2023 Housing Market Forecast [INFOGRAPHIC]

 

Some Highlights

• From home sales to prices, the 2023 housing market will be defined by mortgage rates. And where rates go depends on what happens with inflation.
• If you’re thinking of buying or selling a home this year, let’s connect so you understand where the housing market is headed in 2023.

What Every Seller Should Know About Home Prices

 

If you’re trying to decide whether or not to sell your house, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.

What’s Really Happening with Home Prices?

It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.

While home prices are down slightly month-over-month in some markets, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses the latest data from S&P Case-Shiller to help tell the story of what’s actually happening in the housing market today:

As the graph shows, it’s true home price growth has moderated in recent months (shown in green) as buyer demand has pulled back in response to higher mortgage rates. This is what the headlines are drawing attention to today.

But what’s important to notice is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market.

The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a year was more typical (see bars for January 2019 through mid-2020). But even the latest data for this year shows prices have still climbed by roughly 10% over last year.

What Does This Mean for Your Home’s Equity?

While you may not be able to capitalize on the 20% appreciation we saw in early 2022, in most markets your home’s value, on average, is up 10% over last year – and a 10% gain is still dramatic compared to a more normal level of appreciation (3-4%).

The big takeaway? Don’t let the headlines get in the way of your plans to sell. Over the past two years alone, you’ve likely gained a substantial amount of equity in your home as home prices climbed. Even though home price moderation will vary by market moving forward, you can still use the boost your equity got to help power your move.

As Mark Fleming, Chief Economist at First American, says:

“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”

Bottom Line

If you have questions about home prices or how much equity you have in your current home, let’s connect so you have an expert’s advice.

Your House Could Be the #1 Item on a Homebuyer’s Wish List During the Holidays

 

Each year, homeowners planning to make a move are faced with a decision: sell their house during the holidays or wait. And others who have already listed their homes may think about removing their listings and waiting until the new year to go back on the market.

The truth is many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. Here are five great reasons you shouldn’t wait to sell your house.

1. While the supply of homes for sale has increased this year, there still aren’t enough homes on the market to keep up with buyer demand. As Nadia Evangelou, Senior Economist & Director of Forecasting at the National Association of Realtors (NAR), explains:

“There’s still this gap between demand and supply because we were underbuilding for many years. . . . So now we see demand is slowing, but it still outpaces supply.”

2. Serious homebuyers are out looking right now. Millennials are driving homebuying demand today, and many are eager to make a purchase. Mark Fleming, Chief Economist at First American, explains:

“While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.”

3. The desire to own a home doesn’t stop during the holidays. In fact, homes decorated for the holidays appeal to many buyers. Plus, purchasers who look for homes during the holidays are ready to buy.

4. You can restrict the showings in your house to days and times that are most convenient for you. That can help you minimize disruptions, which is especially important this time of year.

5. Rents have skyrocketed in recent years. And, many buyers are looking to escape rising rents and avoid falling into the rental trap for another year. As an article from Zillow says:

“Over the next 12 months, rents are expected to grow more than inflation, the stock market and home values.”

Your home could be their ticket to leaving renting behind for good.

Bottom Line

There are still many reasons it makes sense to list your house during the holiday season. Let’s connect to determine if selling now is your best move.

VA Loans: Making Homes for the Brave Achievable [INFOGRAPHIC]

 

Some Highlights

• VA Loans can help make homeownership possible for those who have served our country.
• These loans offer great benefits for eligible individuals and can help them buy a VA-approved house or condo, build a new home, or make improvements to their house.
• Homeownership is the American Dream. One way we can honor and thank our veteransis to ensure they have the best information about the benefits of VA home loans.

What Happens to Housing when There’s a Recession?

 

Since the 2008 housing bubble burst, the word recession strikes a stronger emotional chord than it ever did before. And while there’s some debate around whether we’re officially in a recession right now, the good news is experts say a recession today would likely be mild and the economy would rebound quickly. As the 2022 CEO Outlook from KPMG says:

“Global CEOs see a ‘mild and short’ recession, yet optimistic about global economy over 3-year horizon . . . 

 More than 8 out of 10 anticipate a recession over the next 12 months, with more than half expecting it to be mild and short.”

To add to that sentiment, housing is typically one of the first sectors to rebound during a slowdown. As Ali Wolf, Chief Economist at Zonda, explains:

“Housing is traditionally one of the first sectors to slow as the economy shifts but is also one of the first to rebound.”

Part of that rebound is tied to what has historically happened to mortgage rates during recessions. Here’s a look back at rates during previous economic slowdowns to help put your mind at ease.

Mortgage Rates Typically Fall During Recessions

Historical data helps paint the picture of how a recession could impact the cost of financing a home. Looking at recessions in this country going all the way back to 1980, the graph below shows each time the economy slowed down mortgage rates decreased.

Fortune explains mortgage rates typically fall during an economic slowdown:

“Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”

While history doesn’t always repeat itself, we can learn from and find comfort in the trends of what’s happened in the past. If you’re thinking about buying or selling a home, you can make the best decision by working with a trusted real estate professional. That way you have expert advice on what a recession could mean for the housing market.

Bottom Line

History shows you don’t need to fear the word recession when it comes to the housing market. If you have questions about what’s happening today, let’s connect so you have expert advice and insights you can trust.

3 Questions You May Be Asking About Selling Your House Today [INFOGRAPHIC]

 

Some Highlights

• If you’re planning to sell your house this year, you likely have questions about what the shift in the housing market means for your home sale.
• You might be wondering: Should I wait to sell? Are buyers still out there? And can I afford to buy my next home?
• Let’s connect so you can get answers to these questions and learn about the opportunities you still have in today’s housing market.

The Emotional and Non-financial Benefits of Homeownership

 

With higher mortgage rates, you might be wondering if now’s the best time to buy a home. While the financial aspects are important to consider, there are also powerful non-financial reasons it may make sense to make a move. Here are just a few of the benefits that come with homeownership.

Homeowners Can Make Their Home Truly Their Own

Owning your home gives you a significant sense of accomplishment because it’s a space you can customize to your heart’s desire. That can bring you added happiness.

In fact, a report from the National Association of Realtors (NAR) shows making updates or remodeling your home can help you feel more at ease and comfortable in your living space. NAR measures this with a Joy Score that indicates how much happiness specific home upgrades bring. According to NAR:

“There were numerous interior projects that received a perfect Joy Score of 10: paint entire interior of home, paint one room of home, add a new home office, hardwood flooring refinish, new wood flooring, closet renovation, insulation upgrade, and attic conversion to living area.”

And as a homeowner, unless there are specific homeowner’s association requirements, you typically won’t have to worry about the changes you can and can’t make.

If you rent, you may not have the same freedom. And if you do make changes as a renter, there’s a good chance you’ll need to revert them back at the end of your lease based on your rental agreement. That can add additional costs when you move out.

The Responsibilities of Homeownership Give You a Greater Sense of Achievement

There’s no denying taking care of your home is a large responsibility, but it’s one you’ll take pride in as a homeowner. Freddie Mac explains:

“As the homeowner, you have the freedom to adopt a pet, paint the walls any color you choose, renovate your kitchen, and more. . . . Of course, along with the freedoms of homeownership come responsibilities, such as making your monthly mortgage payments on time and maintaining your home. But as the property owner, you’ll be caring for your own investment.”

You’re not taking care of a living space that belongs to someone else. The space is yours. As an added benefit, you may get a return on investment for any upgrades or repairs you make.

Homeownership Can Lead to Greater Community Engagement

That sense of ownership and your feelings of responsibility can even extend beyond the walls of your home. Your home also gives you a stake in your community. Because the average homeowner stays in their home for longer than just a few years, that can lead to having a stronger connection to your local area. NAR notes how that can benefit you:

“Living in one place for a longer amount of time creates an obvious sense of community pride, which may lead to more investment in said community.”

If you’re looking to put down roots, homeownership can help fuel a sense of connection to the area and those around you.

Bottom Line

If you’re planning to buy a home this year, there are incredible benefits waiting for you at the end of your journey, including the ability to customize your home, the sense of achievement homeownership brings, and a greater connection to your community. Let’s connect to discuss everything homeownership has to offer.

Saving for a Down Payment? Here’s What You Should Know.

 

As you set out to buy a home, saving for a down payment is likely top of mind. But you may still have questions about the process, including how much to save and where to start.

If that sounds like you, your down payment could be more in reach than you originally thought. Here’s why.

The 20% Down Payment Myth

If you believe you have to put 20% down on a home, you may have based your goal on a common misconception. Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

Unless it’s specified by your loan type or lender, it’s typically not required to put 20% down. According to the latest Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. There are even 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.

This is good news for you because it means you could be closer to your homebuying dream than you realize. For more information, turn to a trusted lender.

Down Payment Assistance Programs Can Be a Game Changer

A professional will be able to show you other options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from downpaymentresource.com, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

A recent article explains why programs like these are helpful:

“These resources can immediately build your home buying power and help you take action sooner than you thought possible.”

And if you’re wondering if you have to be a first-time buyer to qualify for these programs, that’s not always the case. According to an article from downpaymentresource.com:

“It is a common misconception that homebuyer assistance is only available to first-time homebuyers, however, 38% of homebuyer assistance programs in Q1 2022 did not have a first-time homebuyer requirement.”

There are also location and profession-based programs you could qualify for as well.

Bottom Line

Saving for your down payment is an important first step on your homebuying journey. Let’s connect today and make sure you have a trusted lender to help explore your options.

How To Prep Your House for Sale This Fall

 

Today’s housing market is different than it was just a few months ago. And if you’re thinking about selling your house, that may leave you wondering what you need to do differently as a result. The answer is simple. Taking the time upfront to prep your house appropriately and create a solid plan can help bring in the greatest return on your investment.

Here are a few simple tips to make sure you maximize the sale of your house this fall.

1. Price It Right

One of the first things buyers will notice is the price of your house. That’s because the price sends a message to home shoppers. Pricing your house too high to begin with could put you at a disadvantage by discouraging buyers from making an offer. On the flip side, pricing your house too low may make buyers worry there’s some underlying issue or something wrong with the home.

Your goal in pricing your house is to gain the attention of prospective buyers and get them to make an offer. And with price growth and buyer demand moderating, as well as a greater supply of homes available for sale, pricing your home appropriately for where the market is today has become more important than ever before.

But how do you know that perfect number? Pricing your house isn’t a guessing game. It takes skill and expertise. Work with a trusted real estate advisor to determine the current market value for your home.

2. Keep It Clean

It may sound simple but keeping your house clean is another key to making sure it gets the attention it deserves. As realtor.com says in the Home Selling Checklist:

“When selling your home, it’s important to keep everything tidy for buyers, and you never know when a buyer is going to want to schedule a last-minute tour.”

Before each buyer visits, assess your space and determine what needs your attention. Wash the dishes, make the beds, and put away any clutter. Doing these simple things can reduce potential distractions for buyers.

For more tips, check out this checklist for preparing your house for sale. Ultimately an agent is your best resource for tailored advice, but this list can help get you started.

3. Help Buyers Feel at Home

Finally, it’s important for buyers to see all the possible ways they can make your house their next home. An easy first step to create this blank canvas is removing personal items, like pictures, awards, and sentimental belongings. It’s also a good idea to remove any excess furniture to help the rooms feel bigger and make sure there’s ample space for touring buyers to stand and look at the layout.

If you’re unsure what should be packed away and what can stay, consult your trusted real estate advisor. Spending the time on this step can pay off in the long run. As a recent articlefrom the National Association of Realtors (NAR) explains:

“Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. The right arrangements can move you into a higher price-point and help buyers fall in love the moment they walk through the door.”

Bottom Line

Selling a house requires prep work and expertise. If you’re looking to sell your house this season, let’s connect so you have advice on how to get it ready to list, how to help it stand out in today’s shifting market, and more.

How an Expert Can Help You Understand Inflation & Mortgage Rates

 

If you’re following today’s housing market, you know two of the top issues consumers face are inflation and mortgage rates. Let’s take a look at each one.

Inflation and the Housing Market

This year, inflation reached a high not seen in forty years. For the average consumer, you probably felt the pinch at the gas pump and in the grocery store. It may have even impacted your ability to save money to buy a home.

While the Federal Reserve is working hard to lower inflation, the August data shows the inflation rate was still higher than expected. This news impacted the stock market and fueled conversations about a recession. It also played a role in the Federal Reserve’s decision to raise the Federal Funds Rate last week. As Bankrate says:

“. . . the Fed has raised rates again, announcing yet another three-quarter-point hike on September 21 . . . The hikes are designed to cool an economy that has been on fire. . .”

While their actions don’t directly dictate what happens with mortgage rates, their decisions have contributed to the intentional cooldown in the housing market. A recent article from Fortune explains:

“As the Federal Reserve moved into inflation-fighting mode, financial markets quickly put upward pressure on mortgage rates. Those elevated mortgage rates . . . coupled with sky-high home prices, threw cold water onto the housing boom.”

The Impact on Rising Mortgage Rates

Over the past few months, mortgage rates have fluctuated in light of growing economic pressures. Most recently, the average 30-year fixed mortgage rate according to Freddie Macticked above 6% for the first time in well over a decade (see graph below):

The mortgage rate increases this year are the big reason buyer demand has pulled back in recent months. Basically, as rates (and home prices) rose, so did the cost of buying a home. That pushed on affordability and priced some buyers out of the market, so home sales slowed and the inventory of homes for sale grew as a result.

Where Experts Say Rates and Inflation Will Go from Here

Moving forward, both of these factors will continue to impact the housing market. A recent article from CNET puts the relationship between inflation and mortgage rates in simple terms:

“As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.”

Sam Khater, Chief Economist at Freddie Mac, has this to say about where rates may go from here:

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, . . .” 

While there’s no way to say with certainty where mortgage rates will go from here, there is something you can do to stay informed, and that’s connect with a trusted real estate advisor. They keep their pulse on what’s happening today and help you understand what the experts are projecting. They can provide you with the best advice possible.

Bottom Line

Rising inflation and higher mortgage rates have had a clear impact on housing. For expert insights on the latest trends in the housing market and what they mean for you, let’s connect.

Will My House Still Sell in Today’s Market?

If recent headlines about the housing market cooling and buyer demand moderating have you worried you’ve missed your chance to sell, here’s what you need to know. Buyer demand hasn’t disappeared, it’s just eased from the peak intensity we saw over the past two years.

Buyer Demand Then and Now

During the pandemic, mortgage rates hit record lows, and that spurred a significant rise in buyer demand. This year, as rates increased due to factors like rising inflation, buyer demand pulled back or softened as a result. The latest data from ShowingTime confirms this trend (see graph below):

The orange bars in the graph above represent the last few months of data and the clear cooldown in the volume of home showings the market has seen since mortgage rates started to rise. But context is important. To get the full picture of where today’s demand stands, let’s look at the July data for the past six years (see graph below):

This second visual makes it clear that, while moderating compared to the frenzy in 2020 and 2021, showing activity is still beating pre-pandemic levels – and those pre-pandemic years were great years for the housing market. That goes to show there’s still demand if you sell your house today.

What That Means for You When You Sell

The key to selling in a changing market is understanding where the housing market is now. It’s not the same market we had last year or even earlier this year, but that doesn’t mean the opportunity to sell has passed.

While things have cooled a bit, it’s still a sellers’ market. If you work with a trusted local expert to price your house at the current market value, the demand is still there, and it should sell quickly. According to a recent survey from realtor.com, 92% of homeowners who sold in August reported being satisfied with the outcome of their sale.

Bottom Line

Buyer demand hasn’t disappeared, it’s just moderated this year. If you’re ready to sell your house today, let’s connect so you have expert insights on how the market has shifted and how to plan accordingly for your sale.

Getting Your House Ready To Sell? Work with an Agent for Expert Advice

 

In a market that’s shifting as fast as it is today, many homeowners wonder what, if anything, needs to be renovated before they sell their house. That’s where a trusted real estate professional comes in. They can help you think through today’s market conditions and how they impact what you should – and shouldn’t – do before selling your house.

Here are some considerations a professional will guide you through.

What You Need To Know About Your Local Market

Since the supply of homes for sale has increased so much this year, today’s buyers have more options than they had last year. That may mean you’re not able to ignore some of those repairs or cosmetic updates you could have skipped in previous months. As a recent article from realtor.com says:

“To stand out in the market, sellers should make their home attractive to buyers, which usually means some selective updates.”

The key word here is selective. Since it’s still a sellers’ market, focusing on a few key areas may be enough to make your house stand out from other options. And since inventory is still low overall, it’s also possible buyers may be willing to handle the renovations themselves once they move in. It all depends on buyer demand and the available inventory in your local area. For advice on what’s happening in your market and what to do to make your house show well, lean on a professional.

Not All Renovation Projects Are Equal 

In addition to making sure your house makes a good first impression, you’ll also want to consider the return on your investment (ROI) for any renovations. According to the 2022 Remodeling Impact Report from the National Association of Realtors (NAR), here are the projects that could net you the best return when you sell your house (see visual below):

Again, your real estate advisor is your best resource. When your agent comes to your house for a walk-thru and consultation, they’ll use their expertise to offer any insight into what you may need to repair, replace, or refinish. They also know what other sellers are doing before listing their homes and how buyers are reacting to those upgrades to help steer you in the right direction. As Dr. Jessica Lautz, Vice President of Demographics and Behavioral Insights for NAR, explains:

“This year, the winner was hardwood flooring. Hardwood floor refinishing and putting in new wood flooring had the most significant value, . . .” 

How To Draw Buyer Attention to the Upgrades You’ve Made 

For any projects you’ve already completed or for those you plan to do before listing, make sure your real estate professional knows. They’re not just an advisor to help you decide where to focus your efforts, they’re also skilled at highlighting any upgrades in your listing. That way, potential buyers know about the features that may help sell them on the house.

No matter what, contact a local real estate professional for expert advice on what work needs to be done and how to make it as appealing as possible to future buyers. Every home is different, so a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

In today’s shifting market, it’s important to spend your time and money wisely when you’re getting ready to move. Let’s connect to find out where to focus your efforts before you sell.