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Archive for the ‘Selling Myths’ Category

Your Home Equity Can Offset Affordability Challenges

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Your Home Equity Can Offset Affordability Challenges Simplifying The Market

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.”

Bottom Line

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.

Are More Homes Coming onto the Market?

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Are More Homes Coming onto the Market? Simplifying The Market

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:

Bottom Line

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.

Plenty of Buyers Are Still Active Today [INFOGRAPHIC]

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Plenty of Buyers Are Still Active Today [INFOGRAPHIC] Simplifying The Market

Some Highlights

  • 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.

Planning to Retire? Your Equity Can Help You Make a Move

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Planning to Retire? Your Equity Can Help You Make a Move Simplifying The Market

Reaching retirement is a significant milestone in life, bringing with it a lot of change and new opportunities. As the door to this exciting chapter opens, one thing you may be considering is selling your house and finding a home better suited for your evolving needs.

Fortunately, you may be in a better position to make a move than you realize. Here are a few reasons why.

Consider How Long You’ve Been in Your Home

From 1985 to 2009, the average length of time homeowners stayed in their homes was roughly six years. But according to the National Association of Realtors (NAR), that number is higher today. Since 2010, the average home tenure is just over nine years (see graph below):

This means many homeowners have been living in their houses even longer in recent years. When you live in a home for such a significant amount of time, it’s natural for you to experience changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you.

Consider the Equity You’ve Gained

And, if you’ve been in your home for more than a few years, you’ve likely built-up substantial equity that can fuel your next move. That’s because you gain equity as you pay down your loan and as home prices appreciate. And, the longer you’ve been in your home, the more you may have gained. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below): 

While home prices vary by area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by nearly 60%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.

Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to friends or loved ones, that equity can help. Whatever your home goals are, a trusted real estate agent can work with you to find the best option. They’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today.

Bottom Line

As you plan for your retirement, connect with a local real estate agent to find out how much equity you’ve built up over the years and plan how you can use it toward the purchase of a home that fits your changing needs.

Why It’s Still a Seller’s Market Today

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Why It’s Still a Seller’s Market Today Simplifying The Market

Even though activity in the housing market has slowed from the frenzy that was the ‘unicorn’ years, it’s still a seller’s market because the supply of homes for sale is so low. But what does that really mean for you? And why are conditions today so good if you want to sell your house?

The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Housing inventory is measured by the number of available homes on the market. It’s also measured by months’ supply, meaning the number of months it would take to sell all those available homes based on current demand. In a balanced market, there’s usually about a six-month supply. Today, we have only about 3 months’ supply of homes at the current sales pace (see graph below): 

As the visual shows, given the current inventory of homes, it’s still a seller’s market.

Today, we’re nowhere near what’s considered a balanced market. In fact, the current months’ supply is half of what’s typical of a normal market. That means there just aren’t enough homes to go around based on today’s buyer demand.

As Lawrence Yun, Chief Economist for NAR, says:

“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”

How Does Being in a Seller’s Market Benefit You?

Sellers, these conditions give you a real edge. Right now, there are buyers who are ready, willing, and able to purchase a home. And, because there’s a shortage of homes up for sale, the ones that do hit the market are like magnets for those buyers.

If you work with a local real estate agent to list your house right now, in good condition, and at the right price, it could get a lot of attention. You might even end up with multiple offers.

Bottom Line

Today’s seller’s market sets you up with a big advantage when you sell your house. Because supply is so low, your house will be in the spotlight for motivated buyers who are craving more options. Connect with a local real estate agent so you understand what’s happening in your area as you get ready to enter the market.

Buyer Traffic Is Still Stronger than the Norm

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Buyer Traffic Is Still Stronger than the Norm Simplifying The Market

Are you putting off selling your house because you’re worried no one’s buying because of where mortgage rates are? If so, know this: the latest data shows plenty of buyers are still out there, and they’re purchasing homes today. Here’s the data to prove it.

The ShowingTime Showing Index is a measure of buyers touring homes. The graph below uses the latest numbers available and compares them to the same month in the last normal years to show just how active today’s buyers still are:

As you can see, when June 2023 numbers are stacked alongside what’s typical for the housing market at this time of year, it’s clear buyers are still active. And, they’re actually a lot more active than the norm.

If you’re wondering how this could possibly be true, it’s because buyers are getting used to higher mortgage rates and accepting them as the new reality. As Danielle Hale, Chief Economist, Realtor.com, explains:

“Interest rate hikes continue to further cut into buyers’ purchasing power, although they appear to have adapted to the higher mortgage rate environment . . .”

It’s simple. Buyers will always need to buy, and those who can afford to move at today’s rates are going to do so.

The Key Takeaway for You

While it’s true things have slowed down from the frenzy of the last couple of years, it doesn’t mean today’s market is at a standstill. The reality is: buyer traffic is still strong today. Even with today’s mortgage rates, plenty of buyers are still making their moves. So why delay your own move when there’s clearly a market for your house?

Bottom Line

Don’t put off your plans because you’re worried no one will buy your home. The opposite is true, and more buyers are more active than the norm. Connect with a real estate agent to get your house ready to sell, so it makes the best first impression possible on those eager buyers.

Why You May Still Want To Sell Your House After All

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Why You May Still Want To Sell Your House After All Simplifying The Market

Even though you may feel reluctant to sell your house because you don’t want to take on a mortgage rate that’s higher than the one you have now, there’s more to consider. While the financial side of things does matter, your personal needs may actually matter just as much. As an article from Bankrate says:

Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market.”

So, ask yourself this: why did I want to move in the first place?

Chances are your primary motivation wasn’t just financial in nature. Why you’re really thinking about selling likely has more to do with something changing in your life or a shift in what you need out of your house.

Reasons Homeowners Still Need To Sell Today

Let’s explore some of the most common reasons sellers are moving today. A recent article from Builder Online helps shed light on this. In this research, they identified the following categories:

  • Marriage – If you just got married, you may find you either need more space than you currently have, or the two of you want to find a new place you picked out together.
  • Divorce – If you’re getting separated or are divorcing your partner, chances are it’ll be difficult to live under the same roof. Selling the place you have, so you can own get your own spot, may be necessary.
  • Births – If your household is growing, you may need more square footage, including more bedrooms. If you’re running out of room for everyone, you may not be able to wait to move.
  • Deaths – If you’ve recently lost a loved one, it can be hard to spend time in that home. You may need to move for financial reasons or because you no longer need all the space.
  • Retirement – If you’re in the process of retiring, or you just did, you may be looking to downsize to cut costs, relocate to be closer to loved ones, or move to a dream location. In this new phase of life, your current home may not be able to deliver what you need. 

You may find you share one of these top motivators. If any of these resonate with you, it may be time to move so you can find a house better suited to your changing needs. A survey from Realtor.com finds other sellers are in the same boat. It says, 1 in 4 sellers are choosing to move for personal reasons, even with current mortgage rates:

“. . . more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.”

If you need to sell now because something in your own life has changed, don’t let rates hold you back from what you want. You have options to help make that move possible. You can use the equity you already have in your current home toward your next purchase. And with how much equity homeowners have right now, you may be able to finance less than you’d expect, or pay all cash to avoid borrowing at all.

Bottom Line

When you’re ready to prioritize your changing needs, reach out to a trusted real estate professional. They can help you list your house and find a home that delivers on everything you’re looking for.

Today’s Housing Market Has Only Half the Usual Inventory [INFOGRAPHIC]

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Today’s Housing Market Has Only Half the Usual Inventory [INFOGRAPHIC] Simplifying The Market

Some Highlights

  • There are only about half the number of homes for sale compared to the last normal years in the market.
  • That means buyers don’t have enough options right now. So, if you work with an agent to list your house, it should be in the spotlight
  • If you’re thinking of selling, get in touch with a local real estate agent so your house can stand out while there’s such a shortage of supply and buyers are craving more options.

More Jobs and Better Pay Leads to More Buyer Demand

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More Jobs and Better Pay Leads to More Buyer Demand Simplifying The Market

There’s been talk about a recession for quite a while now. But the economy has been remarkably resilient. Why? One reason is employment and wages have stayed strong. Let’s look at the latest information on each one and why both are good news if you’re thinking about selling your house.

More Jobs Are Being Created

Instead of facing the job losses typical of any recession, the economy has been growing and adding jobs. According to the Bureau of Labor Statistics (BLS), 187,000 jobs were created in July, which is up from the 185,000 created in June. That means more people are finding work. In fact, so many jobs are being added that the unemployment rate is far lower than the long-term average of 5.7% (see graph below):

A low unemployment rate means that most people who want to work are finding jobs. When people have jobs, they have steady incomes – and that can help set them up to consider homeownership.

People Are Making More Money

And data also shows hourly earnings have been going up pretty steadily over the past few years (see graph below):

When wages rise, people have more money that they could save or use toward buying a home. This increase in income helps offset some of the affordability challenges in the housing market today. Affordability depends on three main factors: wages, home prices, and mortgage rates. With higher home prices and mortgage rates right now, Builder Online summarizes how growing wages can help:

The housing market has been a beneficiary of the strong economy and labor market. Many of those employed have saved money over the past few years and used those funds toward a down payment on a home.”

If you’re thinking about selling your house, a strong job market, growing wages, and the resulting buyer demand is fantastic news. It means there’s a larger pool of potential buyers out there who are in a position to pursue their dreams of homeownership.

Bottom Line

With more jobs and rising wages creating eager buyers, there’s a lot going in your favor. Reach out to a local real estate agent so you have someone who can guide you through the process of selling your house, from setting the right price to getting your home ready to show.

Why You Need a True Expert in Today’s Housing Market

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Why You Need a True Expert in Today’s Housing Market Simplifying The Market

The housing market continues to shift and change, and in a fast-moving landscape like we’re in right now, it’s more important than ever to have a trusted real estate agent on your side. Whether you’re buying your first home or selling once again, it’s mission critical to work with an expert who can guide you through each unique step of the process. 

The reality is, not all agents operate the same way. To truly make a powerful and confident decision as you buy or sell a home, you need a real estate expert who uses their knowledge of what’s really happening with home prices, housing supply, industry projections, and more to give you the best possible advice. Someone who can provide clarity and trust like that is essential to your success. Jay Thompson, Real Estate Industry Consultant, explains:

“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.”

Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty for consumers. 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.”

But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You can lean on an expert to help you separate fact from fiction and get the answers you need.

The right agent can assist you in figuring out what’s going on at the national level and in your local area. They can debunk headlines using data you can trust. Experts have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the housing market, historical data, and more.

Then, to make sure you have the full picture, an agent can tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision.

After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in.

Bottom Line

If you want sound advice and trusted information about the housing market, reach out to a local real estate professional today.