-term wealth
  • The cooling housing market is causing bidding wars for rental units
  • Our experienced team of dedicated agents will help you secure a home!

The Cost of Rent Is Rising

Recent reports on current conditions in the real estate market have highlighted a new trend developing in today’s heated market: rising rents. In addition to increasing rental costs, bidding wars within the apartment and housing rental market are increasingly becoming commonplace, with some offering hundreds of dollars more than the asking price.

If you’ve been renting and wondering if buying a home instead of renting would be a better use of your money, the good news is that, yes, buying a house is still a better use of your money. So let’s take a closer look at what’s happening in today’s market and why buying a home remains the better option for building your wealth versus renting.

Why is rent increasing?

A house for rent

According to real-estate company Redfin, the median U.S. asking rent passed $2,000 for the first time in May, and it has risen 15% over the past 12 months. While bidding wars have long been a staple of hot housing markets, where buyers compete with offers above the seller’s listing price, these contests are now becoming more commonplace in the rental market.

Historically, rents have risen in step with home prices. As home values rise, renters become more likely to stick to renting, taking pressure off home prices and demands on the housing supply. The push and pull between these two facets of the housing market keep the two markets roughly in balance.

However, an increasing number of white-collar professionals are reluctant to buy because of record-high home prices, rising mortgage rates, and the limited supply of housing that is continuing to haunt the global housing market. As a result, many have said they are renting instead, helping drive a frenzy for leased properties of all kinds and helping fuel the trend of offering above asking rents, which isn’t helping anyone. Real-estate agents from New York to Chicago and Atlanta say they see more people making offers above asking to lease homes and apartments they will never own.

To rent or to buy? It’s not that complicated!

Happy family with daughter holding keys from their new home, selective focus on hands, closeup.

As anyone who has ever rented will tell you, when it’s time to renew your lease, there is an expectation that the cost of rent will increase. Usually, the new monthly rental price will rise nominally, and it’s not that big of a deal for renters to absorb the increase. However, in today’s market, nearly every usual trend has been upended, and renting is no exception. Yet as more individuals experience sticker shock as they renew their rental agreements, with some increases being several hundred dollars more a month, many have begun to question the efficacy of renting for their future.

So as more frustrated buyers retreat from the market and steer toward renting, the savvy move to be made right now is buying a home. Homeownership remains a stable long-term investment despite the higher mortgage interest rates, because owning a home comes with certain tax benefits that renting does not, helping your money go further. Benefits such as deductions on mortgage interest, discount points, mortgage insurance, and property taxes will reduce your taxable income and help you keep more of your hard-earned money.

Another factor to keep in mind is that as the housing market cools off and bidding wars in the rental market increase, the price of homes is beginning to see price reductions from the seller’s side of the market, which indicates that now is a terrific time to consider becoming a homeowner.

Secure Your Future

Serious buyers understand that waiting will cost them more later. They should approach today’s competitive market of rising rates and low inventory as a motivating factor to buy sooner, not a reason to wait. Let’s connect today to see what homes are in your budget, prepare you to become a homeowner, and start building your wealth sooner rather than later.

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Home Equity Is Up – What’s Your Next Move?

Key Takeaways:

  • With home values continuing to rise, what are the best options to maximize your equity gains?
  • Now might be the perfect time to tap into your equity for a vacation home or investment property.
  • Don’t delay—contact us and put your home equity gains to work for you!

Homeowners Have Historic Equity Gains

It’s no secret that home equity values are at historic highs right now. Surging home prices have caused tappable equity to set a record in 2021, hitting $9.9 trillion, mortgage technology and data firm Black Knight Inc reports. The firm also noted that the average mortgage holder has $185,000 in tappable equity. 

For current homeowners, these recent gains are tremendous and mean all your hard work has paid off. Of course, the big question in many homeowners’ minds now is: what should I do with the equity I’ve gained? So if you’ve been calculating your equity gains and wondering what the best thing to do with them is, let’s explore some ways you could maximize your equity growth.

Renovations, Repairs, and Restoration

Happy smiling woman in goggles with saw sawing wooden board

With the current equity built up in your home, you can borrow against it by taking out a home equity loan or line of credit (HELOC) and using that money for whatever you want. While homeowners commonly borrow against their equity to fund renovations or repairs, you can take out a home equity loan to use for any goal you have in mind. But if your home desperately needs a new roof, windows, newer energy-efficient appliances, or even an addition, tapping into your equity to make that happen is warranted. And with recent drops in lumber costs, this may be an ideal time to get that extra space you’ve been dreaming of.

There’s also the option to do a cash-out refinance. With a regular refinance, you typically borrow the exact amount you owe on your mortgage. However, with a cash-out refinance, you borrow more than your remaining mortgage balance and receive a check for the difference. And as with a home equity loan or HELOC, you can use that money for any purpose you choose.

Purchase a Second Property

Senior couple standing outside log cabin in countryside

According to CoreLogic, nationally, home prices increased 19.1% between January 2021 and January 2022, which has been fantastic news for current homeowners. Equity gains don’t just benefit those looking to sell their homes to walk away with a substantial profit. If you don’t have plans to sell your home in the near term, having a lot of equity in it affords you plenty of different options to put that money to good use. 

Consider using your existing equity to buy the vacation home you’ve been dreaming of, or to purchase income-producing real estate that may generate passive income and possibly lower your monthly costs, or other investment assets. Until recently, financing a vacation home was the same as financing a primary residence. But the Federal Housing Finance Agency recently announced increases to upfront fees for second-home loans that took effect on April 1, 2022. As a result, homeowners have been encouraged to tap equity from their primary residence to pay for their secondary property.

Make a Smart Move

Your decision on what to do with your equity gains depends upon your financial situation and long-term real estate goals. So as you’re watching your equity grow and wondering how to put that money to good use, having a trusted, experienced real estate team behind you is your best first step to figuring that out. You’ll rest easy knowing that we’ve seen the ups and downs of the market over the years, so contact us today to discuss your options!

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Now Could Be the Best Time to Sell Your Home

Key Takeaways:

  • Shifting buyer demand creates lucrative opportunities for decisive sellers
  • Higher mortgage rates have set fire to this already hot housing market
  • Don’t delay—now is the time to contact us and get your home on the market!

The current housing market

With a sudden jump in home listings recently, today’s hot housing market has many homeowners wondering if now is the best time to sell. Of course, trying to time the market perfectly is challenging, though if there ever was a time to sell, this is absolutely a great one. 

Everyone’s situation is different, but if you’ve been thinking about selling your home lately, contact us today to begin the process and maximize your success. 

The supply of homes for sale, explained 

Saleswoman giving home keys to new property owner.

Compared with last year, the supply of homes for sale jumped 9% in May, which is striking considering the historically low supply of home inventory that has defined the US housing market this year. 

As sellers rushed to put their properties onto the market and cash in their equity gains, new home listings rose nearly twice as fast as a year ago in May, while pending home sales fell by almost 4% in April. And with sales of newly built homes dropping by a much broader 16% compared with March, this marked the sixth straight month of sales declines. 

To fully appreciate this drop-off, consider that this softening in demand for housing marks the greatest slowdown on record in nearly a decade. 

Home sales are slowing because mortgage rates have risen sharply since the start of the year, with the most significant gains coming in April and early May. The average rate on the 30-year fixed mortgage started the year close to 3% and is now well over 5%, causing new home buyers to slow down a bit.

The reality of rising mortgage rates

Businessperson's Hand Protecting Balance Between Percentage Red Cubic Block And House Model On Wooden Seesaw

While homeowners and homebuyers certainly enjoyed locking in 30-year fixed mortgages at the historic low of 2.68% in December 2020, this is far from the norm. It was only a few years ago, during the decade of the 2010’s, that mortgage rates averaged between 3.45% to 4.87%—not that far off from today’s average of just over 5%. 

If you step back even further in time, the absolute highest mortgage rate was a whopping 18.45% in 1981! Like today, that was due to the Federal Reserve raising the federal funds rate to combat inflation, causing mortgage rates to spike. But unlike potential homebuyers in 1981, we have good news on the horizon, as we’re seeing mortgage and refinance rates start to decline for the first time in weeks and the economy showing signs of stabilizing. 

An overdue housing market correction

Chart showing home values changing over time.

If you’re still worried about the housing market, you don’t need to. The good news in these reports is that homes are still selling, and in many cases, they’re still selling above their asking price. The housing market is cooling down due to a lull in buyer demand. However, this cooldown is a much-needed correction to what has been a short-term housing market fueled by the pandemic. 

The critical difference in the market now is that with fewer buyers competing with one another over available housing, home prices rose another 21% in May, meaning equity gains are still there for homeowners. And if you’re looking to sell to downsize and lower your monthly expenses, you’ll be perfectly positioned to find your ideal home with fewer buyers competing with you in the market.

Sell Now for Your Best Return

If you’re considering selling your home, this may be the best possible time to list. With a trusted, experienced real estate team behind you, you can rest easy knowing that we’ve seen the ups and downs of the market over the years. You can always make a smart move, so contact us today to discuss your options!

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Inflation and Home Values

Key Takeaways:

  • Home values are rising faster than inflation, making homes a prized asset
  • This housing market offers unique opportunities for buyers and sellers
  • Contact us today to secure your assets and safeguard your future!

The state of real estate and inflation

As inflation soars to near 40-year highs and raises the cost of everything, many are looking for innovative ways to secure their assets against inflationary losses. Additionally, given the housing market’s recent volatility (primarily driven by historic low levels of housing inventory that have caused an imbalance between supply and demand), it’s understandable that many might consider real estate to be a wrong or risky move right now. But the great news is that nothing could be further from the truth. Let’s explore how and why buying or selling a home can safeguard you against inflation. 

The housing market can protect you from inflation

Image of homes and a graph representing housing market and inflation.

Real estate remains a stable area for investment and profit realization because a home’s value does not increase in relation to currency; it increases based on demand. So if you’ve been holding back from buying because of today’s market pressures, consider that inflation is up even more than mortgage interest rates, making it a smart move. Similarly, if you’re considering selling, the demand for housing has never been greater, which is terrific news for anyone looking to cash out their equity to hedge against inflation. 

Buying a home: by the numbers

Couple showing keys to new home.

Let’s take a look at some numbers. Experts estimate that Americans face an annualized inflation rate of around 15%. Considering that, the current 5% mortgage rate is a bargain for homebuyers in the short term. Moreover, you’re securing an asset that, over time, will increase. And, as you pay down your mortgage, even at 5%, your equity will continue to grow. 

Selling a home: by the numbers

Senior Adult Couple in Front of Sold Home For Sale Real Estate Sign and Beautiful House.

It’s no secret to homeowners that their home equity values have grown over the last couple of years. According to research firm Black Knight, at the end of 2021, Americans were sitting on record-high home equity levels of approximately $9.9 million. So if you’ve noticed homes in your neighborhood selling above their listing price and you’ve been on the fence about selling yourself, now may be a good time to cash in on this opportunity.

Both buyers and sellers can make tremendous gains

Happy family with children moving with boxes in a new house.

In a hot housing market where home inventory is low, competition is fierce, and home equity values are at all-time highs, buyers and sellers can start to feel overwhelmed. But don’t despair: an increase in mortgage rates isn’t stopping homes from selling quickly, nor is it preventing home equities from appreciating. For example, according to the National Association of Realtors (NAR), properties remained on the market for just 17 days in March, with many going for over the asking price!

With more buyers than sellers today, current homeowners looking to sell to fight inflation have the advantage of likely bidding wars, resulting in greater profits and fast-moving homes that don’t stay on the market for very long. For those looking towards homeownership to protect their assets against inflation, reassurance comes from knowing that demand is expected to outpace supply for the foreseeable future, meaning that home equities will continue to rise. And if inflation continues, fixed-rate interest rates will drop again, creating the perfect opportunity to refinance your loan. 

Get Ready to Make Your Move

The first step to buying and selling is crunching the numbers. Our team will help you find the real, up-to-the-minute value of your home using the latest microdata and neighborhood trends. Then, we’ll work with you to figure out the best strategy to shelter your investments and assets from inflation. Contact us today!

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Mortgage Repayment After COVID-19 Forbearance

With the dust of COVID-19 settled, that means the resumption of mortgage payments for many Americans. In a Covid-19 forbearance real estate market, it may be challenging to know the correct next step after the last couple of years.

Key Takeaways:

  • The CARES Act kept homeowners in their homes with mortgage forbearance
  • There’s plenty of options to help homeowners transition to repayment
  • No one needs to face foreclosure – contact us today to discuss your options!

Mortgage forbearance helped homeowners

The good news is that there’s no bad news! The CARES Act enacted by Congress allowed homeowners to postpone their monthly mortgage payments. This policy worked, because evictions have not been as severe as many feared, and the calamity of the 2008 housing market is not going to repeat itself in 2022.

The Mortgage Bankers Association estimates that approximately 525,000 homeowners are still in forbearance plans. If you are one of those homeowners moving into a post-forbearance future, there’s no reason to panic: plenty of help is available. Let’s look at the different post-forbearance options and determine which one best suits your needs.

The CARES Act changed the mortgage landscape

Meeting with real state agent signing mortgage loan at bank

When the pandemic struck in early 2020, rumors of the 2008 housing crisis repeating itself soon infused nearly every real estate conversation. Understandably, homeowners have been nervous about repeating history, with fears of eviction and potential homelessness genuinely gripping many Americans. However, contrary to the Great Recession, homeowners have been better protected against the uncertainties of the Covid-19 pandemic.

When Congress declared that homeowners could postpone their mortgage payments for 18 months with no penalty (known as forbearance), this singular act of Congress truly benefited the American homeowner. Additionally, many servicers of mortgages not backed by the federal government voluntarily did the same. And with substantially more equity in their homes than they had at the start of the Great Recession, plus the ability to refinance at historic lows during the pandemic, homeowners were in better financial shape to weather the storm.

Understanding your mortgage forbearance repayment options

mortgage calculator with model house on desk.

Thankfully you’ve got plenty of helpful options as you move out of forbearance and resume your monthly mortgage payments. Here are five options to restart your mortgage payments:

  1. A Reinstatement means paying the total forbearance amount all at once. Remember, this is only one option to discuss with your mortgage lender. You do not have to take this option.
  2. A Repayment Plan allows you to bring your mortgage current over some time (up to 12 months). A repayment plan is an agreement that will enable you to repay the forbearance amount on your mortgage by making additional monthly payments and your regular monthly mortgage payments.
  3. A COVID-19 Payment Deferral allows you to bring your mortgage current by delaying repayment of forbearance amounts without changing other mortgage terms. This option may be available if you cannot afford a reinstatement or repayment plan. You will not be charged interest on the forbearance amounts. However, all sums will be due if and when the property sells.
  4. A Loan Modification permanently changes the terms of your actual loan. Some common examples are changes to your interest rate or loan term. But, surprisingly, and in another historic move to ensure the stabilization of the housing market, the Federal Housing Administration (FHA) announced in April of 2022 that homebuyers would be able to select a 40-year mortgage for the first time.
  5. A Loan Refinance is perhaps one of the more traditional options, and even if you have resolved or are resolving your forbearance plan, you may be eligible to refinance your loan.

Forbearance doesn’t stop you from selling your home

smiling couple holding sold red card at home with cardboard boxes

The COVID-19 pandemic produced challenges that impacted homeowners’ ability to make timely mortgage payments. Thankfully, taking advantage of the forbearance doesn’t stop you from selling your home, even if you haven’t restarted payments yet. If you can no longer afford your mortgage, but you’ve built up enough equity in your home, one option is to sell it and use the proceeds to help pay off your mortgage and any missed payments during forbearance.

Make an Informed Decision

With more financing options available today than ever before, there’s no reason to worry about mortgage repayment. Contact us today to find out the true value of your home. Then, you’ll be informed and can make a sound financial decision about what type of mortgage is right for you.

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Should You Be Worried About a Housing Bubble?

Key Takeaways:

  • Real Estate Bubbles: what are they, are we in one now, and why there’s no cause for alarm.
  • It’s natural to compare today to 2008, but this housing market is vastly different.
  • You can lean on our expertise! We’ve seen all types of markets, so reach out with questions.

With home prices soaring to levels never before seen, it is undeniable that the U.S. housing market is in uncharted territory, with many industry experts speculating that we’re in the midst of yet another housing bubble. However, like snowflakes, every bubble is created differently and is unique. 

As mortgage rates rise and rumors of another crash in the housing market fill the news cycle, it may be tempting to get cold feet and postpone your homeownership dreams. But as we’ll explore below, it’s essential to understand the anatomy of housing bubbles, what causes them and why it’s a term you needn’t fear.

What exactly is a bubble within the housing market?

house property prices bubble of the investment loan interest rate on mortgage

In basic terms, a real-estate bubble is a temporary economic event that occurs periodically and refers to an increase in the overall value of the housing market. When a bubble grows, home values increase; when a bubble pops, property values decrease.

Simple enough, but, what causes the housing market to experience bubbles?

Traditionally, the Law of Supply and Demand dictate a property’s market value. For example, when the demand for housing is high, and supply is low, home prices often rise, typically resulting in a seller’s market. Conversely, when housing supply is high but demand is low, market values fall, resulting in a buyer’s market. However, additional factors such as speculative investing, FOMO (Fear Of Missing Out) panic buying, and risky lending (such as occurred in the 2008 Housing Crash) are all elements that influence the growth and burst of housing market bubbles.  

Why you don’t need to fear housing bubbles

Loving young couple looking at dream house.

We can always count on the old axiom in real estate: “You can never enter the same river twice.” (Fun fact: Greek philosopher Heraclitus came up with that lasting gem!)

What is meant by this is that history does not strictly repeat itself, and for us today in the real estate market, that means that it’s not 2008. As mentioned above, though the market moves in cyclical fashions, most experts do not believe that The Great Recession is repeating itself in today’s market.   

2022 is not 2008 repeating itself

Young woman holding home keys while hugging boyfriend in their new apartment after buying real estate.

The infamous U.S. housing bubble of the mid-2000s had its origins in the unprecedented growth of the subprime mortgage market. Additionally, U.S. government-sponsored mortgage lenders Fannie Mae and Freddie Mac made home loans accessible to borrowers with low credit scores and a higher risk of defaulting on those loans. 

None of this is happening today. 

The current market demand is not the result of easy lending. Instead, today’s rising property values result from the natural market forces of a low supply in housing inventory meeting high demand. But with new home construction expected to surge in the second half of the year, this will help ease demand in the future and stabilize the market overall.

Regardless of whether you’re selling your home or are a first-time homebuyer, the key takeaway for you is this: today’s high home values are not likely to crash any time soon, so it is as good a time as any to enter the market.

You Can Count on Us in Uncertain Times

If you’re feeling unsure about whether to buy or sell a home right now, reach out and rely on our expertise to guide you to make a sound financial decision. Our team has the experience and knows our local market, so contact us today and we’ll work with you to find the right strategy for your situation.