You may have heard that it’s important to get pre-approved for a mortgage at the beginning of the homebuying process, but what does that really mean, and why is it so important? Especially in today’s market, with rising home prices and high buyer competition, it’s crucial to have a pre-approval letter prior to making an offer. Here’s why.
Being intentional and competitive are musts when buying a home this year. Pre-approval from a lender is the only way to know your true price range and how much money you can borrow for your loan. Just as important, being able to present a pre-approval letter shows sellers you’re a qualified buyer, something that can really help you land your dream home in an ultra-competitive market. With limited housing inventory, there are many more buyers active in the market than there are sellers, and that’s creating some serious competition. According to the National Association of Realtors (NAR), homes today are receiving an average of 3.8 offers for sellers to consider. As a result, bidding wars are still common. Pre-approval gives you an advantage if you get into a multiple-offer scenario, and these days, it’s likely you will. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war. Freddie Mac explains: “By having a pre-approval letter from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don’t already have one.” Every step you can take to gain an advantage as a buyer is crucial when today’s market is constantly changing. Interest rates are rising, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals such as a loan officer and a trusted real estate advisor making sure you take the right steps and can show your qualifications as a buyer when you find a home to purchase. Bottom Line In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your homebuying budget, but it shows sellers how serious you are about purchasing a home. SOURCE:KCM #FirstTimeHomeBuyers #ForBuyers #Move-UpBuyers #SimardRealtyGroup #RealBrokerLLC
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SOURCE:KCM #ForBuyers #HousingMarketUpdates #Infographics #SimardRealtyGroup #RealBrokerLLC One key question that’s top of mind for homebuyers this year is: why is it so hard to find a house to buy? The truth is, we’re in the ultimate sellers’ market, so real estate is ultra-competitive for buyers right now. The number of buyers searching for a home greatly outweighs how many homes are available for sale. While low inventory in the housing market isn’t new, it’s a challenge that continues to grow over time. Here’s a look at two reasons why today’s housing supply is low and what that means for you. 1. New Home Construction Fell Behind for Several Years The graph below shows new home construction for single-family homes over the past five decades, including the long-term average for housing units completed. Builders exceeded that average during the housing bubble (shown in red on the graph). The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008. Since then, the level of new home construction has fallen off. For the last 13 straight years, builders haven’t been able to construct enough homes to meet the historical average (as illustrated in green on the graph). That underbuilding left us with a multi-year inventory deficit going into the pandemic. 2. The Pandemic’s Impact on the Housing Market
Then, when the pandemic hit, it fueled a renewed appreciation and focus on the meaning of home. Having a safe space to live, work, school, and exercise became even more important for Americans throughout the country. So, as mortgage rates dropped to at or below 3%, buyers eagerly entered the market looking to capitalize on those low rates to secure a home that would fulfill their changing needs. At the same time, sellers hesitated to put their houses on the market as concerns about the pandemic mounted. The result? The number of homes available for sale dropped even further. A recent article from realtor.com explains: “Last month, the number of home listings dropped 26.8% compared with the same time a year earlier. This meant there were about 177,000 fewer homes listed in what’s already typically a slower month due to the holidays and colder weather. . . .” What Does All of This Mean for You? For a buyer, low inventory can be a challenge. You want to find the home of your dreams, and you don’t want to settle. But what if there just aren’t that many homes to choose from? There is some good news. Experts are projecting more homes will soon become available thanks to sellers re-entering the market. Danielle Hale, Chief Economist at realtor.com, shares this hope, but offers perspective: “We expect that we’ll start to see a turnaround and inventory will stabilize and start to go up a little bit in 2022. . . . But that means we’re looking at inventory levels of roughly half of what we saw before the pandemic. For buyers, the market is likely to continue to move fast. If you see a home you like, you want to jump on it right away.” Basically, inventory is still low, even though more homes are coming. But you shouldn’t put your plans on hold because you’re waiting for those additional houses to hit the market. Instead, stick with your search and persevere through today’s low inventory. You can find your next home if you’re patient and focused. Remember your goals and why finding a home is so important. Those things should be the driving force behind your search. Share them with your agent and be clear about your priorities. Your trusted advisor is your greatest support as you navigate today’s low housing supply to find the home of your dreams. Bottom Line If you’re planning to buy this year know that, even if inventory improves, it’s still lower than the norm. Contact a local real estate professional today to learn more about what’s happening in your area, what homes are available, and why it’s still worthwhile to prioritize your home search today. SOURCE:KCM #BuyingMyths #ForBuyers #HousingMarketUpdates #SimardRealtyGroup #RealBrokerLLC
SOURCE:KCM
#TopGranbyRealtor #StephenSimard #RealBrokerLLC Last week, the average 30-year fixed mortgage rate from Freddie Mac jumped from 3.22% to 3.45%. That’s the highest point it’s been in almost two years. If you’re thinking about buying a home, this news may have come as a bit of a shock. But the truth is, it wasn’t entirely unexpected. Experts have been calling for rates to rise in their 2022 projections, and the forecast is now becoming a reality. Here’s a look at the projections from Freddie Mac for this year:
As the numbers show, this jump in rates is in line with the expectations from Freddie Mac. And what they also indicate is that mortgage rates are projected to continue climbing throughout the year. But should you be worried about rising mortgage rates? What does that really mean for you? As rates increase even modestly, they impact your monthly mortgage payment and overall affordability. If you’re looking to buy a home, rising mortgage rates should be an incentive to act sooner rather than later. The good news is, even though rates are climbing, they’re still worth taking advantage of. Historical data shows that today’s rate, even at 3.45%, is still well below the average for each of the last five decades (see chart below): That means you still have a great opportunity to buy now with a rate that’s better than what your loved ones may have paid in decades past. If you buy a home while rates are in the mid-3s, your monthly mortgage payment will be locked in at that rate for the life of your loan. As you can see from the chart above, a lot can change in that time frame. Buying now is a great way to protect yourself from rising costs and future rate increases while also securing your payment amount for the long term.
Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says: “Mortgage rates surged in the second week of the new year. The 30-year fixed mortgage rate rose to 3.45% from 3.22% the previous week. If inflation continues to grow at the current pace, rates will move up even faster in the following months.” Bottom Line Mortgage rates are increasing, and they’re forecast to be even higher by the end of 2022. If you’re planning to buy this year, acting soon may be your most affordable option. Work with a trusted advisor to start the homebuying process today. SOURCE:KCM #BuyingMyths #FirstTimeHomeBuyers #ForBuyers #HousingMarketUpdates #InterestRates #Move-UpBuyers #SimardRealtyGroup #RealBrokerLLC Unlike traditional winter patterns, buyers are actively looking for homes to purchase right now. The weather may be cooling in places across the country, but demand is hot. Is your house ready to sell? DM me to learn more about listing your house as the winter real estate market heats up.
#buyerdemand #sellersmarket #sellyourhouse #moveuphome #justsold #instarealestate #instarealtor #realestatetipsoftheday #realestatetipsandadvice #expertanswers #stayinformed #staycurrent #powerfuldecisions #confidentdecisions #keepingcurrentmatters As you plan out your goals for the year, moving up to your dream home may top the list. But, how do you know when to make your move? You want to time it just right so you can get the most out of the sale of your current house. You also want to know you’re making a good investment when you buy your new home. What you may not realize is, that opportunity to get the best of both worlds is already here.
You don’t want to wait until spring to spring into action. The current market conditions make this winter an ideal time to move. Here’s why. 1. The Number of Homes on the Market Is Still Low Today’s limited supply of houses for sale is putting sellers in the driver’s seat. There are far more buyers in the market than there are homes available, and that means buyers are eagerly waiting for your house. Listing your house now makes it the center of attention. As a seller, that means when it’s priced correctly, you can expect it to sell quickly and get multiple strong offers this season. Just remember, experts project more inventory will come to market as we move through the winter months. The realtor.com 2022 forecast says this: “After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows.” Selling now may help you maximize the return on your investment before your house has to face more competition from other sellers. 2. Your Equity Is Growing in Record Amounts Current homeowners are sitting on record amounts of equity thanks to today’s home price appreciation. According to the latest report from CoreLogic, the average homeowner gained $56,700 in equity over the past 12 months. That much equity can open doors for you to make a move. If you’ve been holding off on selling because you’re worried about how rising prices will impact your own home search, rest assured your equity can help fuel your next move. It may be just what you need to cover a large portion – if not all – of the down payment on your next purchase. 3. While Rising, Mortgage Rates Are Still Historically Low In January of last year, mortgage rates hit the lowest point ever recorded. Today, rates are starting to rise, but that doesn’t mean you’ve missed out on locking in a low rate. Current mortgage rates are still far below what they’ve been in recent decades:
Even with mortgage rates rising above 3%, they’re still worth taking advantage of. You just want to do so sooner rather than later. Experts are projecting rates will continue to rise throughout this year, and when they do, it’ll cost you more to purchase your next home. 4. Home Prices Are Going To Keep Rising with Time According to industry leaders, home prices will also continue appreciating this year. While experts are forecasting more moderate home price growth than last year, it’s important to note prices will still be moving in an upward direction throughout 2022. What does that mean for you? If you’re selling so you can move into a bigger home or downsize to the home of your dreams, you want to consider moving now before rates and prices rise further. If you’re ready, you have an opportunity to get ahead of the curve by purchasing your next home before rates and prices climb higher. Bottom Line If you’re considering selling to move up or downsize, this may be your moment, especially with today’s low mortgage rates and limited inventory. Reach out to a local real estate professional today to get set up for homebuying success this year. SOURCE:KCM #ForSellers #InterestRates #Pricing #SellingMyths #SimardRealtyGroup #RealBrokerLLC Homeowners have seen their equity grow significantly thanks to the record levels of price appreciation this year. If you’re a homeowner, you can use that equity to fuel a move to the home of your dreams. DM me today to determine just how much equity you have and how you can use it to make a move.
#homeequity #homepriceappreciation #sellyourhouse #realestate #homeownership #realestategoals #realestatetips #realestatelife #realestatenews #realestateagent #realestateexpert #keepingcurrentmatters Homeownership has long been considered the American Dream, and it’s one every American should feel confident and powerful pursuing. But owning a home is also a deeply personal dream. Our home provides us with safety and security, and it’s a place where we can grow and flourish.
Today, we remember the legacy of Dr. Martin Luther King, Jr. Many of us will remember his passion and determination for the causes he championed, including his famous “I Have a Dream” speech in 1963. As we reflect on his message today, it may inspire your own dream of homeownership. And if so, know you’re not alone. With a trusted real estate advisor at your side, you can begin your journey toward homeownership by answering the questions below. 1. Where Do I Start? The process of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, how much space you need, what kind of commute works for you, and how much you can spend. Then, when you decide you’re ready to buy, you’ll need to apply for a mortgage. Your lender will look at several factors to determine how much you’re able to borrow, including your credit history. Lenders want to understand how well you’ve managed paying your student loans, credit cards, car loans, and other past debts. According to Freddie Mac: “To get a rough estimate of what you can afford, most lenders suggest that you should spend no more than 28% of your monthly gross (pre-tax) income on your mortgage payment, including principal, interest, taxes and insurance.” 2. How Do I Save Enough for a Down Payment? Speaking of how much you can afford, you’ll want to know what to save for a down payment. While the idea of saving for a down payment can be daunting, there are many different options and resources that can help. According to Business Insider, automatic savings can bring you one step closer to achieving your target down payment: “If you receive your paycheck as a direct deposit, you may want to arrange for your company to send a percentage of each check directly into a savings account for the down payment. . . . The automatic-savings strategy makes it so you don’t have to constantly remember to save money.” Before you know it, you’ll have enough for a down payment if you’re disciplined and thoughtful about your process. And the best part is, you may need to save less for your down payment than you think. Your agent and lender can help you understand your options. 3. How Can I Reach My Financial Goals? Another way to increase your savings is by sticking to a planned budget. If you’ve never budgeted before, there are tools available. For example, MoneyFit.org provides a budgeting worksheet you can use to create your own plan and five rules to follow when you’re saving. They recommend you:
If you’re already budgeting, consider finding ways to tighten your spending a bit more to accelerate your journey to homeownership. After all, putting even a little extra into your savings each month can truly add up over time. Bottom Line As you set out to realize your dream of homeownership this year, know that it’s achievable with careful planning. And, most importantly, know that you don’t have to walk alone. A real estate professional is there to help every step of the way. SOURCE:KCM #FirsTimeHomeBuyers #ForBuyers #SimardRealtyGroup #RealBrokerLLC One of the perks of buying a home is that you can make it your own. From fixtures and paint to how you decorate as the seasons change, homeownership allows you to create the perfect environment for you and your loved ones. DM me today so we can work together to find you a home that matches your style and goals.
#dreamhome #inspiredliving #loveyourhome #firsttimehomebuyer #opportunity #renovated #starterhome #housegoals #homeownership #dream #inspiration #realestateagent #realestate #keepingcurrentmatters |
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