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Why Buying Now May Be Worth It in the Long Run

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Why Buying Now May Be Worth It in the Long Run

Why You Should Buy a Home NowShould you buy a home now or should you wait? That’s a question a lot of people have these days. And while what’s right for you is going to depend on a lot of different factors, here’s something you’ll want to consider as you make your decision and Why Buying Now May Be Worth it in the Long Run.

As soon as you buy, you’ll start gaining equity. And you’d be surprised how quickly that can add up – even with more moderate home price appreciation.

Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts project prices will continue to rise nationally through at least 2028 (see the graph below):

No Caption ReceivedWhile home prices are going to vary from one local area to the next, this shows they’re expected to keep going up nationally. The size of the increase varies from year-to-year, but the important takeaway is that prices are forecast to rise every single year – just at a moderate pace.

And while rising home prices may not sound great right now, once you own a home, that growth will be a big bonus for you. Here’s a look at what you stand to gain equity-wise once you buy. The graph below uses a typical home’s value and those HPES projections to show how much equity is at stake:

No Caption ReceivedIf you bought a $450,000 home at the beginning of this year, based on that starting value and the expert forecasts from the HPES, you could gain more than $90,000 in household wealth over the next five years. That’s significant.

So, if you’re ready and able to buy, and growing your wealth is important to you, you’ve got an opportunity in front of you. And now that mortgage rates have fallen, it may be time to consider making a move.

To talk more about your options and what makes sense, lean on a pro. They’ll be able to tell you what home prices are doing in your area and what that means for your move (and your future equity). The Mortgage Reports says:

“Given the intricacies of the current market, it’s more important than ever to stay informed and up to date about housing market conditions. Whether you’re looking to buy or sell in the remaining months of 2024, having a professional guide you through the process can make all the difference.” 

Bottom Line –

Why Buying Now May Be Worth It in the Long Run

The decision to buy now or wait is a very personal one, but it’s valuable to have an expert’s perspective. They won’t push you, but they will explain things you may not have considered, like the equity that’s at stake.

If you want help weighing your options and thinking through how the current market factors in, let’s connect.

The Real Story Behind What’s Happening with Home Prices

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The Real Story Behind What’s Happening with Home PricesThe Real Story Behind What’s Happening with Home Prices

If you’re wondering what’s going on with home prices lately, you’re definitely not the only one. With so much information out there, it can be hard to figure out your next move.

As a buyer, you might be worried about paying more than you should. And if you’re thinking of selling, you might be concerned about not getting the price you’re aiming for. 

So, what’s The Real Story Behind What’s Happening with Home Prices? Here’s a quick breakdown to help clear things up and show you what’s really happening with prices—whether you’re thinking about buying or selling. 

Home Price Growth Is Slowing, but Prices Aren’t Falling Nationally

Throughout the country, home price appreciation is moderating. What that means is, prices are still going up, but they’re not rising as quickly as they were in recent years. The graph below uses data from Case-Shiller to make the shift from 2023 to 2024 clear:

No Caption ReceivedBut rest assured, this doesn’t mean home prices are falling. In fact, all the bars in this graph show price growth. So, while you might hear talk of prices cooling, what that really means is they’re not climbing as fast as they were when they skyrocketed just a few years ago.

What’s Next for Home Prices? It’s All About Supply and Demand 

You might be curious where prices will go from here. The answer depends on supply and demand, and it’s going to vary by local market. And remember, a local market can be your specific neighborhood or condo building!! What is happening in the building across the street or the subdivision across the road, may be entirely different from where you are!

Nationally, the number of homes for sale is going up, but there still aren’t enough of them to meet today’s buyer demand. That’s keeping upward pressure on prices – even though recent inventory growth has caused that home price appreciation to slow. Danielle Hale, Chief Economist at Realtor.com, said:

“. . . today’s low but quickly improving for-sale inventory has ushered in more market balance than would otherwise be expected . . . This should help home prices maintain a slower pace of growth.” 

And here’s one other thing you may not have considered that could play a role in where prices go from here. Since experts say mortgage rates should continue to decline, it’s likely more buyers will re-enter the market in the months ahead. If demand picks back up, that could make prices climb a bit further.

Why You Should Work with a Local Real Estate Agent 

While national trends give a big-picture view, real estate is always local – especially when it comes to prices. What’s happening in your neighborhood might be different from the national average based on what supply and demand look like in your market. That’s why it’s crucial to get local insights from a knowledgeable real estate agent. (WINK WINK!)

 As your go-to source for everything related to home prices, a local agent can provide the most current data and trends specific to your area. (WINK WINK….again!)

So, if you’re planning to sell, I can help you price your house accurately. And when you’re ready to buy, I can help you find the right home that fits your budget and your needs.

Bottom Line

Home prices are still rising, just not as quickly as before. Whether you’re thinking about buying, selling, or just curious about what your house is worth, let’s connect so you have the personalized guidance you need.

Why a Foreclosure Wave Isn’t on the Horizon

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Why a Foreclosure Wave Isn’t on the Horizon

Even though data shows inflation is cooling, a lot of people are still feeling the pinch on their wallets. And those high costs on everything from gas to groceries are fueling unnecessary concerns that more people are going to have trouble making their mortgage payments. But, does that mean there’s a big wave of foreclosures coming?

Here’s a look at why the data and Why a Foreclosure Wave Isn’t on the Horizon.

One of the main reasons there were so many foreclosures during the last housing crash was because relaxed lending standards made it easy for people to take out mortgages, even when they couldn’t show they’d be able to pay them back. At that time, lenders weren’t being as strict when looking at applicant credit scores, income levels, employment status, and debt-to-income ratio.

But since then, lending standards have gotten a whole lot tighter. Lenders became much more diligent when assessing applicants for home loans. And that means we’re seeing more qualified buyers who have less of a risk of defaulting on their loans.

That’s why data from Freddie Mac and Fannie Mae shows the number of homeowners who are seriously behind on their mortgage payments (known in the industry as delinquencies) has been declining for quite some time. Take a look at the graph below:  No Caption Received

What this means is that, not only are borrowers more qualified, but they’re also finding ways to navigate through their challenges, exploring their repayment options, or maybe even using the record amount of equity they have to sell and avoid foreclosure entirely.

The Answer Is: There’s No Sign of a Wave Coming

Before there can be a significant rise in foreclosures, the number of people who can’t make their mortgage payments would need to rise significantly. But, since so many buyers are making their payments today and homeowners have so much equity built up, a wave of foreclosures isn’t likely.

Take it from Bill McBride of Calculated Risk – an expert on the housing market who, after closely following the data and market leading up to the crash, was able to see the foreclosure crisis coming in 2008. McBride says:

“We will NOT see a surge in foreclosures that would significantly impact house prices (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.”

Bottom Line

If you’re worried about a potential foreclosure crisis, know there’s nothing in the data to suggest that’ll happen. Buyers are more qualified now, and that’s one reason why they’re not falling seriously behind on their mortgage payments. 

More Than a House: The Emotional Benefits of Homeownership

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More Than a House: The Emotional Benefits of Homeownership

With all the headlines and talk about housing affordability, it can be tempting to get lost in the financial side of buying a home. That’s only natural as you think about the dollars and cents of it all.

And while you ultimately need to be able to afford a home you buy, don’t lose sight of why homeownership was so important to you in the first place. That’s because buying a home is so much more than just a financial transaction. As the National Association of Realtors (NAR) says:

“The benefits of purchasing and owning your place of residence are both financial and emotional – pride in homeownership and the feeling of security are huge intangible benefits.”

Here’s a look at just a few of The Emotional benefits of homeownership, those more emotional or lifestyle perks, to help anchor you to why homeownership is one of your goals.

A Sense of Satisfaction

Owning a home is often associated with better mental health and well-being. That’s probably because buying a home is a big milestone. And the sense of satisfaction and pride that comes with achieving that goal just feels good. A recent article from the Mortgage Reports says:

“By and large, homeownership brings more satisfaction than renting. . . Surveyees scored the overall happiness level of homeowners at 88% compared to 67% for renters.”

More Stability for Your Family

Another thing that may make homeowners feel more satisfied is that they’re finally able to put down roots. Think about it. If you’re used to moving each time your lease renews and your rent climbs, staying put for a while would be nice not just for you, but for any loved ones that live with you.

A home can provide more predictability and the chance to make long-term friends. That should reduce everyone’s stress too. As NAR explains:

“Families also benefit from homeownership, with studies proving that parents are able to spend less time in a stressed state, therefore spending more time with their children. The ability for parents to feel stable has a huge impact on children’s behavioral issues, educational success, and future economic success.”

Emotional Benefits of HomeownershipA Stronger Feeling of Community

And if you’re also looking for a sense of belonging for yourself, homeownership can help with that too. As FinHabits says:

“Homeowners tend to be more involved in their local communities, leading to a stronger sense of belonging . . .”

It makes sense. Your home connects you to your neighborhood and, by extension, your broader community. That’s because owning a home gives you a stake in that community’s future. So, becoming more involved and wanting to do what you can to help improve the area while making long-term relationships with neighbors is only natural.

The Ability To Make the Space Your Own

And don’t forget, your home is a place that’s all yours. Unless you’ve got specific homeowner’s association requirements, you’re free to customize it however you see fit.

So, if renting has been cramping your style, it’s time to express yourself and jump on the latest trends (if you want to). Whether that’s small home improvements or full-on renovations, your house can be exactly what you want and need it to be. And as your tastes and lifestyle change, so can your home. Picture coming home each day to a place that feels like you. That’s a feeling like no other. 

Bottom Line

If you want to enjoy a sense of accomplishment and pride in where you’re living, let’s have a conversation to go over what you need to do now to make this future happen for you.

The Perks of Buying over Renting

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The Perks of Buying over Renting

Thinking about buying a home? While today’s mortgage rates might seem a bit intimidating, here are two solid reasons why, if you’re ready and able, it could still be a smart move to get your own place.

1. Home Values Typically Go Up Over Time

There’s been some confusion over the past year or so about which way home prices are headed. Make no mistake, nationally they’re still going up. In fact, over the long-term, home prices almost always go up (see graph below):

No Caption Received

Using data from the Federal Reserve (the Fed), you can see the overall trend is home prices have climbed steadily for the past 60 years. There was an exception during the 2008 housing crash when prices didn’t follow the normal pattern, but generally, home values kept rising.

This is a big reason why buying a home can be better than renting. As prices go up and you pay down your mortgage, you build equity. Over time, this growing equity can really increase your net worth. The Urban Institute says:

“Homeownership is critical for wealth building and financial stability.”

2. Rent Keeps Rising in the Long Run

Here’s another reason you may want to think about buying a home instead of renting – rent just keeps going up over the years. Sure, it might be cheaper to rent right now in some areas, but every time you renew your lease or sign a new one, you’re likely to feel the squeeze of your rent getting higher. According to data from iProperty Management, rent has been going up pretty consistently for the last 60 years, too (see graph below):

No Caption Received

So how do you escape the cycle of rising rents? Buying a home with a fixed-rate mortgage helps you stabilize your housing costs and say goodbye to those annoying rent increases. That kind of stability is a big deal.

Your housing payments are like an investment, and you’ve got a decision to make. Do you want to invest in yourself or keep paying your landlord?

When you own your home, you’re investing in your own future. And even when renting is cheaper, that money you pay every month is gone for good.

As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), says:

“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”

Bottom Line

If you’re tired of your rent going up and want to explore the many benefits of homeownership, let’s talk to explore your options. You can also reach out to one of our Team Lenders to get a pre-approval and know what your purchasing power is as well as if there are any credit issues you may not be aware of. 

Ways Your Home Equity Can Help You Reach Your Goals

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Ways Your Home Equity Can Help You Reach Your Goals

If you’ve owned your house for at least a couple of years, there’s something you’re going to want to know more about – and that’s home equity. If you’re not familiar with that term, Freddie Mac defines it like this:

“. . . your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.”

That means your equity grows as you pay down your home loan over time and as home values climb. While it’s true home prices dipped slightly last year, they rebounded and have been climbing in many areas since then. Here’s why that price growth is good news for you.

In the latest Equity Insights Report, Selma Hepp, Chief Economist at CoreLogic, explains:

“With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year. And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up.”

And that figure is just for the last year. To help you really understand how that number can add up over time, the report also says the average homeowner with a mortgage has more than $300,000 in equity. That much equity can have a big impact.

Here are a few examples of how you can put your home equity to work for you.

1. Buy a Home That Fits Your Needs

If your current space no longer meets your needs, it might be time to think about moving to a bigger home. And if you’ve got too much space, downsizing to a smaller one could be just right. Either way, you can put your equity toward a down payment on something that fits your changing lifestyle.

2. Reinvest in Your Current Home

And, if you’re not ready to move just yet, you can use the equity you have to improve your current home. But it’s important to consider the long-term benefits certain upgrades can bring to your home’s value. A real estate agent is a great resource on which projects to prioritize to get the greatest return on your investment when you sell later on.

3. Pursue Personal Ambitions

Home equity can also serve as a catalyst for realizing your life-long dreams. That could mean investing in a new business venture, retirement, or funding an education. While you shouldn’t use your equity for unnecessary spending, using it responsibly for something meaningful and impactful can really make a difference in your life.

4. Understand Your Options to Avoid Foreclosure

While the number of foreclosure filings remains below the norm, there are still some homeowners who go into foreclosure each year. And don’t listen to those foreclosure headlines you see here and there. If you’re in a tough spot financially, having a clear understanding of your options can help. Equity can act as a cushion if you’re not able to make your mortgage payments on time.

Bottom Line —

As you can see, there are ways your home equity can help you reach your goals! If you want to know how much equity you have in your home, let’s connect. That way you have someone who can do a professional equity assessment report on how much you’ve built up over time. Then let’s talk through how you can use it to help you reach your goals.

Thom Abbott

Associate Broker, REALTOR(R)
905 Juniper Street, NE Suite 110
Atlanta, Georgia 30309
770.713.1505 Direct
404.876.4901 Office

 
 
 
 
 
 
 
 
 
 

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