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Buying a home is such and exciting time. This information is a resource for any questions you may have. You can also reach out to us directly at any time. We’re here to help!
Buying and owning your own home can have a big impact on your life. While there are financial reasons to become a homeowner, it’s essential to think about the non-financial benefits that make a home more than just a place to live.
Here are some of the top non-financial reasons to buy a home.
According to Fannie Mae, 94% of survey respondents say “Having Control Over What You Do with Your Living Space” is a top reason to own.
Your home is truly your own space. If you own a home, unless there are specific homeowner association requirements, you can decorate and change it the way you like. That means you can make small changes or even do big renovations to make your home perfect for you. Your home is uniquely yours and by buying, you give yourself the freedom to tailor it to your individual style. Investopedia explains:
“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.”
When you rent, you might not be able to make your place really feel like it’s yours. And if you do make any modifications, you might have to change them back before you leave. But if you own your home, you can make it just the way you want it. That level of customization can give you a sense of pride in where you live and make you feel more connected to it.
Fannie Mae also finds 90% say “Having a Good Place for Your Family To Raise Your Children” tops their list of why it’s better to buy a home.
Another important factor to think about is what stage of life you’re in. U.S. News breaks it down:
“For those with young children, buying a home and putting down roots is a major driver. . . . You don’t want the upheaval of a massive rent increase or a non-renewed lease to impact your sense of stability.”
No matter which of life’s milestones you’re in, stability and predictability are important. That’s because the one constant in life is that things will change. And, as life changes around you, having a familiar home and not worrying about moving regularly helps you and those who matter most feel more secure and more comfortable.
Lastly, Fannie Mae says 82% list “Feeling Engaged in Your Community” as another key motivator to own.
Owning your home also helps you feel even more connected to your neighborhood. People who own homes usually live in them for an average of nine years, according to the National Association of Realtors (NAR). As that time passes, it’s natural to make friends and build strong ties in the community. As Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), points out:
“Homeowners also tend to be more active in their local communities . . .”
When you care deeply about the people you live near, you’ll do what you can to contribute to your local area.
Owning your home can make your life better by giving you a sense of accomplishment, pride, stability, and connectedness. If you’re thinking about becoming a homeowner and want to learn more, reach out to a local real estate agent today.
The way Americans work has changed in recent years, and remote work is at the forefront of this shift. Experts say it’ll continue to be popular for years to come and project that 36.2 million Americans will be working remotely by 2025. To give you some perspective, that’s a 417% increase compared to the pre-pandemic years when there were just 7 million remote workers.
If you’re in the market to buy a home and you work remotely either full or part-time, this trend is a game-changer. It can help you overcome some of today’s affordability and housing inventory challenges.
How Remote Work Helps with Affordability
Remote or hybrid work allows you to change how you approach your home search. Since you’re no longer commuting every day, you may not feel it’s as essential to live near your office. If you’re willing to move a bit further out in the suburbs instead of the city, you could open up your pool of affordable options. In a recent study, Fannie Mae explains:
“Home affordability may also be a reason why we saw an increase in remote workers’ willingness to relocate or live farther away from their workplace . . .”
If you’re thinking about moving, having this kind of location flexibility can boost your chances of finding a home that fits your budget. Work with your agent to cast a wider net that includes additional areas with a lower cost of living.
More Work Flexibility Means More Home Options
And as you broaden your search to include more affordable options, you may also find you have the chance to get more features for your money too. Given the low supply of homes for sale, finding a home that fits all your wants and needs can be challenging.
By opening up your search, you’ll give yourself a bigger pool of options to choose from, and that makes it easier to find a home that truly fits your lifestyle. This could include homes with more square footage, diverse home styles, and a wider range of neighborhood amenities that were previously out of reach.
Historically, living close to work was a sought-after perk, often coming with a hefty price tag. But now, the dynamics have changed. If you work from home, you have the freedom to choose where you want to live without the burden of long daily commutes. This shift allows you to focus more on finding a home that is affordable and delivers on your dream home features.
Remote work goes beyond job flexibility. It’s a chance to broaden your horizons in your home search. Without being bound to a fixed location, you have the freedom to explore all your options. Reach out to a local real estate agent to find out how this freedom can lead you to your ideal home.
Are you thinking about selling your house? If so, today’s mortgage rates may be making you wonder if that’s the right decision. Some homeowners are reluctant to sell and take on a higher mortgage rate on their next home. If you’re worried about this too, know that even though rates are high right now, so is home equity. Here’s what you need to know.
Bankrate explains exactly what equity is and how it grows:
“Home equity is the portion of your home that you’ve paid off and own outright. It’s the difference between what the home is worth and how much is still owed on your mortgage. As your home’s value increases over the long term and you pay down the principal on the mortgage, your equity stake grows.”
In other words, equity is how much your home is worth now, minus what you still owe on your home loan.
How Much Equity Do Homeowners Have Now?
Recently, your equity has been growing faster than you might think. To help contextualize just how much the average homeowner has, CoreLogic says:
“. . . the average U.S. homeowner now has about $290,000 in equity.”
That’s because, over the past few years, home prices went up significantly – and those rising prices helped your equity to accumulate faster than usual. While the market has started to normalize, there are still more people wanting to buy homes than there are homes available for sale. This high demand is causing home prices to go up again.
According to the Federal Housing Finance Agency (FHFA), the Census, and ATTOM, a property data provider, nearly two-thirds (68.7%) of homeowners have either fully paid off their mortgages or have at least 50% equity (see chart below):
That means nearly 70% of homeowners have a tremendous amount of equity right now.
How Equity Helps with Your Affordability Concerns
With today’s affordability challenges, your equity can make a big difference when you decide to move. After you sell your house, you can use the equity you’ve built up in your home to help you buy your next one. Here’s how:
- Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy a new house without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. The National Association of Realtors (NAR) states:
“These all-cash home buyers are happily avoiding the higher mortgage interest rates . . .”
- Make a larger down payment: Your equity could be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much money so today’s rates become less of a sticking point. Experian explains:
“Increasing your down payment lowers your principal loan amount and, consequently, your loan-to-value ratio, which could lead to a lower interest rate offer from your lender.”
If you’re thinking about moving, the equity you’ve built up can make a big difference, especially today. To find out how much equity you’ve got in your current house and how you can use it for your next home, get in touch with a trusted real agent.
An important factor shaping today’s market is the number of homes for sale. And, if you’re considering whether or not to list your house, that’s one of the biggest advantages you have right now. When housing inventory is this low, your house will stand out, especially if it’s priced right.
But there are some early signs that more listings are coming. According to the latest data, new listings (homeowners who just put their house up for sale) are trending up. Here’s a look at why this is noteworthy and what it may mean for you.
More Homes Are Coming onto the Market than Usual
It’s well known that the busiest time in the housing market each year is the spring buying season. That’s why there’s a predictable increase in the volume of newly listed homes throughout the first half of the year. Sellers are anticipating this and ramping up for the months when buyers are most active. But, as the school year kicks off and as the holidays approach, the market cools. It’s what’s expected.
But here’s what’s surprising. Based on the latest data from Realtor.com, there’s an increase in the number of sellers listing their houses later this year than usual. A peak this late in the year isn’t typical. You can see both the normal seasonal trend and the unusual August in the graph below:As Realtor.com explains:
“While inventory continues to be in short supply, August witnessed an unusual uptick in newly listed homes compared to July, hopefully signaling a return in seller activity heading toward the fall season . . .”
While this is only one month of data, it’s unusual enough to note. It’s still too early to say for sure if this trend will continue, but it’s something you’ll want to stay ahead of if it does.
What This Means for You
If you’ve been putting off selling your house, now may be the sweet spot to make your move. That’s because, if this trend continues, you’ll have more competition the longer you wait. And if your neighbor puts their house up for sale too, it means you may have to share buyers’ attention with that other homeowner. If you sell now, you can beat your neighbors to the punch.
But, even with more homes coming onto the market, the market is still well below normal supply levels. And, that inventory deficit isn’t going to be reversed overnight. The graph below helps put this into context, so you can see the opportunity you still have now:
Even though inventory is still low, you don’t want to wait for more competition to pop up in your neighborhood. You still have an incredible opportunity if you sell your house today. Connect with a real estate agent to explore the benefits of selling now before more homes come to the market.
- Holding off on selling your house because you believe there aren’t any buyers out there?
- Data shows buyers are still active, even with higher mortgage rates. This goes to show, people still want to buy homes, and those who can are moving now.
- Don’t delay your plan to sell for fear no one is buying. The opposite is true and buyer traffic is still strong today. Connect with a real estate agent to get your house in front of these buyers.
One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.
Underbuilding Is a Long-Standing Problem
One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below shows new construction for single-family homes over the past five decades, including the long-term average for housing units completed:
For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while new home construction is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight.
Today’s Mortgage Rates Create a Lock-In Effect
There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps illustrate just how many homeowners may find themselves in this situation:
Those homeowners need to remember their needs may matter just as much as the financial aspects of their move.
Misinformation in the Media Is Creating Unnecessary Fear
Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction.
How This Impacts You
If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.
- For buyers: A limited number of homes for sale means you’ll want to seriously consider all of your options, including various areas and housing types. A skilled professional will help you explore all of what’s available and find the home that best fits your needs. They can even coach you through casting a broader net if you need to expand your search.
- For sellers: Today’s low inventory actually offers incredible benefits because your house will stand out. A real estate agent can walk you through why it’s especially worthwhile to sell with these conditions. And since many sellers are also buyers, that agent is also an essential resource to help you stay up to date on the latest homes available for sale in your area so you can find your next dream home.
The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, connect with a real estate agent. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in your area.
It’s Never Too Late or Too Early to Get Started
Filling out an appliation is the first step to building a mortgage file. With that information, we can guide you on the path to getting Pre-Approved and ready for home financing.