Category Archives: For Buyers

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With Rents on the Rise – Is Now the Time To Buy?

August 3, 2021First Time Home Buyers, For Buyers, Pricing, Real Estate, Rent vs. BuyBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

According to recent data from realtor.com, median rental prices have reached their highest point ever recorded in many areas across the country. The report found rents rose by 8.1% from the same time last year. As it notes:

“Beyond simply recovering to pre-pandemic levels, rents across the country are surging. Typically, rents fluctuate less than 1% from month to month. In May and June, rents increased by 3.0% and 3.2% from each month to the next.”

If you’re a renter concerned about rising prices, now may be the time to consider purchasing a home.

Monthly Rents Are Higher Than Monthly Mortgage Payments

When you weigh your options of whether to buy a home or continue renting, how much you’ll pay each month is likely top of mind. According to the National Association of Realtors (NAR), monthly mortgage payments are rising, but they’re still significantly lower than the typical rental payment. NAR indicates the latest data on homes closed shows the median monthly mortgage payment is $1,204.

By contrast, the median national rent is $1,575 according to the most current data provided by realtor.com. In other words, buyers who recently purchased a home locked in a monthly payment that is, on average, $371 lower than what renters pay today (see graph below):

Rents Are Rising Sharply, and They Continue To Increase

The difference in monthly housing costs when comparing renting and homebuying today is significant, but many would-be homebuyers wonder about the future of rental prices. If we look to historical Census data as a reference, the median asking rent has risen consistently since 1988 (see graph below):The rise in rent over time clearly shows one of the major advantages homeownership has over renting: stable housing costs. Renters face increasing costs every year. When you purchase your home, your mortgage rate is locked in for 30 years, meaning your monthly payment stays the same over time. That gives you welcome peace of mind and predictability for many years ahead.

Bottom Line

With rents continuing to rise across the country, renters should consider if now is the right time to buy. There are multiple benefits to buying sooner rather than later. Let’s discuss your options so you can make your most powerful decision.

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Key Questions To Ask Yourself Before Buying a Home

August 2, 2021First Time Home Buyers, For Buyers, Interest Rates, Move-Up Buyers, Pricing, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

Sometimes it can feel like everyone has advice when it comes to buying a home. While your friends and loved ones may have your best interests in mind, they may also be missing crucial information about today’s housing market that you need to make your best decision.

Before you decide whether you’re ready to buy a home, you should know how to answer these three questions.

1. What’s Going on with Home Prices?

Home prices are one factor that directly impacts how much it will cost to buy a home and how much you stand to gain as a homeowner when prices appreciate.

The graph below shows just how much experts are forecasting prices to rise this year:Continued price appreciation is great news for existing homeowners but can pose a significant challenge if you wait to buy. Using these forecasts, you can determine just how much waiting could cost you. If prices increase based on the average of all forecasts (12.46%), a median-priced home that cost $350,000 in January of 2021 will cost an additional $43,610 by the end of the year. What does this mean for you? Put simply, with home prices increasing, the longer you wait, the more it could cost you.

2. Are Today’s Low Mortgage Rates Going To Last?

Another significant factor that should inform your decision is mortgage interest rates. Today’s average rates remain close to record-lows. Much like prices, though, experts forecast rates will rise over the coming months, as the chart below shows:Your monthly mortgage payment can be significantly impacted by even the slightest increase in mortgage rates, which makes the overall cost of the home greater over time when you wait.

3. Why Is Homeownership Important to You?

The final question is a personal one. Before deciding, you’ll need to understand your motivation to buy a home and why homeownership is an important goal for you. The financial benefits of owning a home are often easier to account for than the many emotional ones.

The 2021 National Homeownership Market Survey shows that six of the nine reasons Americans value homeownership are because of how it impacts them on a personal, aspirational level. The survey says homeownership provides:

Stability
Safety
A Sense of Accomplishment
A Life Milestone
A Stake in the Community
Personal Pride

The National Housing & Financial Capability Survey from NeighborWorks America also highlights the emotional benefits of homeownership:Clearly, there’s a value to homeownership beyond the many great financial opportunities it provides. It gives homeowners a sense of pride, safety, security, and accomplishment – which impacts their lives and how they feel daily.

Bottom Line

Homeownership is life-changing, and buying a home can positively impact you in so many ways. With any decision this big, it helps to have a trusted advisor by your side each step of the way. If you’re ready to begin your journey toward homeownership, let’s connect to discuss your options and begin your journey.

Content previously posted on Keeping Current Matters

Waiting To Buy a Home Could Cost You [INFOGRAPHIC]

July 30, 2021Buying Myths, First Time Home Buyers, For Buyers, Infographics, Interest Rates, Move-Up Buyers, Pricing, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

Some Highlights

If you’re thinking of buying a home but wondering if waiting a few years will save you in the long run, think again.
The longer the wait, the more you’ll pay, especially when mortgage rates and home prices rise. Even the slightest change in the mortgage rate can have a big impact on your buying power no matter your price point.
Don’t assume waiting will save you money. Let’s connect to set the ball into motion today while mortgage rates are hovering near historic lows.

Content previously posted on Keeping Current Matters

3 Hot Topics in the Housing Market Right Now

July 26, 2021For Buyers, For Sellers, Housing Market Updates, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

If you’re a prospective buyer or seller, it’s important to understand the current real estate market conditions and how they affect you. The Counselors of Real Estate (CRE) just released its Top Ten Issues Affecting Real Estate report. Here are three hot topics from the list and how they impact today’s housing market.

Technology Acceleration and Innovation

The past year ushered in many changes to the real estate industry, especially when it comes to technology. The CRE report elaborates on this:

“Lockdown-driven changes in our work, in the economy, in social structures, and in our personal behavior have pushed our reluctance aside. The acceleration and adoption of technology during the pandemic has impacted everything, and real estate is no exception.”

For real estate, innovations like digital documentation, virtual tours, and video chat enable agents to connect with clients no matter their location. These options are ideal for prospective buyers and sellers who aren’t local to the area or those that need the added flexibility signing documents online or doing virtual tours provide. That’s why many trusted real estate advisors will continue to use these technologies moving forward to best serve their clients.

Remote Work and Mobility

Working from home became the reality for many individuals during the pandemic, and the latest list from the CRE identified remote work and mobility as an important influence on the real estate market. As the report notes:

“…the pandemic universally caused a movement away from urban cores, particularly for those with higher incomes who could afford to move and for lower-income individuals seeking lower costs of living. Most of these relocations remained within their original region—84%—and, while some are returning, it is unknown as to the permanence of these movements or whether they represent a true urban exodus.”

With the added mobility remote work offers, where people are moving and where they can ultimately purchase a home is less dependent on a physical office location. This newfound flexibility is giving remote workers the opportunity to move to more affordable areas and buy more home for their money.

Housing Supply and Affordability

Finally, the limited supply of houses for sale and the related affordability challenges also makes CRE’s list of key factors this year:

“According to the National Association of Realtors®, the state of America’s housing inventory is dire, with a chronic shortage of affordable and available homes needed to support the nation’s population.”

There is good news. Homes are still more affordable than they have been historically thanks to today’s low mortgage rates. And while housing supply is still low, we’re seeing steady increases in the number of homes coming to market, which gives hope to homebuyers. As the supply of homes for sale improves, buyers will have more options.

Bottom Line

New technology, remote work, housing supply, and home affordability are key factors in the housing market right now for both buyers and sellers. If you want to better understand how these topics can impact you, let’s connect today.

Content previously posted on Keeping Current Matters

Pop Quiz: Can You Define These Key Terms in Today’s Housing Market? [INFOGRAPHIC]

July 23, 2021For Buyers, For Sellers, Infographics, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

Some Highlights

The language of buying and selling a home may sound scary at first, but knowing how key terms relate to today’s market can help you. For example, current low mortgage rates and higher wages positively impact affordability for buyers, while home price appreciation continues to grow home equity, which sellers can use to fuel a move up.
Terms like appraisal (what lenders rely on to validate a home’s value) and contingencies (which buyers can minimize to make their offer stand out) directly impact the transaction.
You don’t need to be fluent in the language of the market to buy or sell. Instead, let’s connect today so that we can translate the process together.

Content previously posted on Keeping Current Matters

Today’s Real Estate Market Explained Through 4 Key Trends

July 22, 2021For Buyers, For Sellers, Housing Market Updates, Pricing, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

As we move into the second half of the year, one thing is clear: the current real estate market is one for the record books. The exact mix of conditions we have today creates opportunities for both buyers and sellers. Here’s a look at four key components that are shaping this unprecedented market.

A Shortage of Homes for Sale

Earlier this year, the number of homes available for sale fell to an all-time low. In recent months, however, inventory levels are starting to trend up. The latest Monthly Housing Market Trends Report from realtor.com says:

“In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.”

This is good news for buyers who crave more options. But even though we’re experiencing small gains in the number of available homes for sale, inventory remains a challenge in most states. That’s why it’s still a sellers’ market, giving homeowners immense leverage when they decide to make a move.

Buyer Competition and Bidding Wars

Today’s ongoing low supply, coupled with high demand, creates a market characterized by high buyer competition and bidding wars. Buyers are going above and beyond to make sure their offer stands out from the crowd by offering over the asking price, all cash, or waiving some contingencies. The number of offers on the average house for sale broke records this year – and that’s great news for sellers.

The latest Confidence Index from the National Association of Realtors (NAR) says the average home for sale receives five offers (see graph below):For buyers, the best way to put a compelling offer together is by working with a local real estate professional. That agent can act as your trusted advisor on what terms are best for you and what’s most appealing to the seller.

Home Price Appreciation

The competition among buyers is driving prices up. Over the past year, we’ve seen home price appreciation rise across the country. According to the most recent Home Price Index (HPI) from CoreLogic, national home prices increased 15.4% year-over-year in May:

“The May 2021 HPI gain was up from the May 2020 gain of 4.2% and was the highest year-over-year gain since November 2005. Low mortgage rates and low for-sale inventory drove the increase in home prices.”

Rising home values are a big part of why real estate remains one of the top sought-after investments for Americans. For potential sellers, it also means it’s a great time to list your house to maximize the return on your investment.

A Rise in Home Values and Equity

The equity in a home doesn’t just grow when a homeowner pays their mortgage – it also grows as the home’s value appreciates. Thanks to the jump in price appreciation, homeowners across the country are seeing record-breaking gains in home equity. CoreLogic recently reported:

“…homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over $1.9 trillion, and an average gain of $33,400 per borrower, since the first quarter of 2020.”

That’s a major perk for households to leverage. Homeowners can use that equity to accomplish major life goals or move into their dream homes.

Bottom Line

If you’re thinking about buying or selling, there’s no time like the present. Let’s connect to talk about how you can take advantage of the conditions we’re seeing today to meet your homeownership goals.

Content previously posted on Keeping Current Matters

Remote Work Has Changed Our Home Needs. Is It Time for Your Home To Change, Too?

July 21, 2021For Buyers, For Sellers, Housing Market Updates, Move-Up Buyers, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

Over the past year, many homeowners realized what they need in a home is changing, especially with the rise in remote work. If you’re longing for a dedicated home office or a change in scenery, now may be the time to find the home that addresses your evolving needs.

Working from Home Isn’t a Passing Fad

Before the pandemic, only 21% of individuals worked from home. However, if you’ve recently discovered remote work is your new normal, you’re not alone.

A survey of hiring managers conducted by Statista and Upwork projects 37.5% of U.S. workers will work remotely in some capacity over the next 5 years (see chart below):

Working from Home Gives You More Flexibility and More Options

If you fall in that category, working from home may provide you with opportunities you didn’t realize you had. The ongoing rise in remote work means a portion of the workforce no longer needs to be tied to a specific area for their job. Instead, it gives those workers more flexibility when it comes to where they can live.

If you’re one of the nearly 23% of workers who will remain 100% remote, you have the option to move to a lower cost-of-living area or to the location of your dreams. If you search for a home in a more affordable area, you’ll be able to get more house for your money, freeing up more options for your dedicated office space and more breathing room. You could also move to an area you’ve always dreamed of vacationing in – somewhere near the beach, the mountains, or simply an area that features better weather and community amenities. Without your job tying you to a specific location, you’re bound to find your ideal spot.

If you’re one of the almost 15% of individuals who will have a partially remote or hybrid schedule, relocating within your local area to a home that’s further away from your office could be a great choice. Since you won’t be going into work every day, a slightly longer commute from a more suburban or rural area could be a worthy trade-off for a home with more features, space, or comforts. After all, if you’ll still be at home part-time, why not find a home that better suits your needs?

According to the latest Top Ten Issues Affecting Real Estate from The Counselors of Real Estate (CRE), many homebuyers are already taking advantage of their newfound flexibility:

“. . . after years of apparent but variant trends towards urbanization, the pandemic universally caused a movement away from urban cores, particularly for those with higher incomes who could afford to move and for lower-income individuals seeking lower costs of living.”

Bottom Line

If you’ve found what you’re looking for in a home has changed due to remote work, it may be time to make a move. Let’s connect today to start prioritizing your home needs.

Content previously posted on Keeping Current Matters

3 Charts That Show This Isn’t a Housing Bubble

July 20, 2021For Buyers, For Sellers, Housing Market Updates, New Construction, Pricing, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

With home prices continuing to deliver double-digit increases, some are concerned we’re in a housing bubble like the one in 2006. However, a closer look at the market data indicates this is nothing like 2006 for three major reasons.

1. The housing market isn’t driven by risky mortgage loans.

Back in 2006, nearly everyone could qualify for a loan. The Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers’ Association is an indicator of the availability of mortgage money. The higher the index, the easier it is to obtain a mortgage. The MCAI more than doubled from 2004 (378) to 2006 (869). Today, the index stands at 130. As an example of the difference between today and 2006, let’s look at the volume of mortgages that originated when a buyer had less than a 620 credit score.Dr. Frank Nothaft, Chief Economist for CoreLogic, reiterates this point:

“There are marked differences in today’s run up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent.”

2. Homeowners aren’t using their homes as ATMs this time.

During the housing bubble, as prices skyrocketed, people were refinancing their homes and pulling out large sums of cash. As prices began to fall, that caused many to spiral into a negative equity situation (where their mortgage was higher than the value of the house).

Today, homeowners are letting their equity build. Tappable equity is the amount available for homeowners to access before hitting a maximum 80% combined loan-to-value ratio (thus still leaving them with at least 20% equity). In 2006, that number was $4.6 billion. Today, that number stands at over $8 billion.

Yet, the percentage of cash-out refinances (where the homeowner takes out at least 5% more than their original mortgage amount) is half of what it was in 2006.

3. This time, it’s simply a matter of supply and demand.

FOMO (the Fear Of Missing Out) dominated the housing market leading up to the 2006 housing bubble and drove up buyer demand. Back then, housing supply more than kept up as many homeowners put their houses on the market, as evidenced by the over seven months’ supply of existing housing inventory available for sale in 2006. Today, that number is barely two months.

Builders also overbuilt during the bubble but pulled back significantly over the next decade. Sam Khater, VP and Chief Economist, Economic & Housing Research at Freddie Mac, explains that pullback is the major factor in the lack of available inventory today:

“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”

Here’s a chart that quantifies Khater’s remarks:Today, there are simply not enough homes to keep up with current demand.

Bottom Line

This market is nothing like the run-up to 2006. Bill McBride, the author of the prestigious Calculated Risk blog, predicted the last housing bubble and crash. This is what he has to say about today’s housing market:

“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while because Millennials need houses. Prices will keep rising for a while because inventory is so low.”

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What You Should Do Before Interest Rates Rise

July 19, 2021Buying Myths, For Buyers, For Sellers, Interest Rates, Move-Up Buyers, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

In today’s real estate market, mortgage interest rates are near record lows. If you’ve been in your current home for several years and haven’t refinanced lately, there’s a good chance you have a mortgage with an interest rate higher than today’s average. Here are some options you should consider if you want to take advantage of today’s current low rates before they rise.

Sell and Move Up (or Downsize)

Many of today’s homeowners are rethinking what they need in a home and redefining what their dream home means. For some, continued remote work is bringing about the need for additional space. For others, moving to a lower cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.

The chart below shows average mortgage rates by decade compared to where they are today:Today’s rates are below 3%, but experts forecast rates to rise over the next few years.

If the interest rate on your current mortgage is higher than today’s average, take advantage of this opportunity by making a move and securing a lower rate. Lower rates mean you may be able to get more house for your money and still have a lower monthly mortgage payment than you might expect.

Waiting, however, might mean you miss out on this historic opportunity. Below is a chart showing how your monthly payment will change if you buy a home as mortgage rates increase:

Breaking It All Down:

Using the chart above, let’s look at the breakdown of a $300,000 mortgage:

When mortgage rates rise, so does the monthly payment you can secure.
Even the smallest increase in rates can make a difference in your monthly mortgage payment.
As interest rates rise, you’ll need to look at a lower-priced home to try and keep the same target monthly payment, meaning you may end up with less home for your money.

No matter what, whether you’re looking to make a move up or downsize to a home that better suits your needs, now is the time. Even a small change in interest rates can have a big impact on your purchasing power.

Refinance

If making a move right now still doesn’t feel right for you, consider refinancing. With the current low mortgage rates, refinancing is a great option if you’re looking to lower your monthly payments and stay in your current home.

Bottom Line

Take advantage of today’s low rates before they begin to rise. Whether you’re thinking about moving up, downsizing, or refinancing, let’s connect today to discuss which option is best for you.

Content previously posted on Keeping Current Matters

Experts Agree: Options Are Improving for Buyers [INFOGRAPHIC]

July 16, 2021Buying Myths, First Time Home Buyers, For Buyers, Housing Market Updates, Infographics, Move-Up Buyers, Real EstateBennington, Homes, Real Estate, Realtor, Realty, Southern VermontBrenda Jones

Some Highlights

Buyers hoping for more homes to choose from may be in luck as housing inventory begins to rise. Many experts agree – new sellers listing their homes is great news for buyers and the overall market.
Although the supply increases are modest, more homes means more options for buyers. A rise in inventory may also help slow the price gains we’ve seen recently and could be a sign of good things to come.
If you’re searching for a home, rising inventory is welcome news. Let’s connect today to discuss new listings in our area.

Content previously posted on Keeping Current Matters