The Silver Lining for Homebuyers in the Wake of Bank Collapses

How recent financial events could lead to significant savings on your dream home

In the ever-changing world of finance and real estate, sometimes the unexpected can lead to new opportunities. The recent collapse of Silicon Valley Bank and a few other regional banks might seem like bad news, but it could actually present a golden opportunity for potential homebuyers. Let’s delve into the backstory and explore how these events can benefit you.

A Brief Backstory

bank building

A few years ago, in 2020 and 2021, banks saw a flood of new deposits as a result of stimulus money and increased savings during the pandemic. To make the most of this influx, banks invested in low-interest treasury bonds and mortgage-backed securities, locking in 1-2% returns for years. Fast forward to today, and the Federal Reserve has significantly raised interest rates, making those previous investments far less attractive. This series of events has contributed to the banks’ downfall.

The Silver Lining for Homebuyers

calculating home value

The collapse of these banks and the subsequent rapid drop in interest rates have led to a decrease in mortgage rates, as they typically align with the 10-year treasury.

Seizing the Opportunity

international bills and coins

If you or someone you know has been considering purchasing a home, this recent turn of events could be a once-in-a-lifetime opportunity to save big. Here are a few steps you can take to make the most of these favorable financial conditions:

  1. Get pre-approved for a mortgage: With lower interest rates available, now is the time to secure your mortgage pre-approval to lock in these favorable rates.
  2. Start your home search: Begin exploring potential homes and neighborhoods that fit your criteria. Consider working with a knowledgeable real estate agent who can guide you through the process and help you make the most of this opportunity.

Navigating the Current Market

house key

The recent collapse of banks might seem like a cause for concern, but it has opened up a window of opportunity for homebuyers to secure their dream home at a potentially lower cost. By acting quickly and working with knowledgeable professionals, you can take advantage of this rare chance to save on your mortgage and make your dream of homeownership a reality.

If you have any questions or need assistance navigating these unique market conditions, don’t hesitate to reach out to our team. We’re here to help you every step of the way.

Homebuying Tips for the Spring Real Estate Market

Key Takeaways:

  • Get your best mortgage rate with a better credit score
  • When you find a property you love, make an offer
  • Don’t wait—contact us and start planning your move today!

The spring real estate market looks different for homebuyers in 2023 than in previous years. With recent changes to interest rates, available inventory, home prices, and a lot more, it’s essential to work with your trusted local real estate team to get prepared! The spring real estate market is full of opportunity and potential, making it the ideal time to purchase a home. If you’re looking to buy a home this season, here are some tips on what steps to take during the spring real estate market.

Improve your credit score for a better mortgage rate

Photo of cheerful loving young couple using laptop and analyzing their finances with documents.

The first step in buying a home is getting pre-approved for a mortgage loan. This involves submitting information like credit score and payment history to potential lenders so they can determine whether or not you’re eligible for a loan. In order to get the best mortgage rate possible, it’s important that your credit scores are up-to-date. Improving your credit scores may involve paying off any existing debts or disputing any errors that may be present on your credit report. It may also help to keep your debt-to-income ratio low by avoiding taking on new debts while trying to get pre-approved.

Utilize our online tools to find the right home for you

Happy mature older family couple laughing, bonding sitting at home table with laptop.

Technology has made it easier for potential buyers to find their new dream homes without stepping outside their current homes! Our free and easy-to-use tools (such as our advanced property search, instant listing alerts, virtual tours, and mortgage calculators) allow you to view properties from all angles and calculate estimated monthly payments to plan before making an offer. Our tools save you time by giving you an idea of what to expect when viewing a property in person or speaking with lenders about loan options.

Work with the right agent—starting today! 

Real estate agent near door inviting young couple to enter house for visit

Finding the right professional help is key when it comes to navigating through the homebuying process. Work with our knowledgeable team because we know both the local market and the national trends. We’re here to help make finding your dream home much easier, as well as helping you avoid common pitfalls associated with purchasing property. Finding a reliable lender offering competitive rates will ensure you get the best deal possible on your mortgage loan, so make sure to speak with our team as you start the pre-approval process to get our insights into the best lenders for your goals. Start searching homes for sale now, so you have plenty of time before closing day rolls around!

Pounce on desired properties immediately

Happy father with daughter standing near open balcony and smiling. Blonde mother holding girl hand and talking with her. Enjoying family watching new house or flat. Relocation and mortgage concept

Once you find your dream home, don’t hesitate—act quickly! Finding the exact home you’re looking for doesn’t happen every day, so make sure that you take advantage of this opportunity by putting in an offer as soon as possible after viewing it in person or online via virtual tours. Before you contact the home seller, contact our team first! We’ll get you access to the latest neighborhood sold reports and other market data to help you determine the best offer for that dream property. And, our team brings expert negotiation tactics to the table, plus smart advice to avoid common pitfalls like overbidding or offering too little money initially.

Don’t Wait Until Summer—Start Buying Now!

Ready to buy your next home during the spring real estate season? Start by improving your credit score, using our online tools and market data, and building a strategy we can execute quickly when the right home comes up for sale. With these tips, you can maximize your chances of success during this season’s real estate market. So if you’re ready to start looking for your dream home, contact us today to get started!

Get Ready for a Busy Spring 2023 Real Estate Market

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

Open door with key to home

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

Family buying new house

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

Two business man professional engineer worker at the house building, happy feeling.

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!

What’s Ahead in the 2023 Real Estate Market Forecast

Key Takeaways:

  • There’s goods news on the horizon in 2023 for home buyers and sellers
  • Look for shifts when it comes to home prices, inventory, and interest rates
  • Make a smart move by contacting us today to plan and strategize!

The COVID-19 pandemic ushered in an era of unprecedented milestones in the housing market. From the lowest interest rates in history to record amounts of equity, the last few years in the real estate market were anything but ordinary. However, as economies work on finding a middle ground, homebuyers and sellers can look forward to a much more familiar market in 2023. Let’s take a look at what we expect to see this year, so you can start thinking ahead to make your move.

Expect a bright spring for the national real estate market

Coin stack on international banknotes with house and construction crane models on the table.

The current inflationary pressures are expected to ease, especially by the spring of 2023. The recent string of the housing market favoring sellers will start to wane as slight price adjustments and an increase in inventory bring balance. Supply chain issues caused by the COVID-19 global pandemic are easing and will continue to improve throughout the year. And, the overall sentiment of the housing market will improve as we move away from those historic year-over-year comparisons that distort decades of housing market data.

What homebuyers can expect from this year’s market

Happy millennial couple receiving keys from realtor, purchasing real estate

As the market continues to balance, there will be an increase in the number of homes available for sale, with estimates at around 23% more inventory. Younger generations are planning to enter the housing market—many for the first time. A recent survey indicated that 79% of Millennials and 84% of Gen Z plan to buy a house in the next few years. Interest rates are forecast to come down nearly two percentage points from the recent high of 7.12% to a more standard 5.25% by the end of this year, according to Bankrate. This will help fuel movement among homebuyers, who are also enjoying a strong job market. Despite high-profile layoffs primarily in the tech sector making the news, the overall unemployment rate is expected to stay at a low 3.6%.

What homesellers can expect from this year’s market

Home agent shake hand with customer after sign contract and finishes deal purchase house success

While the Fannie Mae Home Price Index (FNM-HPI) expects home prices to decline this year—it’s only by a modest 1.5%. While a “decline” can sound disappointing, since the COVID-19 pandemic in 2020, the median home listing price is up 27%, adding more than $9 trillion to the total value of the US housing market. And, despite the recent dip in home values, homeowners that purchased before February 2020 are still up an average of $92,000 in equity, according to real estate experts Black Knight. This provides homesellers with some flexibility in the listing price, allowing for a faster sale if you’re willing to price your home competitively. It’s important to keep the last several years in perspective in order to maximize those returns and put your investment to work for you.

Talk With Us About Your Real Estate Goals

While the real estate market is always in shift, ultimately, buying or selling a home is more about what’s right for your lifestyle each year. And with a more egalitarian market expected in 2023, both homebuyers and sellers can expect to make beneficial deals. The best way to get started is to contact us. Our team has experienced countless shifts in the market, and we’re backed by the latest data in your local area to help you find your dream home!

Why Now Is a Good Time to Enter the Housing Market

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 buy 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

Portrait Of Happy Family Showing Key, Standing In Living Room.

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

real estate agent Delivering sample homes to customers, mortgage loan contracts. Make a contract for hire purchase and sale of a house. and home insurance contracts, home mortgage loan concepts

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

Beautiful, Newly Built Luxury Home Exterior

Eager would-be homebuyers waiting for home prices 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!

What’s Happening in Your Local Housing Market?

Key Takeaways:

  • Today’s market conditions are unique, and there’s plenty of ways to win
  • Let’s explore the steps you can take to pave your path to homeownership
  • Our team is ready to help you achieve your goals, so contact us today!

Amid high inflation, increasing mortgage rates, and limited housing inventory, the headlines make it seem like there’s no good news in the real estate market. But when you listen closely to expert economists and look at your local market, you’ll learn that there’s plenty of opportunity. Let’s take a closer look to understand the complete picture of what’s really going on in the housing market.

Low inventory keeps home prices high

Magnifying glass in front of an open newspaper with paper houses.

It’s easy to hear snippets of today’s news cycle and get swept up into a maelstrom of doom and gloom, fearing that the Great Recession of 2008 is happening all over again. But Lawerence Yun, Chief Economist for the National Association of Realtors (NAR), gave a talk this month in Orlando. Mr. Yun pointed out why the housing market will remain stable and profitable. 

One of the leading factors behind his assertion is that “housing inventory is about a quarter of what it was in 2008.” The historic low inventory of available housing in the US is a positive because that limited inventory will prevent large price drops for most of the country. Mr. Yun went on to say that “distressed property sales are almost non-existent, at just 2%, and nowhere near the 30% mark seen during the housing crash (of 2008). Moreover, short sales are almost impossible because of the significant price appreciation of the last two years.”

The national housing market is not your local market

Gainesville, Florida, USA downtown cityscape at twilight.

The national news won’t give you an accurate snapshot of what’s happening in your area. It’s a collection of data that makes for wonderful headlines but has little to do with what you need to know to buy or sell a home. That’s why as real estate professionals, it’s our job to dive deep into the microdata and help guide our clients to making smart moves. 

Despite inventory remaining limited nationally, there are still housing markets with increases in available units, especially for starter homes, making this a wonderful time to buy. Other pockets are holding onto a seller’s market, with prices staying steady. It’s always best to speak to your trusted agent to know what’s happening in the area where you live or want to move. And, with rental prices continuing to rise as well, it’s never a bad time to consider purchasing a home. 

How to start planning your next move

Full length body size view of four cheery people dad mom small little kids brother sister carrying cardboard boxes moving new residence cottage town.

As a homeowner or prospective homebuyer, there are always ways you can stay ahead of the market. No one purchases a home overnight, so give yourself plenty of time and take smart steps to ensure success when the time is right. 

First, contact us today to find the latest, up-to-the-minute value of your home, backed by local data. This will give you accurate insights into the value of your home and what your best move may be. From there, you’ll be able to make data-backed decisions about whether you should remodel, list your home, what kind of return you can expect, and more. 

If you’re looking to buy, contact us to learn more about our market and how much inventory is available. Stay flexible, and consider different styles of homes, from townhouses and condos to older homes ready for some modern upgrades. Or, maybe a new construction home is right for you, with special financing and other incentives offered by the builders. 

You Can Win Your Local Housing Market

Ultimately, real estate is always local! The best thing you can do before making a move in today’s real estate market is to contact your local real estate agent. As your local, trusted real estate professionals, we know what’s happening and are your best resource for determining your next best step. So contact us today!

Top 5 Tips for Home Buying in Today’s Market

Key Takeaways:

  • There’s plenty of strategies to successfully buy in today’s market.
  • Lean in on the expertise of your local real estate—we’ve seen it all!
  • Our team is ready to help you achieve your goals, so contact us today.

Whether you’re shopping for your first home or relocating to a new area, purchasing a home in today’s real estate market can be daunting. However, the good news is that today’s housing market can actually be helpful if you’re a prospective homebuyer who knows how to play the game well. When it comes to making a winning offer on your dream home, you must know certain particulars of the homebuying process to be successful. 

So, let’s look at the top five tips that will help to play the real estate game more effectively and pave your path to home ownership. 

1. Determine and know your budget

Woman looking over finances to buy a home

Before you begin the house-hunting process and start picking your paint colors, potential homebuyers should receive pre-approval from one or more lenders to verify the amount of money they are qualified to borrow. Being pre-approved tells sellers you’re serious about buying and have the means to do so. It also helps narrow your search by allowing you to determine which neighborhoods are within your budget. 

Remember to consider the additional costs of homeownership, such as taxes, utilities, maintenance, and insurance. Finally, be realistic about how much you can comfortably afford in today’s tight real estate market. With availability at historic lows and rising mortgage rates, you’ll have to be able to move quickly when the right home presents itself. That means having your finances ready to go.  

2. Distinguish between your wants and your needs

Smiling Family Carrying Boxes Into New Home On Moving Day

To play the real estate game well, you need to know what it is, specifically, that you want from a home. Certain wants, such as stainless steel appliances, new cabinets, or hardwood floors, can always be obtained later. Therefore they shouldn’t be deal-breakers. 

However, if you want to be in a specific school district, need to live close to work, or have a decent-sized backyard to try your hand at homesteading, those cannot be addressed later and must factor in throughout the house-hunting process. As you contemplate a purchase, consider your other financial goals as well. It can be easy to get swept up in the frenzy of a tight housing market, so it’s essential to keep your financial goals top of mind during this process. 

3. Be prepared to act quickly

Couple buying home from real estate agent.

A well-priced property in good condition in a good neighborhood with plenty of nearby amenities will always draw many interested buyers during the first few days of being on the market. In a tight seller’s market like today, such homes rarely stay on the market for very long.   

So, when you find the right home that fits your budget and satisfies your wants and needs, you’ll want to sign an offer immediately and get it presented. Serious buyers should always be ready to submit an offer quickly, or they may risk missing out on the property altogether.

4. Bid competitively and stay flexible

Real estate agent holding house key to his client after signing contract.

Prepare to bid competitively to make your offer stand out, but remain pragmatic and know your limits. It may be tempting to submit a low offer as a starting bid, but in a tight seller’s market, buyers must put forward their highest offer from the very beginning to avoid losing out on the home. In multiple bidding situations, the highest offer is only sometimes accepted by the seller. In many instances, buyers with the fewest contingencies and who are flexible with things like their move-in date are the ones whose bid stands out to the seller.

5. Always work with a certified real estate agent

Smiling broker standing with documents, happy family hugging near their new home

What’s trending nationally is certainly different from the area where you’re looking to buy, sell, or relocate to. Work with us, your local real estate experts. Our team is certified, experienced, and familiar with the areas and neighborhoods you’re considering. As your local agents, we are the most trusted resource for accurate information that you have at your disposal. Our unparalleled knowledge of our local community will give you the competitive advantage you need in this housing market. 

You Deserve to Work With the Best

If you’re ready to make your move, we know the housing market trends. With decades of experience in the natural ups and downs of the market, we know how to help you best navigate what’s happening right now. Contact us today to get started exploring your options and crafting a winning strategy.

How to Stay Ahead of the Real Estate Market

Key Takeaways:

  • Knowing your property’s real-time value is more important than ever
  • Build a relationship with your local real estate team to maximize your money
  • This is a great time to plan for the future of your home, so contact us today!

From volatile national market trends impacting local housing markets to unforeseen structural problems, a property’s value fluctuation can be tricky to gauge accurately. However, the good news for current and would-be homeowners curious about a property’s actual value in today’s market is that information is more accessible than ever. So let’s look at some of the easiest, most straightforward options for knowing a property’s actual value and why it’s so important!

Know the accurate value of your property

Stacked gold coins and plant growing on the top and wooden home model

People usually want to know how much a home is worth to take comfort in knowing they’re making a good investment. Buying or selling a home is one of the most significant financial investments people will ever make. So naturally, when sellers want as much profit as possible and buyers want to pay as little as possible, achieving the right balance between these two when the closing time rolls around can be tricky. Staying informed about your home’s value and the trend of home prices in your local area allows you to make better financial decisions overall. It all boils down to knowing how much a home is realistically worth. 

Suppose you’re a current homeowner about to place your property on the market who’s considering a renovation to increase your payout at closing; knowing your home’s current value will help determine if doing so is even necessary, potentially saving you thousands of dollars. Or perhaps you’re a buyer eager to make an offer; knowing a property’s real-time, comparative value in the market could help you avoid overpaying. 

And this is where getting to know your local real estate professionals becomes one of the most important decisions you will make.

Build a relationship with your local real estate agent

Real estate agent showing modern house

Regardless of what is happening within the broader national housing market, buying or selling a home is always a local matter. While real estate is an industry heavily influenced by environmental, political, social, and broader economic forces that affect property value and pricing, what is valid for buyers and sellers in San Francisco differs from what is reasonable for buyers and sellers in Sioux Falls, SD. 

This is where knowing who your local real estate experts are is invaluable. Top-earning real estate agents have one thing in common: they know their local real estate markets. Ask them any question about the area, and they can answer it, or at least they know where to go and who to ask to find the answer. 

So, when you’re ready to put your house on the market or make an offer, the first and easiest step you can and should take is to contact your local real estate professionals. They are experts in their field who understand market etiquette and know how to make a great offer that achieves the difficult balance of satisfying both buyer and seller. The right real estate agent knows how to negotiate the complex web of forms best, and they can foresee issues you might not.

Discover Your Real Estate Partnership

If you’re ready to 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 best navigate today’s market. So don’t hesitate to reach out and say Hello! to figure out your best options for buying or selling your home!

The Housing Market is a Win 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!

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. 

The current housing market and forecast 

Dreaming of new home

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

Real estate agent handing over keys of new home to young couple. Happy new property owners with estate broker.

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

Happy couple sold home sign.

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!

Why Now Is the Right 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!

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. 

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 a 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!