Dreaming of a Bigger Home? Why Not Buy It This Year?

Dreaming of a Bigger Home? Why Not Buy It This Year?

Are you clamoring for extra rooms or a more functional floorplan in your house? Maybe it’s time to make a move. If you’ll be able to work remotely for the long-term or your overall needs have simply changed, it’s a great time to sell your house and move up.

Why? With mortgage rates in their favor and higher-priced home sales powering more moves across the country, sellers in today’s market are finding the space they need (and have always dreamed of) by purchasing a home in the upper end of the housing market.

With so few homes available for sale and high demand from today’s homebuyers, sellers are profiting in major ways this season. Bidding wars are gaining traction, driving up the sale price of more and more homes throughout the country.

This means sellers are able to leverage extra cash from higher-priced sales while also taking advantage of today’s low mortgage rates when they purchase their next home. It’s the perfect scenario to move up into a true dream home. According to the April Luxury Market Report from the Institute for Luxury Home Marketing:

“The Institute’s recent analysis of sales in 2020 for homes over 5,000 square feet support the continuing preference for larger homes. The analysis determined that there was a 17% increase in the number of 5,000+ sq ft homes sold when compared to the number of sales in 2019.

Luxury home prices continue to see record highs in the majority of affluent ex-urban communities, as the influence of being able to work from home is still driving buyers away from living in high density areas. Low interest rates also remain in play, allowing buyers to realize the affordability of owning a larger property, which further reinforces this trend.”

Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), also explains:

“The market is hot pretty much everywhere and across all price points . . . The only area where there is sufficient inventory is in $1 million-plus homes . . . .”

While this price range certainly doesn’t fit every budget, if it’s in your reach this summer, you may want to make your move sooner rather than later. Today, more homes are available in this segment of the market, but as the report mentions, more buyers are investing here too, so the competition may heat up sooner rather than later.

Bottom Line

If you’re planning to sell your current home to move into a larger one, let’s connect today. We’ll discuss your current situation and the opportunities in our local market.

All my best,

Colette

What’s Motivating People To Move Right Now?

What’s Motivating People To Move Right Now?

This year, Americans are moving for a variety of reasons. The health crisis has truly reshaped our lifestyles and our needs. Spending so much more time in our current homes has driven many people to reconsider what homeownership means and what they find most valuable in their living spaces.

According to the 2020 Annual National Movers Study:

“For customers who cited COVID-19 as an influence on their move in 2020, the top reasons associated with COVID-19 were concerns for personal and family health and wellbeing (60%); desires to be closer to family (59%); 57% moved due to changes in employment status or work arrangement (including the ability to work remotely); and 53% desired a lifestyle change or improvement of quality of life.”

With a new perspective on homeownership, here are some of the reasons people are reconsidering where they live and making moves right now.

1. Working from Home

Remote work became the new norm, and for some, it’s persisting longer than initially expected. Many in the workforce today are discovering they don’t need to live so close to the office anymore and they can get more for their money if they move a little further outside the city limits. Apartment List notes:

“The COVID pandemic has sparked a rebound in residential migration: survey data suggest that 16 percent of American workers moved between April 2020 and April 2021, up from 14 percent in 2019 and the first increase in migration in over a decade… One of the major drivers in this trend is remote work, which expanded greatly in response to COVID and will remain prevalent even after the pandemic wanes. No longer tethered to a physical job site, remote workers were 53 percent more likely to move this past year than on-site workers.”

If you’ve tried to convert your guest room or your dining room into a home office with minimal success, it may be time to find a larger home. The reality is, your current house may not be optimally designed for this kind of space, making remote work very challenging.

2. Room for Fitness & Activities

Staying healthy and active is a top priority for many Americans, and dreams of having space for a home gym are growing stronger. A recent survey of 4,538 active adults from 122 countries noted the three fastest-growing fitness trends amongst active adults:

  • At-home fitness equipment (up 50%)
  • Personal trainers/nutritionists (up 48%)
  • Online fitness courses, classes, and subscriptions (up 17%)

Having room to maintain a healthy lifestyle at home – physically and mentally – may prompt you to consider a new place to live that includes space for at-home workouts, hobbies, and activities for your household.

3. Outdoor Space

Better Homes & Gardens recently released the outdoor living trends for this year, and three of them are:

  • Outdoor Kitchens: 60% of homeowners are looking to add outdoor kitchens.
  • Edible Garden: Millions of people began gardening during the pandemic . . . to supplement pantries with homegrown fruits, vegetables, and herbs.
  • Secluded Spaces: As outdoor activity increases, so does the need for privacy.

You may not, however, currently have the space you need for these designated areas – inside or out.

Bottom Line

If you’re clamoring for more room to accommodate your changing needs, making a move may be your best bet, especially while you can take advantage of today’s low mortgage rates. It’s a great time to get more home for your money, just when you need it most. Connect with us today to discuss your goals and options.

6 Reasons to Celebrate National Homeownership Month

6 Reasons to Celebrate National Homeownership Month

Our homes are so much more than the houses we live in. For many, they’ve also become our workplaces, schools for our children, and safe harbors in which we’ve weathered the toughest moments of a global pandemic. Today, 65.6% of Americans call their homes their own, a rate that has risen to its highest point in 8 years.

As National Homeownership Month kicks off this June, homeowners have every reason to celebrate. A survey by Gallup just ranked real estate as the best investment you can make for the eighth year in a row. However, unlike other investment options, the benefits of owning a home aren’t purely financial. Here are the top ways Americans are winning by owning a home.

Non-Financial Benefits:

1. Civic Participation: Owning a home is owning a part of your neighborhood. Homeowners have a stronger connection to their neighborhoods and are more committed to volunteer work and other ways to get involved.

2. Pride of Ownership: Owning a home is having a space that is uniquely yours. You can customize it to your personal liking and make it reflect your personality and values.

3. A Safe Space: Owning a home gives you a sense of security and privacy – two things that have become even more valuable as we’ve tackled the challenges of the recent health crisis.

Financial Benefits:

1. Forced Savings: Owning a home builds equity. Your equity grows with each payment you make toward your mortgage. This form of forced savings can be used down the road to help you accomplish your biggest financial goals.

2. Appreciation: Owning a home is making an investment that steadily gains value, and experts project home values will continue to rise in the years to come.

3. Stability: Owning a home means having better control over your future housing payments. Over the years, a mortgage stays relatively steady, but rent costs continue to rise.

Bottom Line

If you own your home, take time this June to celebrate the ways homeownership has added value to your life. If you hope to become a homeowner this year, let’s connect today to take the first steps toward achieving your goal.

Why Waiting to Buy a Home Could Cost You a Small Fortune

Why Waiting to Buy a Home Could Cost You a Small Fortune

Many people are sitting on the fence trying to decide if now’s the time to buy a home. Some are renters who have a strong desire to become homeowners but are unsure if buying right now makes sense. Others may be homeowners who are realizing that their current home no longer fits their changing needs.

To determine if they should buy now or wait another year, they both need to ask two simple questions:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

Let’s shed some light on the answers to these questions.

Where will home prices be a year from now?

If you average the most recent projections from the major industry forecasters, the expectation is home prices will increase by 7.7%. Let’s take a house that’s valued today at $325,000 as an example.

If the buyer makes a 10% down payment ($32,500), they’ll end up borrowing $292,500 for their mortgage. Applying the projected rate of home price appreciation, that same house will cost $350,025 next year. With a 10% down payment ($35,003), they’d then have to borrow $315,022.

Therefore, as a result of rising home prices alone, a prospective buyer will have to put down an additional $2,503 and borrow an additional $22,523 just for waiting a year to make their move.

Where will mortgage rates be a year from now?

Today, mortgage rates are hovering around 3%. However, most experts believe they’ll rise as the economy continues to recover. Any increase in the mortgage rate will also increase a purchaser’s cost. Here are the forecasts for the first quarter of 2022 from four major entities:

The projections average out to 3.6% among these four forecasts, a jump up from where they are today.

What does it mean to you if home values and mortgage rates increase?

A buyer will pay a lot more in mortgage payments each month if both of these variables increase. Assuming a buyer purchases a $325,000 home this year with a 30-year fixed-rate loan at 3% after making a 10% down payment, their monthly principal and interest payment would be $1,233.

That same home one year from now could be $350,025, and the mortgage rate could be 3.6% (based on the industry forecasts mentioned above). That monthly principal and interest payment, after putting down 10%, totals $1,432.

The difference in the monthly mortgage payment would be $199. That’s $2,388 more per year and $71,640 over the life of the loan.

Add to that the approximately $25,000 a house with a similar value would build in home equity this year as a result of home price appreciation, and the total net worth increase a purchaser could gain by buying this year is nearly $100,000. That’s a small fortune.

Bottom Line

When asking if they should buy a home, many potential buyers think of the non-financial benefits of owning a home. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year. Shoot us a quick message or give us a call to learn more about how you can transition from renter to homeowner this year.

Are Interest Rates Expected to Rise Over the Next Year?

Are Interest Rates Expected to Rise Over the Next Year?

So far this year, mortgage rates continue to hover around 3%, encouraging many hopeful homebuyers to enter the housing market. However, there’s a good chance rates will increase later this year and going into 2022, ultimately making it more expensive to borrow money for a home loan. Here’s a look at what several experts have to say.

Danielle Hale, Chief Economistrealtor.com:

Our long-term view for mortgage rates in 2021 is higher. As the economic outlook strengthens, thanks to progress against coronavirus and vaccines plus a dose of stimulus from the government, this pushes up expectations for economic growth . . . .”

Lawrence Yun, Chief EconomistNational Association of Realtors (NAR):

In 2021, I think rates will be similar or modestly higher . . . mortgage rates will continue to be historically favorable.”

Freddie Mac:

We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”

Below are the most recent mortgage rate forecasts from four top authorities – Freddie MacFannie Mae, the Mortgage Bankers Association (MBA), and NAR:Are Interest Rates Expected to Rise Over the Next Year? | Simplifying The Market

Bottom Line

If you’re planning to buy a home, purchasing before mortgage interest rates rise may help you save significantly over the life of your home loan. Connect with our team now to find out how much home you can afford and how the current rates impact your budget.

Americans Find the Nonfinancial Benefits of Homeownership Most Valuable

Americans Find the Nonfinancial Benefits of Homeownership Most Valuable

Homeownership is a foundational part of the American Dream. As we look back on more than a year of sheltering in our homes, having a place of our own is more important than ever. While financial benefits are always a key aspect of homeownership, today, homeowners rank the nonfinancial and personal benefits with even higher value.

Recently, two national surveys revealed the reasons homeownership is such an important part of life. The top three personal benefits of homeownership noted by respondents in Unison’s 2021 report on The State of the American Homeowner are:

  • 91% – feel secure, stable, or successful owning a home
  • 70% – feel emotionally attached to the homes that have kept them safe over the past year
  • 51% – call homeownership a “key part of their life”

These sentiments were supported by the most recent National Housing Survey from Fannie Mae, which also shows that the top three reasons Americans value homeownership have nothing to do with money. Those surveyed were given a list of feelings and accomplishments that are associated with or impacted by where we live. They were then asked, “To achieve this, are you better off owning or better off renting?” Here are the top three points from the list that respondents said homeownership could help them achieve:

  • 91% – control over what you do with your living space
  • 90% – a sense of privacy and security
  • 89% – a good place for your family to raise your children

Other nonfinancial advantages of homeownership revealed by the survey include feeling engaged in a community, having flexibility in future decisions, and experiencing less stress.

Bottom Line

Financial and non-financial benefits are a key component to the value of homeownership, but the nonfinancial side is most valued after a year full of pandemic-driven challenges. Let’s connect today if you’re ready to take the first steps toward becoming a homeowner.

 

 

All my best,

Colette

Skip to content