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If you’re planning to buy a home, knowing what to budget for and how to save may sound intimidating – but it doesn’t have to be. One way to ease those concerns is to make sure you understand some of the costs you may encounter up front. And to do that, always turn to trusted real estate professionals. They can help you set a plan and take a strategic look at your budget and your process before you even get started.
Here are just a few things experts say you should be thinking about.
Saving for your down payment is likely top of mind as you set out to buy a home. But do you know how much you’ll need? While every buyer’s situation is different, there’s a common misconception that putting 20% of the purchase price down is required. An article from the Mortgage Reports explains why that’s not always the case:
“The idea that you have to put 20% down on a house is a myth. . . . The right amount depends on your current savings and your home buying goals.”
To understand your options, partner with trusted real estate professionals to go over the various loan types, down payment assistance programs, and what each one requires. The more you know ahead of time, the easier the process will be.
Make sure you also budget for closing costs, which are a collection of fees and payments made to the various parties involved in your transaction. Bankrate explains:
“Closing costs are the fees you pay when finalizing a real estate transaction, whether you’re refinancing a mortgage or buying a new home. These costs can amount to 2 to 5 percent of the mortgage so it’s important to be financially prepared for this expense.”
The best way to understand what you’ll need at the closing table is to work with a trusted lender. They can provide you with answers to the questions you might have.
If you want to cover all your bases, you can also consider saving for an earnest money deposit (EMD). An EMD is money you pay as a show of good faith when you make an offer on a house. According to Realtor.com, it’s usually between 1% and 2% of the total home price.
This deposit works like a credit. It’s not an added expense – it’s paying a portion of your costs upfront. You’re using some of the money you’ve already saved for your purchase to show the seller you’re committed and serious about buying their house. Realtor.com describes how it works as part of your sale:
“It tells the real estate seller you’re in earnest as a buyer . . . Assuming that all goes well and the buyer’s good-faith offer is accepted by the seller, the earnest money funds go toward the down payment and closing costs. In effect, earnest money is just paying more of the down payment and closing costs upfront.”
Keep in mind, an EMD isn’t required, and it doesn’t guarantee your offer will be accepted. It’s important to work with a real estate advisor to understand what’s best for your situation and any specific requirements in your local area. They’ll advise you on what moves you should make so you can make the best possible decisions throughout the buying process.
When buying a home, being informed about what to save for is key. Let’s connect so you’ll have an expert on your side to answer any questions you have along the way.
There’s no denying the long-term financial benefits of owning a home, but today’s housing market may have you wondering if now’s still the time to buy. While the financial aspects of homeownership are important, the non-financial and emotional reasons are too. Here’s why.
The word home truly means something different to everyone. Whether it’s sharing memories with loved ones around the kitchen table or settling in to read a book in your favorite chair, the emotional connections we have to our homes can be just as important as the financial ones. Here are some of the things that turn a house into a happy home.
Buying a home is a major life milestone. Whether you’re ready to buy your first home or your fifth, congratulations will be in order once you’ve achieved your goal. The sense of accomplishment you’ll feel at the end of your journey will truly make your home feel like your special place. Go ahead and smile – you’ve earned it.
Owning your home offers not only safety and security, but also a comfortable place where you can relax and unwind after a long day. Sometimes that’s just what you need to feel refreshed and recharged.
Whether you want more room for your changing lifestyle (like a large backyard for entertaining or room for a home office) or you simply want to move closer to your loved ones, you can invest in a home that truly works for your evolving needs.
Looking to try one of those decorative wall treatments you saw online? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to create an in-house yoga studio. You can do these things and much more when you own your home.
Whether you’re planning to buy your first home, or you’re ready to move into a different one to meet your changing needs, think about the emotional benefits that can turn a house into a happy home. When you’re ready to make a move, let’s connect.
If you were worried buyer demand disappeared when mortgage rates went up, the data shows there are plenty of interested buyers still out there. The housing market isn’t as frenzied as it was during the ‘unicorn’ years when buyer demand was through the roof, mortgage rates were historically low, and home values rose like we’ve never seen before. But that doesn’t mean the market is at a standstill.
Nationally, demand is still high compared to the last normal years in the housing market and plenty of buyers are making moves right now. Here’s the data to prove it.
The ShowingTime Showing Index is a measure of how frequently buyers are touring homes. The graph below uses that index to show buyer activity over the past eight Octobers:
In the graph, the ‘unicorn’ years are shown in pink. You can see demand has dipped some since then. That’s in response to higher mortgage rates. But, when you compare 2023 to the blue bars on the left that represent the last normal years in the market (2018-2019), you can tell buyers are still more active than the norm.
But showing traffic isn’t the only way to see buyer demand is still high. The number of offers other sellers are getting and the average days homes are on the market tell the same story.
According to the latest data from the National Association of Realtors (NAR), sellers are receiving an average of 2.5 offers on their houses. Let’s look at how that compares to recent years (see graph below):
It’s true that’s fewer than the number of offers sellers were receiving during the ‘unicorn’ years (shown in pink). But compared to last year, the number is up slightly. And it’s higher than it was in the more normal, pre-‘unicorn’ years in the housing market too.
And it’s not just that sellers are still typically getting multiple offers more than the norm, they’re also seeing their homes sell fast. That’s a direct result of strong buyer demand. According to Zillow:
“. . . low inventory levels are spurring surprisingly strong competition . . . demand has remained resilient, and attractive, appropriately priced listings are moving quickly.”
To help showcase that homes for sale are still going quickly, let’s look at data from NAR on the median days on market for this same time of year from 2018 through now (see graph below):
As the graph shows, this year homes are sitting on the market only slightly longer than they were during the frenzy of the ‘unicorn’ years. And compared to the last normal years in the market, homes are still selling much faster than they did back then. That’s good news for sellers because it means there are eager buyers out there right now.
You haven’t missed your chance to sell at a time when sellers are receiving multiple offers, and homes are selling fast. When you’re ready to sell your house, let’s connect to get the ball rolling.
If you’re looking to buy a home, your down payment doesn’t have to be a big hurdle. According to the National Association of Realtors (NAR), 38% of first-time homebuyers find saving for a down payment the most challenging step. But the reality is, you probably don’t need to put down as much as you think:
Data from NAR shows the median down payment hasn’t been over 20% since 2005. In fact, the median down payment for all homebuyers today is only 15%. And it’s even lower for first-time homebuyers at 8%. But just because that’s the median, it doesn’t mean you have to put that much down. Some qualified buyers put down even less.
For example, there are loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants. But let’s focus in on another valuable resource that may be able to help with your down payment: down payment assistance programs.
According to Down Payment Resource, there are thousands of programs available for homebuyers – and 75% of these are down payment assistance programs.
And it’s not just first-time homebuyers that are eligible. That means no matter where you are in your homebuying journey, there could be an option available for you. As Down Payment Resource notes:
“You don’t have to be a first-time buyer. Over 39% of all [homeownership] programs are for repeat homebuyers who have owned a home in the last 3 years.”
The best place to start as you search for more information is with a trusted real estate professional. They’ll be able to share more information about what may be available, including additional programs for specific professions or communities.
Here are a few down payment assistance programs that are helping many of today’s buyers achieve the dream of homeownership:
Even if you don’t qualify for these types of programs, there are many other federal, state, and local options available to look into. And a real estate professional can help you find the ones that meet your needs as you explore what’s available.
Achieving the dream of having a home may be more within reach than you think, especially when you know where to find the right support. To learn more about your options, let’s connect.
If you’re thinking about selling your house on your own, called “For Sale by Owner” or FSBO, there are some important things to consider. Going this route means taking on a lot of responsibilities by yourself – and that can be a bit of a headache.
A recent report from the National Association of Realtors (NAR) found two of the most difficult tasks for people who sell their house on their own are getting the price right and understanding and performing paperwork.
Here are just a few of the ways an agent helps with those difficult tasks.
Setting the right price for your house is important when you’re trying to sell it. If you’re selling your house on your own, two common issues can happen. For starters, you might ask for too much money (overpricing). Alternatively, you might not ask for enough (underpricing). Either can make it hard to sell your house. According to NerdWallet:
“When selling a home, first impressions matter. Your house’s market debut is your first chance to attract a buyer and it’s important to get the pricing right. If your home is overpriced, you run the risk of buyers not seeing the listing.
. . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house.”
To avoid these problems, it’s a good idea to team up with a real estate agent. Real estate agents know how to figure out the perfect price because they understand the local housing market. They can use their expertise to set a price that matches what buyers are willing to pay, giving your house the best chance to impress from the start.
Selling a house involves a bunch of paperwork and legal documentation that has to be just right. There are a lot of rules and regulations to follow, making it a bit tricky for homeowners to manage everything on their own. Without a pro by your side, you could end up facing liability risks and legal complications.
Real estate agents are experts in all the contracts and paperwork needed for selling a house. They know the rules and can guide you through it all, reducing the chance of mistakes that might lead to legal problems or delays.
So, instead of dealing with the growing pile of documents on your own, team up with an agent who can be your advisor, helping you avoid any legal bumps in the road.
Selling your house is a big deal, and it can be complicated. Having a real estate agent can make a huge difference with setting the right price and managing all the details, so you can sell confidently. Let’s connect to make the process smooth and take the stress off your plate.
When you read about the housing market, you’ll probably come across some information about inflation or recent decisions made by the Federal Reserve (the Fed). But how do those two things impact you and your homebuying plans? Here’s what you need to know.
One of the Fed’s primary goals is to lower inflation. In order to do that, they started raising the Federal Funds Rate to slow down the economy. Even though this doesn’t directly dictate what happens with mortgage rates, it does have an impact.
Recently inflation has started to cool, a signal those increases worked and are bringing inflation back down. As a result, the Fed’s hikes have gotten smaller and less frequent. In fact, there haven’t been any increases since July (see graph below):
And not only has the Fed decided not to raise the Federal Funds Rate the last three times the committee met, they’ve signaled there may actually be rate cuts coming in 2024. According to the New York Times (NYT):
“Federal Reserve officials left interest rates unchanged in their final policy decision of 2023 and forecast that they will cut borrowing costs three times in the coming year, a sign that the central bank is shifting toward the next phase in its fight against rapid inflation.”
This indicates the Fed thinks the economy and inflation are improving. Why does that matter to you and your plans to buy a home? It could end up leading to lower mortgage rates and improved affordability.
Mortgage rates are influenced by a wide variety of factors, and inflation and the Fed’s actions (or as has been the case recently, inaction) play a big role. Now that the Fed has paused the increases, it looks more likely mortgage rates will continue their downward trend (see graph below):
Although mortgage rates may remain volatile, their recent trend combined with expert forecasts indicate they could continue to go down in 2024. That would improve affordability for buyers and make it easier for sellers to move since they won’t feel as locked-in to their current, low mortgage rate.
The Fed’s decisions have an indirect impact on mortgage rates. By not raising the Federal Funds Rate, mortgage rates are likely to continue declining. Let’s connect so you have expert advice about changes in the housing market and how they affect you.
If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market in 2024. In 2023, higher mortgage rates, confusion over home price headlines, and a lack of homes for sale created some challenges for buyers and sellers looking to make a move. But what’s on the horizon for the new year?
The good news is, many experts are optimistic we’ve turned a corner and are headed in a positive direction.
Recently, mortgage rates have started to come back down. This has offered hope to buyers dealing with affordability challenges. Mark Fleming, Chief Economist at First American, explains how they may continue to drop:
“Mortgage rates have already retreated from recent peaks near 8 percent and may fall further . . .”
Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:
“For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market.”
As rates ease, activity in the housing market should pick up because more buyers and sellers who had been holding off will jump back into action. If more sellers list, the supply of homes for sale will grow – a trend we’ve already started to see this year. Lisa Sturtevant, Chief Economist at Bright MLS, says:
“Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%.”
And mortgage rates pulling back isn’t the only positive sign for affordability. Home price growth is expected to moderate too, as inventory improves but is still low overall. As the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists, investment strategists, and housing market analysts, says:
“On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.”
To wrap it up, experts project 2024 will be a better year for the housing market. So, if you’re thinking about making a move next year, know that early signs show we’re turning a corner. As Mike Simonsen, President and Founder of Altos Research, puts it:
“We’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume . . . All in all, things are looking up for the U.S. housing market in 2024.”
Experts are optimistic about what 2024 holds for the housing market. If you’re looking to buy or sell a home in the new year, the best way to ensure you’re up to date on the latest forecasts is to partner with a trusted real estate agent. Let’s connect.
