Why You Want an Agent’s Advice for Your Move

No matter how you slice it, buying or selling a home is a big decision. And when you’re going through any change in your life and you need some guidance, what do you do? You get advice from people who know what they’re talking about.

Moving is no exception. You need insights from the pros to help you feel confident in your decision. Freddie Mac explains it like this:

“As you set out to find the right home for your family, be sure to select experienced, trusted professionals who will help you make informed decisions and avoid pitfalls.”

And while perfect advice isn’t possible – not even from the experts, what you can get is the very best advice out there.

The Power of Expert Advice

For example, let’s say you need an attorney. You start off by finding an expert in the type of law required for your case. Once you do, they won’t immediately tell you how the case is going to end, or how the judge or jury will rule. But what a good attorney can do is walk you through the most effective strategies based on their experience and help you put a plan together. They’ll even use their knowledge to adjust that plan as new information becomes available.

The job of a real estate agent is similar. Just like you can’t find a lawyer to give you perfect advice, you won’t find a real estate professional who can either. That’s because it’s impossible to know everything that’s going to happen throughout your transaction. Their role is to give you the best advice they can.

To do that, an agent will draw on their experience, industry knowledge, and market data. They know the latest trends, the ins and outs of the homebuying and selling processes, and what’s worked for other people in the same situation as you.

With that expertise, a real estate advisor can anticipate what could happen next and work with you to put together a solid plan. Then, they’ll guide you through the process, helping you make decisions along the way. That’s the very definition of getting the best – not perfect – advice. And that’s the power of working with a real estate advisor.

Bottom Line

If you’re looking to buy or sell a home, you want an expert on your side to help you each step of the way. Let’s connect so you have advice you can count on.

How Changing Mortgage Rates Impact You

Some Highlights

• If you’re looking to buy a home, it’s important to know how mortgage rates impact what you can afford and how much you’ll pay each month.
• That’s because even a small change in mortgage rates can have a big impact on your purchasing power.
• The best way to navigate changing mortgage rates and make an informed buying decision is to rely on the expertise of a local real estate professional and mortgage lender.

Expert Home Price Forecasts for 2024 Revised Up

Over the past few months, experts have revised their 2024 home price forecasts based on the latest data and market signals, and they’re even more confident prices will rise, not fall.

So, let’s see exactly how experts’ thinking has shifted – and what’s caused the change.

2024 Home Price Forecasts: Then and Now

The chart below shows what seven expert organizations think will happen to home prices in 2024. It compares their first 2024 home price forecasts (made at the end of 2023) with their newest projections:

The middle column shows that, at first, these experts thought home prices would only go up a little this year. But if you look at the column on the right, you’ll see they’ve all updated their forecasts and now think prices will go up more than they originally thought. And some of the differences are major.

There are two big factors keeping such strong upward pressure on home prices. The first is how few homes are for sale right now. According to Business Insider:

“Low home inventory is a chronic problem in the US. This has generally kept home prices up . . .”

A lack of housing inventory has been pushing prices up for a long time now – and that’s not expected to change dramatically this year. But what has changed a bit is mortgage rates.

Late last year when most housing market experts were calling for home prices to rise only a little bit in 2024, mortgage rates were up and buyer demand was more moderate.

Now that rates have come down from their peak last October, and with further declines expected over the course of the year, buyer demand has picked up. That increase in demand, along with an ongoing lack of inventory, is what’s caused the experts to feel the upward pressure on prices will be stronger than they expected a couple months ago.

A Look Forward To Get Ahead of the Next Forecast Revisions

Real estate experts regularly revise their home price forecasts as the housing market shifts. It’s a normal part of their job that ensures their projections are always up-to-date and factor in the latest changes in the housing market.

That means they’ll continue to revise their projections as the housing market changes, just as they’ve always done. How those forecasts change next is anyone’s guess, but pay attention to mortgage rates.

If they trend down as the year goes on, as they’re expected to do, that could lead to more buyer demand and even higher home price forecasts.

Basically, it’s all about supply and demand. With supply still so limited, anything that causes demand to go up will likely cause prices to go up, too.

Bottom Line

At first, experts believed home prices would only go up a little this year. But now, they’ve changed their minds and forecast prices will grow even more than they originally thought. Let’s connect so you know what to expect with prices in our area.

Some Experts Say Mortgage Rates May Fall Below 6% Later This Year

There’s a lot of confusion in the market about what’s happening with day-to-day movement in mortgage rates right now, but here’s what you really need to know: compared to the near 8% peak last fall, mortgage rates have trended down overall.

And if you’re looking to buy or sell a home, this is a big deal. While they’re going to continue to bounce around a bit based on various economic drivers (like inflation and reactions to the consumer price index, or CPI), don’t let the short-term volatility distract you. The experts agree the overarching downward trend should continue this year.

While we won’t see the record-low rates homebuyers got during the pandemic, some experts think we should see rates dip below 6% later this year. As Dean Baker, Senior Economist, Center for Economic Research, says:

“They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”

And Baker isn’t the only one saying this is a possibility. The latest Fannie Mae projections also indicate we may see a rate below 6% by the end of this year (see the green box in the chart below):

The chart shows mortgage rate projections for 2024 from Fannie Mae. It includes the one that came out in December, and compares it to the updated 2024 forecast they released just one month later. And if you look closely, you’ll notice the projections are on the way down.

It’s normal for experts to re-forecast as they watch current market trends and the broader economy, but what this shows is experts are feeling confident rates should continue to decline, if inflation cools.

What This Means for You

But remember, no one can say for sure what will happen (and by when) – and short-term volatility is to be expected. So, don’t let small fluctuations scare you. Focus on the bigger picture.

If you’ve found a home you love in today’s market – especially where finding a home that meets your budget and your needs can be a challenge – it’s probably not a good idea to try to time the market and wait until rates drop below 6%.

With rates already lower than they were last fall, you have an opportunity in front of you right now. That’s because even a small quarter point dip in rates gives your purchasing power a boost.

Bottom Line

If you wanted to move last year but were holding off hoping rates would fall, now may be the time to act. Let’s connect to get the ball rolling.

Don’t Let the Latest Home Price Headlines Confuse You

Based on what you’re hearing in the news about home prices, you may be worried they’re falling. But here’s the thing. The headlines aren’t giving you the full picture.

If you look at the national data for 2023, home prices actually showed positive growth for the year. While this varies by market, and while there were some months with slight declines nationally, those were the exception, not the rule.

The overarching story is that prices went up last year, not down. Let’s dive into the data to set the record straight. 

2023 Was the Return to More Normal Home Price Growth

If anything, last year marked a return to more normal home price appreciation. To prove it, here’s what usually happens in residential real estate.

In the housing market, there are predictable ebbs and flows that take place each year. It’s called seasonality. It goes like this. Spring is the peak homebuying season when the market is most active. That activity is usually still strong in the summer, but begins to wane toward the end of the year. Home prices follow along with this seasonality because prices grow the most when there’s high demand.

The graph below uses data from Case-Shiller to show how this pattern played out in home prices from 1973 through 2022 (not adjusted, so you can see the seasonality):

As the data shows, for nearly 50 years, home prices match typical market seasonality. At the beginning of the year, home prices grow more moderately. That’s because the market is less active as fewer people move in January and February. Then, as the market transitions into the peak homebuying season in the spring, activity ramps up. That means home prices do too. Then, as fall and winter approach, activity eases again and prices grow, just at a slower rate.

Now, let’s layer the data that’s come out for 2023 so far (shown in green) on top of that long-term trend (still shown in blue). That way, it’s easy to see how 2023 compares.

As the graph shows, moving through the year in 2023, the level of appreciation fell more in line with the long-term trend for what usually happens in the housing market. You can see that in how close the green bars come to matching the blue bars in the later part of the year.

But the headlines only really focused on the two bars outlined in red. Here’s the context you may not have gotten that can really put those two bars into perspective. The long-term trend shows it’s normal for home prices to moderate in the fall and winter. That’s typical seasonality.

And since the 49-year average is so close to zero during those months (0.10%), that also means it’s not unusual for home prices to drop ever so slightly during those times. But those are just blips on the radar. If you look at the year as a whole, home prices still rose overall.

What You Really Need To Know

Headlines are going to call attention to the small month-to-month dips instead of the bigger year-long picture. And that can be a bit misleading because it’s only focused on one part of the whole story.

Instead, remember last year we saw the return of seasonality in the housing market – and that’s a good thing after home prices skyrocketed unsustainably during the ‘unicorn’ years of the pandemic.

And just in case you’re still worried home prices will fall, don’t be. The expectation for this year is that prices will continue to appreciate as buyers re-enter the market due to mortgage rates trending down compared to last year. As buyer demand goes up and more people move at the same time the supply of homes for sale is still low, the upward pressure on prices will continue.

Bottom Line

Don’t let home price headlines confuse you. The data shows that, as a whole, home prices rose in 2023. If you have questions about what you’re hearing in the news or about what’s happening with home prices in our local area, let’s connect.

Maximizing The Benefits Of Home Equity When Downsizing

When it comes to downsizing, homeowners often view it as a way to simplify their lives, reduce maintenance costs, or even relocate to a more desirable location. But what many don’t realize is that downsizing can also be an opportunity to tap into the built-up home equity and maximize its benefits.

Home equity refers to the portion of the home’s value that you own outright, and it can be a game-changer when you decide to sell and downsize. By carefully strategizing and making thoughtful financial decisions, you can make the most of your home equity and use it to enhance your financial situation and overall quality of life.

One of the primary benefits of downsizing is the potential to accumulate a significant amount of home equity. Suppose you have lived in your current home for a considerable period of time or experienced a rise in property values in your area. In that case, you may have built up substantial equity over the years. When you sell your current property and purchase a smaller one, you can unlock that equity and put it to work for you.

So, how can you maximize the benefits of home equity when downsizing? Here are some key strategies to consider:

1. Evaluate Your Financial Goals: Before making any decisions, it’s essential to define your financial goals. Are you looking to reduce monthly expenses, pay off debts, invest, or enhance your retirement savings? By clearly identifying your objectives, you can align your use of home equity with your financial aspirations.

2. Assess the Real Estate Market: Familiarize yourself with the current real estate market conditions, both in your current location and where you plan to downsize. Understanding property values, market trends, and buyer demand will help you determine the potential selling price of your existing home and the affordability of downsizing options.

3. Plan for a Smaller Mortgage (or None): Downsizing often means purchasing a smaller and less expensive property, and that can lead to a reduced mortgage or even eliminate it entirely. By using the proceeds from the sale of your current home and applying it towards a smaller mortgage or buying a property outright, you can significantly lower your monthly housing expenses.

4. Consider Cash Offers: Depending on the current housing market, you might receive cash offers for your existing home. A cash offer can be advantageous when downsizing as it allows you to skip the traditional sale process, eliminate the need for mortgage approvals, and provide you with immediate access to your home equity.

5. Explore Reverse Mortgages: If you are 62 or older, a reverse mortgage can be a viable option to leverage your home equity when downsizing. A reverse mortgage allows you to borrow against your home equity while still living in your home. This can provide additional funds that can be used to purchase a smaller property, supplement retirement income, or cover other expenses.

6. Invest Wisely: If you are considering investing your home equity, it’s essential to carefully evaluate your options and consult with a financial advisor. Depending on your risk tolerance and financial goals, you may choose to invest in stocks, bonds, real estate, or other investment vehicles. Proper planning and diversification can help you grow your wealth and secure your financial future.

7. Consult with a Financial Advisor: Downsizing and utilizing home equity can have significant financial implications. Seeking guidance from a financial advisor can help you make informed decisions, understand the impact on your overall financial picture, and ensure that you are maximizing the benefits of your home equity effectively.

Downsizing presents an opportunity to leverage the value you have accumulated in your current home to enhance your financial situation and meet your long-term goals. By carefully considering your options, evaluating the real estate market, and seeking expert advice, you can make the most of your home equity and secure a brighter future when you sell and downsize.

The Power Of Home Equity: Understanding The Basics

Homeownership is often considered as a great investment, providing financial stability and a sense of security. One of the major advantages of owning a home is the build-up of equity over time. Home equity is the difference between the market value of your property and the outstanding balance on your mortgage.

Understanding the basics of home equity is crucial, as it can play a significant role in your financial planning, especially when the time comes to sell and downsize. By utilizing the power of home equity, you can potentially unlock a range of opportunities and transform your financial situation.

When you sell your home and downsize, you have the potential to free up a substantial amount of home equity. This equity can be used in various ways, depending on your financial goals and circumstances. Let’s explore some of the options available to homeowners:

1. Boosting Your Retirement Savings: Downsizing can provide an excellent opportunity to increase your retirement nest egg. By using the proceeds from selling your home to contribute to your retirement savings, you can secure your financial future and potentially enjoy a more comfortable retirement.

2. Purchasing a Smaller Home: Downsizing often involves selling your current home and purchasing a smaller, more affordable property. By doing so, you can eliminate the burden of a large mortgage payment and potentially reduce your monthly expenses. This can afford you more financial flexibility and freedom to pursue other interests or invest in your passions.

3. Eliminating Debt: If you have high-interest debt, such as credit card debt or personal loans, downsizing can be a smart way to pay it off. By using your home equity to clear these debts, you can save on interest payments and get on a path towards financial freedom.

4. Investing in Other Opportunities: Home equity can be a valuable resource to explore new investment avenues. Whether it’s starting a business, investing in stocks, or purchasing another property to generate rental income, utilizing your home equity can provide a launching pad for alternative revenue streams.

5. Enhancing Your Lifestyle: Downsizing can also present an opportunity to upgrade certain aspects of your life. By using the proceeds from selling your home, you can invest in renovations or upgrades for your new, smaller property. This can help create a more comfortable and enjoyable living space that suits your evolving needs and preferences.

While the possibilities are exciting, it’s important to be mindful of the potential risks and ensure that downsizing aligns with your long-term financial plans. Before making any decisions, it’s advisable to consult with a financial advisor or real estate professional who can provide expert guidance tailored to your specific circumstances.

In conclusion, understanding the power of home equity can be a game-changer when you sell and downsize. By tapping into the equity built up in your home, you can unlock a range of financial possibilities that can significantly enhance your financial well-being. From bolstering your retirement savings to eliminating debt and exploring new investment opportunities, home equity can offer a fresh start and lay the foundation for a prosperous future. So, when the time comes to downsize, don’t overlook the potential of your home equity and consider how it can positively impact your financial journey.

Strategies For Selling And Utilizing Home Equity Wisely

When it comes to selling your home and downsizing, home equity can truly be a game changer. Home equity is the difference between the current market value of your home and the amount you owe on your mortgage. It can provide you with additional financial flexibility and open up a world of possibilities as you embark on the next phase of your life. However, it is essential to utilize this equity wisely to maximize its potential benefits. In this section, we will explore some effective strategies for selling your home and utilizing home equity wisely.

1. Pay off existing debts: One of the first and most prudent ways to utilize your home equity is to pay off any existing debts you may have. Whether it’s credit card debt, car loans, or personal loans, using your home equity to eliminate these outstanding obligations can provide immense relief and improve your overall financial health. By consolidating your debts and focusing on repaying them, you can free up monthly income and reduce the burden of multiple payments.

2. Invest in your future: Selling your home and downsizing can be an opportune time to invest in your future. By setting aside a portion of your home equity, you can contribute to retirement funds, start a business, or explore other investment opportunities. It is crucial to consult with a financial advisor to determine the best investment options that align with your long-term goals and risk tolerance. Making informed decisions about where to put your home equity can help you secure a more stable and secure financial future.

3. Enhance your new residence: Downsizing often means transitioning to a smaller home or a different living situation. Utilizing your home equity to enhance your new residence can significantly improve your quality of life and make the downsizing process more enjoyable. Consider renovations or upgrades that will increase the value of your new property and make it more comfortable and suitable for your needs. Whether it’s updating the kitchen, installing energy-efficient systems, or creating a cozy outdoor living space, investing in your new residence can be a wise use of your home equity.

4. Establish an emergency fund: It’s always a good idea to have an emergency fund to cushion unexpected financial blows. Selling your home and downsizing can be an opportunity to establish or bolster this fund. By setting aside a portion of your home equity for emergencies, you can gain peace of mind and navigate unforeseen circumstances more comfortably. Whether it’s medical expenses, car repairs, or home maintenance, having a financial safety net can alleviate stress during challenging times.

5. Fund personal aspirations or hobbies: Downsizing and accessing home equity can also enable you to pursue personal aspirations or hobbies that may have been put aside due to financial constraints. Whether it’s traveling, starting a passion project, or taking up a new hobby, utilizing your home equity to support these pursuits can bring immense joy and fulfillment to your life. It’s essential to strike a balance between responsible use of your home equity and allocating funds towards activities that bring you happiness and personal growth.

In conclusion, selling your home and downsizing can be an exciting and transformative process. By utilizing your home equity wisely, you can unlock financial opportunities that can positively impact your life. Whether it’s paying off debts, investing in your future, enhancing your new residence, establishing an emergency fund, or pursuing personal aspirations, there are various strategies you can employ to make the most of your home equity. Remember to consult with professionals and make informed decisions that align with your goals and priorities. By doing so, you can leverage the power of home equity and set yourself up for a brighter financial future as you embark on this new chapter of your life.

Potential Pitfalls And Tips For Safeguarding Your Home Equity

While downsizing can offer a range of benefits, such as reducing expenses, minimizing maintenance, and simplifying one’s lifestyle, it’s crucial for homeowners to be aware of potential pitfalls that could impact their home equity. Safeguarding your home equity during the downsizing process should be a top priority to ensure you can fully leverage this valuable asset. In this section, we will discuss some potential pitfalls and offer tips for protecting your home equity.

1. Pricing your home correctly:

One of the most critical factors in safeguarding your home equity is accurately pricing your home when you put it on the market. Overpricing can lead to extended time on the market, reducing the chances of selling at the desired price. On the other hand, underpricing can result in leaving money on the table. Consulting with a reliable real estate agent or a professional home appraiser can greatly assist you in determining the optimal listing price for your property.

2. Timing the market:

The timing of selling your home can significantly impact your home equity. Real estate markets are dynamic and can experience fluctuations, affecting property values. Monitoring market trends and working with experienced real estate professionals can help you identify optimal periods to list your home and maximize your selling price.

3. Preparing your property for sale:

Investing some time and effort into preparing your property for sale can yield substantial returns in terms of enhanced home equity. Simple improvements like fresh paint, decluttering, and staging can significantly increase the perceived value of your home and attract potential buyers. Prioritize repairs and updates that provide the most impact without overspending, ensuring a good return on investment.

4. Avoiding excessive transaction costs:

When selling a property, there are certain costs involved, such as real estate agent commissions, closing costs, and transfer taxes. These expenses can eat into your home equity if not carefully managed. Comparing multiple real estate agents, negotiating commission rates, and exploring ways to minimize closing costs can help safeguard your home equity and ensure you keep more money in your pocket.

5. Minimizing debt:

Another essential aspect of safeguarding your home equity is to minimize your debt before downsizing. Paying off as much mortgage debt as possible can lower your monthly expenses and potentially unlock additional equity when you sell your home. Focusing on reducing your debt load and improving your credit score can open up more favorable financing options for your downsized property.

6. Considering alternative downsizing options:

Downsizing doesn’t always mean selling your current property and purchasing a smaller one. Exploring alternative downsizing options like rental properties, co-housing communities, or retirement villages can help you maintain your home equity while enjoying a lower-maintenance lifestyle. These alternatives often come with various benefits, such as access to shared amenities, reduced upkeep responsibilities, and potentially lower costs.

In conclusion, safeguarding your home equity while downsizing requires careful planning, diligent research, and strategic decision-making. By avoiding potential pitfalls and implementing the provided tips, you can significantly protect and leverage your home equity to ensure a smooth transition to your downsized dream home. Consulting with professionals along the way and prioritizing financial stability will help you maximize the benefits of downsizing while preserving your most valuable asset.

 

 

Why Pre-Approval Is Even More Important This Year

On the road to becoming a homeowner? If so, you may have heard the term pre-approval get tossed around. Let’s break down what it is and why it’s important if you’re looking to buy a home in 2024.

What Pre-Approval Is

As part of the homebuying process, your lender will look at your finances to figure out what they’re willing to loan you. According to Investopedia, this includes things like your W-2, tax returns, credit score, bank statements, and more.

From there, they’ll give you a pre-approval letter to help you understand how much money you can borrow. Freddie Mac explains it like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Now, that last piece is especially important. While home affordability is getting better, it’s still tight. So, getting a good idea of what you can borrow can help you really wrap your head around the financial side of things. It doesn’t mean you should borrow the full amount. It just tells you what you can borrow from that lender.

This sets you up to make an informed decision about your numbers. That way you’re able to tailor your home search to what you’re actually comfortable with budget-wise and can act fast when you find a home you love.

Why Pre-Approval Is So Important in 2024

If you want to buy a home this year, there’s another reason you’re going to want to be sure you’re working with a trusted lender to make this a priority.

While more homes are being listed for sale, the overall number of available homes is still below the norm. At the same time, the recent downward trend in mortgage rates compared to last year is bringing more buyers back into the market. That imbalance of more demand than supply creates a bit of a tug-of-war for you.

It means you’ll likely find you have more competition from other buyers as more and more people who were sitting on the sidelines when mortgage rates were higher decide to jump back in. But pre-approval can help with that too.

Pre-approval shows sellers you mean business because you’ve already undergone a credit and financial check. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.”

Sellers love that because that makes it more likely the sale will move forward without unexpected delays or issues. And if you may be competing with another buyer to land your dream home, why wouldn’t you do this to help stack the deck in your favor?

Bottom Line

If you’re looking to buy a home in 2024, know that getting pre-approved is going to be a key piece of the puzzle. With lower mortgage rates bringing more buyers back into the market, this can help you make a strong offer that stands out from the crowd.

There’s No Foreclosure Wave in Sight

Some Highlights

• Headlines saying foreclosures are rising might make you feel uneasy. But the truth is, there’s no need to worry.
• If you look at the latest numbers, they’re still below pre-pandemic norms and way below what happened during the crash.
• If you’re worried about a flood of foreclosures, the data shows a foreclosure crisis is not where the market is today and is not where it’s headed.