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Buying a home is a major transaction that can seem even more complex when you don’t understand the terms used throughout the process.
If you’re looking to become a homeowner this year, it’s important to know these housing terms and how they relate to the current market so you feel confident throughout the homebuying process.
Let’s connect so you have expert answers for any questions as they come up.
If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. One cost that’s likely top of mind is your down payment. But don't let a common misconception about how much you need to save make the process harder than it could be.
Freddie Mac explains:
“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):
If saving for a down payment still feels like a challenge, know that there’s help available. A real estate professional and trusted lender can show you options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.
Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.
To understand your options, be sure to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like Down Payment Resource. Then, partner with a trusted lender to learn what you qualify for on your homebuying journey.
Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your down payment options.
If you’re thinking about selling your house, you’re likely hearing about the cooling housing market and wondering what that means for you. While it's not the peak intensity we saw during the pandemic, we’re still in a sellers’ market. That means you haven’t missed your window. Realtor.com explains:
“. . . while prospective home sellers may lament that they missed their prime window, in reality, this is still a terrific time to sell. In fact, according to a recent Realtor.com® home seller survey, 95% of sellers who sold their home in the past year got more than they paid for it.
Nonetheless, some of the more prominent pandemic trends have changed, so sellers might wish to adjust accordingly to get the best deal possible.”
The key to success today is being realistic and working with a trusted real estate advisor who can help you set your expectations based on where the market is now, not where it was over the past few years.
Here are a few things experts say today’s sellers need to consider.
At the peak of the pandemic frenzy, sellers held all the leverage because inventory was at record lows and buyers were willing to enter bidding wars over homes that were available. This year, the supply of homes for sale has increased as the market cooled. Even though inventory is still low overall, buyers today have more options, and with that comes more negotiation power.
As a seller, that means you may see more buyers getting an inspection, requesting repairs, or asking for help with closing costs today. You need to be prepared to have those conversations. As Ali Wolf, Chief Economist at Zonda, says:
“Today’s market is different than it was just six months ago. . . Sellers that want the contract to move forward should be willing to work with the buyer. . . Consider helping with the closing costs or addressing many of the items on the home inspection list.”
It’s not just that the number of homes for sale has grown this year. Buyer demand has also pulled back in light of higher mortgage rates. As a result, pricing your house appropriately so you can catch the eyes of serious buyers is important. Greg McBride, Chief Financial Analyst at Bankrate, explains:
“Price your home realistically. This isn’t the housing market of April or May, so buyer traffic will be substantially slower, but appropriately priced homes are still selling quickly.”
You don’t want to overreach with your price and deter buyers. At the same time, you don’t want to undervalue your home and leave money on the table. This is another area where an agent’s expertise comes in handy.
Buyers have more options and are more particular about their investment since it costs more to buy a home given today’s mortgage rates. As a result, you need to make sure your house shows well. As an article from realtor.com says:
“To stand out in the market, sellers should make their home attractive to buyers, which usually means some selective updates.”
This could include everything from staging the home, to making small cosmetic updates, tackling repairs, or undergoing renovations. A trusted real estate professional will help you assess what may be worthwhile to do compared to other recently sold homes in your area.
To sum it all up, your house should still sell today and move quickly if you’re realistic about today’s market. As a press release from Zillow puts it:
“. . . sellers need to do things right to attract the attention of these buyers — pricing their home competitively and making their listing attractive to online home shoppers.”
For expert advice on how to quickly sell your house in a shifting market, let’s connect.
Experts agree there’s no chance of a large-scale foreclosure crisis like we saw back in 2008, and that’s good news for the housing market. As Mark Fleming, Chief Economist at First American, says:
“. . . don’t expect a housing bust like the mid-2000s, as lending standards in this housing cycle have been much tighter and homeowners have historically high levels of home equity, so there likely won’t be a surge in foreclosures.”
Data from the Mortgage Bankers Association (MBA) helps tell this story. It shows the overall percentage of homeowners at risk is decreasing significantly with time (see graph below):
But even though the volume of homeowners at risk is very low, there is still a small percentage of homeowners who may be coming face to face with foreclosure as a possibility today. If you’re facing difficulties yourself, it can help to understand your options. It starts with knowing what foreclosure is. Investopedia defines it like this:
“Typically, default is triggered when a borrower misses a specific number of monthly payments . . . Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.”
The good news is there are alternatives available to help you avoid going through the foreclosure process, including:
Reinstatement
Loan modification
Deed-in-lieu of foreclosure
Short sale
But before you go down any of those paths, it’s worth seeing if you have enough equity in your home to sell it and protect your investment.
Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.
In today’s real estate market, many homeowners have far more equity in their homes than they realize due to the home price appreciation we’ve seen over the past few years. According to CoreLogic:
“The total average equity per borrower has now reached almost $300,000, the highest in the data series.”
So, what does that mean for you? If you’ve lived in your house for at least a few years or more, chances are your home’s value, and your equity, has risen dramatically. In addition, the mortgage payments you’ve made during that time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage.
Rick Sharga, Executive VP of Market Intelligence at ATTOM Data, explains how equity can help:
“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”
To find out how much equity you have, work with a local real estate professional. They can give you an estimate of what your house could sell for based on recent sales of similar homes in your area. You may be able to sell your house to avoid foreclosure.
If you find out you have to pursue other options, your agent can help with that too. They’ll be able to connect you with other professionals in the industry, like housing counselors, who can look into your unique situation and offer advice on next steps if selling isn’t your best alternative.
If you’re a homeowner facing hardship, let’s connect so you have an expert on your side to explore your options and see if you can sell your house to avoid foreclosure.
As you look ahead to the winter season, you’re likely making plans and thinking about what you want to achieve before the year ends. One of those key decision points could be whether or not you want to move this year. If the location or size of your current home no longer meets your needs, finding a house that better suits your lifestyle may be a top priority for you. But with today’s cooling housing market, is it really a good time to sell your house, or should you wait?
If you’re ready to make your decision, here are three reasons you may want to consider selling before the holidays.
Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and deprioritize selling their house until the start of the new year when their schedules and social calendars calm down.
Selling now, while other homeowners may hold off until after the holidays, can help your house stand out. Start the process with a real estate professional today so you can get your house on the market and get ahead of your competition.
Even though housing supply has increased this year as buyer demand has moderated, it’s still low overall. That means there aren’t enough homes on the market today, especially as the millennial generation reaches their peak homebuying years. As Mark Fleming, Chief Economist at First American, says:
“While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.”
Serious buyers will still be looking this winter and your house may be exactly what they’re searching for. If you work with an agent to list your house now, you’ll be able to get in front of the eager buyers who are hoping to make a move before the year ends.
Don’t forget, today’s homeowners have record amounts of equity. According to CoreLogic, the average amount of equity per mortgage holder has climbed to almost $300,000. That’s an all-time high. That means the equity you have in your house right now could cover some, if not all, of a down payment on the home of your dreams.
And as you weigh the reasons to sell before winter, don’t lose sight of why you’re thinking about moving in the first place. Maybe it’s time to buy a house that’s in a better location for you, has the space you and your loved ones have been craving, or simply gives you that sense of home. A trusted real estate advisor can help you determine how much home equity you have and how you can use it to achieve your goal of making a move.
If you’re thinking about selling your house so you can find a home that better suits your needs, don’t delay your plans. Let’s connect so you can accomplish your goals before winter.
While higher mortgage rates are creating affordability challenges for homebuyers this year, there is some good news for those people still looking to buy a home.
As the market has cooled this year, some of the intensity buyers faced during the peak frenzy of the pandemic has cooled too. Here are just a few trends that may benefit you when you go to buy a home today.
During the pandemic, housing supply hit a record low at the same time buyer demand skyrocketed. This combination made it difficult to find a home because there just weren’t enough to meet buyer demand. According to Calculated Risk, the supply of homes for sale increased by 39.5% for the week ending October 28 compared to the same week last year.
Even though it’s still a sellers’ market and supply is still lower than more normal levels, you have more to choose from in your home search. That makes finding your dream home a bit less difficult.
One of the top stories in real estate over the past two years was the intensity and frequency of bidding wars. But today, things are different. With more options, you’ll likely see less competition from other buyers looking for homes. According to the National Association of Realtors (NAR), the average number of offers on recently sold homes has declined. This September, the average was 2.5 offers per sale. In contrast, last September, the average was 3.7 offers per sale.
If you tried to buy a house over the past two years, you probably experienced the bidding war frenzy firsthand and may have been outbid on several homes along the way. Now you have a chance to jump back into the market and enjoy searching for a home with less competition.
And when you have less competition, you also have more negotiating power as a buyer. Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But the latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving those contingencies is going down.
As a buyer, this is good news. The appraisal and the inspection give you important information about the value and condition of the home you’re buying. And if something turns up in the inspection, you have more power today to renegotiate with the seller.
A survey from realtor.com confirms more sellers are accepting offers that include contingencies today. According to that report, 95% of sellers said buyers requested a home inspection, and 67% negotiated with buyers on repairs as a result of the inspection findings.
While buyers still face challenges today, they’re not necessarily the same ones you may have been up against just a year or so ago. If you were outbid or had trouble finding a home in the past, now may be the moment you’ve been waiting for. Let’s connect to start the homebuying process today.
Even with higher mortgage rates, the mortgage process doesn’t need to be something you fear. Here are some steps to help as you set out to buy a home.
Know your credit score and work to build strong credit. When you’re ready, lean on the pros and connect with a lender so you can get pre-approved and begin your home search.
Any major life change can be scary, and buying a home is no different. Let’s connect so you have an advisor by your side to take fear out of the equation.
Since the 2008 housing bubble burst, the word recession strikes a stronger emotional chord than it ever did before. And while there’s some debate around whether we’re officially in a recession right now, the good news is experts say a recession today would likely be mild and the economy would rebound quickly. As the 2022 CEO Outlook from KPMG says:
“Global CEOs see a ‘mild and short’ recession, yet optimistic about global economy over 3-year horizon . . .
More than 8 out of 10 anticipate a recession over the next 12 months, with more than half expecting it to be mild and short.”
To add to that sentiment, housing is typically one of the first sectors to rebound during a slowdown. As Ali Wolf, Chief Economist at Zonda, explains:
“Housing is traditionally one of the first sectors to slow as the economy shifts but is also one of the first to rebound.”
Part of that rebound is tied to what has historically happened to mortgage rates during recessions. Here’s a look back at rates during previous economic slowdowns to help put your mind at ease.
Historical data helps paint the picture of how a recession could impact the cost of financing a home. Looking at recessions in this country going all the way back to 1980, the graph below shows each time the economy slowed down mortgage rates decreased.
Fortune explains mortgage rates typically fall during an economic slowdown:
“Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”
While history doesn’t always repeat itself, we can learn from and find comfort in the trends of what’s happened in the past. If you’re thinking about buying or selling a home, you can make the best decision by working with a trusted real estate professional. That way you have expert advice on what a recession could mean for the housing market.
History shows you don’t need to fear the word recession when it comes to the housing market. If you have questions about what’s happening today, let’s connect so you have expert advice and insights you can trust.
While most of Tampa’s prime waterfront land is taken up by stunning homes with a true variety in architectural styles rather than commercial space and restaurants; there are still a couple of gems that both locals and visitors alike should not miss! Here are some of my personal favorites:
With only 52 Sundays in a year, you had better make each one count! Thankfully, you are in a city containing a myriad of options for brunch, allowing you to live it up every Sunday Funday of the year. Follow my guide below for a few of my favorite options to grab a meal where both the ambience and the food will hopefully exceed your expectations.
Enjoy!
Recommendations: Shrimp Ceviche, Lobster Roll, Vegan Caesar, Benedict, Grilled Octopus, Smoked Salmon/Goat Cheese Omelette
Recommendations: Bourbon Caramel Cinnamon Roll, Wagyu Pastrami Hash, Smoked Salmon Tier, Soufflé Nutellalizé (never too early for dessert)
Both photos below were embedded from the @swanmiami Instagram Account. Credit: Swan
1,320 Likes, 54 Comments - Swan (@swanmiami) on Instagram: "This Bourbon Caramel Cinnamon Roll is waiting for you. See you for Brunch!"
797 Likes, 23 Comments - Swan (@swanmiami) on Instagram: "Joining us for brunch this weekend?"
Recommendations: Split Pancakes & An Omelette…Enjoy with a Greenstreet Mary (served in a cool can), or venture out and try a Grove Goddess (St. Germain, Aperol, Fresh Watermelon Juice, Giulia)
Recommendations: Buffet-Style a.k.a. try everything you can! Do not pass up the ceviche bar! :)
Recommendations: Charcoal Croissant w/ Dulce de Leche Filling, Croque Madame, Pastelito Pancakes, Truffle Bun, Charred Tomato Chilaquiles
““Brunch is always a good idea.” ”
