TopReasonsTo OwnYourHome
TheBestWayToKeepTrackof MortgageRateTrends
Ifyou'rethinkingaboutbuyingahome,chancesareyou’vegotmortgagerates onyourmind.You’veheardtheyimpacthowmuchyoucanaffordinyour monthlymortgagepayment,andyouwanttomakesureyou’refactoringthat inasyouplanyourmove.But,itcanfeelabitoverwhelmingtokeeptrackofit all.Here'swhatyouneedtoknow.
What'sImpactingMortgageRates?
Rateshavebeenvolatile–thatmeansthey’rebouncingaroundabit.And,youmaybe wondering,why?Theansweriscomplicatedbecauseratesareaffectedbysomanyfactors.
Thingslikewhat’shappeninginthebroadereconomyandthejobmarket,thecurrentinflation rate,decisionsmadebytheFederalReserve,geopoliticaluncertainty,andmorehaveanimpact. Lately,allofthosefactorshavecomeintoplay,andit’scausedthevolatilitywe’veseen.
AsOdetaKushi,DeputyChiefEconomistatFirstAmerican,explains:
“Ongoinginflationdeceleration,aslowingeconomyandevengeopoliticaluncertaintycan contributetolowermortgagerates.Ontheotherhand,datathatsignalsupsideriskto inflationmayresultinhigherrates.”
RealEstateProfessionalsCanHelpMakeSenseofitAll
Whileyoucoulddrilldownintoeachofthosethingstoreallyunderstandhowtheyimpactrates, thatwouldbealotofwork.Insteadofspendingyourtimeonthat,leanonthepros.
Theycoachpeoplethroughmarketconditionsallthetime.They’llfocusongivingyouaquick summaryofanybroadertrendsupordown,whatexpertssaylaysahead,andhowallofthat impactsyou.Takethischartasanexample.
Itgivesyouanideaofhowmortgageratesimpactyourmonthlypaymentwhenyoubuyahome. Imaginebeingabletomakeapaymentbetween$2,500and$2,600workforyourbudget (principalandinterestonly).Thegreenpartinthechartshowspaymentsinthatrangeorlower basedonvaryingmortgagerates(seechartbelow):
MonthlyMortgagePayment(PrincipalandInterest)
$440,000$420,000$400,000$380,000$360,000
$2,709$2,586$2,463$2,340$2,217
$2,638$2,518$2,398$2,278$2,158
Principalandinterestpaymentsroundedtothenearestdollar.TotalMonthlypaymentmayvarybasedonloanspecificationssuchas propertytaxes,insurance,HOAdues,andotherfees.Interestratesusedhereareformarketingpurposesonly.Consultyourlicensed MortgageAdvisorforcurrentrates.
Asyoucansee,evenasmallshiftinratescanimpacttheloanamountyoucanaffordifyouwant tostayinthattargetbudget.It’stoolsandvisualslikethesethattakeeverythingthat’shappening andshowwhatitactuallymeansforyou.Andonlyaprohastheknowledgeandexpertise neededtoguideyouthroughthem.
BottomLine
Youdon’tneedtobeanexpertonrealestateormortgagerates,youjustneedtohave someonebyyoursidewhois.Let’sconnecttotalkaboutyourhousinggoals.
Ifyou’reinafinancialpositiontodosoand readytostayputforatleastafewyears, buyingahouseistotallyworthit.You’llgain stability,buildequityandretainasenseof ownershipandcontrol,ratherthanbeingat thewhimofalandlord.
-Bankrate
ThePerksofBuyingoverRenting
Areyouwonderingifitmakessensetobuyahomerightnow?While today’smortgageratesmightseemabitintimidating,herearetworeasons whyitstillmaybeagoodtimetobecomeahomeowner.
HomeValuesTypicallyGoUpoverTime
There’sbeensomeconfusionoverthepastyearorsoaboutwhichwayhomepricesareheaded. Makenomistake,nationallythey’restillgoingup.Infact,overthelong-term,homepricesalmost alwaysgoup(seegraphbelow):
PriceAppreciationovertheLast60Years AverageSalesPriceofHousesSoldintheUnitedStates
Basedonthechart,youcanseetheoveralltrendinhomepriceshasclimbedsteadilyforthe past60years.Therewasanexceptionduringthe2008housingcrashwhenpricesdidn'tfollow thenormalpattern,butgenerally,homevalueskeeprising.
Thisisabigreasonwhybuyingahomecanbebetterthanrenting.Aspricesgoupandyou paydownyourmortgage,youbuildequity.Overtime,thisgrowingequitycanreallyincrease yournetworth.
RentsKeepRisingintheLongRun
Here’sanotherreasonyoumaywanttothinkaboutbuyingahomeinsteadofrenting–rentjust keepsgoingupovertheyears.Sure,itmightbecheapertorentrightnowinsomeareas,but everytimeyourenewyourleaseorsignanewone,you’relikelytofeelthesqueezeofyourrent gettinghigher.AccordingtodatafromiPropertyManagement,renthasbeengoinguppretty consistentlyforthelast60years,too(seegraphbelow):
IncreaseinRentsovertheLast60Years MedianMonthlyRentintheUnitedStates(1960–2023)
Sohowdoyouescapethecycleofrisingrents?Buyingahomewithafixed-ratemortgagehelps youstabilizeyourhousingcostsandsaygoodbyetothoseannoyingrentincreases.Thatkindof stabilityisabigdeal.
Yourhousingpaymentsarelikeaninvestment,andyou'vegotadecisiontomake.Doyou wanttoinvestinyourselforkeeppayingyourlandlord?
Whenyouownyourhome,you'reinvestinginyourownfuture.Andevenwhenrentingischeaper, thatmoneyyoupayeverymonthisgoneforgood.AsDr.JessicaLautz,DeputyChiefEconomist andVPofResearchattheNationalAssociationofRealtors(NAR),states:
“Ifahomebuyerisfinanciallystable,abletomanagemonthlymortgagecostsandcan handletheassociatedhouseholdmaintenanceexpenses,thenitmakessensetopurchase ahome.”
BottomLine
Whenitcomesdowntoit,buyingahomeoffersmorebenefitsthanrenting,evenwhen mortgageratesarehigh.Ifyouwanttoavoidincreasingrentsandtakeadvantageof long-termhomepriceappreciation,let’sconnecttogooveryouroptions.
Equityisthecurrentvalueofyourhome minuswhatyoustilloweonyourloan. Itgoesupwhen:
•Youpaydownyourloan
•Homepricesappreciate Here’salookathowjustthehomepriceappreciationpiececanincreaseyourwealthovertime.
-LawrenceYun,ChiefEconomist,NAR
IsItEasierToFindaHome ToBuyRightNow?
Oneofthebiggesthurdlesbuyershavefacedoverthepastfewyearshasbeena lackofhomesavailableforsale.Butthat’sstartingtochange.
ThegraphbelowusesdatafromRealtor.comtoshowtherearemorehomesonthemarket in2024thantherehavebeeninanyofthepastseveralyears(2021-2023):
NumberofHomesforSale
Since2017,AprilofEachYear
So,isfindingahomeeasier?Theanswerisyes,andno.Ontheonehand,inventoryisup overthepastfewyears.Thatmeansyou’lllikelyhavemoreoptionstochoosefromasyousearch foryournexthome.
But,atthesametime,thegraphabovealsoshowstherearestillsignificantlyfewerhomesfor salethanthere’dusuallybeinamorenormal,pre-pandemicmarket.Andthatdeficitisn’tgoingto bereversedovernight.
BottomLine
Tohelpyouexplorethegrowinglistofchoicesyouhavenow,let’sconnect.Thatway youhaveaprowhocanreallyhelpyouunderstandtheinventorysituationwhere youwanttobuy.We’llgooversomehandytipsthathavehelpedotherbuyersinour areadealwithongoinglowhousingsupply.
WhyPre-ApprovalIsEvenMore ImportantThisYear
Ifyou’relookingtobuyahome,youneedtogetpre-approvedtohelpfigureout yournumbersandshowsellersyou’reserious.Let’sbreakdownwhatitisand whyit’simportantifyou’relookingtobuyahomethisyear.
WhatIsPre-Approval?
FreddieMacexplainsitlikethis:
“Apre-approvalisanindication fromyourlenderthattheyare willingtolendyouacertainamount ofmoneytobuyyourfuturehome..
..Keepinmindthattheloanamount inthepre-approvalletteristhe lender’smaximumoffer.Ultimately, youshouldonlyborrowanamount youarecomfortablerepaying.”
Now,thatlastpieceisespeciallyimportant withthecurrentaffordabilitychallenges.
Gettingagoodideaofwhatyoucanborrow helpsyoureallywrapyourheadaroundthe financialsideofthings.Itdoesn’tmeanyou shouldborrowthefullamount.Itjusttells youwhatyoucanborrow.
HowDoesItWork?
Aspartofthehomebuyingprocess, alenderlooksatyourfinancesto determinewhatthey’rewillingto loanyou.AccordingtoInvestopedia, thisincludesthingslikeyourW-2,tax returns,creditscore,bankstatements, andmore.Fromthere,they’llgiveyou apre-approvallettertohelpyouknow howmuchmoneyyoucanborrow.
Thissetsyouuptomakeaninformed decisionaboutyournumbers.Thatway you’reabletotailoryourhomesearch towhatyou’recomfortablewithbudgetwiseandcanactfastwhenyoufinda homeyoulove.
WhyPre-ApprovalIsSoImportant
Ifyouwanttobuyahome,there’sanotherreasonyou’regoingtowanttobesure you’reworkingwithatrustedlendertomakethisapriority.
Whilemorehomesarebeinglistedforsale,theoverallnumberofavailablehomesis stillbelowthenorm.Thatmeanstherearen’tenoughhomesforsaleforeveryonewho wantstobuyone.Theimbalanceofmoredemandthansupplycreatesabitofatug-ofwarforyou.
Becauseofthis,you’lllikelyfindyouhavetoputupwithcompetitionfromotherbuyers. Butpre-approvalcanhelpwiththattoo.
Pre-approvalshowssellersyoumeanbusinessbecauseyou’vealreadyundergonea creditandfinancialcheck.AsGregMcBride,ChiefFinancialAnalystatBankrate,says:
“Preapprovalcarriesmoreweightbecauseitmeanslendershaveactuallydone morethanacursoryreviewofyourcreditandyourfinances,buthaveinstead reviewedyourpaystubs,taxreturnsandbankstatements.Apreapproval meansyou’veclearedthehurdlesnecessarytobeapprovedforamortgage uptoacertaindollaramount.”
Sellerslovethisbecausethatmakesitmorelikelythesalewillmoveforwardwithout unexpecteddelaysorissues.Andifyoumaybecompetingwithanotherbuyertoland yourdreamhome,whywouldn’tyoudothistohelpstackthedeckinyourfavor?
BottomLine
Ifyou’relookingtobuyahomethisseason,knowthatgettingpre-approvedisgoingto beakeypieceofthepuzzle.Withmorebuyerscomingbacktothemarket,thiscanhelp youmakeastrongofferthatstandsoutfromthecrowd.
ThingsToAvoid AfterApplyingfor aMortgage
Don’tchangebankaccounts.
Don’tdepositcash intoyourbank accountsbefore speakingwithyour bankorlender.
Don’tmakeany largepurchases.
Consistencyisthenameofthegame afterapplyingforamortgage.Besureto discussanychangesinincome,assets, orcreditwithyourlender,soyoudon’t jeopardizeyourapplication.
Don’tapplyfornewcreditor closeanycreditaccounts.
Don’tco-signother loansforanyone.
Thebestplanistofullydiscloseanddiscussyourintentions withyourlenderbeforeyoudoanythingfinancialinnature.
4TipsforMakingYourStrongest OfferonaHome
It'simportanttoknowtoday’smarketiscompetitiveinmanyareasbecausethe numberofhomesforsaleisstilllow–andthat’sleadingtomultiple-offer scenarios.
1.PartnerwithaRealEstateAgent
Relyonarealestateagentwhocansupportyourgoals.AsPODSnotes:
“Makinganofferonahomewithoutanagentiscertainlypossible,buthavinga probyyoursidegivesyouamassiveadvantageinfiguringoutwhatto offeronahouse.“
Agentsarelocalmarketexperts.Theyknowwhat’sworkedforotherbuyersinyour areaandwhatsellersmaybelookingfor.Thatadvicecanbegamechangingwhen you’redecidingwhatoffertobringtothetable.
2.UnderstandYourBudget
Knowingyournumbersisevenmoreimportantrightnow.Thebestwaytounderstand yourbudgetistoworkwithalendersoyoucangetpre-approvedforahomeloan. Doingsohelpsyoubemorefinanciallyconfidentandshowssellersyou’reserious.That givesyouacompetitiveedge.AsInvestopediasays:
“...sellershaveanadvantagebecauseofintensebuyerdemandandalimited numberofhomesforsale;theymaybelesslikelytoconsiderofferswithout pre-approvalletters.“
3.MakeaStrong,butFairOffer
It’sonlynaturaltowantthebestdealyoucangetonahome,especiallywhen affordabilityistight.However,submittinganofferthat’stoolowdoeshavesomerisks. Youdon’twanttomakeanofferthat’llbetossedoutassoonasit’sreceivedjusttosee ifitsticks.AsRealtor.comexplains:
“...anofferpricethat’ssignificantlylowerthanthelistingprice,isoftenrejected bysellerswhofeelinsulted...ifasellerisoffendedbyabuyerorisn’ttaking thebuyerseriously,there’snotmuchyou,ortherealestateagent,cando.”
Theexpertiseyouragentbringstothispartoftheprocesswillhelpyoustay competitiveandfindapricethat’sfairtoyouandtheseller.
4.TrustYourAgentDuringNegotiations
Afteryousubmityouroffer,thesellermaydecidetocounterit.Whennegotiating,it’s smarttounderstandwhatmatterstotheseller.Beingasflexibleasyoucanonthings likemovingdatescanmakeyouroffermoreattractive.
Yourrealestateagentisyourpartnerinnavigatingthesedetails.Trustthemtoleadyou throughnegotiationsandhelpyoufigureoutthebestplan.Asanarticlefromthe NationalAssociationofRealtors(NAR)explains:
“Therearemanyfactorsupfordiscussioninanyrealestatetransaction—from pricetorepairstopossessiondate.Arealestateprofessionalwho’s representingyouwilllookatthetransactionfromyourperspective,helping younegotiateapurchaseagreementthatmeetsyourneeds...”
BottomLine
Withinventorystilllowoverall,youwanttocomeinwithastrongoffer.Let'stalkso youcanhaveanexpertonyourteamtohelpyoubringyourbestoffertothetable.
TheTop5ReasonsYouNeed anAgentWhenBuyingaHome
Ifyou’vedecidedyou’rereadytobuy,chancesareyou’retryingtofigureout whattodofirst.Itcanfeelabitoverwhelmingtoknowwheretostart,butthe goodnewsisyoudon’thavetonavigateallofthatalone.
Whenitcomestobuyingahome,expertadvicefromatrustedrealestateagentispriceless,now morethanever.Andhere’swhy.
Arealestateagentdoesalotmorethanyoumayrealize.
Youragentisthepersonwhowillguideyouthrougheverystepwhenbuyingahomeandlookout foryourbestinterestsalongtheway.Theysmoothoutacomplexprocessandtakeawaythe bulkofthestressofwhat’slikelyyourlargestpurchaseever.Andthat’sexactlywhatyouwant anddeserve.
ThisisatleastapartofthereasonwhyarecentsurveyfromBrightMLSfoundanoverwhelming majorityofpeopleagreeanagentisakeypartofthehomebuyingprocess(seevisualbelow):
Ofrespondentsagree "Itwouldbeverystressful tonavigatethehomebuyingprocess withoutarealestateagentorbroker.”
Ofrespondentsbelieve "Arealestateagentorbrokeris anessential,trustedadvisorfor ahomebuyer."
Source:BrightMLS
Togiveyouabetterideaofjustafewofthetopwaysagentsaddvalue,checkoutthislist.
1.DeliverIndustryExpertise:Therightagent–theprofessional–willcoachyou througheverythingfromstarttofinish.Withprofessionaltrainingandexpertise,agents knowtheinsandoutsofthebuyingprocess.Andintoday’scomplexmarket,theway realestatetransactionsareexecutedisconstantlychanging,sohavingthebest adviceonyoursideisessential.
2.ProvideExpertLocalKnowledge:Inaworldthat’spoweredbydata,agreatagent canclarifywhatitallmeans,separatefactfromfiction,andhelpyouunderstandhow currentmarkettrendsapplytoyouruniquesearch.Fromhowquicklyhomesareselling tothelatestlistingsyoudon’twanttomiss,theycanexplainwhat’shappeninginyour specificlocalmarketsoyoucanmakeaconfidentdecision.
3.ExplainPricingandMarketValue:Agentshelpyouunderstandthelatestpricing trendsinyourarea.What’sahomevaluedatinyourmarket?Whatshouldyouthink aboutwhenyou’remakinganoffer?Isthisahousethatmighthaveissuesyoucan’t seeonthesurface?Noonewantstooverpay,sohavinganexpertwhoreallygetstrue marketvalueforindividualneighborhoodsispriceless.Anofferthat’sbothfairand competitiveintoday’shousingmarketisessential,andalocalexpertknowshowto helpyouhitthemark.
4.ReviewContractsandFinePrint:Inafast-movingandheavilyregulatedprocess, agentshelpyoumakesenseofthenecessarydisclosuresanddocuments,soyou knowwhatyou’resigning.Havingaprofessionalthat’strainedtoexplainthedetails couldmakeorbreakyourtransaction,andiscertainlysomethingyoudon’twanttotry tofigureoutonyourown.
5.BringNegotiationExpertise:Fromoffertocounterofferandinspectiontoclosing, therearealotofstakeholdersinvolvedinarealestatetransaction.Havingsomeoneon yoursidewhoknowsyouandtheprocessmakesaworldofdifference.Anagentwill advocateforyouastheyworkwitheachparty.It’sabigdeal,andyouneedapartnerat everyturntolandthebestpossibleoutcome.
BottomLine
Realestateagentsarespecialists,educators,andnegotiators.Theyadjusttomarket changesandkeepyouinformed.Andkeepinmind,everytimeyoumakeabigdecision inyourlife,especiallyafinancialone,youneedanexpertonyourside. Expertadvicefromatrustedprofessionalispriceless.
Agoodbuyer'sagentcanactasaguideonyour homebuyingjourney.They'llshowyoupropertiesthat fityourcriteria,helpyoucraftacompetitiveoffer, negotiateonyourbehalfandgenerallyprovideyou withknowledgeandsupportthroughoutthe homebuyingprocess.
-NerdWallet
I’msureyouhavequestionsandthoughtsaboutthe realestateprocess. I’dlovetotalkwithyouaboutwhatyou’vereadhereandhelpyou onthepathtobuyingyournewhome.Mycontactinformationis below,andIlookforwardtoworkingwithyou.
