A Key To Building Wealth Is Homeownership

A Key To Building Wealth Is Homeownership | Simplifying The Market

The link between financial security and homeownership is especially important today as inflation rises.  But many people may not realize just how much owning a home contributes to your overall net worth. As Leslie Rouda Smith, President of the National Association of Realtors (NAR), says:

“Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability.”

Here are just a few reasons why, if you’re looking to increase your financial stability, homeownership is a worthwhile goal.

Owning a Home Is a Building Block for Financial Success

A recent NAR report details several homeownership trends and statistics, including the difference in net worth between homeowners and renters. It finds:

“. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”

To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter (see visual below):

A Key To Building Wealth Is Homeownership | Simplifying The Market

The results from this report show that owning a home is a key piece to the puzzle when building your overall net worth.

Equity Gains Can Substantially Boost a Homeowner’s Net Worth

The net worth gap between owners and renters exists in large part because homeowners build equity. As a homeowner, your equity grows as your home appreciates in value and you make your mortgage payments each month.

In other words, when you own your home, you have the benefit of your mortgage payment acting as a contribution to a forced savings account. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month.

To sum it up, NAR says it simply:

“Homeownership has always been an important way to build wealth.”

Bottom Line

The gap between a homeowner’s net worth and a renter’s shows how truly foundational homeownership is to wealth-building. If you’re ready to start on your journey to homeownership, let’s connect today.

Content previously posted on Keeping Current Matters

* This article was originally published here

What You Can Expect from the Spring Housing Market

What You Can Expect from the Spring Housing Market | Simplifying The Market

As the spring housing market kicks off, you likely want to know what you can expect this season when it comes to buying or selling a house. While there are multiple factors causing some uncertainty, including the conflict overseas, rising inflation, and the first rate increase from the Federal Reserve in over three years — the housing market seems to be relatively immune.

Here’s a look at what experts say you can expect this spring.

1. Mortgage Rates Will Climb

Freddie Mac reports the 30-year fixed mortgage rate has increased by more than a full point in the past six months. And despite some mild fluctuation in recent weeks, experts believe rates will continue to edge up over the next 90 days. As Freddie Mac says:

“The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”

If you’re a first-time buyer or a seller thinking of moving to a home that better fits your needs, realize that waiting will likely mean you’ll pay a higher mortgage rate on your purchase. And that higher rate drives up your monthly payment and can really add up over the life of your loan.

2. Housing Inventory Will Increase

There may be some relief coming for buyers searching for a home to purchase. Realtor.com recently reported that the number of newly listed homes has grown for each of the last two months. Also, the National Association of Realtors (NAR) just announced the months’ supply of inventory increased for the first time in eight months. The inventory of existing homes usually grows every spring, and it seems, based on recent activity, the next 90 days could bring more listings to the market.

If you’re a buyer who has been frustrated with the limited supply of homes available for sale, it looks like you could find some relief this spring. However, be prepared to act quickly if you find the right home.

If you’re a seller, listing now instead of waiting for this additional competition to hit the market makes sense. Your leverage in any negotiation during the sale will be impacted as additional homes come to market.

3. Home Prices Will Rise

Prices are always determined by supply and demand. Though the number of homes entering the market is increasing, buyer demand remains very strong. As realtor.com explains in their most recent Housing Report:

“During the final two weeks of the month, more new sellers entered the market than during the same time last year. . . . However, with 5.8 million new homes missing from the market and millions of millennials at first-time buying ages, housing supply faces a long road to catching up with demand.”

What does that mean for you? With the demand for housing still outpacing supply, home prices will continue to appreciate. Many experts believe the level of appreciation will decelerate from the high double-digit levels we’ve seen over the last two years. That means prices will continue to climb, just at a more moderate pace. Most experts are predicting home prices will not depreciate.

Won’t Increasing Mortgage Rates Cause Home Prices To Fall?

While some people may believe a 1% increase in mortgage rates will impact demand so dramatically that home prices will have to fall, experts say otherwise. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, says:

“What I will caution against is making the inference that interest rates have a direct impact on house prices. That is not true.”

Freddie Mac studied the impact that mortgage rates increasing by at least 1% has had on home prices in the past. Here are the results of that study:

What You Can Expect from the Spring Housing Market | Simplifying The Market

As the chart shows, mortgage rates jumped by at least 1% six times in the last thirty years. In each case, home values increased.

So again, if you’re a first-time buyer or a repeat buyer, waiting to buy likely means you’ll pay more for a home later in the year (as compared to its current value).

Bottom Line

There are three things that seem certain going into the spring housing market:

  1. Mortgage rates will continue to rise
  2. The selection of homes available for sale will modestly improve
  3. Home prices will continue to appreciate, just at a slightly slower pace

If you’re thinking of buying, act now before mortgage rates and home prices increase further. If you’re thinking of selling, your best bet may be to sell soon so you can beat the increase in competition that’s about to come to market.

Content previously posted on Keeping Current Matters

* This article was originally published here

The Average Homeowner Gained More Than $55K in Equity over the Past Year

The Average Homeowner Gained More Than $55K in Equity over the Past Year | Simplifying The Market

If you’re a current homeowner, you should know your net worth just got a big boost. It comes in the form of rising home equity. Equity is the current value of your home minus what you owe on the loan. Today, you’re building that equity far faster than you may expect – and this gain is great news for you.

Here’s how it happened. Home values are on the rise thanks to low housing supply and high buyer demand. Basically, there aren’t enough homes available to meet this high buyer interest,  so bidding wars are driving home prices up. When you own a home, the rising prices mean your home is worth more in today’s market. And as home values climb, your equity does too. As Dr. Frank Nothaft, Chief Economist at CoreLogic, explains:

“Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth.”

The latest Homeowner Equity Insights from CoreLogic shed light on just how much rising home values have boosted homeowner equity. According to that report, the average homeowner’s equity has grown by $55,300 over the last 12 months.

Want to know what’s happening in your area? Here’s a breakdown of the average year-over-year equity growth for each state based on that data.

The Average Homeowner Gained More Than $55K in Equity over the Past Year | Simplifying The Market

How Rising Equity Impacts You

In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. It works like this: when you sell your house, the equity you built up comes back to you in the sale.

In a market where you’re gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home. So, if you’ve been holding off on selling and worried about being priced out of your next home because of today’s home price appreciation, rest assured your equity can help fuel your move.

Bottom Line

Equity can be a real game-changer if you’re planning to make a move. To find out just how much equity you have in your home and how you can use it to fuel your next purchase, let’s connect so you can get a professional equity assessment report on your house.

Content previously posted on Keeping Current Matters

* This article was originally published here

Spring Cleaning Checklist for Sellers [INFOGRAPHIC]

Spring Cleaning Checklist for Sellers [INFOGRAPHIC] | Simplifying The Market

Spring Cleaning Checklist for Sellers [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • If you’re thinking about selling your house this spring, here are some things you’ll want to tackle before you list.
  • Spend your time on tasks that make it feel inviting, show it’s cared for, and boost your curb appeal.
  • To determine the full list of things you’ll want to tackle for your home, you need the opinion of a trusted expert. Let’s connect to help make sure your house shows well this season.
Content previously posted on Keeping Current Matters

* This article was originally published here

Did Your Dream Home Just Come on the Market?

Did Your Dream Home Just Come on the Market? | Simplifying The Market

For the first time in a long time, the number of newly listed homes is beginning to rise. In their latest monthly release, realtor.com reveals the number of existing homes entering the market has increased for two months in a row (this comes after six months of declines). Here’s a graph showing the monthly new listings going back to January of last year. The green bars indicate the first gains since June.

Did Your Dream Home Just Come on the Market? | Simplifying The Market

However, buying demand is still outpacing housing supply.

Though the increase in homes coming to the market is great news for prospective homebuyers, the number of buyers is still outpacing the number of homes available for sale. As realtor.com explains in their latest report:

“During the final two weeks of the month, more new sellers entered the market than during the same time last year. . . . However, with 5.8 million new homes missing from the market and millions of millennials at first-time buying ages, housing supply faces a long road to catching up with demand.

In fact, according to the latest ShowingTime Showing Index, which tracks the average number of appointments received on active listings during the month, buyer demand was greater this January than any other January in the last five years (see graph below):

Did Your Dream Home Just Come on the Market? | Simplifying The Market

This prompted ShowingTime to say:

“The latest data from ShowingTime . . . shows a surge in home buyer demand in January. . . . This enormous activity occurred in a month when buyer activity typically slows and followed a historic 2021, where buyer demand across the country was extraordinarily strong.”

What does that mean for you?

Basically, as homes come to the market, they are quickly being purchased by eagerly awaiting buyers. So even though the number of newly listed homes is increasing, the number of active listings is still shrinking every month because buyers are purchasing homes almost as soon as they come up for sale. That means listings are coming on and off the market so fast that they don’t carry over to be counted in the active listing numbers the following month. Here’s a graph showing the number of active listings each month since last January using data released by realtor.com:

Did Your Dream Home Just Come on the Market? | Simplifying The Market

This graph shows that the number of active listings has decreased for each of the last five months even though the number of newly listed homes has increased over the last two months.

Bottom Line

Whether you’re looking to upgrade to a home that will better suit your lifestyle or looking to purchase your first house, let’s connect so you can stay updated on what’s happening in your area. And be prepared to move immediately if a home fitting your needs hits the market. Your dream home may be one of those new listings that just became available, but if you don’t act quickly, it could be gone tomorrow.

Content previously posted on Keeping Current Matters

* This article was originally published here

This Spring Presents Sellers with a Golden Opportunity

This Spring Presents Sellers with a Golden Opportunity | Simplifying The Market

If you’re thinking of selling your house this year, timing is crucial. After all, you’ll want to balance getting the most out of the sale of your current home and making the best investment when you buy your next one.

If that’s the case, you should know – you may be able to get the best of both worlds today. Here are four reasons why this spring may be your golden window of opportunity.

1. The Number of Homes on the Market Is Still Low

Today’s limited supply of houses for sale is putting sellers in the driver’s seat. There are far more buyers in the market today than there are homes available. That means purchasers are eagerly waiting for your house.

Listing your house now makes it the center of attention. And if you work with a real estate professional to price your house correctly, you can expect it to sell quickly and likely get multiple strong offers this season.

2. Your Equity Is Growing in Record Amounts

According to the most recent Homeowner Equity Insight report from CoreLogic, homeowners are sitting on record amounts of equity thanks to recent home price appreciation. The report finds that the average homeowner has gained $55,300 in equity over the past year.

That much equity can open doors for you to make a move. If you’ve been holding off on selling because you’re worried about how rising prices will impact your next home search, rest assured your equity can help fuel your move. It may be just what you need to cover a large portion – if not all – of the down payment on your next home.

3. Mortgage Rates Are Increasing

While it’s true mortgage rates have already been climbing this year, current mortgage rates are still below what they’ve been in recent decades. In the 2000s, the average mortgage rate was 6.27%. In the 1990s, the average rate was 8.12%.

For context, the current average 30-year fixed mortgage rate, according to Freddie Mac, is 3.85%. And while recent global uncertainty caused rates to dip slightly in the near-term, experts project rates will rise in the months ahead. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, says:

“For homebuyers, we believe that borrowing costs will likely rise with the increase in mortgage rates….”

When that happens, it’ll cost you more to purchase your next home. That’s why it’s important to act now if you’re ready to sell. Work with a trusted advisor to kickstart the process so you can take key steps to making your next purchase before rates climb further.

4. Home Prices Are Climbing Too

Home prices have been skyrocketing in recent years because of the imbalance of supply and demand. And as long as that imbalance continues, so will the rise in home values.

What does that mean for you? If you’re selling so you can move into the home of your dreams or downsize into something that better suits your current needs, you have an opportunity to get ahead of the curve by leveraging your growing equity and purchasing your next home before prices climb higher.

And, once you make your purchase, you can find peace of mind in knowing ongoing home price appreciation is growing the value of your new investment.

Bottom Line

If you want to win when you sell and when you buy, this spring could be your golden opportunity. Let’s connect so you have the insights you need to take advantage of today’s incredible sellers’ market.

Content previously posted on Keeping Current Matters

* This article was originally published here

The Responsibilities of Homeownership - How to Prepare

Our guest author today is Bryce Green.

A beautiful home














Being a homeowner sure sounds awesome. You own your own home, and you can do with it whatever you please. This sense of freedom and independence is why people take considerable mortgages to become homeowners. But, before you run to your local bank, you should be aware of the responsibilities of homeownership and what you'll have to deal with. After all, having the complete picture is usually better than focusing on only the good parts.

The responsibilities of homeownership

Before we begin, it is essential to note that homes can differ wildly from one another. It should be evident that the responsibilities of living in a flat can be different than living in a two-story house. And homes with specific designs and added utilities can bear further obligations for homeowners. For the sake of this article, we will only focus on the most common responsibilities that homeowners face. Some of these may or may not apply to you, depending on what your home is like.


Financial responsibilities

Let's first cover the financial responsibilities of a brand-new homeowner. First and foremost, you will need to make your mortgage payments. While renting, you could get away with being late sometimes. But, with mortgage payments, you really need to be exact and on time. One missed payment, and you soon get penalties on your credit report. Miss a couple more, and you can quickly lose your home. So, understand that mortgage payments are not something you can postpone or minimize. They are a necessary monthly payment that you'll have to meet.

Calculator on a pile of money, showing that finances are one of the responsibilities of homeownership.





As a homeowner, it is paramount that you are financially responsible.




The second financial responsibility heading your way is property taxes. While renting out a home, this is one of the things that you need not worry about. But, once you become a full-fledged homeowner, property taxes become another burden to bear. Texas, unfortunately, has some of the highest property taxes in the US. Taxes can add thousands of dollars to your annual cost of homeownership. Be certain to determine the cost of taxes on your home of choice.

Landscaping

If you are going to be a homeowner, you need to understand that landscaping is not a matter of choice. If you want your yard to look nice and avoid a whole lot of trouble, you will do your landscaping with due diligence. This includes:

        Mowing the lawn.

        Gathering leaves.

        Trimming the trees.

        Regular cleaning.

        Getting rid of snow.

        Getting rid of ice.

Now, it is possible to make landscaping easier. As you'll soon learn, there are plenty of tools and gadgets that make your job a lot faster and more efficient. For instance, riding lawnmowers, leaf blowers, snow blowers, fertilizer equipment, etc. All of these can make your task almost effortless, not to mention more fun. But, they can be costly, especially if you want to get the high-end stuff.

A homeowner using a grass trimming tool.





Some of the responsibilities of homeownership can be costly.




Another option is to hire a landscaping company to maintain your yard for you. While many homeowners choose to do this, keep in mind that this isn't a cheap option. If you cannot maintain your yard (either due to lack of time or a physical disability), hiring a landscaping company is your only option. But, if you plan on doing so simply because of laziness, try to consider how much money you'll spend on something you can learn to do by yourself.

Home maintenance

A pearl of standard wisdom among homeowners is that there is a difference between being able to buy a home and affording one. Being able to buy a home simply means that you have enough money, or a good enough credit score, to purchase a home. Being able to afford it, on the other hand, means that you can invest in your home all the necessary funds to keep it decent state. Even standard home maintenance includes:

        Plumbing system maintenance.

        Electrical maintenance.

        Roof repair and replacement.

        Gutter cleaning and repair.

        Floor maintenance.

        HVAC maintenance.

        Heating system repair and maintenance.

While you can learn to DIY some of these repairs, most will require professional help—especially when it comes to serious issues around the house. One thing that is important here to remember is that regular maintenance and inspection save money in the long run. You can avoid most large repairs by simply being attentive and performing home inspections on a regular basis. Yes, no aspect of your home can last forever. Sooner or later, you might need to replace your roof or install new floors. But you can prolong the well-being of your home by decades if you understand what maintenance entails and perform it with due care.

Pest control

Another big part of home maintenance is keeping your home clean, whether you own or rent. But there is a reason why doing so is even more critical if you are the sole owner. Namely, properly cleaning your home is one of the vital aspects of pest control.

 And remember: you need to do this right away, even before moving into your new home. But you will also need to make sure it stays clean after, and this you can do by turning the spring cleaning into a habit.

If you do get a pest problem, there are a couple of options you can go for. More mild versions are the natural methods (either predatory pets or baits).


A mousetrap with cheese.





Old-school pest control can be effective. But it rarely deals with the root cause.



While there are poison options and DIY fumigation, they will likely only give superficial results. The safest option is to hire a professional pest control service and have them tackle the core issue.

Final thoughts

As you can see, the responsibilities of homeownership are manifold. But, don't be deterred. The mere fact that you own your home makes these responsibilities easier to bear. And, who knows, you may even grow to like dealing with some.


Author bio:

Bryce Green worked as a contractor and a relocation manager for companies like Heavenly Moving and Storage. He now focuses on raising his daughters and writing helpful articles about relocation and homeownership. 


Photos used:

https://www.pexels.com/photo/white-and-brown-painted-house-209274/

https://www.pexels.com/photo/calculator-and-notepad-placed-on-usa-dollars-stack-4386366/

https://www.pexels.com/photo/man-holding-orange-electric-grass-cutter-on-lawn-1453499/

https://www.pexels.com/photo/brown-wooden-mouse-trap-with-cheese-bait-on-top-633881/




Key Terms for Homebuyers [INFOGRAPHIC]

Key Terms for Homebuyers [INFOGRAPHIC] | Simplifying The Market

Key Terms for Homebuyers [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • Knowing key housing terms and how they relate to today’s market is important. For example, when mortgage rates and home prices rise, it impacts how much home you can afford.
  • Terms like appraisal (what lenders rely on to validate a home’s value) and the inspection contingency (which gives buyers essential information on a home’s condition) directly impact the transaction.
  • Buying a home can be intimidating if you’re not familiar with the terms used throughout the process. Let’s connect so you have an expert guide and advice for any questions that may come up.
Content previously posted on Keeping Current Matters

* This article was originally published here

How To Navigate a Market Where Multiple Offers Is the New Normal

How To Navigate a Market Where Multiple Offers Is the New Normal | Simplifying The Market

If you’re thinking of buying a home today, you already know that the number of homes available for sale is low. But what does that really mean for you? As a buyer, low housing supply coupled with high buyer demand means you should be prepared to navigate a highly competitive market where homes sell fast and get multiple offers. Realtor.com has this to say:

“Homes also flew off the market at record pace as buyers put offers in the moment properties came up for sale….”

In a bidding war situation like this, doing everything you can to get ahead of the competition is a wise move. That’s because when you find a house and submit an offer, it’ll likely be up against strong offers from other buyers. According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), homes today are receiving an average of 3.9 offers. That’s the most offers we’ve seen in January for the last 5 years (see graph below):

How To Navigate a Market Where Multiple Offers Is the New Normal | Simplifying The Market

To help you navigate bidding wars with multiple offers, an expert real estate advisor is key. They know what’s worked for other buyers, what sellers are looking for, and how to help you prepare when it comes time to make an offer. Here are three tips to keep in mind that will help you make the best offer possible.

1. Know Your Numbers​

Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. Pre-approval shows sellers you’re serious, which can give you a competitive edge. You should also know making an offer at the home’s asking price may not be enough. Homes today often sell for more than their listing price. An agent can help you understand the market value of the home and what other homes are selling for in your area.

2. Be Ready To Move Fast​

Speed and the pace of sales are contributing factors to today’s competitive housing market. When homes are selling fast, it’s important to stay on top of the market and be ready to move quickly. Your agent will help you stay up to date on the latest listings and help you put together your best offer as soon as you find the home you want to buy.​

3. Make a Strong but Fair Offer​

​When you’re up against other offers, putting your best offer forward from the start is key. Lean on your agent to write a strong offer and use their expertise on which levers you can pull to make your offer as enticing as possible. One option is to wave some of your contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Just remember there are certain contingencies you don’t want to give up, like the home inspection.

Bottom Line

No matter what, your agent is your best resource for making an offer that stands out in a competitive market. Let’s connect to talk through what you can expect as a buyer and how to kick off a successful home search.

Content previously posted on Keeping Current Matters

* This article was originally published here

Why It’s Critical To Price Your House Right

Why It’s Critical To Price Your House Right | Simplifying The Market

When you make a move, you want to sell your house for the highest price possible. That might be why many homeowners are eager to list in today’s sellers’ market. After all, with record-low inventory and high buyer demand, many homes are selling for more than asking price. Data from the National Association of Realtors (NAR) shows 46% of homes are selling above list price today.

But even in a market like we have now, working with an agent to set the right asking price is critical, as pricing it too high or too low could have a negative impact on your final sale. Here’s why.

Pricing Your House Right Is Crucial Even in a Sellers’ Market

The price you set for your house sends a message to potential buyers. Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with the property. Not to mention, you could leave money on the table, which decreases your future buying power if you undervalue your house.

On the other hand, price it too high and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.

In other words, think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see a bidding war, too. And when a bidding war happens, you’ll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.

To get a look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:

Why It’s Critical To Price Your House Right | Simplifying The Market

Lean on a Professional’s Expertise To Price Your House Right

There are several factors that go into pricing your house and balancing them is the key. That’s why it’s important to lean on an expert real estate advisor when you’re ready to move. A local real estate advisor is knowledgeable about:

  • The value of homes in your neighborhood
  • The current demand for houses in today’s market
  • The condition of your house and how it affects the value

A real estate professional will balance these factors to make sure the price of your house makes the best first impression and gives you the greatest return on your investment in the end.

Bottom Line

Even in a sellers’ market, pricing your house right is critical. Don’t rely on guesswork. Let’s connect to make sure your house is perfectly priced.

Content previously posted on Keeping Current Matters

* This article was originally published here

Homeownership - Hedge Against Inflation


 








































It funnels down to a simple question. Do you want to pay your mortgage or your landlord's mortgage? At the end of 30 years, which choice is better for you? Reach out to me to discuss that.  Al

About Home Misconceptions







Now that we cleared that up.... reach out to me and let's chat about your new home.

Supply and Demand in Today’s Market [INFOGRAPHIC]

Supply and Demand in Today’s Market [INFOGRAPHIC] | Simplifying The Market

Supply and Demand in Today’s Market [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • Today’s housing market is the direct result of low supply and high buyer demand. Here’s what that means for you and your plans to buy or sell.
  • For buyers, expect competition, be ready to move fast, and be prepared to submit your strongest offer. For sellers, know your house will be the center of attention and that it’ll likely sell quickly and get multiple offers.
  • If you’re ready to move, let’s connect to talk about our local area and how you can take advantage of today’s unprecedented housing market.
Content previously posted on Keeping Current Matters

* This article was originally published here

Are Home Prices Continuing To Rise?

Are Home Prices Continuing To Rise? | Simplifying The Market

Many analysts projected home price appreciation would slow dramatically in the fall of 2021 and then continue to soften throughout 2022. So far, that hasn’t happened. The major price indices are all revealing ongoing double-digit price appreciation. Here’s a look at their reports on year-over-year price appreciation for December:

To show that they’re not seeing signs of softening, here’s a graph that gives the progression of all three indices for each month of 2021.

Are Home Prices Continuing To Rise? | Simplifying The Market

As the graph above reveals, last year, home price appreciation accelerated dramatically from January to July according to all three indices. Then, it began to decelerate in August when prices appreciated at a slower pace, but it didn’t decline. Many thought that would be the beginning of a rapid slowdown in the level of home price appreciation, but as the data shows, that wasn’t the case. Instead, prices began to level off for a few months before two of the three indices saw appreciation re-accelerate again in December.

To clarify, deceleration is not the same as depreciation. Acceleration means prices rise at a greater year-over-year pace than the previous month. Deceleration means home values continue to rise but at a slower pace of year-over-year appreciation. Depreciation means prices drop below current values. No one is forecasting that to happen.

In fact, the FHFA revealed that price appreciation accelerated in December in six of the nine regions it tracks. Case Shiller showed that appreciation accelerated in 15 of the 20 metros they report on. As Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

“After some signs of slowing home price growth . . . monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel.”

What Does This Mean for You?

Whether you’re a first-time purchaser or someone looking to sell your current house and buy a home that better fits your needs, waiting to decide what to do will cost you in two ways:

  1. Mortgage rates are forecast to rise this year.
  2. Home prices should continue to appreciate at double-digit levels for some time.

If you wait, rising mortgage rates and high home price appreciation will have a dramatic impact on your monthly mortgage payment.

Bottom Line

Maybe the best thing to do is listen to the advice of Len Kiefer, Deputy Chief Economist at Freddie Mac:

If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”

Content previously posted on Keeping Current Matters

* This article was originally published here