Two Reasons Why Today’s Housing Market Isn’t a Bubble

You may be reading headlines and hearing talk about a potential housing bubble or a crash, but it’s important to understand that the data and expert opinions tell a different story. A recent survey from Pulsenomics asked over one hundred housing market experts and real estate economists if they believe the housing market is in a bubble. The results indicate most experts don’t think that’s the case (see graph below):

As the graph shows, a strong majority (60%) said the real estate market is not currently in a bubble. In the same survey, experts give the following reasons why this isn’t like 2008:

• The recent growth in home prices is because of demographics and low inventory
• Credit risks are low because underwriting and lending standards are sound

If you’re concerned a crash may be coming, here’s a deep dive into those two key factors that should help ease your concerns.

1. Low Housing Inventory Is Causing Home Prices To Rise

The supply of homes available for sale needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation.

As the graph below shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s still a shortage of inventory, which is causing ongoing home price appreciation (see graph below):

Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a limited supply of homes for sale. Odeta Kushi, Deputy Chief Economist at First American, explains:

“The fundamentals driving house price growth in the U.S. remain intact. . . . The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.”

2. Mortgage Lending Standards Today Are Nothing Like the Last Time

During the housing bubble, it was much easier to get a mortgage than it is today. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the years after:

This graph helps show one element of why mortgage standards are nothing like they were the last time. Purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash. Realtor.com notes:

“. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.”

Bottom Line

A majority of experts agree we’re not in a housing bubble. That’s because home price growth is backed by strong housing market fundamentals and lending standards are much tighter today. If you have questions, let’s connect to discuss why today’s housing market is nothing like 2008.

Content previously posted on Keeping Current Matters

* This article was originally published here

Why an Agent Is Essential When Pricing Your House [INFOGRAPHIC]

Some Highlights

• When it comes to pricing your house, there’s a lot to consider. The only way to ensure you price it right is by partnering with a local real estate professional.
• To find the best price, your agent balances current market demand, the values of homes in your neighborhood, where prices are headed, and your home’s condition.
• Don’t pick just any price for your house. If you’re ready to sell, let’s connect to find the perfect price for your house.

Content previously posted on Keeping Current Matters

* This article was originally published here

Homeownership Is a Great Hedge Against the Impact of Rising Inflation

If you’re following along with the news today, you’ve heard about rising inflation. Today, inflation is at a 40-year high. According to the National Association of Home Builders (NAHB):

“Consumer prices accelerated again in May as shelter, energy and food prices continued to surge at the fastest pace in decades. This marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981.”

With inflation rising, you’re likely feeling it impact your day-to-day life as prices go up for gas, groceries, and more. These climbing consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.

If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.

Homeownership Helps You Stabilize One of Your Biggest Monthly Expenses

Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.

Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. When you have a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate, says:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same. That’s certainly not the case if you’re renting.”

So even if other prices increase, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.

Investing in an Asset That Historically Outperforms Inflation

While it’s true rising home prices and higher mortgage rates mean that buying a house today costs more than it did even a few months ago, you still have an opportunity to set yourself up for a long-term win. That’s because, in inflationary times, you want to be invested in an asset that outperforms inflation and typically holds or grows in value.

The graph below shows how the average home price appreciation outperformed the average inflation rate in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):

So, what does that mean for you? Today, experts forecast home prices will only go up from here thanks to the ongoing imbalance of supply and demand. Once you buy a house, any home price appreciation that does occur will grow your equity and your net worth. And since homes are typically assets that grow in value, you have peace of mind that history shows your investment is a strong one.

That means, if you’re ready and able, it makes sense to buy today before prices rise further.

Bottom Line

If you’ve been thinking about buying a home this year, it makes sense to act soon, even with inflation rising. That way you can stabilize your monthly housing cost and invest in an asset that historically outperforms inflation. If you’re ready to get started, let’s connect so you have expert advice on your specific situation when you’re ready to buy a home.

Content previously posted on Keeping Current Matters

* This article was originally published here

Why Achieving the Dream of Homeownership Can Be More Difficult for Some Americans

Today we take time to honor and recognize the past and present experiences of Black Americans. When it comes to real estate specifically, equitable access to housing has come a long way, but the path to homeownership is still steeper for households of color.

The Gap in Homeownership Rate in America

It’s a more challenging journey to achieve homeownership for some buyers, as shown by the measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, Census data shows the lowest homeownership rate persists in the Black community (see graph below):

This graph clearly indicates there’s a gap that still exists in the percentage of people in each community who are able to achieve homeownership. 

How Homeownership Impacts Household Wealth 

One of the challenges that could make buying a home harder for these groups is how difficult it can be to accumulate wealth. Even today, there are obstacles certain racial and ethnic groups, especially the Black community, still face. A recent article from NextAdvisor explains:

“The median Black household earns 61 cents for every dollar earned by a comparable White household, according to the Economic Policy Institute. This not only makes it more difficult to afford a home, but also to accumulate and pass on generational wealth.”

This can delay or prevent many from achieving homeownership, challenging their ability to grow their net worth and build wealth that can pass down to future generations – a point that’s clear in a 2022 report from the National Association of Realtors (NAR):

“Given that homeownership contributes to wealth accumulation and the homeownership rate is lower in minority groups, data shows that the net worth for these groups is also lower. At $188,200, the net worth of a typical white family was nearly 8 times greater than that of a Black family ($24,100) in 2019.”

It’s important to talk about the experience Black homebuyers may have and the challenges they may face as they pursue their dream of homeownership. The inequity that remains in housing can be a point of pain and frustration. That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process.

These professionals aren’t only experienced advisors who understand the market and give the best advice. They’re also compassionate allies who will advocate for your best interests every step of the way. They can point you to important resources and tools that can help you throughout your journey to homeownership.

Bottom Line

Opportunities in real estate improve every day, but there are still equity challenges that many face. Let’s connect to make sure you have an advocate on your side to help you achieve your dream of homeownership.

Content previously posted on Keeping Current Matters

* This article was originally published here

More Listings Are Coming onto the Market [INFOGRAPHIC]

Some Highlights

• Worried you won’t be able to find your next home after you sell? You should know data from realtor.com shows more listings are coming onto the market each month this year.
• Having additional options can make the search for your next home. But inventory is still low overall, which means your house should still stand out when you sell.
• If your biggest question is where you’ll go if you sell, take this as encouraging news. Let’s connect to start the process today.

Content previously posted on Keeping Current Matters

* This article was originally published here

More Americans Choose Real Estate as the Best Investment Than Ever Before

Americans’ opinion on the value of real estate as an investment is climbing. That’s according to an annual survey from Gallup. Not only is real estate viewed as the best investment for the ninth year in a row, but more Americans selected it than ever before.

The graph below shows the results of the survey since Gallup began asking the question in 2011. As the trend lines indicate, real estate has been gaining ground as the clear favorite for almost a decade now:

If you’re thinking about purchasing a home, let this poll reassure you. Even when inflation is high like today, Americans recognize owning a home is a powerful financial decision.

How an Investment in Real Estate Can Benefit You During High Inflation

Because inflation reached its highest level in 40 years recently, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board, and that includes goods, services, housing costs, and more. When you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increases on one of your biggest budgetary items each month.

If you’re a renter, you don’t have that same benefit, and you aren’t protected from these increases, especially as rents rise. As Danielle Hale, Chief Economist at realtor.com, notes:

“Rising rents, which continue to climb at double-digit pace . . . and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.”

When Inflation Has Risen in the Past, Home Prices Have Too

Your house is also an asset that typically increases in value over time, even during inflation. That‘s because as prices rise, the value of your home does too. Mark Cussen, Financial Writer for Investopedia, puts it like this:

“There are many advantages to investing in real estate. . . . It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values. . . .”

And since rising home values help increase your equity, and by extension your net worth, homeownership is historically a good hedge against inflation.

Bottom Line

Buying a home is a powerful decision. It’s no wonder why so many people view it as the best long-term investment, even when inflation is high. When you buy, you help shield yourself from increases in your housing costs and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.

Content previously posted on Keeping Current Matters

* This article was originally published here

How to Part with Your Family Home

 Our Guest Author Today:  Sarah Richardson

Regardless of whether you decided to downsize or you’re simply moving to another city or a country for whatever reason, parting with your old family home can be bittersweet and a true emotional rollercoaster. It’s never easy to leave your family home behind because it always feels like you’re leaving a part of yourself with it. But if that has to be done, then there’s no other way but to learn to cope with it. We’ve prepared a few tips on how to part with your family home without breaking your heart to pieces. So, dive in!

Embrace your emotions

Once the decision to move from your old family house is final and you put it up for sale, there’s no going back. And there’s no point in going back. What comes first is acceptance.

Embrace how you’re feeling about moving and selling your family home. Know that it will be overwhelming and the whole process will be emotionally draining, but it’s something you need to deal with in order to move to the next stage of your life in a new place.

Give yourself time to pack up and go through all the memories every corner of your home (and your backyard) carry. Cherish the good times you had in this place. Cry if you have to in order to be able to let it all go in the end.

Try to see moving to a new place as an adventure and like an empty photo album ready to be filled with new memories. 

Patience is Key When You Need to Part with Your Family Home

Your decision is final, and maybe you’re ready to start packing and moving your things. Still, expect the process to be lengthier than you anticipated. Dealing with all the paperwork can sometimes take months longer than your initial estimate. And if you also have to deal with selling your old home, then that’s double the stress and worry.

Patience is key here. Make sure you’ve dealt with everything you need to cover in order to move out of the old home and move into the new one. Leave the rest to people who handle the paper, your legal representative, real estate agents, etc. And use the given time to part with your family home at your own pace and pack up properly. You can also use the time to make any changes you want in your new place. It’s better if you do that prior to actually moving in. Anyway, see the lengthy process as beneficial to your mental health since it enables you to cope with this life-changing event without any rush.

Organize a farewell party with your loved ones to say a proper goodbye to your old family home.

Organize a farewell party in your family home if you like. There’s no better way to part with your memories and the years built in your family home.

Rely on your chosen real estate agents

When you’re selling your family home you spent years and years in, all the emotions can get in the way of being rational and approaching the selling in a business-like manner. Leaving the whole process of selling to the professionals is the best thing you can do. The truth is, no family will ever be good enough for your home. And that’s okay to think, but not to act led by those thoughts.

The right agent will make the entire process easier since they can help you determine the most realistic price for your home. As we emphasized before, your emotional attachment to the house determines the high value it has for you, but it doesn’t necessarily mean that the real price will match your expectations. Therefore, it is necessary to trust professional and objective estimation of your family home. In that sense, your chosen real estate agent is a true confidante to rely on through the entire process of relocation. They’ve already been through it all countless times and know how to approach the process sensibly and objectively. Meanwhile, you can focus on dealing with the process of moving unencumbered by the selling of your family home.

Packing and moving can be stress-free if you rely on professional help.

When relocating within TX, the most important thing is to make sure you hire experts to make itstress-free, especially if you’re moving long-distance. Reliable movers can make the whole process of transporting your cherished items from your family home to a new place go smoothly and can further help you with their expert advice on any moving-related matter.

Focus on the future

Accepting that you’re moving out of your old home and all the emotions that come with it are the first step toward embracing your future home. Once you revisit your old memories and say a proper goodbye to your old home, it’s time you start focusing on the future and on your new place.

If you bought a home that doesn’t require any additional modifications or refurbishing, you still have a lot to do to make it a warm and cozy home. Planning what décor goes with your new place, buying some new furniture, or just settling in takes some time. Make sure you find the space for all that in your mind, heart, and your schedule.

Moving into your new home can become a starting point for creating new memories with your loved ones. So don’t hesitate to invite your family and friends to help you with the process of setting up your new place. It can be a bonding opportunity and a fun experience for everyone involved.

Learning how to part with your family home is not that hard if you embrace the change.

There’s no one-size-fits-all answer to the question of how to part with your family home, but one important thing to bear in mind is that you need to embrace the change in order to be able to handle it with as much ease as possible. Hiring a top realestate agent will definitely make the entire process of selling and buying less stressful. Hiring reliable movers can also help a great deal when relocating. Whatever the reason for your move, don’t be afraid of the unknown, and make sure you have a strong support network of family and friends through the entire process. In the end, remember that home isn’t a place—it’s a feeling.

Author Bio: Sarah Richardson has worked as a professional content writer and social media manager for 5 years. She has written for Evolution Moving Company DFW and helped moving companies expand their online presence.

Photos used:

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https://www.pexels.com/photo/word-goodbye-on-white-surface-4439451/