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Category: Housing Market (Page 17 of 38)

Is It Too Late to Buy a Home?

high angle shot of suburban neighborhood

2021 was a banner year for housing, fueled by record low interest rates, strong demand, and a low supply of homes. 

woman working at the desk in office

Some buyers may be wondering if they are late to the party, or if it’s still a good time to purchase a home. 

The answer is YES, it’s still a good time to buy…it’s not to late!

Sure, the market is tight, but interest rates are still remarkably low and homeownership has some fantastic perks!

Today’s Market…and Looking Forward

microphotography of orange and blue house miniature on brown snail s back

Experts expect demand to increase over the next several years as more millennials turn of age to buy a home.  At the same time, inventory is expected to remain extremely tight.

Builders are struggling to deliver homes with labor and chip shortages, as well as supply chain disruptions.  Like any market, strong demand and tight supply is very supportive of home prices. 

Additionally, interest rates are still extremely favorable. Yes, they have moved a bit higher from record-low levels (due mainly to inflationary pressures), but are still historically super low.

What’s The Next Step?

If you are considering purchasing a home, conditions are a bit challenging because of low inventory. At the same time, the rewards can be substantial, as the home values are expected to continue increasing!

Contact me to see the opportunity you have in becoming a homeowner, as it would be my pleasure to help you!

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Big Increases in Conforming Loan Limits for 2022

Picture of Front of FHFA Building

The Federal Housing Finance Agency announced new baseline conforming loan limits for Fannie Mae and Freddie Mac in 2022: $647,200

This is an 18% increase from the 2021 limit of $548,250 and marks the sixth consecutive year of increases from the FHFA.

This is important because now buyers and borrowers can purchase a higher priced home and still stay within conforming loan guidelines. That means easier qualifications at higher price points.

In 2016, the FHFA increased the Fannie and Freddie conforming loan limits for the first time in 10 years. Since then, the baseline loan limit has gone up by over $230,000.

Chart of Max Conforming Loan Limits in 2021 and 2022
Chart of Max High Cost Area Loan Limit in 2021 and 2022

These new limits apply to conventional, conforming loans (those sold to or backed by Fannie Mae and Freddie Mac), for both refinances and purchases.  Any loan amounts above these limits would be considered “jumbo” loans and fall outside of conventional guidelines.

Do I have to wait until 2021 to take advantage of a higher conforming loan amount?

Actually, no.  The change actually applies to the date that Fannie and Freddie sign off on the new loan (either via “delivery” or “securitization”). 

Essentially, any loan originated today would most likely close in 2021 and fall under the new loan limits.

Please do contact me for more information!

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Home Appreciation Continues To Accelerate

Hands Surrounding a Small Wooden Home

Good news on the home appreciation front…real estate valuations are continuing to increase at a rapid pace!

Check out these numbers…

CASE-SHILLER

The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices rose 1.2% in August and 20% year-over-year, which was unchanged from the previous reading.

Case Shiller August Stats

This was the first time since early 2020 we have not seen a year-over-year increase, which means that we might have reached the height of annual growth and we will start to see those appreciation numbers slow a bit.

With that said, it’s not that prices are declining, they are just increasing at a slower rate.

Modern Apartment with Black Metal Staircase

As you can see above, Phoenix, San Diego, and Tampa reported the highest annual gains.

FHFA

The FHFA (Federal Housing Finance Agency) released their House Price Index, as well. This measures home price appreciation on single-family homes with conforming loan amounts. 

Home prices rose 1% in August of 2021 and are up 18.5% year-over-year, down from 19.2%. 

Believe it or not, this is the first time we actually saw prices moderate on an annual basis in quite some time.  We are still seeing home prices rise, but just at a slightly slower pace. 

FHFA House Price Index Comparing July 2021 to August 2021 and August 2020 and August 2021

This is great news for homeowners, as their equity position has increased tremendously over the last 3+ years.

If I can be of help in strategizing on a purchase or refinance, don’t hesitate to reach out, as it would by my pleasure to do so!

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Homes Are More Affordable Now Than They Have Been in Years

Clipart of the Word Unaffordable where a Hand is Cutting Un with Scissors from Affordable

The media is reporting that there is an affordability crisis and discouraging potential home buyers. Unfortunately, this narrative is completely wrong, as homes are more actually affordable now than they have been in some time.

As we all know, home prices are appreciating. When buyers hear that prices are going up, it’s normal to think a home will cost more as the trend continues.

The way the housing market is positioned today, however, low mortgage rates are actually making homes more affordable, even as prices rise.

Clipart of White Cartoon Man Holding Magnifying Glass over a Red House

Understanding Home Affordability

Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.

There are three main factors that go into determining how affordable homes are for buyers:

  • Mortgage Rates
  • Mortgage Payments as a Percentage of Income
  • Home Prices

The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s home buying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years.

Affordability Graph from 1990-2020

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home.

With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Bottom Line

If you’re thinking of making a move, now is a great time to take advantage of the affordability that comes with such low mortgage rates.

Whether you’re thinking of purchasing your first home or moving into a new one and securing a significantly lower mortgage rate than you may have on your current house, please do contact me so we can determine your next steps in the process.

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To Buy or To Rent?

Coins Stacked Next to Small Wooden House

Deciding between buying or renting your next home?  It’s true that home values have gone up quite a bit, but so have rents.

In fact, the largest landlord in the US, Invitation homes, said that rents have gone up 14% since last year. 

Red For Rent Sign

And that’s not all – they forecast that rents will continue to go up about 6% annually

So, while it’s true that initially purchasing a home will be more expensive, your mortgage payment will remain relatively stable into the future.  Whereas your rental payments will likely rise significantly in the years to come.

There are other amazing benefits that come with buying a home, including pride of ownership, more freedom in renovating and design, and of course building equity. 

Hand Holding House Key

And because of increasing demand and tight supply, it looks as if home values will be well supported, and many are forecasting home prices to move higher.

I can give you a complete analysis with statistics for your specific zip code so you can make accurate comparisons and see which choice is best for you. Give me a call today to learn more.

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