How the Economy Impacts Mortgage Rates in Camarillo, California.
How the Economy Impacts Mortgage Rates
As someone who’s thinking about buying or selling a home, you’re probably paying close attention to mortgage rates – and wondering what’s ahead.
One thing that can affect mortgage rates is the Federal Funds Rate, which influences how much it costs banks to borrow money from each other. While the Federal Reserve (the Fed) doesn’t directly control mortgage rates, they do control the Federal Funds Rate.
The relationship between the two is why people have been watching closely to see when the Fed might lower the Federal Funds Rate. Whenever they do, that’ll put downward pressure on mortgage rates. The Fed meets next week, and three of the most important metrics they’ll look at as they make their decision are:
- The Rate of Inflation
- How Many Jobs the Economy Is Adding
- The Unemployment Rate
Here’s the latest data on all three.
1. The Rate of Inflation
You’ve probably heard a lot about inflation over the past year or two – and you’ve likely felt it whenever you’ve gone to buy just about anything. That’s because high inflation means prices have been going up quickly.
The Fed has stated its goal is to get the rate of inflation back down to 2%. Right now, it’s still higher than that, but moving in the right direction (see graph below):
2. How Many Jobs the Economy Is Adding
2. How Many Jobs the Economy Is AddingThe Fed is also watching how many new jobs are created each month. They want to see job growth slow down consistently before taking any action on the Federal Funds Rate. If fewer jobs are created, it means the economy is still strong but cooling a bit – which is their goal. That appears to be exactly what’s happening now. Inman says:
“. . . the Bureau of Labor Statistics reported that employers added fewer jobs in April and May than previously thought and that hiring by private companies was sluggish in June.”
So, while employers are still adding jobs, they’re not adding as many as before. That’s an indicator the economy is slowing down after being overheated for quite some time. This is an encouraging trend for the Fed to see.
3. The Unemployment Rate
The unemployment rate is the percentage of people who want to work but can’t find jobs. So, a low rate means a lot of Americans are employed. That’s a good thing for many people.
But it can also lead to higher inflation because more people working means more spending – which drives up prices. Right now, the unemployment rate is low, but it’s been rising slowly over the past few months (see graph below):
It may seem harsh, but a consistently rising unemployment rate is something the Fed needs to see before deciding to cut the Federal Funds Rate. That’s because a higher unemployment rate would mean reduced spending, and that would help get inflation back under control.
What Does This Mean Moving Forward?
While mortgage rates are going to continue to be volatile in the days and months ahead, these are signs the economy is headed in the direction the Fed wants to see. But even with that, it’s unlikely they’ll cut the Federal Funds Rate when they meet next week. Jerome Powell, Chair of the Federal Reserve, recently said:
“We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing or loosening policy.”
Basically, we’re seeing the first signs now, but they need more data and more time to feel confident that this is a consistent trend. Assuming that direction continues, according to the CME FedWatch Tool, experts say there’s a projected 96.1% chance the Fed will lower the Federal Funds Rate at their September meeting.
Remember, the Fed doesn’t directly set mortgage rates. It’s just that whenever they decide to cut the Federal Funds Rate, mortgage rates should respond.
Of course, the timing of when the Fed takes action could change because of new economic reports, world events, and other factors. That’s why it’s usually not a good idea to try to time the market.
Bottom Line
Recent economic data may signal that hope is on the horizon for mortgage rates. Let’s connect so you have an expert to keep you up to date on the latest trends and what they mean for you.
A Newly Built Home May Actually Be More Budget-Friendly in Oxnard, California
A Newly Built Home May Actually Be More Budget-Friendly
If you’re in the market to buy a home, there’s some exciting news for you. Many people assume that newly built homes are more expensive than existing ones (houses that have already been lived in), but that’s not always the case. In fact, exploring newly built homes can sometimes lead to more cost-effective options, especially today. Hard to believe, right? But the data doesn’t lie.
Here are two key reasons working with your agent to look into new home construction could help you find a more budget-friendly option.
Reason 1: Lower Median Prices for Newly Built Homes
The median sales price for newly built homes is lower than the median sales price for existing homes today. This might seem surprising, but it’s true according to the latest data from the Census and the National Association of Realtors (NAR):
Why is that? Builders are focused on building what they can sell. And right now, there’s a very real need for smaller and more affordable homes – so that’s what they’ve been bringing to the market. At the same time, there are also more newly built homes already on the market than there have been over the past few years, so builders are motivated to make sure they’re selling what they’ve got available before adding more.
Reason 2: Attractive Incentives from Home Builders
Another big reason to consider a newly built home is the range of incentives that many home builders are offering. Again, since builders are aiming to sell their current inventory, some are providing special deals to sweeten the pot for homebuyers. HousingWire explains today’s trend:
“Overall, the usage of sales incentives was up to 61% in June, compared to 59% in May.”
One of the most appealing incentives right now is how builders are able to offer competitive mortgage rates. They may also provide other incentives, such as covering closing costs, or offering free upgrades.
Why This Matters to You
Considering a newly built home could open up opportunities you hadn’t thought of before. With competitive pricing and attractive incentives, you might just find that a brand-new home is the most appealing option for you.
Bottom Line
Buying a home is a big decision, and it’s essential to consider all your options. By looking into newly built homes, you might find a perfect fit for your needs and your budget.
Let’s explore the possibilities together. If you have any questions or want to see what’s available, feel free to reach out.
How Affordability and Remote Work Are Changing Where People Live in Prescott, Arizona.
How Affordability and Remote Work Are Changing Where People Live
There’s an interesting trend happening in the housing market. People are increasingly moving to more affordable areas, and remote or hybrid work is helping them do it.
Consider Moving to a More Affordable Area
Today’s high mortgage rates combined with continually rising home prices mean it’s tough for a lot of people to afford a home right now. That’s why many interested buyers are moving to places where homes are less expensive, and the cost of living is lower. As Orphe Divounguy, Senior Economist at Zillow, explains:
“Housing affordability has always mattered . . . and you’re seeing it across the country. Housing affordability is reshaping migration trends.”
If you’re hoping to buy a home soon, it might make sense to broaden your search area to include places where homes that fit your needs are more affordable. That’s what a lot of other people are doing right now to find a home within their budget. Extra Space Storage explains:
“55% of American adults are looking to relocate to a different state or city for more affordable homes and lower costs of living. . . Specifically, states with a strong economy, lower costs of living, and remote work options continue to be the ideal places to live in the U.S.”
Remote Work Opens Up More Home Options
If you work remotely or drive into the office only a few times each week, you have many more possibilities when looking for your next home. That’s because you can cast a broader net and include more suburban or rural areas nearby. As Market Place Homes says:
“People start to reconsider where they want to live when commute times are slashed in half or eliminated altogether. If they have a longer commute but don’t have to do it daily, they may feel like they can tolerate living farther away from their job. Or, if someone works entirely remotely, they can move to a cheaper area and get a lot of house for their dollar.”
How a Real Estate Agent Can Help
A real estate agent can help you find the perfect home for your budget. They’re especially valuable if you’re moving to a new, unfamiliar area. Bankrate says:
“If you’re moving far away, you may not have a good idea about which neighborhoods or towns will be the best fit. An experienced local agent can help you find the lifestyle you’re looking for in a home you can afford.”
So, if you’re thinking about relocating to somewhere with more affordable homes, what are you waiting for? With the added flexibility of remote work, you might have more options than before.
Bottom Line
Dreaming of a place where your money goes further? Let’s connect so you have someone to help you find your next home. Together, we’ll make your dream of homeownership a reality.
The Biggest Mistakes Homebuyers in Phoenix, Arizona Are Making Right Now [INFOGRAPHIC]
Unlocking Homebuyer Opportunities in 2024 in Prescott Valley, Arizona
Unlocking Homebuyer Opportunities in 2024
There’s no arguing this past year has been difficult for homebuyers. And if you’re someone who has started the process of searching for a home, maybe you put your search on hold because the challenges in today’s market felt like too much to tackle. You’re not alone in that. A Bright MLS study found some of the top reasons buyers paused their search in late 2023 and early 2024 were:
- They couldn’t find anything in their price range
- They didn’t have any successful offers or had difficulty competing
- They couldn’t find the right home
If any of these sound like why you stopped looking, here’s what you need to know. The housing market is in a transition in the second half of 2024. Here are four reasons why this may be your chance to jump back in.
1. The Supply of Homes for Sale Is Growing
One of the most significant shifts in the market this year is how the months’ supply of homes for sale has increased. If you look at data from the National Association of Realtors (NAR), you’ll see how inventory has grown throughout 2024 (see graph below): 
This graph shows the months’ supply of existing homes – homes that were previously lived in by another homeowner. The upward trend this year is clear.
This increase means you have a better chance of finding a home that suits your needs and preferences. And if the biggest reason you put off your home search was difficulty finding the right home, this is a big relief.
2. There’s More New Home Construction
And if you still don’t see an existing home you like, another big opportunity lies in the rise of new home construction. Builders have worked to increase the supply of newly built homes this year. And they’ve turned their attention to crafting smaller, more affordable homes based on what’s most needed in today’s market. This helps address the long-standing issue of housing undersupply throughout the country, and those smaller homes also offset some of the affordability challenges you’re feeling today.
According to data from the Census and NAR, one in three homes on the market is a newly built home (see graph below):
This means, that if you didn’t previously look at newly built homes as part of your search, you may have been cutting your pool of options by a third. Not to mention, some builders are also offering incentives like buying down mortgage rates to make it easier for buyers to get a home that fits their budget.
So, consider talking to your agent about what builders have to offer in your area. Your agent’s expertise on builder reputations, contracts, and more will help you weigh your options.
3. Less Buyer Competition
Mortgage rates are still hovering around 7%, so buyer demand isn’t as fierce as it once was. And when you combine that with more housing supply, you have a better chance of avoiding an intense bidding war. Danielle Hale, Chief Economist at Realtor.com, highlights the positive trend for the latter half of 2024, saying:
“Home shoppers who persist could see better conditions in the second half of the year, which tends to be somewhat less competitive seasonally, and might be even more so since inventory is likely to reach five-year highs.”
This creates a unique opportunity for you to find a home you want to buy with less stress and at a potentially better price.
4. Home Prices Are Moderating
Speaking of prices, home prices are also showing signs of moderation – and that’s a welcome shift after the rapid appreciation seen in recent years (see graph below): 
This moderation is mostly due to supply and demand. Supply is growing and demand is easing, so prices aren’t rising as fast. But make no mistake, that doesn’t mean prices are falling – they’re just rising at a more normal pace. You can see this in the graph. The bars are still showing prices increasing, just not as dramatic as it was before.
The average forecast for home price appreciation in 2024 is for positive growth around 3% to 5%, which is more in line with historical norms. That moderation means that you are less likely to face the steep price increases we saw a few years ago.
The Opportunity in Front of You
If you’re ready and able to buy, you may find that the second half of 2024 is a bit easier to navigate. There are still challenges, but some of the biggest hurdles you’ve faced are getting better as time wears on.
On the other hand, you could choose to wait. But if you do, here’s the risk you run. As more buyers recognize the shift in the market, competition will grow again. On a similar note, if mortgage rates do come down (as forecasts say), more buyers will flood back into the market. So, making a move now helps you take advantage of the current market conditions and get ahead of those other buyers.
Bottom Line
If you’ve put your dream of homeownership on hold, the second half of 2024 may be your chance to jump back in. Let’s connect to talk more about the opportunities you have in today’s market.
Why Fixing Up Your House Can Help It Sell Faster in Scottsdale, Arizona
Why Fixing Up Your House Can Help It Sell Faster
If you’re thinking about selling your house, you should know there are buyers who are ready and able to pay today’s high prices. But they want a home that’s move-in ready. A recent press release from Redfin explains:
“Buyers are still out there and they’re willing to pay today’s high prices, but only if the house is in really good shape. They don’t want to spend extra money on paint or new appliances.”
It makes sense when you think about it. They’re having to pay a lot of money for a house in today’s market. That means they may not be able to easily afford upgrades after they move in. So, if your home is outdated or needs some work, buyers might pass it by or offer a lower price than you were hoping for.
And there are a lot of homes that need upgrades right now. Millions are entering their prime remodel years, meaning they’re between 20 and 39 years old. Maybe yours is one of them. According to John Burns Research and Consulting (JBRC), the number of homes in their prime remodel years is high and growing (see graph below):
If your house falls into this category, it’s important to consider making selective updates to help it appeal to buyers, so it sells faster. But how do you know where to spend your time and money?
Why You Need a Real Estate Agent
By working with a local real estate agent to be strategic about the improvements you make, you can be sure you’re making a smart investment. Put simply, not all upgrades are worth the cost. As Bankrate says:
“Before you spend money on costly upgrades, be sure the changes you make will have a high return on investment. It doesn’t make sense to install new granite countertops, for example, if you only stand to break even on them, or even lose money.”
And, as that same Bankrate article goes on to say, that’s where a local real estate agent comes in:
“. . . a good real estate agent will know what local buyers expect and can help you decide what needs doing and what doesn’t.”
Your agent will know what buyers in your area are looking for and what they’re willing to pay for it. By working together, you can avoid spending money on upgrades that won’t pay off. Instead, they’ll fill you in on which changes will make your house more appealing and valuable.
Bottom Line
Selling a house right now requires more than just putting up a For Sale sign. You need to make sure it’s in good condition to attract buyers who are willing to pay today’s high prices.
The way to do that is by making smart improvements that will give you the best return on your investment. Let’s work together so you know what buyers are looking for and what your house needs before selling.
How Do Presidential Elections Impact the Housing Market in Ventura, California? [INFOGRAPHIC]
Why Moving to a Smaller Home After Retirement Makes Life Easier in Simi Valley, California
Why Moving to a Smaller Home After Retirement Makes Life Easier
Retirement is a time for relaxation, adventure, and enjoying the things you love. As you imagine this exciting new chapter in your life, it’s important to think about whether your current home still fits your needs.
If it’s too big, too costly, or just not convenient anymore, downsizing might help you make the most of your retirement years. To find out if a smaller, more manageable home might be the perfect fit for your new lifestyle, ask yourself these questions:
- Do the original reasons I bought my current house still stand, or have my needs changed since then?
- Do I really need and want the space I have right now, or could somewhere smaller be a better fit?
- What are my housing expenses right now, and how much do I want to try to save by downsizing?
If you answered yes to any of these, consider the benefits that come with downsizing.
The Benefits of Moving into a Smaller Home
There are many reasons why you should downsize. Here are just a few from Bankrate:
Your Equity Can Help Make Downsizing Possible
If those perks sound like something you’d want, you may already have what you need to make it happen. A recent article from Seniors Guide shares:
“And at a time when homeowners age 62 and older have more than $12 trillion in home equity, downsizing makes sense . . .”
If you’ve been in your house for a while, odds are you’re one of those homeowners who’s built up a considerable amount of equity. And that equity is something you can use to help you buy a home that better fits your needs today. Greg McBride, Chief Financial Analyst at Bankrate, explains:
“Downsizing can mean taking that equity when the home is sold and using it to pay cash or make a large down payment on a lower-priced home, reducing your monthly living expenses.”
When you’re ready to use all that equity to fuel your next move, your real estate agent will be your guide through every step of the process. That includes setting the right price for your current house when you sell, finding the home that best fits your evolving needs, and understanding what you can afford at today’s mortgage rate.
Bottom Line
Starting your retirement journey? Think about downsizing – it could really help. When you’re ready, let’s connect.
The Price of Perfection: Don’t Wait for the Perfect Home in Phoenix, Arizona
The Price of Perfection: Don’t Wait for the Perfect Home
In life, patience is a virtue – but in the world of homebuying, waiting too long in hopes of finding the perfect home actually isn’t wise. That’s because the pursuit of perfection comes at a cost. And in this case, that cost may be delaying your dream of homeownership. As Bankrate explains:
“One of the most common first-time homebuyer mistakes is looking for a home that checks each of your boxes. Looking for perfection can narrow your choices and lead you to pass over good, suitable options for starter homes in the hopes that something better will come along.”
The Cost of Holding Out for Perfection
Nothing in life is ever perfect – and that’s true when you search for a home too. Unless you’re building a brand-new home from the ground up, chances are there are going to be some features or finishes you wouldn’t have picked yourself. It may be as simple as paint colors, a light fixture, or the tile in the bathrooms or kitchen. Or even that the backyard isn’t fenced in. It could also be that the home itself is great, but it’s not the ideal location you were hoping for.
But here’s the trade-off you’d be making without even realizing it. In all that time you’d spend searching for the perfect place, you’d overlook a lot of homes that would’ve worked for you. U.S. News explains:
“. . . you may miss opportunities if you enter the process with blinders on and aren’t open-minded . . . Countless potential buyers never buy because of this, and thus miss great investments or never move on to the next chapter of their lives.”
It’s Time To Redefine Perfection
Especially with affordability and inventory where they are today, buying a home that needs some updates, is a few neighborhoods away from your ideal location, or doesn’t have all your desired features can be a smart move. Here’s why.
For starters, these homes are usually more affordable, which is important at a time when some buyers are struggling to find options in their budget.
And they give you a chance to make the space your own or discover a whole new area of town. You may find out you actually love that neighborhood. Or, swapping out a feature here or there after move-in isn’t such a big deal. So, look past the green shag carpet and see the bones of the house. With a little vision and creativity, you can turn a good house into a fantastic home.
How an Agent Helps You Explore Your Options
If you’re open to a home that needs a little elbow grease or is a bit further out, let your agent know. They’ll be happy to show you how this can really open up your pool of homes to pick from. They’ll also help coach you through this process by:
1. Prioritizing Your Must-Haves: Your agent will want to revisit your wish list and separate your non-negotiables from your nice-to-haves. From there, they’ll focus on what’s really most important to you as they come up with a bigger list of options for you to choose from.
2. Coaching You To See the Potential: As you tour these added options, your agent will help you look beyond cosmetic flaws and imagine what the home could be with a little work. Simple updates like a fresh coat of paint or new flooring can make a big difference.
3. Connecting You with Local Pros: And an agent’s support goes one step further. If they know what you’re hoping to change after you move in, they can connect you with local pros who can get the job done. That way it’s less work for you, and you don’t have to worry about tracking down contractors.
Bottom Line
Remember, there is no perfect home. But with expert help and an open mind, we can find you the right home – even in today’s market. Let’s connect to see what’s out there.